There’s a vast value to devolution, you know?
As we keep insisting the beating heart of the very idea of a market economic system is that we get to try many - even all - things and then do more of what works and less of what doesn’t. In this manner we are able, over time, to zero in on what makes us better off.
England and Scotland are not the same place - a stunning revelation, we know - but they are pretty similar. Similar enough that it’s possible to think that something that works in the one will work in the other, something that doesn’t, won’t. Thus there’s a value to devolution in that it guides us to what we should be doing more of. Or less, obviously:
Public sector workers in Scotland have been awarded bigger pay rises than anywhere else in the UK, driving up Holyrood’s wage bill after the SNP Government hired thousands of new staff.
Pay for state employees in Scotland has risen by 5pc above inflation since 2019, according to the Institute for Fiscal Studies (IFS), compared to an increase of 0pc for public sector workers across the rest of the UK.
Combined with the ballooning public sector headcount, the think tank said that “higher pay poses an increasing financial challenge for the Scottish Government”.
Analysis by the IFS found that public sector pay rates across a large number of roles were higher in Scotland than in the rest of the UK.
For example, a newly qualified teacher in Scotland can expect to earn £33,594 per year, which is almost £2,000 more than the £31,650 on offer in most of England.
A similar pay gap exists for newly qualified nurses, who can earn £31,892 in Scotland as opposed to £29,970 in most of England.
Higher rates of pay have left the Scottish Government nursing a public sector bill of £27bn a year after its employee headcount grew by 56,000 since 2017, equivalent to an 11pc increase.
The state now employs 22pc of Scotland’s total workforce – 590,000 people – compared to the 17pc on the public payroll in England.
OK. So, Scotland enjoys the firm thwack of more government than England. Is the outcome of that a better lived experience in Scotland than that in England?
Yes, yes, different people have different ideas about what is a better lived experience. But those who are arguing in favour of a larger - thwackier - state have their example there. It’s possible to draw conclusions from that experience.
Now, we have our doubts that all of that larger state is wholly effective. We’re particularly taken by the ability of the Scottish Government to bankrupt its own state owned shipbuilding yard by making ferries for its own state owned ferry company. But possibly that’s just an aberration from the general experience?
This is also more than just snark. Scottish Water is and remained a state owned company while the English companies became for profit and capitalist. It is not - to be polite about it - obvious that the performance of Scottish Water is better for all the shrieking we hear about dividends and the like. As above the Scottish NHS pays its nurses more. It also uses markets rather less than NHS England - it is again not obvious that the performance of the Scottish plan is better than that of the English.
We actually have that controlled experiment thing that is so difficult in economics. Devolution has led to one place - as opposed to the other - with more bureaucrats and better paid bureaucrats. Does that double whammy thwack of more governance improve life in that place?
We tend to doubt it but perhaps that’s just us. But having done the experiment it really is true that those insisting we, south of the border, should follow that path should present their evidence. No, not “but this speculative report says” nor “in theory that” nor even “‘S’right, see?”. We’ve done the experiment, what works then? With evidence, please.
Tim Worstall