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Deprivation is a useful measure to identify areas of the country that are experiencing significant disadvantage. The Scottish Index of Multiple Deprivation (SIMD) uses statistics on income, employment, health, education, access to services, crime and housing to calculate the level of deprivation across all regions of Scotland. Last year, levels of deprivation fell in Glasgow City, Renfrewshire and City of Edinburgh compared to SIMD 2016. Glasgow City demonstrated the greatest fall, from 48% of data zones in the 20% most deprived areas in Scotland, to 44%.

However, the UK Government has not privatised solving deprivation and so, a UK-wide index of multiple deprivation does not exist. Therefore, it is difficult to compare levels of disadvantage in areas of Scotland and other regions of the UK. As a result, this article will offer a comparison of GDP per head of population, one of the common indicators of deprivation and disadvantage, within the UK and across the EU.

10 Regions of UK with lowest GDP per head (2018)

As this table demonstrates, of the 10 regions with the lowest GDP per head in the UK, only one area is within Scotland. Meanwhile, 8 of the regions are within England and one is in Wales. This suggests that economic inequality is a greater problem in the rest of the UK than it is in Scotland.

Furthermore, it is interesting to compare these figures to the EU-27 countries average GDP per head of population. Indeed, it has been implied that regions within the UK have struggled to keep pace with the rest of Europe since the financial crash in 2008.

In 2018, GDP at market prices in the EU-27 was valued at 13.5 trillion euros, equivalent to an average of 30,200 euros per person (approximately £26,195.63).

UK NUTS 2 (Nomenclature of Territorial Units for Statistics) Regions with GDP per head lower than EU-27 Average

This table highlights that many regions across the UK continue to lag behind many European countries in terms of GDP per capita. Indeed, 14 NUTS 2 regions in the UK have a GDP per head lower than the EU-27 average. Of these regions only 1 is in Scotland, 1 is in Wales, 1 is in Northern Ireland and 11 are in England.

The major exception

While we have demonstrated that deprivation and inequality are rife across England, there continues to be one major exception – London. In fact, this is a huge part of the problem. In 2018, data from the Office for National Statistics showed that London recorded a 1.1% annual rise in output per person to £54,700. Meanwhile, in the North East, growth was only 0.4%, rising to just £23,600 per head. This shows a further widening of the per capita gap between the richest and poorest regions of the country.

We have recognised for years that the key issue at play here is that the UK is far too centralised around London and the South East. Seven years ago, at Business for Scotland, we said that “power, money, opportunity and influence has been drained from the rest of the country for generations towards a metropolis that has developed its own financial and capitalist culture which sits a world apart from the distant regions and nations that make up the wider UK” and unfortunately, this still applies today but to an even greater degree. Ultimately, this constant investment in London and the financial sector has resulted in huge disparity across England, and harmed the other nations of the UK, including Scotland, Wales and Northern Ireland.

Further mismanagement

The past year has undoubtedly been a challenging one for many countries across the world, with the COVID-19 pandemic having drastic consequences for economies and healthcare systems worldwide. However, adding a hard Brexit deal to the equation has only worsened matters, particularly with regards to deprivation. Indeed, studies have found that there is a high risk that the economic impacts of COVID-19 and Brexit will further increase regional disparities. In particular, already deprived areas such as the North East, Wales and Outer London are likely to be hardest hit by Brexit. Meanwhile, tourism dependent coastal communities and hospitality dependent cities such as Manchester and Liverpool are already facing drastic consequences as a result of COVID-19.

These struggles are only emphasised by the lack of support displayed by the UK Government. Indeed, new research has shown that if the Chancellor’s plans to cut Universal Credit go ahead, millions of individuals will be left without the income needed to afford the minimum living standard and the Scottish Child Payment will be undermined. Indeed, after years of austerity, followed by the chaos of Brexit and a global pandemic, such policy decisions will only cause further deprivation and inequality in the UK, particularly in England where great disparity already exists. This highlights that as a result of UK Government mismanagement and the already severe levels of inequality, certain impoverished areas in England are likely to suffer further in the coming months and years.

Southern Scotland

This region is the only area of Scotland that is within the 10 regions of the UK with the lowest GDP per head and holds a GDP per capita lower than the EU-27 average. However, it is important to note that this situation is gradually improving and the GPD per head of population in this region has significantly improved since 2011. In 2011, Southern Scotland’s GDP per head was £16,142. Meanwhile, the EU-27 average was approximately £22,346. This means that Southern Scotland’s GDP per head was approximately 72% of the EU-27 average in 2011. However, in 2018, this figure had risen to 76%, demonstrating the gradual increase of GDP per head and the closing gap between Southern Scotland and the EU-27 average.

Scottish Government Approach

So, let’s see why Scotland is leading the way in reducing such deprivation. One of the key ways to tackle deprivation is through education. Indeed, the Scottish Government recently announced the investment of £215million to benefit pupils in Scotland’s most deprived communities.

An area in which the Scottish Government has also invested in to reduce deprivation and inequality is affordable housing. Indeed, in the 2021-22 budget, £711.6 million was dedicated to affordable housing and a new £55 million programme was put in place to support town centres.

Another critical example that extends to the wider community is the Empowering Communities Fund. This programme was established in 2015 and has already had huge benefits for deprived communities in Scotland. To date, the programme has helped hundreds of projects that create change in disadvantaged communities through training, employment, healthy eating and volunteering opportunities.

It is clear that reducing inequalities and deprivation is a key ambition of the Scottish Government and one that is continuously being met, with levels of deprivation reducing across the country.

Conclusions

It is evident that inequalities and uneven levels of deprivation across the UK continue to be a significant problem. However, it is also clear that Scotland is continually challenging these inequalities and the Scottish Government is working to ensure that levels of GDP per head in Scotland match the average of EU countries.

The backlash against Boris Johnson's refusal to recognise the support for a second independence referendum is growing. Even those who do not support independence are increasingly speaking out against any Tory bid to block the vote. Here are three voices who recently added their support to the arguments in favour of holding indyref2.

1: Michael Sharpe, former Labour Party general secretary

Michael Sharpe has urged Labour’s leader in Scotland Anas Sarwar to rethink the party’s opposition to a second independence referendum.

Writing in the Daily Record, Mr Sharpe urged Mr Sarwar: “Change must start by standing up to the UK Party and unquestionably affirming that sovereignty lies with the Scottish people.’

Scottish Labour’s dismissive stance on self-determination cut the party off at the knees

He said the Labour party in Scotland “still doesn’t get devolution”. He added: ‘ With the constitution still the prism through which Scottish politics is viewed, Scottish Labour’s dismissive stance on self-determination cut the party off at the knees …’

Mr Sharpe, who left the general secretary job in December, warned that the hardline stance on indyref2 of the party’s current hierarchy is scuppering its chances of a revival.

He argued that separating Scottish Labour from the UK party is also crucial to the party’s future success. He wrote: “As recent polling suggests, Anas Sarwar must distance Scottish Labour from the Keir Starmer leadership.’

Will Labour listen to the words of advice? A Scottish Labour spokesperson said: ‘Scottish Labour’s relentless focus continues to be coming through Covid and our national recovery.”

That will be a ‘no’ then.

2: Matt Qvortrup, professor of political science at Coventry University

Mr Qvortrup, who has been described as ‘an expert on nationalist movements around the world’, wrote in the Times recently that the Conservative threat to attempt a block on an independence  referendum in court had made Britain more like Spain, which sent riot police to prevent an independence referendum in Catalonia in 2017.

He said:  “Just like Catalonia the British courts will declare the Scottish referendum illegal. This will be a gift for Sturgeon. Imagine a bunch of posh, mainly English lawyers blocking the will of the Scottish people in the unelected Supreme Court in London.”

Mr Qvortrup may not be a supporter of independence but he knows the inevitable result of standing against democracy. He tells Prime Minister Boris Johnson that he would stoke an upsurge in already strong support for a second independence referendum if he attempted to stop it.

John Burnside, writer, poet

John Burnside was moved to abstain in the 2014 independence referendum. He could not bring himself to vote against independence but was worried that if Scotland left the UK ‘the cynical and increasingly xenophobic brand of Toryism that had already taken root there would only gain in strength’.

I suspect that the best way for Scottish folk to help our brothers over the Border is to break the ties that have bound us together for three centuries

Writing in the Guardian recently he says he would now vote for independence the first chance he gets.

Mr Burnside wrote: 'Now, however, I suspect that the best way for Scottish folk to help our brothers over the Border is to break the ties that have bound us together for three centuries, and let fate take its course. Perhaps we can provide some kind of example of an honourable attempt at a civic society …

‘I am not so naive as to pretend that Scotland hasn’t got a long way to go if it is to establish a just society. Still, we have to start somewhere, and I have to think that such a start can only be more hopeful if it is not muddled by interference from a toxic but far more powerful neighbour.’

New analysis shows that UK state pensions are the least generous in North West Europe in comparison to the average wage. The analysis from the House of Commons library shows pensions in the UK are the lowest of our European neighbours as a proportion of pre-retirement wages.

UK pensioners receive around a quarter of the average working wage. In comparison pensioners in Luxembourg and Austria receive 90%.

A recent Believe in Scotland billboard campaign highlighted the fact that UK pensions are the lowest in the developed world as a percentage of final earnings.

Pensions, of course, have been one of the main areas of concern for those still considering whether to vote for independence. So how would an independent Scotland handle its pensions system and how successful is that system likely to be?  One way to understand how pensions might be affected is to consider the way in which they have been handled and developed within newly independent countries.

This article will examine a number of newly independent country case studies, including the countries that formed after the collapse of the Soviet Union and Yugoslavia.

USSR

Many of the independent countries that have formed since 1990 were previously part of the Soviet Union. It is important to understand how the pension scheme operated before the Soviet Union collapsed. Four main stages contributed to the development of the pension security system in the USSR:

With reference to the third stage, a new law concerning state pensions was passed in 1956. This reform extended the coverage of the pension system, increased the benefit amount and reduced the gap between the minimum and maximum pension. On average, old-age pensions rose 100%, invalidity pensions 50% and survivors’ pensions 64%. The largest increases were felt among low-paid workers.

Old-age pensions in the USSR were based on past earnings (recent earnings, rather than lifetime earnings). The basic pension rate depended on the category of work and the level of earnings in the Soviet Union. For example, in 1973 the percentage of current average wage paid in old-age pension - based on current average earnings and 35 years of employment in ordinary conditions - was 55% for a single pensioner and 61% for a pensioner with one dependent.

AFTER INDEPENDENCE

Russian Federation

After the dissolution of the USSR and throughout the early 1990s, the Russian Federation state pension system was similar to the Soviet Union’s system and its general qualifying conditions. However, the law on state pensions in the Russian Federation in 1990 was the first step in changing Russia’s system and instigated the formation of a new type of pension system, fully independent from the state budget of the USSR.

Article 1 of the law stated that labour and its results were the main criterion for differentiated terms and norms in the pension system. As a result only two forms of pensions - labour and social - were created to replace the former multifaceted and multilevel pension system.

The modernisation of the social security system and improved living standards of the most disadvantaged citizens became the fundamental objective of social reforms held by the Russian Federation government

Under this law a new financial institution, the Pension Fund of the Russian Federation (PFR), was also founded to finance pension benefits through insurance contributions, as well as allocations from the state budget. The system is financed from contributions paid by insured persons and employers. The insured individuals pay 1% of their earnings and the employer pays 28% of the payroll. The PFR managed to stabilise the pension system, despite difficult circumstances. Moreover, the number of Russian pensioners grew, as creative workers, clerics, sole proprietors and other working groups who had previously not been included in the national pension system now met the qualifying conditions.

The modernisation of the social security system and improved living standards of the most disadvantaged citizens became the fundamental objective of social reforms held by the government with the direct participation of the Pension Fund of Russia.

Latvia

After its independence from the USSR Latvia started to reform its pension system. This involved an initial reform in 1990. The reformed system retained much of the Soviet pension system qualifying conditions for years after independence.

Latvia currently operates a three-pillar pension system. The first pillar is a Pay as You Go (PAYG), notional defined contribution (NDC) system, the second is a funded mandatory pillar and the third pillar consists of private voluntary occupational and individual pension arrangements.

In this article we will focus on public pensions - the first pillar. Reform of the first pillar took place in 1996 due to low retirement ages, widespread early retirement, the evasion of social security contribution and demographic change. The new system created a strong link between contributions and benefits. Indeed, NDC pension systems offer participants a hypothetical account in which all the contributions that are made throughout their working life are held. At the time of retirement, benefits are calculated by dividing the amount accumulated in the account by the cohort life expectancy.

The new Latvian system has been considered radical and hugely successful. It offers something for all key stakeholders: it exposes what is normally hidden in a traditional pension system, revealing the cost of providing guarantees and benefits. It is flexible and adjusts to demographic and economic changes. This highlights that while the transition of the pensions system may be gradual after independence, it can also be hugely successful.

YUGOSLAVIA

The pensions system in Yugoslavia was based on the PAYG model, in which investment, level of earnings and the duration of insurance determines the benefits of the pension. Since the collapse of Yugoslavia, the countries that constituted this region adopted similar systems.

Croatia

Here the PAYG system was in place until 1998. However, it was clear that it was unable to deal with shocks due to low retirement age, a weak link between contributions and benefits, and the overly generous benefits. As a result, major pension reforms were initiated in a gradual, step-by-step manner. The Croatian government implemented reforms of the PAYG system in 1999 and introduced mandatory and voluntary pension funds in 2002.

The 1999 reform was the first step towards introducing a three-pillar system. That year Croatia reformed public pensions and set out to achieve financial sustainability and cost containment. By 2009 retirement age had gradually been increased, reaching 65 for men and 60 for women. The minimum early retirement age was also raised and the benefit deductions for early retirement were increased.

While the pension system may not suddenly change when a country becomes independent ... changes are possible and have brought great successes for many newly independent countries

Slovenia

Slovenia also inherited the legislation of its pension system from the former Yugoslavia and soon after independence initiated its transformation from worker self-management to a modern market economy.  Slovenia conducted relatively mild reforms and preserved the old pensions insurance system in which pensions are dependent on earnings and contributions. Indeed, the first pillar of Slovenia’s pension system is based on the PAYG model. Certain significant reforms were established after 2000, including raised age limits and maximum pension restrictions. Slovenia is now one of the richest Central and Eastern European countries and its pension system is very similar to Western European countries.

Across all of these examples, it has been clear that while the pension system may not suddenly change when a country becomes independent, and aspects of its former system may be retained, changes are possible and have brought great successes for many newly independent countries.

Net pension replacement rates

It is interesting to consider the net pension replacement rates in these newly independent countries to see exactly how successful the reforms and pension systems have been. To offer a comparison, we have included the net pension replacement rate of the UK.

This table clearly highlights a significant difference between the net pension replacement rate of these newly independent countries and the UK. This suggests that the various reforms and new pension systems have benefitted the citizens of these countries.

Conclusions

To conclude, these country case studies have demonstrated that change in pension systems is not always immediate after a country becomes independent and aspects of the former pension scheme may be continued. However, it has also been clear that positive changes and reforms are possible and have benefitted these newly independent countries and their aged population. Therefore, it appears likely that an independent Scotland would manage public pensions successfully and, similarly to other independent countries and would be able to raise the net pension replacement rate to one more aligned to thr rest of Europe.

Thousands of people who considered Scotland their home have been left fearing they have lost the right to stay here and that their lives are being torn apart. This morning they are waking up in a country they no longer recognise.

The UK government’s decision to force EU nationals to apply to remain in their homes is not just cruel and inhumane. It has also been a shambles. Time and again Boris Johnson refused to even countenance agreeing to pleas that the deadline be extended past midnight on Wednesday to deal properly with the staggering number of applications.

More than 50,000 people applied for ‘settled status’ on the last day. More than 5.5 million applications have been received in total.

The last-minute rush forced the UK government to take the action they had ruled out and extend the deadline ... but only for nine hours.

Social media has been full of heart-breaking messages from those who face having to leave and those who desperately want them to stay

Its assurance that applications submitted before 9am on Thursday was hardly enough to calm the fears of those worried they could face deportation.

Social media has been full of heart-breaking messages from those who face having to leave and those who desperately want them to stay.

Michael Goulden @mikegoulden posts telling the story of his 83 year-old mother - who was originally from Germany, who worked for the British Army as a translator and who moved to the UK in 1962 - went viral.

She qualified as a teacher, raised two children and is a long-standing member of The Society of Women Writers and Journalists. She now has dementia and became upset when her son was going through the process to complete her application for her settled status.

Mr Goulden posted: ‘A Britain that was once tolerant, generous and welcoming has morphed into a cruel, xenophobic, third-rate country under the monstrous government we now have. My mum has contributed so much to this country and this process is an insult to her and millions like her.’

Donald Macaskill, chief executive of Scottish Care, posted: ‘Tonight I light my #candleforcare thinking of and thanking all who come from #Europe to work in Scotland’s health and social care  sectors.

These posts and thousands like them highlight the terrible pain being caused by a Westminster government determined to plough ahead with the very worst aspects of Brexit despite mounting unarguable evidence that it has been a disaster.

This is what Vote Leave promised us in 2016: ‘There will be no change for EU citizens already lawfully resident in the UK. These EU citizens will automatically be granted indefinite leave to remain in the UK and will be treated no less favourably than they are at present.’

Scotland’s message has always been at direct odds with Westminster’s inhumane moves to strip our friends and neighbours of their right to live and work in the country they love

It was a lie in a long list of lies about Brexit and in this week of all weeks the terrible truth has been laid bare for all to see.

Scotland’s message has always been at direct odds with Westminster’s inhumane moves to strip our friends and neighbours of their right to live and work in the country they love.

We have continually stressed that those who have come to Scotland from elsewhere in Europe are welcome here and contribute a huge amount to our economy and our culture. Our politicians have insisted that the need for settled status should be abandoned and this cruel treatment brought to an end.

But again and again we have been ignored.

Just as we were ignored when we voted against Brexit. Just as we were ignored when we argued for a softer form of Brexit which would protect our industries, our economy and our people. Even when we try to enshrine children's human rights into law Westminster objects so much it takes our parliament to court to stop us.

The treatment of EU nationals is a stark confirmation that believing in Scotland and its independence offers a better, smarter, kinder alternative to the cruel and xenophobic country the UK has become.

Westminster’s bid to persuade the Supreme Court to stop the Scottish parliament improving children’s rights is entering its second day.

It is a naked attempt to thwart legislation passed unanimously by MSPs in Holyrood. At its heart is a determination to limit the powers of the Scottish parliament and protect what the Conservative government views as the superiority of Westminster.

If it succeeds the losers will be the children of Scotland and their protection from laws which threaten their human rights.

The issue dates back to March, when the Scottish parliament passed the United Nations Convention on the Rights of the Child (UNCRC) (Incorporation) (Scotland) Bill. That writes the UN convention into law and would require public authorities to respect children and young people’s rights.

At the time MSPs considered it uncontroversial. They passed it unanimously, with no dissent even from Tory MSPs. But within days the Tory Scottish Secretary of State Alister Jack threatened to take legal action to against Holyrood’s move.

And in April Scottish Conservative leader Douglas Ross backed up Mr Jack’s attack on legislation his own party’s MSPs had voted for. Mr Ross said the legal challenge was over ‘very small, technical legal issues’.

The KidsRights Foundation ranks the UK as 169 out of 182 countries on its respect for the rights of children

He insisted Westminster had no issue with the aims of protecting children’s rights, yet the KidsRights Foundation ranks the UK as 169 out of 182 countries on its respect for the rights of children.

That same organisation praised Scotland as the first devolved nation in the world to legislate to bring the UN Conventions of the Rights of the Child into law.

Westminster signed up to the treaty in 1990 but it has not directly written it into domestic law. The Holyrood legislation would allow children, young people and their representatives go to the courts to enforce their rights, and let courts strike down legislation that is incompatible with the UNCRC.

James Mure, the QC representing the Lord Advocate of Scotland, said: ‘The UNCRC Bill is concerned with furthering children’s rights in Scotland. The true purpose of placing the duty on public authorities is to protect children’s rights and to further the fulfilment of those rights in Scotland.”

The UK government’s legal argument suggests the Holyrood legislation is not competent because it impinges on Westminster’s ability to legislate for Scotland. Its fears are revealed in its written submissions to the Supreme Court which refer to Westminster as ‘the sovereign UK parliament’.

Nicola Sturgeon has described Alister Jack’s legal challenge as politically catastrophic and morally repugnant

UK ministers are clearly rattled by the prospect of tougher children’s rights laws in Scotland taking precedence over weaker laws agreed by Westminster.

First Minister Nicola Sturgeon has described Mr Jack’s legal challenge as ‘politically catastrophic and morally repugnant’.

And the Scottish government has described the move as an ‘orchestrated and sustain assault’ on Holyrood powers.

The European Charter of Local Self-Government (Incorporation) (Scotland) Bill, which MSPs also passed unanimously, has also been referred to the Supreme Court for similar reasons.

Two days have been set aside for the arguments to be presented to a panel of five judges. The UK government presented its case yesterday and it is the Scottish government’s turn today.

The Welsh Government is also involved in the case and will make oral submissions today. Judgment is expected to be made at a later date.

Since 1990, 34 territories have become independent countries. Many of these new countries were formed as a result of the dissolution of the USSR and Yugoslavia during the 1990s. Others formed as a result of independence and anticolonial movements.

The 1990s was also a significant period for Scotland, with the reconvening of the Scottish parliament and the transfer of devolved powers. This article sets out to compare the different experiences of these newly independent countries and Scotland as a devolved nation, analysing the various currencies that have been adopted, their GDP growth rates and their successes as independent countries.

This will allow us to determine whether Scotland would have benefitted more from independence in the 1990s than from the limited powers obtained through devolution. We will also be able to offer a hypothetical picture of what an independent Scotland may have looked like, including its potential currency and the country’s probable financial situation.

EU members

First, let’s look at the countries that have joined the EU since declaring independence, and examine the currencies that have been adopted and the impact independence has had on their GDP. Of the countries formed since 1990, eight have become members of the EU, including Estonia, Latvia, Lithuania, Croatia, Slovenia, Germany, Czech Republic and Slovakia.

However, not all of these countries have chosen to employ the Euro. For example, Croatia and the Czech Republic introduced their own currency after independence. In fact, in Croatia the National Bank was formed in 1990, before the country was actually independent, and the new Croatian Dinar followed in December 1991. In May 1994 the Croatian Kuna replaced the Dinar, as part of the government’s stabilisation programme that followed Croatia’s involvement in the Bosnia-Herzegovina war. This stabilisation programme and the introduction of the Kuna brought inflation down from the 1993 rates of 1616% to 1.0% in 1994 and 3.7% in 1995. Since the introduction of the Croatian Kuna, it has remained stable and has effectively countered inflationary expectations.

Employing the Euro after independence is not a necessity and countries can join the EU without doing so

Some of the other newly independent countries adopted the Euro further down the line after independence and several years after joining the EU. For example, Estonia gained independence in 1991 and established its own currency  - the Estonian Kroon - just 10 months later. Estonia joined the EU in 2004 but did not adopt the Euro until 2011. This highlights that employing the Euro after independence is not a necessity and countries can join the EU without doing so.

Let’s look at the average GDP growth of these EU members since declaring independence.

These figures show that on average the newly independent countries that have joined the EU have a GDP growth rate of 2.84%. Those that have joined the EU and adopted the Euro have an average of 3.07%. Those countries that are members of the EU but have their own currency averaged at 2.15%.

Non-EU members

So, what is the currency situation and average GDP rate in newly independent countries that are not members of the EU?

This data suggests that across most of these independent countries, a new currency has been formed. The average GDP growth since independence across all of these countries is 2.68%. Among those countries that have created their own currency, it is 3.09%. This suggests that the introduction of a new currency after independence may  benefit GDP growth rates.

Scotland

Since the 1990s Scotland has held certain devolved powers. However, unlike the countries that we have examined throughout this article Scotland has not obtained full independence. As a result, it  continues to use the British Pound as its currency. So, how does Scotland’s annual GDP growth compare to the newly independent countries that we have looked at? Since devolution was introduced until the  present day, Scotland’s GDP growth rate averages at 1.4%. This is considerably lower than the averages we have seen across the many newly formed countries, both within and outside of the EU.

Conclusions

Ultimately, this article has highlighted that different routes and options exist for newly independent counties with regards to currency and EU membership. Many of the countries that have been analysed in this article have shown great success after independence, particularly in terms of GDP growth and developing their own currency. Overall, it can be suggested that full independence would have contributed to greater GDP growth for Scotland than devolution.

In some of our previous articles and on our recent Believe in Scotland campaign billboards we have highlighted some of the inadequacies that exist within the UK’s social support system. In particular, one of our billboards drew attention to the fact that the UK offers the worst state pension in the developed world.

In this article, we will consider the social welfare and support systems across some of the small, independent countries in Europe. In particular, we will look at Norway, Denmark and Ireland. This will allow us to analyse and compare the performance and policies of these smaller countries to those of the UK.

This will allow us to present a hypothetical picture of the type of social support that an independent Scotland would be able and likely to offer.

State pension

As we have already shown, the state pension is a gloomy aspect of the UK’s welfare system. So, how much exactly does the UK offer to old age pensioners?

The UK former state pension consisted of two tiers – the basic state pension (£137.60 a week) and an earnings-related additional state pension. The new state pension provides a flat-rate pension worth up to £179.60 a week.

Let’s see how this compares to other countries.

Flat-rate state pensions in countries across Northern Europe: a comparison of full entitlement

Small, independent countries offer a much greater state pension than the much larger UK

These figures highlight that small, independent countries offer a much greater state pension (including full entitlement) than the much larger UK. Therefore, it’s more likely that an independent Scotland would follow a similar path as its European neighbours. Indeed, the SNP has said that an independent Scotland would work to increase the Scottish state pension to match the EU average, effectively doubling it.

 Net pension replacement rate

The net pension replacement rate is another interesting way of analysing and comparing the state pension schemes across various countries.

The Organisation for Economic Co-operation and Development (OECD) defines net pension replacement rate as “the individual net pension entitlement divided by net pre-retirement earnings, taking into account personal income taxes and social security contributions paid by workers and pensioners.”

The net pension replacement rate measures how effectively a pension system provides a retirement income to replace earnings as the main source of income before retirement.

This table demonstrates that the UK’s net pension replacement rate is significantly worse than several of the small independent countries across Europe. In fact, the only country that offers a state pension that constitutes a lower percentage of pre-retirement earnings is South Africa.

Public social spending

 Public social spending is another important factor that should be considered when analysing the effectiveness of a country’s social support system. Public social spending includes health, old age, incapacity-related benefits, family, unemployment and housing, among other things.

These figures highlight that, with the exception of Ireland in this case, Scotland’s Northern European neighbours with a similar population size outperform the UK in terms of public social spending. Indeed, both Norway and Denmark spend a significantly great share of the country’s GDP on public social services than the UK.

 Income distribution

Lastly, this article will consider the distribution of income – another important aspect of ensuring an equal and well-supported society.

The OECD provides an Income Distribution database that monitors the performances of countries in the field of income inequality and poverty. This is measured using the Gini coefficient, which is based on the comparison of cumulative proportions of the population against cumulative proportions of income they receive (ranging from 0, in the case of perfect equality, and 1, in the case of perfect inequality). Therefore, with reference to the OECD’s database, we have compared the case study countries of this article.

This data, again, shows several small independent countries across Europe outperforming the UK. Indeed, Ireland, Norway and Denmark all provide greater income equality than the UK.

By analysing these various social support factors, it has become clear that small, independent countries largely outperform the UK and offer greater security to their citizens

Conclusions

 This article has drawn upon data from various countries across Europe, including the UK, Ireland, Norway and Denmark. By analysing these various social support factors, it has become clear that small, independent countries largely outperform the UK and offer greater security to their citizens. This includes pensions, income distribution and public social spending. Overall, it can be suggested that an independent Scotland would behave similarly to these small European countries and the Scottish Government has already set out various goals for an independent Scotland to prioritise social wellbeing factors and match European targets.

FOOTBALL

A Scottish student became the first black football player to play at an international level 140 years ago.

Andrew Watson played three matches for Scotland between 1881 and 1882. He was the son of a rich Scottish sugar planter, Peter Miller Watson, and studied natural philosophy,  mathematics and engineering at the University of Glasgow.

He first played football for Maxwell in 1876 and then signed for Parkgrove, where he played alongside another black player Robert Walker.

He won the first of three caps for Scotland in March 1881, and he captained the Scottish side which defeated England 6-1

He signed for Queen’s Park – then Scotland’s largest football team – in April 1880 and became their secretary in November the following year.

He won the first of three caps for Scotland in March 1881, and he captained the Scottish side which defeated England 6-1. Can Scotland pull off a repeat performance today? It has been reported that there are plans to erect a statue of Andrew Watson outside Hampden.

THE LAW

Women were appointed to two of the most senior legal roles in Scotland for the first time this week.

MSPs confirmed the appointment of Dorothy Bain QC as the new Lord Advocate and Ruth Charteris QC was chosen as Scotland’s next solicitor general.

It is the first time women have held both roles at the same time. When she proposed the appointments at Holyrood this week First Minister Nicola Sturgeon underlined their historic nature.

 PERIOD POVERTY

In July 2017 Scotland became the first country in the world to provide free sanitary products to low-income women. An initial six-months trial was so successful the scheme was rolled out across the country.

MSPs unanimously passed the Period Products  (Free Provision) (Scotland) Act in November 2020. A survey in February 2019 showed that period poverty had afflicted more than a quarter of women in the UK.  Research revealed that 27% of women had at times been unable to afford sanitary products.

The problem had forced women to miss either work or school. The initiative was introduced after research by Women for Independence.

RENEWABLES

Scotland has become a world leader in renewable energy. It produced enough electricity from renewable sources to meet 97.4% of its needs in 2020, only narrowly missing the 100% target.

Wind turbines in Scotland produced enough energy in the first six months of 2019 alone to meet twice the country’s domestic requirements

Output has tripled over the past decade, producing enough power for the equivalent of seven million households.

Wind power is the fastest growing renewable energy technology and wind turbines in Scotland produced enough energy in the first six months of 2019 alone to meet twice the country’s domestic requirements.

Scotland possesses more than a quarter of the UK’s renewable energy generation and 90% of its hydropower.

CLIMATE CHANGE

All eyes will be on Glasgow in November, when the city will host the 26^th UN Climate Change Conference.

A major TV, radio and digital campaign – Let’s Do Net Zero – has already been launched in Scotland to raise awareness of climate change and biodiversity loss.

Scotland is committed to reaching net zero greenhouse gas emissions by 2045. The summit is one of a number of initiatives expected to benefit from Glasgow green energy projects worth £13m.

The SNP’s Social Justice and Fairness Commission recently published a report that sets out a road map to a fairer Scotland. At Business for Scotland, we have for several years supported many of the policies that have been proposed in this report.

Indeed, we are particularly happy to see that some of the concepts concerning fairer taxation that we have for years encouraged the Scottish government to adopt have been embraced within this report.

In 2019 Business for Scotland presented a report and plan on benefit corporation tax credits to Kate Forbes, who at that time held the position as the minister for public finance and digital economy.

So after years of promoting this concept and encouraging the Scottish government to support this idea of reforming the tax system and introducing incentives, we would like to offer a bit more detail on what exactly this type of taxation system could look like.

The UK taxation system

The UK’s tax system is widely recognised as dysfunctional. It is complex, ineffective and very centralised. Furthermore, any reforms that have been introduced have failed to keep up with economic and societal changes. The UK government often cuts corporation tax, which currently sits at 19%, in an attempt to make businesses more competitive and stimulate investment.

While it is true that too much tax can lower profitability and ultimately slow down private sector investment, this notion is not relevant to the UK’s current situation. Indeed, the UK government has no reserves and instead possesses a massive sovereign debt.

Cutting taxes will not stimulate the economy and will instead directly impact front line services

Furthermore, Brexit has greatly damaged private sector investment and the Covid-19 pandemic has had, and will continue to have, a critical and long-lasting impact on the economy.

Therefore, with the UK’s current economic situation looking rather grim, it is clear that cutting taxes will not stimulate the economy and will instead directly impact front line services.

Unified taxation powers

Corporation tax cuts can work, but only as part of a collection of flexible taxation powers and policies. For taxation policy to be successful it must involve a wide range of unified tax powers, otherwise the weight of taxation will be placed too heavily on one societal group. This issue has been recognised within the Social Justice and Fairness Commission’s report, highlighting that the burden of taxation must be shifted. The Joseph Rowntree Foundation has revealed that “the total cost of poverty to the UK economy is in the region of £78bn per year”.

A more balanced approach to taxation can be achieved in an independent Scotland. Indeed, with progressive policies such as those that Business for Scotland have advocated for years and that have now been proposed in the SNP’s report, Scotland can achieve a fairer tax system.

Changing behaviour

In 2019, we suggested to the Scottish government that rather than implementing ‘something for nothing’ tax cuts, taxation should be incentivised. For example, solutions such as benefit corporation tax credits could be introduced.

In the commission’s report, it is stated that taxation should be “used to influence actions or behaviours that generate good outcomes for society.”

This complements our campaigning and the ideas that we have proposed within many of our articles and reports. For example, in a previous article we offered a hypothetical scenario in which this concept was implemented:

Imagine if Scotland decided to avoid corporation tax cuts and instead raised taxation by 1%. While some may fear a decline in competitiveness, we suggest that this could be resolved through the numerous benefits of linking corporate taxation to the business pledge.

Under this system, businesses that are willing to make positive changes to company behaviour and support a more equal society will pay less in tax

This pledge asks businesses to behave in a way that benefits the company, wider society and the economy by changing corporate behaviours. However, because there is currently no profit to be gained from signing this pledge, it is easily ignored. Therefore, we advise that corporations should be able to earn back this loss and also gain further tax credits by signing this pledge and positively changing their behaviour. This may involve targeted investment and corporate behaviours that help create a better, fairer and more prosperous Scotland.

Positive changes rewarded

Under this system, businesses that are willing to make positive changes to company behaviour and support a more equal society will pay less in tax.

This system will fund itself with its benefit/cost approach. For example, corporates that invest in environmentally sustainable practices would pay less in taxation, but their contribution to society would help efforts to tackle the climate crisis and boost Scotland’s environmental and recycling sectors.

This concept of incentivising corporate taxpayers will also improve the growing issue of tax evasion and avoidance that exists across the UK. With the obvious benefits of this system, corporates are more likely to pay their taxes and ultimately this will increase Scotland’s taxation revenues by several billion every year.

Conclusions

Firstly, it is evident that the people of Scotland and the Scottish government desire change to the current UK taxation system and this emphasises the need for the powers to do so to be devolved to the Scottish Parliament. Secondly, we welcome the Scottish government’s proposed changes to create a fairer taxation system, particularly the concept of incentivising corporate tax.

For years, Business for Scotland has promoted the idea of benefit corporation tax credits, and we are pleased to see that the road map for an independent Scotland involves this progressive concept to encourage the development of a fairer and more prosperous country.