John Cooper on Industry in Scotland
03/06-1987
In the following hour, or hour and a half, 'll try to provide you with something of the economic and industrial structure of contemporary Scotland.
I'm not an economist, and I aim to provide you more with a selection of more prominent, basic industrial features and discussion points, rather than to provide you with a detailed inventory of economic data which in any case I would be quite unable to interpret satisfactorily.
Some of you have visited Scotland, others will no doubt do so. To savour its natural beauty is a privilege indulged in by many French visitors and the profits increasingly accruing from the expanding tourist industry warm the hearts of the Scots as much perhaps as their traditional beverages.
Most foreigners in this category, and one must include the English, approach Scotland already equipped with a stereotyped image of the people and the country. A stereotype which is a product of popular mythology, and tourist industry propaganda, and Hollywood perhaps.
Their view of Scotland tends to be one of purple heather, misty glens, romantic lochs, tartan kilts, and the prevailing howl of the bagpipes penetrating every corner of the haunted intersterces of ancient castles, filled with whisky consuming occupants.
Certainly we have heather, which is sometimes purple, and our glens are frequently misty.
Sometimes, very occasionally, people wear kilts and from time to time, one can hear the pipes, if one goes too close to the tourists. Whisky is consumed and there are many castles, which , for all I know, may be haunted.
However, we also have unemployment, micro-electronics, higher education, new towns, petro-chemicals, and the highest rates of heart disease and alcoolism in western Europe.
The stereotype image founded on the novels of Walter Scott, the poems of Burns, the Highland Regiments, which fought at Locato and other places, Victorian painting, rugby matches at Murray field, which the Scots usually win, the Scottish tourist office brochures and so on, needs redressing, and I hope we can go some way towards doing this today.
On arriving in Scotland, you will readily notice certain Scottish features of the society . An absence, for example, of English banks, the prevailing use of Scottish bank notes, some of which have no English equivalents. We use a pound note in Scotland for example, published by the banks and there is now no pound note in England.
The symbol of a lion rampant on Scottish stamps, and public notices in the name of the Secretary of State for Scotland. Such signs are not indicative simply of your presence in a region of Britain, but in your presence in a society with its own national identity and history, which is jealously preserved.
On the other hand, you will not have passed any customs barrier on your journey from England. The currency you acquired in England is equally accepted in Scotland, and the two countries are in complete customs and monetary union. Hence it follows that Scotland(s economic fortunes are inextricably linked with those of the United Kingdom, and that as a small part of the total, about 10% of the population of Britain lives in Scotland, Scotland has very little control over its own economic destiny. So although we can talk of the economy of Scotland, we are not dealing in any way with a national independant economy, but with a regional United Kingdom economy, even though Sctland in many ways has a very very strong national identity.
Here perhaps it's appropriate to outline something of the historic relationship between Scotland and the rest of the United Kingdom.
Much of the period up to the 17th century was one of intermitant wars between England and Scotland. The Scottish crown incidentally relying on its close connections with France as a support against their common enemy, the English.
Such was the influence of France that historians quote this as a contributary factor to the Scottish reformation which has been quite fundamental in shaping the dour Scottish personality.
Even now French people tend to experience a warm welcome in Scotland, because of what the Scots refer to as the "Auld alliance", the historic alliance between the Scots and French crowns.
Of course the Scots people say this to French people, we're glad you're here because of the "Auld alliance", and French people are totally ignorant as to what it means because it's not really a central feature of French history in the same way as it's a very central feature of Scottish history.
In 1603 the thrones of Wales and England and Scotland were united under James 1st of England, James the 6th of Scotland. Interesting here of course to note that Elisabeth 2nd of England, as Scottish nationalists will tell you, is actually Elisabeth 1st of Scotland.
The Scottish parliament however remained separate until 1707, and in 1707 there was an act of union which brought about a united parliament, which removed the anciant Scottish parliament and established government of Scotland from Westminster, in opposition to a substantial proportion of the Scots. For whatever reason, the act of union guaranteed the continued existence of 7 Scottish institutions : these being the Scottish Presbyterian church, the Scottish legal system, and the Scottish Universities. Each of these institutions has subsequently exerted a fundamental pressure on Scottish society, so that its religious, legal and educational systems remain quite different from those in the rest of the United Kingdom.
For example, English laws have no validity in Scotland. Laws that are passed by the government of England have to be passed again by the government of Scotland, and the laws by no means always coincide. Hence the occasions in the past in which young people used to run away in order for example to get married in Scotland, because they could marry at an earlier age than they could elsewhere.
English lawyers cannot practice, the Scots experience quite a different education to that in England, and generally leave school earlier to undertake degree courses which are longer.
The queen is not head of the church of Scotland in the way that she is head of the church of England, and she has no power over it. Some of these points are interesting. I don't want to dwell upon them, you may then want to ask questions about them afterwards.
However you can see the influences of the continued preservation of distinct Scottish institutions, the law, the church and the universities in contemporary Scotland, and this has influenced to a very great extent the economic problems that exist in Scotland today and some of the economic advantages. To administer Scotland in its unique relationship to the rest of the UK a peculiarly Scottish administrative system has emerged. This is headed by the Secretary of State for Scotland who has a place in the cabinet at Westminster. He has control over five Scottish departments, the department of agriculture, most of Scotland is agricultural, industry is very concentrated in the whole of this area, and over that area is basically agriculture, so an agricultural ministry is important although we're not going to talk about agriculture today.
An education department, a health department, home department, which is particularly important in looking after the police and the large number of criminals that we have, and economic planning which is particularly important with regards to industry.
The Scottish office as the whole of this administrative structure is named, is based at St Andrews House Edinburgh, and contains about 7,5 thousands civil servants.
There's no separate elected assembly for Scotland, although all indications are that there will be such an assembly in the fairly near future. Only the conservative party is opposed to a degree of home rule for Scotland, so that both the labour party and the alliance party are in favour of devolved rule in Scotland with a Scottish assembly, and the Scottish nationalist party, which is very small, is of course for a completely independent Scotland.
It is clear however with what has been said with regards to administration, that Scotland is again, not an independent economic unit.
There is no real control, within or on behalf of Scotland, of taxation, of the money supply, or of the major instruments of economic management.
It's quite interesting over the last 2 or 3 years, in Scotland one has a very strong socialist presence. Most Scottish MPs are socialists. You may have noticed that the government that we have is very conservative, is very right wing. The conservative government has persistently pursued a policy of cutting back on public expenditure in Scotland, and on lowering taxation. The Scottish cities and regions can levy a tax which is equivalent to your municipal taxes on property, and as the government has cut back on expenditure, certain cities through the various regions of Scotland have increased the one tax that they have control of in order to maintain a level of public expenditure, but that is the only tax that can be levied independently in Scotland, independently of White Hall, and the government is about to take away the right for the Scots to levy that tax.
The existence of a Scottish banking system might be taken to imply that there could be an independent monetary policy, but this is not so. Nobody exercises for Scotland the central banking role of the bank of England.
The Scottish banks operate more or less with the same relationship to the bank of England as the English clearing banks. The Royal Bank of Scotland has basically the same role in the economy as perhaps Barklay’s bank or Westminster bank or one of the other English banks you may have seen.
The note issue, the actual bank notes which makes the Scottish banks appear different to the tourist gives them very little freedom, as they have to have a one for one English coin or note backed for every Scottish note that they issue.
Even if Scotland were, as the Scottish Nationalist Party wishes, to have its own independent government, it would be unlikely in the foreseeable future to be able to operate a truly independent economic policy, so deeply is its industry and finance integrated with that of the rest of the United Kingdom, on which it is dependent for most of its trade.
If you talk about Scottish trade in terms of the sale and purchase of goods, by firm based in Scotland, you find that the vast majority of that trade, other than oil, is with firms in England. It does appear that to have a viable Scottish monetary independence, requires enormous changes in the way that all business is conducted in Scotland. If Scotland had never been joined to England, and here I quote “one could well conceive Scotsmen accepting wage settlements fixed in their own currency, but this is less likely if Scotland, after more than 200 years of union with England, were turned into a separate country”. A very small open economy is not really a feasible idea, since it would be of no significance in having its own exchange rate. Its own currency would have no liquidity value, and the population would choose to strike wage bargains in a foreign currency, the English pound, rather than in some sort of Scottish currency. Not everyone would agree with these statements, particularly Scottish nationalists, but certainly political independence would not come to Scotland very easily and would not bring about a genuine economic independence.
Let us now consider a little of the industrial background of the country, without which the contemporary form and particular weaknesses of the Scottish economy cannot be explained.
The move from a predominantly agricultural to a predominantly manufacturing economy took place at roughly the same time as it took place in England, that is to say, it took place rather earlier than it did in France, and it took place rather more quickly. As in England, agricultural advances and changes in communications were followed rapidly in the XIXth century by the development of textiles, coal, iron and steel industry. By 1851, 43% of Scotland’s workforce was already employed in manufacturing, mostly at that time, in textiles, which is still a very important industry. In terms of output, perhaps the most reliable measure of industrial expansion is pig iron.
Pig iron is the iron that immediately comes out of the smelters., the castings that you find as the iron flows out and solidifies, these castings were called pigs, they supposedly looked like pigs. So the iron is called pig iron.
Now the production of pig iron rose from 22 000 tons in 1806 to 196 000 tons in 1839, and reached a peak of
1 358 000 tons a year in the first decade of this century.
Question : You said that textiles are very important in Scotland. Has the textile industry suffered in the same way as it has in France , for example around St Etienne ?
I can’t make a precise comparison but I don’t think it has. The textiles that Scotland produces are fairly specialized.
There’s never been in Scotland the sort of mass production textile industry such as you have in for example Liverpool where there’s been mass manufacturing of cotton material, or such as you have in the north of England where there’s been mass manufacturing of standard material. In Scotland it tends to be a very specialized production of high quality woollen material and although there has been a decline in the industry, it has surprisingly maintained a very important presence and there are really three parts of the textile industry, one is in the Borders, there are whole production of high quality woollen material and although there has been a decline in the industry, it has surprisingly maintained a very important presence and there are really three parts of the textile industry, one is in the Borders, there are whole series of plants, right across the borders, where you get the production of Border cloth, those towns still flourish in the production of that cloth, which is mostly used in clothing.
There’s then the production, domestic production of Harris tweed, which everybody knows about. You can buy it in shops here. But that takes place on a very small scale, in people’s houses, in the islands out there, and it involves only at the most 3 or 4000 people. It’s a very small industry. And the other centre of production must be up here in Dundee, but there has been a decline in the industry. The world jute industry was centered on Dundee, and that industry has collapsed because jute processing largely takes place in the country of origin of the fiber.
But no, there hasn’t been the same collapse as there has been here.
Coal output shows a similar pattern, rising from 7,4 million tons in 1854, to an all time peak of 41,3 million tons in 1910. Population in Scotland rose a little faster than for the rest of the British isles. There was about a million and a half Scots in 1801, in 1901, there were about 4,5 million of Scots. Until 1961, Scotland remained between 9,8 and 10,8 of the United Kingdom population, but since then it’s tended to decline. The natural increase of the population in Scotland has always been balanced by very very considerable emigration. And that continues by and large. And that accounts for this fairly slow growth in population relative to the rest of the United Kingdom.
Geography very much determined the pattern of population distribution during industrialization, and this has remained largely unchanged to the present day, partly because of the geological distribution of iron ore and coal, and partly because of the limitations of topography. Outside the central Lowland areas, industrialization, centered on the central valley between the Forth and Clyde estuaries, particularly in the west, is evident to the present day.
Most of the population in Scotland lives there, in that little narrow belt, between those two estuaries. In the west, you have the Strathclyde region, which is based upon Glasgow, the biggest city. In the east, the population is based upon Edinburgh, the capital city.
Outside that central belt, the only centres of population are really here, around Dundee, and up the east coast, around Aberdeen, which is the centre of the oil industry. The rest of Scotland is a desert. Nobody lives there. You can go out and walk in Scotland, without seeing anybody for a week. It’s a desert, most of the country. Very pleasant desert.
In 1979, the last year for which I have figures, over 47% of the population lived in Strathclyde. So almost half of the Scottish population lived in this area here. A further 15% lived around Edinburgh, 9% in Grampian (Aberdeen).
But the population concentrates in a very very small area. If you look for example at Highland region, which is all that area, it has 3,7% of the Scottish population and it must be about a third of the country.
It is perhaps not only surprising that this pattern established in the early XIXth century persists today, but that the percentage of the workforce employed in manufacturing in 1851, which was 43%, remained remarkably stable until 1971. So from the middle of the XIXth century, to 1971, the amount of the population involved in traditional manufacturing remained about the same. I would guess that it was perhaps the same here.