The Economic Question Revisited

During a recent BBC television debate programme on Scotland's future, one young lady asked the question whether we will be better off or worse after independence. On the surface this seemed a reasonable enough question and, given the amount of time the panel spent debating the issue, it seems that it is something that concerns a great many of us.

Yet, the reality is that it is entirely the wrong sort of question we should be asking. Indeed, we’d be as well asking what the weather will be like after independence as its simply not possible to predict the future economy of any nation, regardless of  whether they are independent or not. Patrick Harvie MSP, co-convenor of the Scottish Green Party and a supporter of independence was perhaps the most candid when he said that we simply don’t  know what the Scottish economy will be like after independence. It could be said that it was not an answer that the majority in the audience were looking for, yet the truth is that he was just giving an honest response to what is essentially an impossible question to answer.

Yet perhaps the most redundant aspect to the question asked on the programme was that it failed to include a time frame – i.e. it failed to ask when and for how long Scotland would be better (or worse) off after independence. There is simply no point in asking whether Scotland would be better off after independence without being specific as to exactly what period of time you are concerned with. Immediately after independence? Or maybe perhaps after ten years of independence?  

Of course, even with the clarification of a time frame, its simply not possible to predict Scotland’s economic future, whether as part of the United Kingdom or as an independent nation state. Moreover, even if we were somehow able to see into some specific point in the future, the results could very easily be misinterpreted. For example, what if an independent Scotland was worse off in 10 years time, but it had been better off in all of the nine years prior to this and it was just that particular year which had been somewhat economically challenging? Equally, what if in ten years time the entire global economy was in a much worse state than it is now, yet Scotland was better off as an independent nation in terms of GDP than England, but still worse off than it was ten years previously as a member of the United Kingdom?

Even with the benefit of a crystal ball, there are simply too many variables for this type of question to be answered seriously. Yet, as Nicola Sturgeon stated on the programme, we would at least have a great deal more economic levers under independence than we do now. Moreover, our economic future would clearly be dealt with best by a government and parliament that serves us directly and not as a mere subsidiary of another nation. When you have a population of 5 million and your southern neighbour has 50 million, who really takes priority?

The simple truth is that it is beginning to seem more and more likely that the world economy will not return to the level of growth that we have become accustomed to in previous years. Finite and ever depleting energy resources, especially oil resources, are hampering Western society’s abilty to return to economic growth. Peak oil, the point at which oil production reaches its highest point and after which starts to decline, is either on the verge of occuring or has happened already (it is only possible to ascertain its exact date of occurrence some years after the event itself). The result of all of this is that there will be ever increasing costs for producers and ever increasing costs for consumers, something that will make it ever harder to return to the levels of growth we have seen in the past. Indeed, many commentators, especially Richard Heinberg argue that Western society is now entering a new phase in its economy and one in which the notion of economic growth on a global scale, at least, will be impossible to return to.

Being part of the UK did protect Scotland from the current economic turmoil, nor will it protect Scotland from future economic downturns. And, if it seems likely that the world economy is set for some turbulent times ahead then what we really need to ask ourselves is this: when the shit really hits the fan who are the British government going to look after first? The 50 million people of the country in which the UK parliament sits, or a bunch of 5 million whingers north of the border?

If There’s One Thing We Can Depend On, It’s Uncertainty

In recent weeks there have been a number of Scottish-based businesses expressing concern about the supposed “harm” that the prospect of an independent Scotland is causing their businesses. Companies such as the Weir Group and Maitland Mackie have both expressed concerns.

Such fears, however, appear to be largely based on a somewhat outmoded view of what independence actually means. National independence in the 21^st century is a very different animal to the ring-fenced, tariff-imposing states of the 19^th Century and early 20^th Century. As a result of both globalization and the European Union, we now have free movement of people goods and services across Europe.

Under independence, Scotland will keep the Pound and will continue to be linked by good road and rail links to England. Moreover, movement across the border for both people and goods will be unaffected. Talk of having to show passports at the border is simply nonsense spouted by desperate Unionists who like to pretend that they haven’t travelled anywhere in continental Europe in the last decade. There simply are no physical borders in Western Europe any more.

There really is no rational reason not to invest in Scotland either now or after independence. Yet for those who remain unconvinced, it might be worth taking note of what Philip Grant, of Lloyds Banking Group had to say recently to MSPs. According to Grant, rather than being a hindrance to the economy, the issue as regards Scotland’s constitutional future has actually helped to boost Scotland’s profile internationally. The reason for this is simple: people are beginning to realise that there really is a country out there called Scotland and that its not just a northern outpost of England.

For those amongst you who are old enough to remember, who can seriously say that they were aware of either Latvia or Estonia prior to the break-up of the USSR? The reality was that, for most people, Russia and the USSR were simply one and the same in much the same way that people today treat Holland and the Netherlands as being the same. Likewise, beyond the shores of the British Isles, the terms Great Britain, The UK and England are pretty much synonymous. Take, for example, the recent Olympic propaganda video from Argentina showing one of their athletes training in the Falkland Islands. At the end of the video it says: “To compete on English soil, we train on Argentinean soil”. The Olympics will, of course be held on English soil, yet the point of the video is to clearly make the point that they don’t consider the Falklands to be English soil. And nor should they: the majority of settlers came from Scotland and Wales. Indeed, why would any Englishman have left their green and pleasant land to settle in some barren remote archipelago in the South Atlantic when there were plenty of economically disadvantaged Celts to do the job for you?

The reality is that Union with England resulted in Scotland getting the shitty end of the stick. It gave up its name and identity. It also gave up its parliament, choosing to be ruled directly from England’s parliament. And those who choose to believe that there is such a thing as a “British” parliament are deluding themselves. The Palace of Westminster and its historic traditions all predate the Union of 1707. Westminster Palace, for example, was built in 1097, over 600 years before the Treaty of Union. Moreover traditions such as the prayers before each sitting of the house and also the position of “Black Rod”, the usher who summons the House of Commons to the State opening of Parliament, both predate the Treaty of Union by centuries.

Both Scottish Independence and the publicity generated in the lead up to the referendum on independence, clearly has its benefits. If you’ve ever been to Dublin Airport and wondered why it would easily dwarf the size of both Glasgow and Edinburgh airport combined, the answer is really quite simple. People tend to visit countries they know to exist as opposed to ones they don’t. Likewise, multinationals have a tendency to locate in countries they know to exist. As a dependent region, Scotland has to compete against the likes of Humberside, the West Midlands and East Anglia. Certainly, under independence, it would have to compete against these areas too, but it would have the weight of its own state behind it, with a direct voice at the top tables of Europe and the United Nations. Furthermore, it would have the tools and resources to attract inward investment (like, for example, the ability to control its own corporation tax). Yet, perhaps most importantly, it would be counted equally among the community of nations as a contender with which to invest in and do business with, and not a mere peripheral region of another state.

The Unionist naysayers may do well to look at the vast European trade hub that China is proposing to build in Athlone, Ireland (pictured above) http://www.irishtimes.com/newspaper/ireland/2012/0502/1224315454567.html. The argument given for citing the trade centre in Athlone was that it was geographically in the centre of Ireland and served by good road and rail links to Ireland’s capital. A Scottish equivalent would perhaps be Falkirk, located between Glasgow and Edinburgh and served by excellent road and rail links between the two. Yet China would never have built the project in Falkirk, or indeed anywhere in Scotland. To the Chinese the Scotland is simply a remote outpost of the UK (during the 2008 Beijing Olympics, for example, the Chinese media referred to the UK team as English). The simple truth is that the good road and rail links between Scotland’s biggest city and Scotland’s capital really city count for nothing when Scotland’s capital is little more than mere provincial city of the UK.

Both Scotland and Ireland, in European geographical terms, could be considered to be remote nations on the North Western fringe of the continent. Yet only one of them is a member state of the EU in its own right, something that gives it the ability to punch above its weight. And when it comes to Chinese investment, this clearly makes all of the difference.

 

The Scaremongering of the Warmongers

The UK government’s "vote no" machine kicked up a gear the other day when it asserted that it would no longer choose to buy Scottish-built ships if Scotland voted in favour of independence. According to a Westminster spokesman, “No British warship has been built in a foreign country for the last 50 years and we do not intend to start doing that now.”

What seems immediately apparent, aside from the fact that this is little more than a cheap scaremongering tactic, is that the UK government has not quite grasped the essence of its true place within the United Kingdom. Scotland cannot be a foreign country to the United Kingdom Government, because without Scotland there simply is no United Kingdom. The UK government is not an English institution and, after Scottish independence would, along with the United Kingdom itself, technically cease to exist. Rather, it is a UK institution and as such, it must surely remain neutral towards Scotland and England. Consequently, there will be no British warships built after Scottish independence. Likewise, The Royal Navy is not the English Navy, nor the English Navy in waiting; Scotland must be entitled to its share of the hardware too. Furthermore, the current UK government has no right to determine policy of its successor governments in either England or Scotland. Yet here we have a situation where the UK government, which is meant to represent both Scotland and England equally within the union to which they are supposedly equal partners, is choosing to designate itself as the heir apparent to a future English state.

Of course the reality is that the Royal Navy has always been an English Navy – it simply represented Scotland. Likewise, the Palace of Westminster always was the English Parliament. After the Treaty of Union they simply brought in a few more chairs. Yet, if we’re going to be held accountable for the national debt after independence, then we’ve got every right to claim our share of the assets too.

There are some serious double standards being employed here too. After all, why is it fine for the UK government to order American-made Lockheed Martin planes for the Royal Navy, yet it would choose to boycott ships made in Scotland? After all, the United States not only declared independence from Britain in 1776, but it also discarded the monarchy in the process – something Scotland has pledged to retain.   

The idea that England would boycott Scotland just for having the audacity to exercise its democratic right to leave the Union, shows just what a shabby set up the United Kingdom really is. Are these really the sort of vindictive, mean-spirited, dummy-throwing hypocrites that we should be in political union with?  If Scotland simply has to be in political union with another country (for fear that it would it would be subject to some sort of Armageddon-like scenario as predicted by Unionist naysayers), then surely there must be some better options out there.   

The Independence Referendum: How “Constitutional Uncertainty” Can Pay Off

According to the Scotsman newspaper, “the decision to make Edinburgh the headquarters of the £3 billion UK Green Investment Bank was made in part to strengthen the case against Scotland breaking away from the UK”. They also reveal that the letters UK were added to the name of the bank “to emphasise Scotland’s place in the Union”.

Of course, reading further down the article it soon becomes apparent that the bulk of the jobs will actually be based in London, England. However, according to the Scotsman, “the aim is that board meetings will take place in Edinburgh and eventually half the jobs will be in the city”.

So they’ll aim to have board meetings in Edinburgh? In other words, they’ll try when they can, but the reality is that a good many will take place in London where the real work is going on. Furthermore, we’re told that eventually half the jobs will be in Edinburgh. Eventually? Half the jobs? It really doesn’t sound like this bank is being based in Edinburgh at all.

Of course, in reality, this is little more than a bribe to keep Scotland in the union: stay with us and there may be more like this to come. The bribe is, however, something of a double-edged sword: leave the Union and the bank may go too. Yet, to some, it may seem strange for the UK government to base the headquarters of a newly-created bank in a part of the United Kingdom which, in a few years, may well secede. Indeed, given the whole emphasis on responsible banking these days, it seems a highly risky strategy. Of course, Whitehall knows this and it also knows fine well that the bank could easily operate in an independent Scotland. Take the case, for example, of the HSBC, or The Hong Kong and Shanghai Banking Corporation, to give its full title. This is a bank that was founded in the former British colony of Hong Kong. Yet despite the handover of Hong Kong to China in 1997, the HSBC retains its headquarters in London. There’s also the case of a British institution like the Abbey National bank which has since been taken over and re-branded by the Spanish bank Santander. Indeed, since we moved away from the gold standard in the 20^th Century, banking and finance has truly become a global industry, unconstrained by national borders. The City of London, for example, is not the financial hub that it is because it only serves the United Kingdom.

If all of this were not convincing enough, then it would be worth reiterating the fact that an independent Scotland would retain Sterling as its currency. The simple truth is that whether Scotland remains a part of the United Kingdom or not, it really will have little bearing in its effectiveness to provide a base for the headquarters of the Green Investment Bank, or indeed any bank. In essence, the message we should be telling Whitehall is: thanks for the bank but it doesn’t in any way tie us to the United Kingdom.

Yet, even if this bank is being offered to Scotland as a bribe and regardless of the fact that the Edinburgh headquarters of this bank may be little more than a “brass plate” address (as the Scotsman puts it) for what is, in reality, a London-operated bank, the fact that Edinburgh was chosen at all can, at least in part, be attributed to what has been described as the current “constitutional uncertainty” as regards Scotland’s future. In essence, if there wasn’t a serious possibility that Scotland may leave the United Kingdom, would this bank have had its headquarters offered to Scotland? Likewise, if the prospect of independence was not a reality, would David Cameron have recently promised to “consider” more powers for Scotland?

The irony of all of this is that, rather than suffering from this “constitutional uncertainty”, as Keith Cochrane the chairman of the Weir Group warned recently, Scotland, if anything, seems to be benefiting. Of course, there will always be the likes of Michelle Mone who will threaten to leave Scotland if it becomes independent (perish the thought). Yet this seems somewhat reminiscent of when Paul Daniels, Frank Bruno and Jim Davidson threatened to leave Britain if Labour got into power in 1997 - all of whom, when push came to shove, chose to stay.

Yet for those who genuinely fear constitutional uncertainty, the only way that it will truly come to an end, is if we vote “yes” in the upcoming referendum. This is because, even if there is a “no” vote, as the successive referendums in Quebec have proven, this will not be the end of the matter, because the feeling of unsettled business will remain. 

The Empty Rhetoric of The Unionist

According to the Daily Telegraph, “David Cameron promises more powers for Scotland”. How very thoughtful of him, you may well think. After all, what is power if not to be shared? Yet, read underneath the banner headline and it clarifies this slightly (and dilutes the message somewhat) by stating that “Prime Minister David Cameron has promised to consider more powers for Scotland if voters reject independence in a referendum”.

Let’s reiterate that. He promises to “consider” more powers “if voters reject independence”. Now, leaving aside the fairly obvious fact that this is little more than bribery, when we look at what he is offering here, it is actually no more than empty rhetoric.

According to the Scotsman, his actual words where: “When the referendum on independence is over, I am open to looking at how the devolved settlement can be improved further”. “And, yes, that does mean considering what further powers could be devolved”.

Perhaps he is, but “considering” to do something is one of the vaguest commitments anyone could actually make. You might be considering washing the car this weekend, but actually going ahead and doing it can be a very different matter. A cynic might suggest that the reason Mr Cameron is so against a second referendum question offering more powers to the Scottish Parliament (albeit falling short of full independence) is that it might actually deliver more powers, rather than leaving them as an option to be merely considered.

Mr Cameron also stated: “It's never been part of my argument that Scotland couldn't make it on her own - there are countries in Europe, small countries that make it on their own, but my argument is, we are better off, we are stronger together, we're fairer together, we're richer together.

So there you have it: stronger, richer and fairer. Yet looking at this a little more closely, what is he actually saying here? Firstly, he implies we are stronger by being part of the United Kingdom. Yet, considering our non-existent membership of the United Nations, our lack of statehood and our inability to be counted as a nation in the Olympic Games, this seems a highly dubious claim. By ceding our right to represent ourselves independently on the world stage, be it in politics or at the world’s premier sporting event, it is difficult, to the say the least, to see how we are in any way stronger as part of the United Kingdom.

As far the part about us being fairer, is he implying that an independent Scottish state would be less fair than the United Kingdom? Finally, there is the claim that we are richer as a part of the United Kingdom. This is certainly an intriguing claim to be making, especially without any clarification as to exactly how much we are richer, and for exactly which fiscal period(s) in the future we will be richer if we choose to remain within the United Kingdom.

Yet to be fair to Mr Cameron, he is not the only one offering empty rhetoric as a counter argument to the independence movement. Former Secretary of State for Foreign and Commonwealth Affairs, David Miliband, a Labour MP stated on the 30th January this year that independence would “undermine the drive to bring social justice to the UK”. Firstly what exactly does he mean by “social justice”. Secondly, if “social justice” is actually so important, why has it taken over 300 years since the Treaty of Union, before anyone considered bringing it about. Finally, in what way would an independent Scotland not be able to bring about “social justice” on its own?

It all smacks of desperation, like when you visit someone and it starts to get late. You want to get back home and on with the rest of your life, yet they try to coax you to stay a little bit longer with the promise of treats if you do.