On 7 March 2014 the Scotsman published an article listing 20 positive reasons for remaining with the Union. The article was titled ‘Twenty Positive Reasons For Staying In The Union’. At least The Scotsman has come forward with an argument that we can responded to – pay attention Darling Alistair – all we’ve heard from you is Not-Yes, ‘put downs’ and scaremongering. When will you present your case instead of just rejecting everyone else’s? You must be better than that!
One of my ‘tweet backs’ was kind enough to send me a copy of the article and I committed to respond to each point. My concern is that many people will have read this article and may use these extremely trite points to form an opinion.
My response is, of course, just my opinion and no better than anyone else’s. I would welcome any questions or challenges and will expand or explain any of my points.
The Reasons are bold and my response is italicised:
1 Being in a strong currency union. The UK are currently carrying a debt of £1.4Trillion and rising (http://www.bbc.co.uk/news/business-25944653 ) This is pure debt. On top of that the UK are carrying over an £80 Billion budget deficit and a £50 Billion Structural Deficit. All in all the UK economy is in very bad shape – it does show signs of recovery but this is a very long way off.
2 Low interest rates. As a consequence of the debt and deficit the UK has been downgraded from AAA rating by the 3 main ratings agencies; Standard & Poor’s, Moody and Fitch Group. They may even drop further. Standard & Poor’s stated that an Independent Scotland could expect an AAA rating. Moreover, Fitch have indicated that in the event of an Independent Scotland they would downgrade the UK’s rating – no doubt as a consequence of them not benefitting from Scottish oil and gas and an abundance of cheap sustainable electricity.
3 Being part of a large, influential EU member state with a large rebate of part of its annual contribution to the EU, opt outs from VAT on food, children’s clothing and books, an opt out from the Schengen agreement and the freedom to continue providing free university tuition for Scottish students as happens now. The UK has opted out of Shengen but the whole system is under review. The UK is not particularly influencial in the EU. The main MEP Groups are Conservative and UKIP. After May 2014 it is likely that the main leading group of MEPs will be UKIP. The UK is not a member of the 17 member Euro group and excluded from their meetings. The UK is virtually powerless in the EU and any proposed changes will almost certainly be veto’d. Nevertheless the cost of membership of the EU is around £26 Billion per annum. There is a real possibility that the UK will vote to leave the EU if the promised referendum in 2017 takes place. As one of the richer nations in the EU the UK is a net contributor – so we get less out than we put in and we trade less with them than they trade with us. Although opted out of Shengen the entire EU population has the right to come to the UK to work! Most of the EU countries have a lower or much lower standard of living than the UK so there is an inherent attractiveness and incentive about coming to the UK. With regards VAT on food, we have always paid VAT on processed food (i.e. prepared). It’s the raw materials that are zero VAT although there are a few anomalies. On free university tuition, a wealthy country as an Independent Scotland would be, can well afford free university tuition. Although, I think we could do better with English students. I understand if Scotland’s Uni’s were free to students across the border we would be overwhelmed. I would prefer a quota system to ensure there are sufficient places for our own students plus other UK and foreign students, free of charge. Although a repayment in work commitment in Scotland should unsure students don’t use Scotland for a great and free education, putting nothing back.
4 Keeping the Barnett formula which provides approximately 10% extra public expenditure per person in Scotland. Despite asking the Scottish Government for guarantees against their White Paper, David Cameron could give no guarantee about the future of the Barnett Formula. Since Cameron et al have played down the receipts from North Sea oil and gas they have painted themselves into a corner and if Cameron does not slash the Scottish budget it will look like he has lied about North Sea receipts. Over 40 years the UK Government has taken about £1.5 Trillion out of the North Sea and Scotland, as an otherwise oil rich country has almost nothing to show for it. Furthermore, in 1999 Blair and Brown secretly partitioned 6000 square miles of Scotland’s territorial water in the North Sea ‘grabbing’ 15% of North Sea oil and gas for the UK. On the other hand, Norway have oil reserves in the North Sea as part of their managed depletion policy that guarantees the strength of their economy for many decades to come.
5 Being part of a large economy where wealth can be redistributed through the tax system and which shields us from fluctuating oil revenues. Scotland is aware that oil prices fluctuate. This requires a management policy that buffers in the abundant years – the same as Norway. By contrast, the UK Government have blown every penny ,and some, and now claim it is running out – albeit they have failed to invest more recently – some would say in anticipation of the referendum – they wouldn’t lose this revenue because the oil is still there anyway. Of course, with a Scottish agenda on Trident and Fastlane (outside my bedroom window) Scotland would be free to exploit the oil reserves in the Firth of Clyde that are currently denied them because of Trident exercises.
6 Having subsidies for our wind farms, which are one third of the UKs total, being shared across a population of 60 million, instead of 5 million in Scotland. Having some of the windiest areas on the planet, Scotland is ideally placed to exploit wind farms – if they pay their way. This is a simple business case. If it makes business sense, finding the investment capital is incredibly simple – otherwise why would we do it – especially when we lead the world in the wholly sustainable wave powered energy. If Gordon Brown looked out of his window in Kirkaldy he would see an oil platform in the distance. This is capturing large amounts of fossil fuel. Under his nose, the North Sea lashes the coast with huge ferocity and unharnessed sustainable energy, vastly greater than the platform in the distance. But then he’s an accountant of sorts not a technologist – (although see my blog ‘Brown’d off). We hear today that an Independent Scotland may have to negotiate with the UK to avoid energy price hikes. Scotland is on target to be energy self sufficient by 2020. Scotland can supply renewable energy to much of Europe and currently supplies 25% of its load to England – Scotland is one of the worlds energy power-houses. An Independent Scotland will be able to dictate energy prices.
7 Retaining the arrangement under EU rules which allow cross border pension schemes to have ten years to become fully funded, instead of having to achieve this as soon as Scotland becomes independent. We need to be clear here. First of all, State based pensions have already been paid for through our NIC contributions so it is not a hand out, it is our own money back. Looking into how our pension money has been invested under the UK ‘oversight’ is a whole different subject that touches on the US Negative Equity scandal. Work related pensions again have been self funded and they are clearly understood. So, in the first instance we would expect our pension pots, pro-rata, transferred to the new Scottish Government. It is also worth mentioning that an Independent Scotland would be far wealthier per head than England. Scotland can not only afford to pay all our pensions but as a potentially wealthy nation may even be able to reverse some of the provisions of the 2011 Pensions Act. Of course an Independent Scottish Government would have the levers to pull to develop the wealth of our country and as they say, a ‘rising tide lifts all the boats’.
8 Private and company pension schemes able to keep costs down through sharing a single pensions regulator, funded by the industry, for the whole UK. As I said in 7 above, it would be worth looking at how well the UK has regulated pensions and investment of the funds. I intend to publish more research into this but would say only one thing – many of these roads lead back to Bill Clinton. Don’t let’s forget, Scotland has been at the forefront of the financial services for decades. No doubt some have questions to answer. However, a new Scottish Government broom may be the medicine we need – we certainly have the talent. Oh, and there would be a lot less snouts in the trough!
9 Retaining jobs in shipyards which build UK warships and in the financial sector for which the rUK is, for some companies, as much as 90% of their market. This is a big one. Fortunately, I am steeped in this history coming from a shipping family from Antwerp and growing up on the Clyde, overlooking the yards since 1951. You could use this as a metaphor for Scotland’s health as a nation. I will paraphrase and do more of this in a blog. In its heyday, the Clyde produced 80% of the ‘worlds’ shipping. Around 300 big ships went down their slipways every year. That is why the Clyde was #1 in the world, bar none. The clue is ‘heyday’ and some will say that day is long gone. But that is where people are wrong. Today, 90% of all goods are transported by ship at some stage and since 1970 the worlds shipping has increased by 400%. The heydays are still here and getting better – just not on the Clyde! We need to ask ourselves why! I will shine more light on this in a separate blog.
10 Businesses have only one set of regulations and one tax system across the UK. Possibly correct – the EU. Something like 70% of our regulations come from the EU and the European Court trumps the UK Supreme Court. Tax is a massive subject but there are some interesting facts. Gordon Brown introduced more ‘stealth taxes’ than any other Chancellor. The UK tax system is one of the most complex in the developed world and it is incredibly unfair. For example, the rich can afford good accountants who are excellent at tax avoidance. The rest of us struggle with the annual dilemma of our tax return that is so complex we submit it then wait for a ‘knock on the door’. The biggest tax blunt instrument is VAT and we got that from Europe. Every small business will tell you that VAT is the bain of their lives. They must put aside a lot of time to record the tax collecting work they have done for HMRC. VAT is unique in that it is the one tax that if you fail to pay you are withholding or stealing the Governments cash – all other taxes are levies. In the UK everything and everybody is taxed to the hilt every time we do something – even dying. This would be a great opportunity for a new Scottish Government to totally reform the tax system.
11 Businesses free from currency transaction costs within the UK. As recent as today in the Times a leading group of academics have sided with this mysterious Minister who reckon Scotland will certainly negotiate a deal on currency sharing. Of course there is no reason why Scotland could not simply continue to use Sterling. We would not have a say in the currency standards – but we don’t have at the moment and never have had. Ironically, the Government will tell us that we currently enjoy a shared currency – if that is the case then why do we not have a share in the decision about its future?
12 Savers covered by the Bank of England guarantee to protect savings of up to 85,000 pounds. There is a simple answer to this. The reason that certain banks such as RBS were bailed out was because they were ‘too big to fail’. There’s your answer. Bank with one of the big banks and the Government will indemnify you. If RBS or Barclays was allowed to fail we are all pretty much down the pan anyway! Remember, this scheme was introduced following the collapse of Northern Rock, Bradford & Bingley and the Icelandic banks. The FSA in the UK had to be asleep at the wheel. Again, Scotland was one of the key founders of world banking. It has massive expertise in this area. However, in a smaller country, banks may be subject to much closer scrutiny and of course we do benefit now from 20/20 hindsight so it should never happen again?
13 Scottish banks underpinned by the Bank of England which in turn is underpinned by taxpayers across the UK. We can benefit here from hindsight to ensure our banks don’t make the same mistakes. As a potentially rich country an Independent Scotland with it’s vast resources can underpin their own banks. However, a more important point is taken from the Benefits System analogy where some people have preferred to live off the toils of others. The UK abhor scroungers living off the security of the State – yet they use this as the argument for Scotland remaining in the Union? Scotland is a very proud nation and should not use the ability to be bailed out if they ‘screw up’. That’s makes Scotland look like a national sized benefits scrounger.
14 Supermarkets selling products in Scotland at UK and not foreign country prices. Actually, the supermarkets that are in the ascension ahead of Tesco, Asda, Sainsbury and Morrisons are Lidl and Aldi. They are beating the competition on value for money and continuing to do so. They are German. There is a current trend away from the large supermarkets which the big guys are playing to, except Asda, that will put smaller stores closer to our high streets. We should be focusing on Scottish produce as we have some of the best land, the best water and air and we are far less intensive which is excellent for agriculture. I don’t think the big supermarkets have done us any favours. They have killed our high streets and many smaller competitors using their bulk buying power to wipe out just about every rival. Who would have thought, 30 years ago, that we would nip down to the supermarket for milk, bread and tea and pick up a TV, printer and a new wardrobe in the other aisles and take out household insurance and arrange a loan at the checkout?
15 An open border between Scotland and the other countries in the Union is guaranteed. This is one for 1 April. The UK already has open borders such as the Isle of Man. Not even a problem when we had the ‘ring of steel’ around the City of London which was an armed checkpoint staffed in part by the army. This was a direct consequence of internal conflict within the UK. Scotland and England love to hate each other but the truth is we have a great relationship, much better than many neighbouring countries even in Europe. Belgium and France are very different independent countries with open borders same as most of Europe – never been a problem!
16 We will benefit from retaining the BBC. The BBC regions produce great programmes. Every region contributes and there is a wealth of quality programmes from all over the UK. However, the BBC is far too often accused of political and social bias, as we are all witnessing. When I was a tweenie, the joke at Xmas was the repeat of ‘She wore a yellow ribbon’. Nowadays, the BBC channels repeat, repeat, repeat, repeat until we are all sick to the back teeth. Also, it looks very likely that the BBC model, which many argue is long past it’s ‘sell by’ date, will be a very different institution sooner rather than later, especially if it opts for a ‘subscription’ model.
17 Continuing to share the UKs large network of 267 embassies and consulates around the world, compared to 70 to 90 “international offices” planned in the white paper at a cost of £90 to £120 million. Scotland can establish its presence anywhere in the world. Was there ever a country that was more globally popular? I would argue that Scotland and the Scots are the most universally popular people and nation ever. With this level of popularity and the respect we command, £120 Million sounds like a great investment. We could have our embassies finished in tartan paint!
18 Scots, young and old, will have uninhibited access to the UK labour market, for example the same currency and tax system, national insurance contributions counting towards the same state pension (less than six years of contributions, the minimum needed to qualify for the UK state pension, will not be wasted if people return to Scotland to continue working), there will be no need to change car registration plates after six months and there is the open border. Unemployment and under employment in Scotland is dire. I don’t see any part of the UK inhibited to an Independent Scotland any more than the current EU is inhibited. I lived and worked in Scotland most of my life but also worked in London for 20 years as did, and do, my kids. I have also worked in Belgium, Germany and Switzerland. The live/work balance especially in London is about as bad as it gets and all but the top people in high paid jobs can afford a house or decent flat. The apparent availability of work in England has done nothing to benefit the vast majority of Scots who want to live and work in their own country or environment and be able to afford a good home and standard of living. Many Scots in the past have moved south or abroad because of the scarcity of jobs. If there were decent opportunities at home many would not have left and many would consider coming home. The really top people, and I don’t wish to demean our regular hard working population, will travel and work just about anywhere and they are usually welcomed with open arms because our top people are in high demand. Just look at the number of top Scots sitting on Exec Boards in London and all over the world. With regards car registration plates – that IS a very good reason for staying in the union! Actually, this would be a great opportunity to adopt a new system like the system in Germany that is vastly superior to the UK system. You can see at a glance where a person is from. That benefits security and road safety, and would get my vote.
19 We will benefit from universal postal charges across the UK. This would be good news for the Highlands and Islands – they have been surcharged for decades – so much for a UK scheme? Some say that the highlands are too far away. When I lived in London and drove to my office in Reading it would take as long as 3 ¾ hours each way and a tank of fuel lasted 2 days – that was only 40 miles – the slowest and costliest miles in the UK are in Greater London. The average speed in London is 11 MPH, the same as it was at the turn of the last century – and that includes a stop for hay and a lump of sugar!
20 Last but not least, families with members across the UK and those of us with friends across the UK will continue to feel joined together, and the social union which has helped to make the Union a success for over 300 years will be maintained. Put it another way; if a member of your family goes abroad are they now less of a family member? My immediate family is spread across Scotland, England, Belgium, France, Germany and Spain. It’s great to see them when I can and the distance has no bearing on feelings. The immigrant population all over the UK would be horrified to learn that their migration has somehow lessened their family union? This, by far, is the weakest reason I have ever heard for a country to give up on Independence!
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