Scottish Referendums

Devolution and the Economy

The economic arguments for devolution have changed significantly since the last referendums in 1979. Then, Scotland was perceived to be lagging behind the rest of the UK in terms of economic development, with critics citing mismanagement from Westminster as a key factor. Since then, the evidence suggests Scotland and Wales have made up lost ground, partly in terms of large regional investment from both central government and the European Union, but also because of substantial structural changes away from the old declining industries of coal and steel and towards a service sector economy.

Growth: Gross Domestic Product in 1995 in Scotland was 8.4% of that for the whole of the United Kingdom. For Wales, the figure was 4%.

GDP per Head: Usually a more meaningful measure for comparative purposes. In Scotland, GDP per head was 97.4% of the total for the UK economy, and has climbed from below 90% towards the end of the seventies. Wales has been more stable at 84% since 1992.

Regional Assistance: Spending on regional preferential assistance from central government has greatly favoured Wales and Scotland. In 1995, regional aid per head in Wales was 15 times the figure for England and for Scotland it was 11 times. Assistance has also come from the EU, mainly to help those areas suffering from industrial decline. Allocation of EU structural funds has also favoured the regions, but to a lesser degree.

Unemployment: In May 1997, both Scotland and Wales reported unemployment rates of 6.6%; compared with the UK average of 5.8%. Wales has been above the national average for the past four years, whereas Scotland has been lower (1994) or broadly in line (1994 and 1995).

Industry: Over a quarter of Welsh output comes from manufacturing. Output from mining and quarrying is broadly in line with the national average at just under 1% of GDP. In Scotland, output from agriculture, hunting, forestry and fishing is above the national average at 3.25%, with manufacturing accounting for 20% of total output in 1995.