UK Government policy drives down the standard of living in Scotland
Failing to maintain the headquarters of major companies in Scotland has a major impact on the Scottish economy. This is arguably one of the most significant factors that have reduced the overall standard of living in Scotland. ”The low proportion of private sector managers also seems to reflect the weakness of Scottish owned companies since the war. Given the concentration of headquarters in London, and the significance of overseas companies in manufacturing in Scotland, it is unsurprising that Scotland is well down the scale of [UK] regions” (McCrone, 1992).
The loss of headquarters functions has a negative impact on the Scottish economy in a number of ways. It reduces the requirement for support services with a resulting loss of jobs in the support services industries and an increase in unemployment. The loss of senior management, middle management, and specialist job opportunities reduces the income levels that are available to Scottish workers. This results in a general lowering of the amount of money available for consumer spending which has a knock-on effect on the wider economy. With less money to be spent there is less of a need for retail and leisure services. This results in fewer jobs being available in the leisure and retail industries. Fewer jobs in these industries results in even less money being available for consumer spending. This is a downward spiral that is exacerbated every time another tranche of headquarters jobs is lost. Another major impact that the loss of headquarters functions has on Scotland is that as the number of higher paid management, specialist, and skilled jobs reduces, the number of unskilled, and lower paid, jobs increases. “Scotland does have the highest proportion of unskilled workers as well as the lowest proportion of petit bourgeois groups … employers and managers in small establishments and … own account workers” (ibid).
To add insult to injury, a UK Government budget proposal for 2012 has the objective of linking public sector pay to the performance of regional and local economies. For Scotland, this is almost guaranteed to result in a reduction in public sector pay. This will result in even more Scots being sucked into the downward spiral towards lower paid jobs, and even less money being available to fuel the Scottish economy.
There is also a less obvious, but arguably more devastating, impact that the loss of higher paid jobs has on Scottish prosperity. People seeking higher paid executive and specialist jobs need to search further afield. “Job opportunities have been less, with the result that the greater propensity to migrate has produced significant net out migration and a declining share of UK population”, (Ashcroft, 2002). So not only do the economic policies that have been implemented in Scotland by UK Governments result in a reduced standard of living, they also contribute to the gradual reduction of the Scottish population. This does not just result in fewer people; it strips Scotland of some of the brightest and best people who could be the entrepreneurs of tomorrow. So rather than the people of Scotland benefiting from the businesses and jobs that these Scottish entrepreneurs create it is the people of Canada, New Zealand and the USA who reap the benefit. As Young (2002) sums up this sorry situation, “any economy that consistently, over time, leaks people has failed to provide its citizens with either an acceptable level of prosperity or all the economic opportunities and challenges they seek …Scots left their native land in large numbers not out of any sense of adventure or to seek their fortune, not because they found the society they left behind claustrophobically disapproving of their aspirations, but because the Scottish economy had consistently failed to produce enough jobs or pay decent enough wages to keep them all productively employed in the land of their birth”.