Saturday, 19 July 2014

A summary with two months to go

We’re approaching the end of the longest political campaign any of us can remember. I suspect the result is already determined and that it would make no difference if the referendum were next week or in two months. However, there are some Scots who have yet to make up their minds and there is a lot of confusion because the claims of both sides are so contradictory. Here’s what I think of the main issues.

Polls

I follow polls and I’m pleased when my side appears to do well and less pleased when my side appears to do less well. However, I try my best not to be too bothered by them either way. Anyway it’s best to campaign as if you were behind and never to say “we’re way ahead”, “it’s over” and “we’re going to win easily.” Complacency is the biggest danger to No, continuing to fight hard is the best chance for Yes.

There’s a systematic error in the polling. Someone is wrong. The No lead can’t be both small (Survation) and large (Yougov).  There’s not much point debating something, which the facts will determine on September 19th. But it’s best to campaign as if the lead were small and try to make it larger.

Economy

Scotland will remain a relatively wealthy Western European economy whatever the result of the referendum. Wealth comes from the activities of people and more or less the same people will probably be here next year. Independence would neither be an economic disaster nor would the streets be made of gold. An independent Scotland’s extra share of oil revenue would be more or less cancelled out by the loss of economies of scale and UK government funding (Barnett formula). Whether independent or not, how Scotland fairs economically in the future depends on the sorts of choices politicians make. The best choice politicians can make is to interfere as little as possible in the market. I don’t believe however, that this is the route that an independent Scotland would take at least initially and for this reason economically independence might be damaging at least in the short term.

EU

International relations are frequently carried out ambiguously. Diplomacy is often a matter of trying to please both sides. It’s considered poor form to interfere too much in a country’s internal affairs. However, when someone like Jean-Claude Juncker says that he’s not planning to expand the EU beyond 28 countries, of course, he’s also talking about Scotland. His office might deny that he is, because it would be interfering, but these sorts of remarks are calculated. The EU does not want secession to take off in Western Europe like it has in Eastern Europe. Changing international boundaries is historically   problematic and can lead to unforeseen, unintended consequences. It is the opposite direction to the one Mr Juncker wants Europe to go.

What matters anyway is not whether Scotland is in the EU, but that we have the same EU status as the UK. If they voted to leave (I think they won’t in the end), we would have to go with them whether independent or not. Scotland is too integrated into the UK economy to be able to be in the EU while the UK is not.

Pound

The lesson of the Eurozone is that currency union without political and fiscal union does not work. When countries become independent, even tiny ones like Latvia, the norm is that they set up their own currencies. Using the pound without a currency union would send Scotland’s financial sector down south, along with the associated jobs and wealth and would mean that our savings lacked a lender of last resort. The best option for an independent Scotland would be to set up its own currency. This however would be damaging to Scotland’s trade and integration into the UK economy.  

Lots of Scots did not appreciate George Osborne & co. saying that we could not keep the pound after independence. Did they mean it? There’s no way of knowing until and unless negotiations begin after a vote for independence. You take your pick according to what you want to believe and which side of the debate you support. These matters however, in the end are determined by self-interest and public opinion. Anyone who thinks the other parts of the UK are going to vote for a Eurozone style currency union with Scotland after rejecting it with the EU, does not understand their fellow citizens.

Conduct

With a short time to go it is more and more important that when campaigning we do nothing that harms the image of the side we support. Don’t hate or insult the sort of people you meet every day in shops, on the bus or at work. I find it best simply to ignore any insulting language online. We’re all very passionate about the issues and we’ve all said things that are unkind. That’s the nature of politics. But there are lots of good people on both sides and it’s possible to have reasonable, informed conversations with them. You often learn something too and make friends.

Conclusion


Independence is clearly possible. The issue is whether it is the best course of action for Scotland. Many independence supporters want independence as an ideal in itself. They want it come what may. The rest of us have to balance up the advantages and disadvantages of what we think would happen. There is much that is uncertain, especially with regard to the key issues of currency and the EU. How someone is liable to vote may be influenced by their attitude to risk. Scotland is a great place to live now. It’s a great place, at least in part, because we’ve been in the UK for the last 300 years. No doubt Scotland would still be a great place to live after independence, but that Scotland is another country where I have never lived a new nation state with an international relationship with places I have always thought of as part of my home.  

2 comments:

  1. A very reasonable overview but a bit too lenient on the economic situation IMO.

    It isn't just the block-grant/Barnett spending that would be lost. The UK Gov spends £billions on UK civil servant posts, paid from London but based in Scotland. DWP staff, Tax Offices, Student Loans, Army Pay, military bases and other outreach UK jobs, 30,000 civil servants in all.

    All of this would be lost or have to be paid out of Scottish taxes.... a huge burden for a fledgling country.

    ReplyDelete
    Replies
    1. I completely agree that all the things that you mention have to be taken into account. It would indeed be expensive to set up a separate Scottish bureaucracy. All that goes on the negative side of the equation while only an increased share of declining oil revenues goes on the positive side. The loss of the economies of scale and disruption to the UK internal market is the biggest argument against independence.

      However, although I'm opposed to independence, partly because of my assessment of the economics, I don't think it reasonable to think that Scotland could not be a prosperous independent country. California would still be prosperous if it left the USA, Bavaria if it left Germany. The point is that both Bavaria and California realise that there are huge advantages in being part of a larger whole, not least because there is an internal market for all that they want to trade trade. It is the loss of this that would most damage Scotland.

      In general when trying to persuade opponents and the undecided I think it best to try to be moderate and try to see things at least somewhat from their point of view. From that shared position it is sometimes possible to persuade, rather than simply be dismissed.

      Delete