Scottish independence: what would Alan Peacock have said?

The leading Scottish economist stood up to Thatcher over advertising on the BBC, but died a month before the referendum. What would he have thought?

Christian Herzog Simon Worthington
16 October 2014

Alan Peacock

In an historic vote, Scotland has decided against independence. Clearly, the decision for Yes or No was based on weighting up expected benefits (e.g. more responsibility for legislation) and possible negative implications (e.g. losing the British pound). Speaking from a German perspective, most people here seem to be relieved that the future of the European Union is not put in question. Still, it is by no means our concern to assess the decision of the people of Scotland. Instead, we take the vote as a way of asking what Alan Peacock would have said, or, rather, to review what he did say about Scottish devolution and independence.

Sir Alan, eminent economist, died on 2 August 2014 in Edinburgh, aged 92. He was most famous for chairing the Committee on Financing the BBC, dubbed the Peacock Committee, which delivered its report in July 1986. In the report, Peacock rejected Thatcher’s desire to fund the BBC by advertising, proposing instead a long-term strategy at whose end – in alignment with the agenda of the Institute of Economic Affairs, then one of the leading British Think Tanks – the BBC would be subscription funded, albeit a public service provision would continue.

Had the Thatcher administration done their homework, when they appointed Peacock as chairman, they would have known in advance that he was markedly independent-minded. A clear hint can be found in the early 1970s.

From 1971 to 1973 Peacock was a member of the Royal Commission on the Constitution, set up by Harold Wilson’s Labour government in 1969. The Royal Commission preceded the first Scottish devolution referendum in 1979, which has been much discussed during this year’s campaign. It ran for five years, costing the taxpayer an estimated £483,993. The Kilbrandon (initially Crowther) Commission’s task was to examine the functions of the central legislature and government in relation to the several countries, nations and regions of the UK, considering standards of good governance. Eventually, the Majority Report of the Commission argued in favour of devolved, directly-elected Scottish and Welsh assemblies, rejecting the notion of Scotland and Wales as separate nations or the application of federalism to the UK.

Peacock did not sign the report, disagreeing with the interpretation of the terms of reference (which he found too narrow) and the conclusion. Together with another member of the Commission, he authored a detailed Memorandum of Dissent which became a largely self-contained alternative report.

Peacock argued that partial devolution for Scotland and Wales is an essentially unstable position because the English regions would become discontent with their inequality of political rights. However, what Peacock took as a more compelling issue than political devolution or independence was economic freedom. As he wrote in his book The Political Economy of Economic Freedom (2007, p. 268):

With political devolution, the individual citizen is still faced with a high opportunity cost in trying to influence legislators to provide services efficiently so that they conform to his perception of what he should be obliged to pay for them. I would be the first to agree [...] that the policy of assigning to individuals more responsibility for their own welfare presents formidable difficulties of implementation. However, having embarked on this policy, which has had widespread if reluctant acceptance, a concentration of effort on overcoming these difficulties, notably in the field of the regulation of industry and the professions, appears to me to have much higher priority than embarking on a constitutional change which has been made to look much easier to implement than in fact would be the case. 

The result of the referendum means we cannot now find out if constitutional change would indeed have been so difficult to implement, though expectation that it would may have been a significant factor in voting behaviour. During his lifetime Sir Alan was interested in public choice and the expansion of individual freedom. Politically, the vote alone met these objectives.

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