by Matthew Wilson, English Teacher, Edinburgh
Many teachers don’t take a huge interest in the details of economics but realise that economics underpins the quality of the service that we deliver and the morale of the staffroom, something as important as resources when it comes to teaching and learning.
I’ll start with a confession. I’m a politics and economics junkie for reasons too boring to go into. And in this blog, I’d like to outline why an independent Scotland is the best prospect for education in this country on purely economic grounds.
Teachers will have had a 20% pay cut in real terms by the time the most recent pay deal ends. This is greater than during the Great Depression. Budgets in schools have been cut and will continue to be cut for the foreseeable future. This means class sizes will go up. In my own department, we have gone from 8 full time teachers to 6; class sizes from low 20s to the 30s.
There are some who believe that if we just see this period through that things will start to pick-up. This is just another ordinary recession. It’s not. UK debts stands at 1.5 trillion. To give you an idea of how enormous this is here’s a fact: the UK spent 300 years building-up a debt of £500 bn. By 2015, a 1000 billion will have been added in just 8 years! Incredible. Yet the issue is not only the amount of debt, it’s the fact that the debt is stilling rising. The deficit of what we spend and what we earn is at 6%.
Without wanting to send you in to a tailspin of despair, there are some other important things to note. Real wages are down by 8.4% and the wages for the self-employed have dropped by 31% in real terms. Given that a lot of people have been registered as self-employed by job centers to make the figures look good, you can see that there has been a massive drop in personal income for many. All of this happening, despite hundreds of billions spent by the government to get the economy going.
What this means is that cuts are going to continue. Although it seems that the economy has improved, this has been due to short term stimulus to the housing market where the government pays part of the deposit? It boosts the building trade and supports the supply chain. Manipulation of the housing market has also helped. There are thousands of empty properties in the UK that cannot be sold by the banks in case they cause house prices to fall. A house price fall would mean people are in negative equity; they might then try to sell their house, or lose confidence and stop spending. Either would be a disaster for the economy.
To believe that the situation will improve in the near future, would mean believing that 1.5 trillion is going to go away, that the deficit can be turned into a surplus by borrowing more and that genuine growth is going to come back strongly to a society that is maxed out on credit cards and over-stretched on expensive mortgages. All of that looks impossible. It looks especially impossible when we realise that to realistically get out of this situation we will have to ask the rich to take a serious hit on their investments. Ask yourself if that is very likely in today’s UK? What it then does mean, if your answer is No to the rich taking a hit, is that there are more cuts and the cost of living crisis will accelerate.
The cost of living crisis is caused by wages not going-up and inflation eating into the spending power of your money. This has been going on for years now. My signature dish of chicken, peaches, creme fraiche and curry powder has increased by over 50% in price!
Inflation was the government’s traditional way of making debts smaller. The growth of inflation means a debt is worth less than it was. However, it only works if inflation outpaces interest rates and wages rise along with inflation and that requires low interest rates and high government spending. It is a sign of how much debt we’re in as a society that high government spending and ultra low interest rates cannot get wages to rise.
Where does an independent Scotland fit into all of this? Well, if there is no currency union we’ll be debt free and so are in a pretty good position. However, there will be a currency union so what will be the consequence of that?
A CU does entail us taking on debt, yet we will have more flexibility. Although we’ll still have a large government debt, we can expect to benefit from a quite a few things: we will be able to set up a state-owned energy company that can deliver oil and renewable at better prices. We will spend on infrastructure projects that will put money into people’s pockets, and this will improve the tax base. The extra money that Scotland pays to subsidise London will be returned to support spending up here. Our level of defence spending will be less, down from 3.3 bn to 1.8 bn, and all of it will be spent in Scotland, unlike now when only £800 million is spent in Scotland. The £4 bn of exports that are counted as UK exports because they leave from ports down south will now be taxed as they leave Scotland, further adding to the tax base.
When you add it all up an independent Scotland is in a very healthy financial position, and there’s potential for even more growth to improve things further. The Scottish government would be able to fund schools to the level of a few years ago and still pay down debt, if we elect a government to do that.
I am not saying that on day one of independence, teachers will get a pay rise and smaller class sizes. Nonetheless, the direction of travel will be the opposite of the UK at present. At the moment, the UK is slowly collapsing under the weight, not so much of debt, but of lack of vision. It should be learning from Germany, not trying to cover up its problems by letting the City of London have its way with everything which, in truth, means bailing itself out and passing the bill onto us. (The teacher pension scheme was in surplus.)
Scotland is learning. We know we have to re-industrialise, move away from an economy based on personal indebtedness and invest in the future. Our models are Denmark, Switzerland, Norway and other successful countries. Scotland has an unbelievable amount of natural resources and human potential. The tidal technology being trialled in Orkney could makes us 100% renewable in the next decade alone. If we’re smart, we’ll vote in a way that will allow us to use the what we have for the benefit of us all.
Teachers for Yes 