Driven by data; ridden with liberty.
The campaign for Scottish separatism has idolised the Nordic economies. In 2008, First Minister Alex Salmond named Iceland and Norway as part of the “arc of prosperity”, into which an independent Scotland would be placed. With the Scottish referendum dawning, Seumas Milne argues in The Guardian that the Scottish National Party (SNP) “doesn’t offer an escape hatch from neoliberal Britain”. Mr Milne writes:
But the idea that a yes vote would be a short cut to a progressive future in a Scandinavian-style social democracy is another matter. It’s not just that Scottish voters aren’t being offered genuine independence at all. Instead, the state cooked by the SNP is one signed up in advance to the monarchy, Nato, the EU and a currency controlled from London.
Scandinavia usually refers to Denmark, Norway and Sweden; the ‘Nordic countries’ is used to describe Denmark, Norway, Sweden, Finland and Iceland, along with their associated territories. Denmark, Norway and Sweden are all constitutional monarchies, whereas Finland and Iceland are parliamentary republics. Denmark, Norway and Iceland are members of Nato. The European Union (EU) has 28 member states, which includes Denmark, Finland and Sweden. As former Prime Minister Tony Blair highlighted, “Norway isn’t a member of the European Union”. Iceland is currently outside of the EU, due to ongoing disagreements over mackerel fishing quotas.
Finland uses the euro as its currency, meaning its central bank sits in Frankfurt. Sweden is obligated to accede to the euro once it meets the criteria. Denmark, along with the United Kingdom (UK), has a formal opt-out from joining the European single currency.
After arguing that Scottish independence, within the sterling area, will induce “turbo-charged austerity”, Mr Milne states:
Backed by tax avoiders, hedge funders, privateers and Rupert Murdoch, its central economic policy is to cut corporation tax 3% below the British rate to attract capital to Scotland.
According to KPMG, European nations have generally cut their corporation tax rates over the past eight years. Sweden, Finland and Denmark have all substantially decreased their corporation tax rates. In Sweden’s case, it declined from 28% in 2006 to 22% in 2014. Norway has only slightly reduced their corporate tax rates, from 28% to 27%. Of the five Nordic countries, only Iceland has increased its corporation tax rate over this timeframe. The rate was 18% in 2006, spending a two-year stint at 15%, before rising to 20% in 2010.
Mr Milne complains about SNP pledges for “deregulation and cuts in red tape”. The World Bank Group’s Ease of Doing Business Index implies lower levels of regulation amongst these social democracies, as the five Nordic countries place within the top 15 nations in the world.
This is the Nordic paradox: these nations are idealised by political parties and commentators, but the advocated policies are often directly opposed to these countries’ actual policies. Moreover, the proposed purpose of Scottish independence is not to provide “a short cut to a progressive future”, but to allow – as a separate political entity – Scotland to make its own choices.