Our Friends in the North Referendum Documentaries

Look at the North Sea.

Does it divide us from our Nordic neighbours, or connect us to them?

The Norsemen came to Scotland a thousand years ago.

They settled here, drawing much of Scotland into their world,

into a single maritime community of peoples

gathered around the sea they shared.

Does anything survive of that common heritage?

Scotland has a choice to make next September.

Should we look across the sea to our Nordic neighbours,

to Norway and Sweden and beyond, for guidance or inspiration?

For they have evolved a way of living

and of governing that is the envy of much of Europe.

That constellation of small, independent nation states

is just across the North Sea here.

They're often held up as an example

of what an independent Scotland might become.

Benign, non-belligerent, compassionate,

socially harmonious and prosperous.

But how much do we understand those countries?

What can we really learn from our friends in the north?

I was born, raised and educated in Scotland, but like many Scots,

I left as a young man to make my career elsewhere.

For the past 25 years, I've worked as a foreign correspondent.

I've reported from something like 80 countries all over the world.

Here, ethnic cleansing is almost complete.

More than 10,000 of the 13,000 Muslims

who used to live here have gone.

It is a war we can see and hear only from a distance.

The refugee camp is Rwanda, the volcano is in Zaire.

Between them, a conflict is raging.

The Zairian government troops are on the run

in the face of an armed Tutsi uprising.

Boris Yeltsin leaves the stage much as he entered it,

with a dramatic gesture

that leaves his political opponents in bewildered disarray.

Tonight, he becomes the first leader of this ancient nation

to walk voluntarily out of office and into retirement.

This is one of the most sensitive parts of the city.

The American embassy is just a little way down the road

and there's a big American military base there,

but the target on this occasion was a moving target,

a convoy of Italian vehicles coming from the airport into the city.

You can see from here that one vehicle in particular

has taken the full force of the blast.

I've watched nations torn apart,

but I've also seen others born, or reborn,

and take their place in a changing world.

I've watched old certainties collapse,

and once secure identities alter and shift.

Many in the pro-independence camp point to the so-called Nordic model

as an alternative vision for Scotland.

I'm intrigued by that

but, as a foreign correspondent, I'm bound to be sceptical too.

We'll point to the initiatives taken

by many of our neighbours and friends in Scandinavia

who've managed to build

both more prosperous and more equal societies.

There are a range of issues with the Scandinavian countries

that we can learn from

and, indeed, a range of links that we have in cultural terms.

What's happening here?

What is it about the Nordic nations

that has seized so many of our politicians?

I think, in the Scottish dialogue,

the Nordic model is not one that would be understood

in any of the Scandinavian countries.

I think it's an ideal.

I think it's all about an understanding

of where Scotland might be

in terms of a very progressive left-of-centre polity

in which they've dealt with all their social problems

and, essentially, a very caring society.

I think we're failing to understand that the Nordic model

isn't really one model - it's a series of models.

Each of the different countries is different

and, actually, they still have some significant problems.

They've got problems with regard to immigration,

with regard to unemployment, with regard to the welfare state,

they're operating in a global economy.

All the difficulties and challenges

that would face Scotland or anywhere else

are being faced there, and difficult choices are having to be made.

The Nordic model appeals, above all,

to those on the pro-independence left,

who admire the apparent social equality

of the Scandinavian countries.

The Nordic model is just a basic change in philosophy

of how you organise society and the economy,

and particularly the economy.

It's always worked on the basis

that you should be seeking to produce a high-wage economy

based on highly productive enterprise,

and that you use the resource from that,

you use the money that that generates,

largely through tax, to create extremely strong public services.

And so you have this chain - good economy, good jobs,

good wages, good taxes, good public services and high social cohesion.

It's really quite a simple model,

and the fact that we haven't learned more from it

seems to me to have been a terrible mistake.

Why haven't learned from it?

Britain is a state which I would call disorientated.

"Orientate" means to look to the east,

but we never look east and we never look north

for, partly, linguistic reasons

but, largely, for political ideological reasons,

we take all our lessons from our west.

We look to Washington and the US for lessons on everything that we do

and it's a very, very strange decision to have made

to look in that direction,

because if we take all the things

that people say they want from their nation,

which tends to be security, economic security, social security,

good public services,

the best examples of those don't come from our west.

And that, they argue, is consistent with Scotland's own core values -

a small, left-leaning country on the periphery of Europe,

with a strong commitment to welfare provision and egalitarianism.

But is it?

Does Scotland really have more in common with Scandinavia

than it does with the rest of Britain?

Helsinki. Capital of Finland.

It was once in a union with Sweden, and then with Imperial Russia.

As an independent state, it's doing well now.

But it's passed through many stormy waters

on its voyage to the success it enjoys today.

It's a small country, population five million,

on the northern edge of Europe.

Sound familiar? Well, this one flies its own flag.

It used to be the smaller partner

in a union with a much bigger neighbour.

It's been independent for less than 100 years,

and in that time, it's achieved levels of prosperity

that puts it at or near the top of most international league tables.

I've been here before,

and I've always been intrigued as to how they do it.

Finland got its independence in 1917.

Its story illustrates both the strengths and weaknesses

of small independent states.

During the Cold War, its economy was heavily dependent

on trade with the old Communist bloc.

Dangerously overdependent, in fact,

for when the Soviet Union collapsed in 1991,

Finland's economy collapsed with it.

We had a number of boom years in the late 1980s

and the prices of houses were going up like never before

and there was a feeling that we're more or less invincible.

And we called it the "casino years".

And then, at the same time, we faced the collapse of the Soviet Union

and the world economy also in relative turmoil,

and this resulted in a large banking crisis

and a very sudden, more or less,

collapse of the whole Finnish economy 20 years ago.

How did Finland start getting its way out of this crisis?

Well, of course, it was a very slow and painful road

and it started in the...

And one issue that did have a big significance,

and which is interesting from today's perspective,

is the fact that we had also anchored the Finnish currency,

the Finnish markka, and to have sort of a fixed rate,

and after fighting for quite some time to keep it at a fixed rate,

we had to give it up and let it float,

and it devalued considerably.

And then, slowly, we made the necessary decisions on the banks,

we let a couple of major ones go bust.

The ones that were left standing merged.

So, the whole banking sector was completely renovated.

Many small nations have this weakness.

They rely on relatively few key economic sectors.

The failure of just one of these can have an enormous economic impact.

So, Finland's government had to slash public spending.

The Finns did not riot. They did not strike.

They did not demand

that their government spend money it didn't have.

And things got much, much worse before they got better.

And key to their recovery was an asset

that an independent Scotland would not have -

an independent currency that could be devalued

to boost the country's competitiveness

in the global economy.

PIANO PLAYS

CHILDREN SING

This generation, though, inherits the more prosperous Finland

that emerged from those lean and painful years two decades ago.

Pasi Sahlberg is the brains behind Finland's status

as an educational world-beater.

His country sits at the top of the international league table.

Finns are the best educated people in the world.

How has it pulled that off?

We increased, significantly, the autonomy of the school,

schools decentralised the education management,

so that most important decisions,

for example regarding curriculum and student assessment

and many other things,

were done by teachers in the local schools.

-So, schools are highly autonomous?

-You can say that's so, yes.

And what happens if a school starts to fail?

What do you do with failing schools?

That's something that the government cannot do very much,

because government has only a light hand over the management.

But it's kind of a responsibility

of each and every municipality and educational leader there

to deal with those things.

Probably the first thing that they would do

is to go and have a serious conversation

with the school principal and see where the issue is.

I think Finland is more likely

to first try to provide help and assistance,

try to identify the issue,

than punish and close down the school,

as it is in many other places nowadays.

This is a junior school in the city of Espoo

and it's radically different from our own schools.

The children start school at the age of seven, not five.

They don't sit exams, or competitive tests, until they're 16.

-The teachers and children all eat together?

-Yeah.

-That's good.

-It's an educational thing...

-Right.

..that we teach them to eat with good habits.

They call their teachers by their first names

and there's a relaxed, informal atmosphere.

So, what do we have here?

-Spinach...

-Spinach.

-..and potatoes and salad.

In this school, at least, social cohesion, harmony

and equality of opportunity are the goals.

Tell me about the philosophy in the classroom.

What are the priorities in the classroom?

The first priority

is that you must grow up as a harmonised person

who can use his or her talents,

and the main concept is personality,

and so you are yourself,

but you must also take care of other people.

And then the results of learning and mathematics,

they are in the second... second grade.

So, the most important priority is not academic at all, it's social.

Yeah, and personal grow up, yeah.

And you put a lot of stress on mixed ability classes,

-not separating the brighter kids from the less bright ones.

-Yeah.

And why is that?

Because we believe that we are a stronger nation

if we are, together, talented and not so talented.

So, this gives also, for talented children,

a possibility to help others.

And do the parents of the brighter kids never come to you and say,

"I think these mixed ability groups

"are holding my very talented child back"?

No. No. They under...

I think this is quite shared opinion in Finland

that we don't separate children.

SHE SPEAKS IN HER OWN LANGUAGE

Yet this country, where kids spend less time in the classroom

and less time doing homework,

and where there's almost no private sector schooling,

outperforms every other country in Europe in educational attainment.

How?

We take it easy. We don't have tests.

We don't have that kind of pressure,

which is usual...which is very common in other countries.

How important is this clear spirit of egalitarianism in the classroom?

Yeah, it's a philosophical solution

that every child is valuable

and no child is left behind.

But the nature of children is that some will be very clever

and some will be much less clever.

-That's true, isn't it?

-Yeah, that's true. But who cares?

THEY SING IN THEIR OWN LANGUAGE

The Finns are getting something right in their schools.

Pasi Sahlberg's expertise is in demand all over the world.

Could Scotland adopt the Finnish model and achieve its success rates?

I think that this model as it is, as you see it now, here,

is not exportable.

If you export the Finnish school model,

you have to also export big part of the culture

and the values and traditions

and things that are happening around the school.

Obviously, Finnish school can serve as inspiration.

There are many aspects there in our school system

that can help many others to, you know,

rethink and ask good questions about, regarding their own education system.

So, in education, Finland punches above its weight internationally.

Its radical approach demonstrates the flexibility,

the adaptability of small nations,

an ability to tailor things to their own distinct needs and character,

and Scotland already has autonomy in education.

But the Finns, after years of pain,

have achieved something similar with their economy.

Finland is geographically one of the biggest countries in Europe,

but by population, it's one of the smallest.

Most of the country is a lot like this - covered in forest,

all the way from here to the Arctic Circle and beyond.

This, in fact, was the basis of their first real industry -

wood pulp and paper manufacture.

And that was one of the main planks of their economy

until really quite recently.

Finland has traditionally been dependent on

a small and limited range of industries.

But then, at the height of Finland's economic meltdown,

one of those wood-pulp companies took a spectacularly

successful leap of faith in the future.

Nokia, for more than 100 years, had made wood pulp,

rubber boots and electrical cable,

hardly the stuff of the digital future and the knowledge economy.

An early, and risky, investment in communications technology

put it ahead of the global pack.

At the height of its success,

Nokia was supplying 40% of the global market.

We got new leadership at Nokia,

and also, we, in a way, evaluated what...

..of all those businesses that we were involved,

what would be the most lucrative?

And we came to the conclusion that that would be mobile communications.

And then, the decision was made to divest all the other businesses,

and to concentrate on mobile communications,

and then we... The rest is history.

Did the government here build an entrepreneurial society?

A more business friendly Finland?

Well, Finland was in those days in a very, very severe crisis.

Our GDP fell by 9%,

and the government had to do

quite drastic measures in order to improve the conditions.

And one of the things was of course that there were

severe cuts in the public expenditure but, at the same time,

the government makes significant investments

in research and innovation.

At the time when the public expenditures were cut severely,

the government decided to increase public expenditure for R & D

by 25%, which is a huge increase, within three years.

Understand the nature of that.

As Finland's government was cutting public services,

it was spending more money to help private businesses.

But it worked.

Nokia came to dominate Finland's economy,

and around it grew a network of smaller companies,

suppliers and software start-ups,

feeding this giant of global telecommunications.

But the phone sector is a tough one.

The sale of Nokia to Microsoft this summer

marked the end of the company's reign

as the king of Finnish business.

In the age of globalised markets,

Finland's independence, its sovereignty,

could not save the company that had once saved Finland itself.

Lay-offs, globally, have been more than 10,000 people,

and that has affected Finland in a significant way.

But, at the same time, it's been extremely encouraging to see

what has come as a result of those talents that have left Nokia.

Now there are the game companies,

there are digital service companies.

Many other new initiatives have been launched

as a result of Nokia's lay-offs and difficulties.

This is one example of those new companies

that came along in Nokia's wake.

This is Rovio.

What have we here, Saara?

We have Angry Birds Space, which we launched last year,

based on the idea that the birds and the piggies go to space.

I'm a complete stranger to Angry Birds.

I'm going to reveal myself now as Mr Analogue.

Explain what I am trying to do here.

Why am I attacking these poor pigs?

The pigs have stolen the birds' eggs and, of course, as parents,

-they want to get them back.

-Right.

-So I have to make this bird hit this one?

-Exactly.

-Shall I try.

-Yeah.

Bang. Got one.

Uh-huh. That was quite easy.

Tell me the story of Angry Birds. How did it start?

So Angry Birds was first launched in 2009

and back then, we were a very, very small mobile game studio

and we spent a lot of time figuring out

what our next game concept would be.

And we saw the appeal of the Angry Birds' characters.

-Shall we go up a level?

-Yeah.

-15?

-Yeah.

What is this bird?

He is the very, very angry, explosive Bomb Bird.

I see. That's the Bomb Bird. So he taps...

It's a bit violent, isn't it?

Not really.

And then, if you tap the screen again... There you go.

-God, it is violent. Oh, I got two!

-Very good.

The whole idea is that the gameplay is very easy to pick up, for anybody,

but then, of course, there's different levels to it.

And how many had you tried before?

-Angry Birds didn't come out of nothing, did it?

-No.

-It was the end of a long process.

-Yeah.

So Rovio was actually established in 2003

and about 50 games later, Angry Birds was created.

That's a fantastic result. And you even have one left.

To date, there have been 1.7 billion downloads of Angry Birds.

If you've ever downloaded the app,

you've helped fund Finland's dynamic private sector success.

Oh, I missed. Defeated by a cartoon pig.

Are you proud of what Finland's achieved,

or do you simply take it for granted?

Finns are very humble and we are not very sort of...

We don't like to brag with our achievements

but I think everybody in Finland is very proud

of what we've done with Nokia and with Rovio,

with a lot of the different technology companies we have.

Do you think of yourself

as a small country that punches above its weight?

I don't think all the Finnish people think about it that way.

I think we really sort of are focused on what we do

and we want to, you know, make the best out of it.

Finland, partly because it was ready to make tough choices

and endure real pain, recovered from economic disaster

and came to dominate one of the key industries of our time.

Despite levying high taxes

and spending heavily on its public services,

its economy was this year ranked number one in Europe

in the Global Dynamism Index.

But it's only one version of the Nordic model.

I'm back in London, where I live and work.

Why do the Nordic countries not enjoy

more widespread recognition here?

For it's not only the political left that likes the Nordic model.

Some on the right also take inspiration from it.

It's become strange that people on the right in Britain

used to look to America for ideas,

but now we look to Sweden.

It's one of the few countries in the world

that is cutting taxes and getting growth as a result,

everything from pensions policy to the way you run public services.

The Swedes are at the forefront of liberalisation,

and the Americans haven't really come up with many good ideas

on the right for quite some time.

And it goes to show that there need not be any tension

between the free-market ideas and progressive ends.

They've managed to marry the two in a way which is really appealing

to those of us in Britain

who are arguing for the same kind of modernisation here.

And in the context of Scotland's constitutional debate,

do you think a more strongly devolved Scotland

or even an independent Scotland

could look to Sweden as some kind of model?

Very much so. Every time I'm in Sweden, I look around thinking,

"This is just like the Highlands."

It's on the same latitude as Inverness.

We've got the same landscapes, the same raw materials,

so why can't things be as good in Scotland as they are in Sweden?

There is no reason at all.

The only problem is bad ideas in Scotland

that can be supplanted by good ones,

and we can be just as progressive, I think, as the Swedes are now.

Sweden is the big beast of the Nordic countries.

With more than nine million people,

it's the size of Norway and Finland put together.

By every measure, it is one of the most stable, prosperous,

best-governed and socially egalitarian countries in the world.

But it's changing,

especially in how its famous public services are delivered.

This is St Goran's Hospital, the nation's biggest.

It's part of the public health service

but since 2000, it's been owned and run by a private company.

Britta Wallgren is a former anaesthesiologist,

who's now chief executive of the hospital.

We are publicly financed,

and we have a contract with the county,

so they order care.

It's the same funding as for all the hospitals in Stockholm.

We have a contract to how much care we have to deliver,

we also have quality goals that we have to reach,

otherwise we lose some of the reimbursement.

We know that if we improve the quality,

if we increase the value-adding time for the patients,

so they can get paid for every diagnosis.

So if you enter the hospital with a hip fracture,

if we treat you very efficiently and with rehab and everything

so you can leave the hospital two days earlier,

we get the same reimbursement, but the cost is two days shorter.

10% of Sweden's public health service

is provided by private companies.

Swedes also pay a fee to visit their GP.

Would any political party dare propose this in Scotland?

Wouldn't it be denounced as privatisation of the NHS?

If profit is the issue,

then you to tend to forget to discuss

how the care is delivered,

because just by being publicly owned,

that's not something that will ensure that the quality is high.

Do you expect the role of private companies in Swedish

health care provision to increase in the years ahead?

We have a big discussion in Sweden right now

and we have elections next year, and it's not uncontroversial.

I think that we should focus on what I said earlier -

delivery of care on the operations, what the quality is -

and less focus on if we are state owned or privately owned.

But I think there's a market for different providers.

I think that it's good, the challenge is good in the system.

-It's good to have a mix?

-Yeah.

This is what Fraser Nelson meant

when he said Holyrood and Westminster should take note of

the way Sweden is changing,

for bringing private enterprise into the public hospitals

is not how we traditionally perceive the Nordic model.

And neither's this.

This is a job centre in central Stockholm.

Sweden's unemployment rate is 8%, higher than ours.

Workers buy insurance which covers them

for a year's unemployment benefit.

After that, they go on to much-reduced state benefits

and have to undergo rigorous testing and training.

It is a myth that Sweden's unemployment benefit is generous.

So right now, here we are,

this is the most glorious view of Stockholm you can imagine.

It's literally 360 degrees.

You see here some of the usual sights, of course.

This is the palace down there, this is the amusement park here,

but the most significant building,

the tallest building that you can see here in Stockholm,

you find over there.

That is the building that houses the Swedish tax authority.

That's the most prominent structure in Stockholm.

That is the biggest, most prominent building in the whole city?

-That's right. As it well should be.

-That's appropriate for Sweden?

Yeah. The castle, you can barely notice by comparison.

Many Swedes pay close to two-thirds of their income to the taxman.

The academic Lars Tragardh is an expert on Swedish society.

Sweden is, in many ways, a very harsh society,

precisely because we emphasise the individual

and individual responsibility, right?

There's not a lot of compassion, right, for loafers,

for people who do not work, right?

It's not a kind society in that sense, right?

So, unemployment is a tragedy, OK?

It's something that is viewed as a negative

in so many different ways, right?

It's stigmatising for the unemployed.

It places you outside of so many of the support systems,

right, so that you do not, for example,

qualify the same way for your future pensions, right?

You have some money but much less, right?

This is not a generous welfare state in that sense, right?

We have very few welfare queens.

It's an unhappy situation to be in.

'This is not the Sweden that many on the political left imagine

'and take inspiration from.'

What's so curious about the Swedes today

is that when we look at data, like the World Values Survey,

we see that the Nordics, and particularly the Swedes,

score in a very extreme way as individualists, in that sense,

on the emphasis on the individual as the primary unit in society

as opposed to, let's say,

the family or the clan, you know, or the religious community, right,

or any kind of communities that are between individual and the state.

And the linkage between individual and state,

what I refer to as "statist individualism",

really is an outstanding feature of the Swedish social contract

but it's rooted, right,

in values that have a long, long pedigree, right, a long history.

This "statist individualism" may seem paradoxical,

but it's part of the character of Sweden, as a country of

big government, and high levels of social equality - but also strongly

entrenched individual liberties - including private property rights.

Sweden's relative classlessness doesn't come out of nowhere.

It wasn't created in a few decades

by some social democratic acts of parliament.

It's built on a centuries-old tradition of land ownership

that's radically different to anything Scotland has ever known.

In the 18th century,

the peasants owned 50% of the land of the kingdom.

They had title deed to the land they worked.

It put them in a quite different power relationship with the state.

People talk about Swedes as socialists.

We never socialised our banks,

we didn't nationalise our industries to any great extent.

You know, the only times that Social Democrats tried classic

socialist policies, they were defeated in the polls.

These are countries of land-owning peasants.

Swedes, Norwegians, Danes, Finns - they like to own stuff!

They like their property, right? They are not communists, you know?

-So...

-They're not even collectivists, are they, really?

No, no, no.

And this is what the Social Democrats discovered -

Swedes like to have their stuff and own their own things,

but they do like also to be liberated from ties

of dependency, right, in traditional social institutions.

In Sweden, social welfare spending

is designed to support people in work,

not reward them for being out of it.

Anna Nyborg is a senior executive at Ericsson,

the Swedish telecommunications company.

She also has two children below school age.

You had a baby and you took time off for maternity.

In Sweden, does that disrupt a career?

Not... I would say you put your career, obviously, a little bit on hold -

you can't expect a promotion while you're actually away -

but I think a lot of women like myself take the opportunity

while you're away to think a little bit about the next step,

do some networking and maybe change your jobs when you come back.

That's what I did.

As a working mother,

is it advantageous to be Swedish, to live in this country,

as a young working mother?

Yes. I definitely think so.

The combination of subsidised health care

and paid parental leave means that, as a woman, you don't need to

choose between having children and a career.

In many other countries that's a, you know,

an option not available to women, only to men.

So from that perspective,

I'm very grateful that I am a mother in Sweden.

You say you get paid parental leave. What do you get?

The government pays up until a salary cap,

80% of your salary for I think it's 13 months,

and then you get another five months of around 200 Crowns a day.

And these days are split between the parents, so two months

you cannot give to the other parent, but other than that you can

sort of distribute it any way you want between the two parents.

So it's very flexible.

Yeah, it is.

And now that you're back at work, who looks after your children

during the day? Do you get subsidised child support?

Yeah.

From the time when the child is 12 months,

the council is obliged by law to supply childcare.

And the fees are really, really low, so about 2,000 crowns pay for

two children now in preschool, and the rest is funded by council tax.

2,000 crowns per month.

So that's about £200 a month.

-Yeah, yeah, yeah.

-For two children.

And that's including nappies and food and everything.

How can the state afford to carry that burden?

This is what our taxes pay for, I guess,

I mean, Sweden has one of the highest tax rates in the world,

that's known, and this is what we use it for.

High tax is a way of life here.

Swedes seem reconciled to it.

But the welfare model it buys supports and sustains wealth-creating enterprise,

rather than drains from it.

Their childcare provision means many more Swedish women

can stay in the workplace.

With a larger supply of productive hours,

I mean, twice as many people in the workforce, more or less,

that should, that should, you know, contribute to higher GDP

per capita, should make Sweden a wealthier country.

Also, and this is, I mean, this is also speculation,

I haven't seen the statistics, but if a family doesn't have to

rely on one salary to survive, then I suppose that that will allow us to

be a little bit more moderate when it comes to...salary increases,

so it should make us more competitive in, you know,

global markets as well.

This is Lars Tragardh's statist individualism in action.

It's part of what makes Sweden's version of the Nordic model successful.

But many Swedes see a downside in it.

I do this show about the Swedish mentality in which

I explain that people in other parts of the world

doesn't know the square metre that they live on,

which every Swede does.

Fredrick Lundstrom is a comedian

and film-maker who specialises in satirising the Swedish character.

We had an interesting discussion in Sweden

when the tsunami catastrophe in Thailand in 2004, I think.

There were lots of Swedes there, it's very popular to go to Thailand

and this is a new Majorca for Swedes.

Of course, it was very tragic and people died and stuff.

The interesting discussion afterwards,

it was obvious that many people had some kind of idea that

the Swedish nation or state or government

should protect their inhabitants wherever you were in the world.

You should go abroad with the sun and stuff like that.

It's a cold, grey winter in Sweden, but if something happens, you want to run.

It's like a teenager's relation to your parents - you want to be

a grown-up when it's good for you, but then you, you know,

something happens or...shit happens and then you want to run back

to your parents and say, "I'm still a kid, help me."

It is, in his view, the quintessential nanny state.

Finland, Sweden and Norway all have centre-right governments now.

But they've all accepted the key values of the Nordic model.

The only reason that the centre-right was able to

actually win an election and then win again was not, right,

by proposing a radical alternative to what social democracy has built

in the Nordic or in Sweden over the last, you know, 30, 40, 50 years,

but it was by finally giving up on opposition altogether, right?

So they said, "We also believe in the civil religion of Sweden, which is the welfare state.

"We do not intend to dismantle the welfare state. We like Sweden.

"We're just going to do it a little bit better."

Right? Then they won, right?

"We're not just going to reduce taxes,

"we are actually going to make the welfare state better."

That's how they reinvented themselves.

And, of course, it created a huge consensus at the centre,

you know, of Swedish politics.

In fact, the centre is roughly, what, 95%.

Once, Imperial Sweden dominated its neighbours.

Norway and Finland have both, in their histories,

been the junior partner in a union with Sweden.

This is the Swedish warship Vasa, in its day one of the largest

and most heavily armed military vessels in the world.

It sank on its maiden voyage in 1628,

sunk by the grandiose unsustainability of its ambition.

It was salvaged in the 1960s by a Sweden that had utterly

reinvented itself in the three intervening centuries.

When you stand here today, you get an almost thrilling sense

of what a huge imperial and military power Sweden once was.

This is a great projection of that power,

and of Sweden's ability to draw its two much smaller Nordic neighbours

under its wing, and into an incorporating union.

Almost nothing in contemporary Sweden even hints at this mighty past.

Sweden spends less on its armed forces today

than it does on providing free childcare for working parents.

Finland and Sweden are both in the European Union.

Finland has also adopted the euro, in effect surrendering

the currency independence that helped get it out of the economic mess of the 1990s.

Do these countries, as small independent states,

think of themselves - to use a phrase from Scotland's own debate -

as "going it alone"?

I don't think that phrase has any meaning here.

They all have independent statehood.

But they are all also utterly interdependent,

pooling and sharing sovereignty with each other and with much of Europe.

Even Norway - which has joined neither the EU nor the Euro -

knows that its real independence is highly restricted.

Of these three nations, Norway is perhaps

the closest in character, geography and circumstance to Scotland.

Oslo sits at the head of Oslo fjord - or firth in Scots -

the words are surely from the same root -

the legacy of a shared linguistic past.

Our populations are almost exactly the same size.

Both nations have had a long and intimate relationship with their bigger, closest neighbour.

And of course, 50 years ago,

something changed both Norway and Scotland for ever.

A comparison is often made between the way Britain has

handled its oil finds and the way the Norwegians have done it.

They've also struck it rich, but they've been much more demanding with the oil companies.

Norway found oil off its coast in 1969, and through the 1970s and '80s,

its industry grew alongside Britain's.

What are we looking at here?

We are looking here at... Here is Norway,

and here is Scotland and England.

This is basically unexplored.

Bjorn Lereon has covered the Norwegian oil story

both as a journalist, and as an analyst for the industry.

He's seen the effects it has had on Norway.

Oil saved our nation.

You should bear in mind we are now at the beginning of the '70s,

the first oil crisis, where oil prices went through the skies.

We had a crisis in the shipbuilding industry,

Norway was a strong nation in building ships, oil vessels.

And that market collapsed in a period of months in 1974.

The market disappeared.

And that situation to a small nation -

very dependent on the fabricating industry - we could switch

all the shipyards -

most of the shipyards could switch to offshore production facilities.

And of course, together with the oil, a lot of money came,

and I totally agree this could ruin a small, relatively small economy.

But oil did not ruin Norway.

Norwegians are the richest people in the world -

despite, rather than because of, their oil windfall.

It's thanks to a radical

and forward-thinking decision made by the nation's politicians.

In the early years of oil,

Norway's leaders understood that a sudden,

massive windfall like that can be a curse as well as a blessing,

that it can have the effect of so over-inflating

the value of your national currency as to make every other sector

of the productive economy uncompetitive,

to put everybody except the oil people out of business.

So to avoid that, Norway's political parties

entered into a kind of self-denying pact with each other.

They agreed that none of the oil revenues should be

spent in Norway itself.

Instead, they'd be put into a fund to be invested overseas.

Further, 96% of the interest on that fund would be re-invested overseas.

All the Norwegian government allows itself is 4%,

not of the capital, but of the interest on that capital.

And even that tiny proportion is enough to give them

some of the best schools and hospitals

and public services in the world.

It's called the Norwegian Sovereign Wealth Fund, or,

more colloquially, the State Pension Fund.

It's currently worth £400 billion, and it owns nearly 2% of the entire world's stocks and shares.

It's owned by the people, managed by the state,

and invested for the future.

It's the envy of pro-independence campaigners in Scotland.

I think that the Norwegian politicians also in this respect

had acted very wise, and if you look today

what is saved in the pension fund,

and we are talking about 4,700 billion Norwegian krones,

I think they have been clever in doing it.

But in the first years, you can say that they spent

all the money as soon as they could take the oil off ground

and sell it, the money was spent, and we got inflation and we spent

a lot of money on conserving industry that had no ability to live.

So in that sense, we spoiled a lot of money,

but gradually, we fixed this and we...

I think that Norwegian politicians,

they have showed a very, very, very strong discipline.

Very early, Norway stopped using oil revenues to bail out

old industries -

despite pressure from the trade unions and the public.

Back in the UK,

oil revenues were a much smaller portion of the national economy,

but no attempt was made to save and invest the windfall resource.

Successive Labour and Conservative governments of the 1970s and '80s

used the money to help prop up dying industries

and then to pay the social costs of letting them die.

Norway let its old industries die too.

There used to be a steel plant here.

Now it's the BI Business School,

a prestigious private university near central Oslo.

And this is a recruitment fair for graduating students.

This is the new workers.

They are not industrial workers, they are office workers.

This is in a way to me the metaphor of the Norwegian economy.

This is where the old steel industry was,

we had manufacturing here some years ago.

All that is closed now.

Now it's education, it's research, it's IT, it's culture,

this is the new part of Norway,

that's where the entrepreneurship takes place, it's along the river.

And the river gives us this idea that we can do new things here.

This is quite important to understand, isn't it?

Norwegians aren't rich because they're spending all this oil money.

They're rich because they are not spending it.

Exactly, we transformed the petroleum wealth,

we transformed that to knowledge wealth, and that's how we could

be competitive, even after the North Sea is empty,

because in a way Norway is now in many respects like Houston.

Where is our technology now?

Take drilling, technology, subsea technology, it's Houston or Norway.

And we didn't know those industries at all at first,

but we learned very quickly.

We learned from Americans, from the British and so on.

And then we went on our own,

and now, when Brazil is developing offshore oil,

they use Norwegian technology,

Norwegian vessel, Norwegian subsea, Norwegian...

even Norwegian oil companies are there.

33 of them.

The school is producing the next generation

of Norway's business leaders.

Central Bank. They are the people with the fund.

Like here...

NBIM, that is the Petroleum Fund.

Right. This fund owns a proportion of most companies in the world?

Almost every company on the stock exchange, stock-listed.

So this is the Sovereign Wealth Fund, that Norway's so famous for.

And they're recruiting young people to come and manage it for them?

Yes, and it is managed by the Central Bank,

but then it is split out into a separate institution,

called Norwegian Bank Investment Management, NBIM,

and that's the largest sovereignty fund in the world right now.

And just to be clear, none of that money is invested in Norway itself?

They can't do that.

The constitution says none of that money can be invested in Norway.

The Scottish government says an independent Scotland

could start an oil fund of its own.

But much of the oil has already gone.

And Norway has a 40-year head start,

using its wealth to prepare for a post-oil future,

by building a different kind of economy

based on the skills of its young people.

Jonas Store has served as both Foreign and Health Ministers

in Norway's former Labour governments.

What would the Norwegian economy look like now, if 40 years ago,

governments had decided

to use oil revenue to fund recurrent expenditure?

Well, I think, you know, it would have been overheated.

It would have closed down industry.

It would have been, you know, a service-based economy,

disproportionately big.

We've had quite strong pressure groups, you know, from industry -

a warning against this because they know, you know, if that goes on,

the currency will go up, costs will go up, and competition will be out.

So if you follow Norwegian politics and economic debate

from week to week,

we have weekly debates about whether this currency is now

getting too strong and that is directly impeding on

government's public spending.

So it's not only about, you know, some kind of moral context here.

It's also about some very hard realities.

In most European countries,

governments have been spending money they don't have.

Norway is the mirror image of that -

choosing not to spend money it clearly does have.

But using it in a much more disciplined and imaginative way.

It is a remarkable achievement,

and a quiet Nordic rebuke to the rest of us.

But Norway's experience also challenges us

to rethink what we mean by independent statehood.

For Norway - even outside the EU -

has found that global economic realities mean

that in effect, its real sovereignty,

its real freedom of manoeuvre, is -

like everyone else's - highly restricted.

How important was it that Norway didn't join the European Union?

Well, I was part of the delegation that negotiated membership

back in '93 and I voted in favour

because I believe Norway belongs in that European family.

But I can also explain, you know, if you have half an hour,

why we didn't, because it really...

we are not a standard European country from nature.

Norway's an ocean country and we have the fish sector,

we have energy, we're a sparsely populated country.

And we fought with Brussels to have acceptance that, you know,

arctic settlement is different from middle of Europe.

But I think what is key here is that there is broad consensus

in Norway that, OK, we can take that decision.

There's no way we can escape the European economic reality

which makes us, you know,

fully part of the European internal market

with rights and obligations.

All the key out of Brussels is adopted into Norwegian legislation.

-So you have to obey all the rules?

-Yes, we do.

And, you know, and you may then say without voting them,

well, that's right. And I think, had Norway - my private opinion -

been a larger country, that bargain would've been very hard to accept.

Norway is anything but insular.

It's a trading nation with a long history of looking abroad

to increase its wealth.

Once, of course, the Norse did it by force.

More than 1,000 years ago, they set sail in these longboats

to pillage and conquer.

This museum pays tribute to that violent past.

But it also tells us something else about the modern nation.

These boats were excavated and put on display here 100 years ago,

around the time of Norway's independence from Sweden.

Young, newly independent nations need a tale to tell themselves,

of roots to take pride in,

of the histories that shaped their characters.

What is the national identity that this history shaped in Norway?

We used to have an inferiority complex,

especially against Swedes,

who were always considered big brother of the Nordic countries.

And of course they had ruled over Norway until 1905.

So, we're a relatively young nation,

but of course the oil has given us a much, much stronger position.

Tell me about this inferiority complex that Norway has

traditionally vis-a-vis the Swedes. How are they viewed?

Er...with scepticism,

but now the Swedes are of course coming here,

especially the young Swedes come here,

to work in the service industry and so forth.

And so now we can get a little bit back at them,

and they are serving us, so to speak.

But I think it's still, especially my generation and the older people,

still have that little bit of inferiority complex.

And I think it has to do a little with

the Swedes have always been, sort of,

the rich people in Sweden have been the aristocracy,

which we don't have, and so they seem more posh,

more wealthier, more...sophisticated so to speak,

while we are still farmers and fishers and so forth.

You're describing the relationship between England and Scotland here.

Yes, exactly, I know, because I've been a correspondent in the UK

and I recognise all these same traits in the Scottish people

as I do in the Norwegians.

And...I think a close connection, of course, the history is there,

but I think the whole way we think of ourselves is very similar.

What was it about the Scottish people that reminded you

of the Norwegians when you went there?

I think the Scottish people have the same thing that Norwegians have

that they are very outgoing and so forth,

but if you push their buttons, they're a bit touchy,

where their country and their nationality comes through.

Especially if it's the Swedes, in your case,

or the English, in Scotland's case, who are pushing those buttons.

Exactly, exactly, so, there you have, I see that,

where soccer is concerned, where you have the big games

between England and Scotland,

that's the same thing with the Norwegians and Swedish team.

The most important thing is to beat the Swedes.

Much of the debate back home is framed by the asymmetric nature

of the United Kingdom - by Scotland's relationship

with its much bigger partner in the Union.

I think what we've got to try and work out is how we relate to others.

I would prefer to see this constitutional debate

completely reframed as a debate about relationships.

It's about how we relate to the rest of the UK and beyond.

And the truth of that, that can't be resolved in a referendum.

This referendum is not going to resolve anything,

whether we vote Yes or No.

There will constantly be a need to look again,

re-adjust the relationships, and they are plural relationships,

that will affect Scotland and its position in the world.

Norway does not sit at the top table of global diplomacy.

It will never be a permanent member of the UN Security Council.

It does not punch above its weight in the world in that sense.

This is Oslo's Nobel Peace Centre.

It speaks volumes about the values

Norway tries to project internationally.

Norway is, by example, and in its own way,

influential beyond its size.

The Nordic countries are all sovereign independent states.

But they are also immersed in a broader European identity,

in which sovereign states have spent much of the last half century

gradually surrendering aspects of national sovereignty

to act together, to better advance their national interests.

I think we've seen over the last years that these countries

come out on top when it comes to innovation, creating new businesses,

flexibility, the flexicurity notion has emerged.

20 years ago, we were told that these countries were doomed

in the global economy because the state was too big,

the unions were too strong, public sector too powerful.

And then now we see that the figures tell different stories, you know?

We have higher employment, sounder public finances, more re-adaptation

in our businesses, some businesses close and others occur

because we have safe and solid public welfare,

because we have unions that take collective responsibility

and strike responsible deals.

So, for me, this is another sign of what I have really

been following with great interest - that these countries

also have a high level of social capital, in addition to, you know,

financial capital, human capital, and everything you can calculate.

A couple of decades ago, the received wisdom in Europe

was that the Nordic Model had had its day.

Taxes were too high, the state was too big,

it was all an impossible burden on a truly productive economy.

Well, since then, the Nordic Model has proven itself more robust,

more flexible, more dynamic than anyone else's in Europe.

It's certainly weathered the storm of the last five years better than most.

But could you take the Nordic Model off the peg, so to speak,

and make it fit a non-Nordic society?

Could it fit an independent Scotland?

And if it could, why couldn't it fit

a devolved Scotland inside the United Kingdom?

For what does national sovereignty really mean in the Nordic context?

In what sense is any of these three countries -

to use the language of our own independence debate -

really going it alone?

I don't know the answer to these questions.

But shouldn't they be at the heart of the debate we have

between now and next September?

And shouldn't we try to see the choice we face

in its broader, European, context?