Monday, 29 September 2014

Ukip face the SDP's old problem: momentum


For any modern or contemporary historian, the United Kingdom Independence Party (Ukip) irresistibly brings to mind the Social Democrats of the early- to mid-1980s (above). It's not the Guardian reading or the moderation, of course - not the calm teacherly voices and the long deliberation of that most democratic and centrist of breakaway parties - that suggests the parallels.

It's the electoral dynamics of breaking away from one part of the electoral landscape, and trying to fill both that gap and the rest of the vessel of democracy at one and the same time. The SDP broke away from Labour, and nearly killed its 'parent' party in the act. Ukip has its origins in right-wing revolts: on immigration, on Europe, on gay marriage, and on a rather vague and nebulous sense that 'the elites' are betraying 'the people' (whatever that means). But it knows that it must invade Labour's blue-collar fortresses as well if it's to have any lasting future.

What it most needs to do this is what someone once called 'the oxygen of publicity'. Its vote share shoots up when it does well in local or Euro elections, but then trends down again when it's out of the headlines. Hence the recent defections of Eurosceptic Conservative MPs such as Douglas Carswell and Mark Reckless, and the by-elections we're now going to be treated to in their seats (Clacton and Rochester and Stroud). And that was exactly what happened to the early SDP. It shot into the headlines winning Glasgow Hillhead and Bermondsey in spectacular by-election coups at either end of the country; it won both Conservative-held and Labour-dominated seats; it seemed to appeal to everyone who was sick and tired of the two older and (by that time) apparently extremist parties.

But the SDP ultimately spluttered and died. For a moment in early 1982, it really did seem as if the SDP and their Liberal allies might win the forthcoming General Election - or at least be in a position to form a coalition with Labour. Mrs Thatcher's resurgence, given the economy's recovery and the Falklands War, put paid to all that. But losing by-elections also did it. Mitcham and Morden in June 1982 and Darlington in March 1983 (that latter contest often credited with allowing Labour leader Michael Foot to keep his job) took lots of the steam out of their engine when the Conservatives and then Labour triumphed. The same could happen to Ukip if they fail to hang on to Rochester and Strood. Clacton looks gone, right at the top of academics' '100 most likely Conservative seats to go to Ukip'. But Rochester and Strood, which sits precisely nowhere in that list, is less likely and fertile ground. Lose it, and all the air will go out of the balloon. Win it, and other defectors and other by-elections are likely completely to derail the Conservative electoral push. The stakes are high.

Ukip actually has a lot going for it. Two decades of machine electioneering, perfected especially by the Liberal Democrats, which show that you can win seats if you target all your resources on them - rather than hoping for the SDP's larger, and in the end chimerical, 'breakthrough' everywhere. The new party has a heartland - roughly, poorer eastern seaside and inland towns with high proportions of low-income voters. They know where they can win: Clacton and Rochester and Strood, of course, but also in Thurrock, Great Grimsby and Thanet South (where Ukip's leader, Nigel Farge, is standing). Some unlikely fruit might just fall into their laps - Lord Ashcroft's recent polling of Liberal Democrat seats suggests that they're in with a shout in Torbay and St Austell and Newquay in the South West (you can download the full report here). They'll probably win two to four seats if they go on like this. But it's like threading the proverbial eye of the needle - one big misstep, and the whole prospect might disappear.

So what must they do? Win Rochester and Strood, and secure one or two more defections. Keep up the momentum, in terms of plausible narrative at least. If they once look down, or look like they are wobbling in the performance of their high-wire act, the precedent of the SDP suggests that they might fall - far and fast.

The Conservatives had better hope they do. If they don't? Ed Miliband will walk into Downing Street, almost unopposed.

Wednesday, 24 September 2014

Does Labour's 'Ed problem' really matter?


Turning away from the epochal and era-defining issue of Scottish independence for a moment, normal politics is struggling to make itself heard. And nowhere more so in yesterday's party conference speech by Labour leader Ed Miliband (above), which by common consent (especially among those in the hall) was a bit of a dud - especially when compared to his last two efforts, which were rightly and heavily praised. Wordy, worthy and solidly likeable, nowhere was there an ounce of the charisma or sense of powerful, election-shaping personality that one might have looked for in a man 'inevitably' on his way to Downing Street.

But 'Public Policy and the Past' thinks that our yearning for such 'powerful' leadership may be misplaced. Rare are the pre-election speeches that really make the weather. Harold Wilson's 1963 Scarborough address, summoning up 'the white heat of technology' in Labour's support, is still evoked as the model. It's still discussed and pored over as one of the most important speeches of the second half of the twentieth century - before its time as it in the end proved to be. And Tony Blair's 1996 appeal to 'education, education, education' as the nation's potential salvation was another humdinger, all sweat and sincerity. Those are speeches, that's for sure.

But for every Wilson or Blair there's a David Cameron, whose rather forgettable desire to 'get Britain back on its feet' disappeared as soon as the ink was dry in 2009. Heath and Thatcher delivered similarly anodyne conference speeches in Opposition, but they were soon in No. 10. So there's no need to shout and scream on your barnstorming way to general admiration, Gordon Brown-style (much as Ed could do with that as well). It's a trap and a delusion to believe that there's only one style of leadership - or that voters really care about which bits of the speech Ed did or did not forget. They know he's likeable but not-very-inspiring. They've long known that. Maybe a pledge to protect the NHS and the implication that Labour might go easier on spending cuts will appeal to them anyway.

So we're beginning to ask ourselves: do Ed's presential problems really matter? Labour's economic credibility gap and the unpopularity of its leader have long been 'priced in' to their chances at the next General Election, now only seven and a half months away. And yet the party leads, in the latest opinion polls, by four, six and seven points.

It's an intriguing question, for contemporary historians and political scientists alike. The main relief? At least we'll soon find out.

Sunday, 21 September 2014

Five takeaways from Scotland's independence referendum


Well, that wasn't close. We thought it would be, but it wasn't. The 'yes' camp in the Scottish independence referendum took a bit of a beating, albeit one partly disguised by its very strong performance in Glasgow and Dundee. Landslide victories for 'no' across great swathes of the country more than handsomely offset the radical 'yes' movement's very strong grass-roots mobilisation in those two big cities, sweeping through areas that the Scottish National Party has come to think of as 'theirs' in the Edinburgh Parliament. Middle Scotland, that little-talked-about but deeply conservative and cautious slice of the nation that explains why Scotland is actually much more like England than anywhere else, came out in its droves to defend what it saw as good economics and blatant common sense. For the most part, it was right to do so - despite an admirably multi-coloured and vigorous campaign from the other side of the debate.

And we do apologise for that outbreak of emotionalism at the end, by the way. It won't happen again. The normally calm, cool, detached and analytical order of service has been resumed. How embarrassing, eh?

In any case, it's all over - for a long time, if nothing particularly radical changes. But what can we learn from it? Here's the five takeaway headlines 'Public Policy and the Past' thinks are worthy of note, which are hopefully a bit different from the usual run of the mill commentary:

1. You can't fool all of the people all of the time. Gallons of newsprint have been spilled over the perceived weaknesses of a 'negative' and 'backward-looking' Better Together campaign. Except they won, and they did so in exactly the way their pollsters thought that they would: by calling forth a decision of the head to frustrate a potential decision of the heart. It was a triumph also founded in the fact that the formal 'yes' campaign was absolutely, unremittingly, indeed breathtakingly dire in a way that mattered much more than tone. It was this, by the way, that was behind the breach between the media and Alex Salmond, Scotland's First Minister and leader of the Scottish National Party (SNP): journalists who actually didn't have much of a dog in the fight were appalled by the evasions and straightforward, blatant untruths pumped out by the SNP. They tried to call them out on it, to little effect, and were then subjected to a public monstering for their pains. But let's run through some of the sub-GSCE economics of the 'yes' campaign, shall we? What currency would an independent Scotland use, they were asked. The pound, they said, first in a proper currency union, then as a 'sterlingized' rogue currency, then as a 'transition' (though to what, we were never told). We'll get the required currency reserves out of the Bank of England, they said - even though they must have known that Scotland's share by population would have been nothing like enough. We'll defend our currency without any public sector spending cuts, they said - even though a new state's credit rating would have fallen even as its interest rates shot upwards. The whole thing was - and we're genuinely sorry to say this, we really are - a complete and utter farce and a joke. By the end Mr Salmond was forced into saying that Scotland would 'get a share' of the UK government debts the Bank of England has bought under Quantitative Easing - even though that would just mean holding a load of debt at different levels of maturity to set against a load of other spending demands. Mr Salmond once worked as an economist in the oil industry. He must have known that all of this was a load of cobblers. Other Scots ran a mile from these unbelievably reckless gambles, just as Americans eventually recoiled from the truth-lite Romney campaign in 2012. Maybe Scotland will become an independent state in our lifetime. That's for voters in Scotland to decide. But the prospectus will have to be written on something other than the back of an envelope.

2. Our formal politics is in deep, deep trouble. Use the word 'Westminster' anywhere and you'll get a derisive snort - a fact that the 'yes' campaign used to great effect against its opponents. Fair enough. But that's yet another of those many ties that binds us together, because that's the reply you'd get in Lewisham, Luton, Leamington Spa and Leominster as well as in Lewis and Lerwick. Now this isn't new. Harold Wilson and Edward Heath hardly set the world alight in 1970 and 1974, and to be honest it was a bit of a reach to get all that many voters to really, deeply trust either of them. But the great Labour and Conservative Parties of the past are dead. Their mass membership has withered. The social lives which they offered have been wiped out in favour of a home-centred life that offers many Britons the promise of a more easeful, peaceful, less easily-identifiable and less clearly class-based life. What that means is that much of the deep, powerful resonances that they could once summon up are fading away: Gordon Brown's intervention in this campaign may therefore be a last hurrah for such old-time religion, rather than a symbol of its resurrection. Whenever formal politicians in suits try to say anything, they get shouted down - not always fairly, it has to be said. Interesting, innovative, multi-dimensional community groups organising at grass roots level often take their place, because they seem to listen to and represent local people more sympathetically. Women for Independence, the National Collective and the Radical Independence Campaign in Scotland are all good examples of this: glorious, riotous, optimistic and deeply heartening. But the problem remains that getting and sharing all your information on blogs, Facebook and Twitter lets oodles of deeply unrealistic propaganda spray out everywhere with no checks - the fantastical and mendacious Wee Blue Book, or the rumours of massive oil finds that were being hidden from the electorate, are good examples from this campaign. But unless the main UK parties do something to shore up trust in our politics, they are on a hiding to nothing in the long run.

3. If the new settlement doesn't work, the separatists will be back - soon. Nationalism, now and forever, must inherently believe that its progress is natural, is inevitable, is without question the embodiment of the will of 'the people' it represents. This is, of course, nonsense. Plenty of 'national' movements have surged ahead only to then fade away - at least in terms of establishing a formal state for the group that their vanguards have claimed to lead. Quebec's example is an instructive one, for after its 1980 and 1995 referenda the independence movement there has gradually crumbled. Voters, quite frankly, have got bored with it and turned to other, perhaps more concrete, issues. But Mr Salmond's campaign rhetoric exposed that the SNP don't understand this: there were no actual 'no' voters, he said, but only 'deferred yesses', in one of the most offensive and counter-productive remarks of a long campaign studded with them. He revealed it again in his concession speech, saying that Scots did not wish to form a new nation-state only 'at this time'. Articles written by the 'yes' camp since the result came in are drenched with the idea: take Irvine Welsh's piece in The Guardian, for instance, which preposterously and presumptuously manages to say that pro-union voters have been engaged in a 'last-ditch' defence of the union which has only 'bought time' for their cherished (but apparently backward) ideas. A 'true' national consciousness is of course on the way whatever real people, with their fuddy-duddy ideas about individual liberty and independent thought, may want or say they want. It is a set of concepts that belongs to the nineteenth century: deterministic, one-dimensional, simplistic - and wrong. Nationalists linger over polling results which show that 16- and 17-year-olds voted heavily for the 'yes' side, without noting the small sample sizes involved - and the fact that many polls had them in the 'no' camp. Nor do they look at the 18- to 24-year-old age groups, which is pretty solidly in the 'no' column. 'Our time will come', they tell themselves, once the heavily no-voting older generation has passed on - without considering that present 'yes' voters might themselves get more conservative as they grow older and start to ask 'who's going to pay for my pension?' The idea provides solace now, as the 'yes' camp's reaction turns from shock, to disbelief, and now to anger. But it will also allow them many a myth to build on in the years to come. 'The 45 per cent', as they incrasingly label themselves, have not gone away. They'll be back, more rapidly than many think- which is why they're busy constructing a 'stab in the back' myth of betrayal even as we speak.

4. David Cameron is not as clever as he thinks he is. Gordon Brown came to his rescue. Bill Clinton came to his aid. Barack Obama sprang to his defence. Had he lost the Union, he would probably have had to pack his bags and move out of No. 10 Downing Street. But he didn't. His 'side' won, quite easily in the end (though they would have won by a huge landslide had their campaign been better managed). And he didn't even have to do any of the legwork. But then he did what he always does: as soon as the pressure was off, he started to fumble around in the mud for the ball. Again. He announced straight away that there would now be a consultation on 'English votes for English laws', since the unionist parties had promised Scotland so much more devolution that Scottish MPs shouldn't really be voting on English-only issues. Now put to one side that this is a bit of a diversion (there have been only two recent Parliaments - those elected in February 1974 and May 2010 - where this would have made much of a difference, and even fewer votes) and just consider the mood music. Forget for a moment that England is so dominant within the Union that a few non-English MPs voting on proposed laws should be the least of 'English' people's worries. Accept that Mr Cameron has to say something about England given the furious state of his back benchers, incandescent that so much had been 'offered' to Scotland without their say-so. This was still a blunder into a trap that he was trying to set for Labour's leader, Ed Miliband. By trying to strip Labour's Scottish MPs of wider voting rights, and thus entrenching the Conservatives' control of England, he was squandering the chance to celebrate and deepen unionism's victory - and threatening a furious backlash in Scotland if the joint UK party leaders' pledge were to collapse altogether. He was foregoing any attempt to win any more Westminster seats in Scotland, though the 'no' vote suggests that there might well be opportunities there, and he was yet again trashing his own best and most successful image, that of national Baldwinite unifier. Now Labour has rejected his idea, what if they get together with the Liberal Democrats, who also oppose tying English 'reforms' to more Scottish devolution, and just pass the Scottish package themselves without listening to the Conservatives at all? The Prime Minister will be naked before the storm. Way to go, Dave.

5. Ed Miliband is about to be subjected to a pasting. Scotland's 'yes' campaign reminds us of Labour's projected campaign in the 2015 UK General Election. It's apparently determined to be optimistic, offer a slightly more left-wing variant of social reform that's been on offer for a long while, and to be built from the ground up given how early Labour has got its target seats and candidates in place. Well, if Mr Miliband as Leader of the Opposition thinks that's how he's going to play it, he's now seen the ruthlessness of the reply. There'll be a 'shock and awe' campaign of businesses lining up to warn of the consequences of a Labour vote, just as there was in the campaign against 'yes' in this independence referendum. There'll be the fast-moving cynicism that the Prime Minister displayed when talking about 'English votes for English laws' before the last count on Scottish independence had even been completed. There'll be leak after leak after leak questioning the Labour leader's competence and team. It'll be very personal, very nasty, very concerted, very dirty - and probably very successful.

And that's it for now - except to reflect that our national life must now go on without some of the rancour of recent weeks. 'Yes' made a lot of important points. They did much better, in terms of the result, than we would have supposed when the campaign started out. Their ultimate ends are not yet extinguished. Once the initial pain has healed, the 'yes' camp will see how important its gains and arguments have become. The skill and the challenge now is for us all - 'yes' or 'no' in a debate now past - to put those insights and that campaign to good use.

Tuesday, 16 September 2014

Reasons to oppose Scottish independence, #10: the ties that bind us


We've spent the last couple of weeks trying to demolish the analytical, statistical and intellectual case for Scottish independence - this time at least, and on the prospetus we're being offered right now. We'd say that you could get the Yes campaign's plausible policy ideas on a postage stamp, but that would flatter them. A microdot would do.

Even so, something is missing. Something important. A sense of passion, urgency and attachment - an insight into the visceral, familial, emotional and above all personal feelings that make so many of us so depressed and downcast about a possible future as two states, rather than one. The statistics serve often as a front for deeper habits, beliefs and commitments - a justification for, rather than the source of, what we really felt deep down all along. You can get through pages of graphs, reams of tables, binders full of merely dry-as-dust concepts - and get precisely nowhere persuading anyone of anything. Because the first moment, the 'blink', of what you feel and believe cuts through all that. It's all 'we' and 'your correspondent' and 'the present writer' on here all the time, isn't it? All the links. All the highlighting. All the numbers. All the figured rhetoric. It's a useful way of talking, but a poor substitute for the flesh and blood business of actually living with other people. Or peoples.

That's not how nations are made. Or preserved.

So let's try a bit of 'I' as well. Without links or numbers. I - there it is - apologise in advance for this. It isn't the run-of-the-mill way of proceeding. But then it's not a run-of-the-mill moment, is it?

Where to begin? Oh, that's it. I love Scotland. I always have. I have looked out at Muckle Flugga and its far northerly lighthouse from Unst on the very tip of the Shetland Islands; walked in the frigid, snowy summer cold between the peaks of Cairngorm and Ben Macdui; looked out from Sgurr na Stri in Skye's Cuillin Hills on the bright seas lapping around the islands of Rùm and Eigg; stood aghast at the carpets of beach-flowery wild machair on the Uists; laboured under a hot sun on the Fife Coastal Path between Crail and Elie; crawled into the middle of the Maeshowe chambered cairn on Orkney; scoffed down many a cream tea from Braemar and Peebles; huffed and puffed up to the peak of An Cliseam on Harris, to be rewarded by a (very) brief parting of the clouds; been blessed with a scorching hot day at Crape Wrath, massive foghorn and huge lighthouse looking for a few hours as if they were redundant; I've snaked the car up and around the notorious Bealach na Bà pass on the way to Applecross in the far west; and I lifted my midge veil to propose to my wife at the end of the Ardnamurchan Peninsula in the Highlands. A seal bobbed up to have a look at what was going on, by the way.

And lest I get accused of promoting only the chocolate box tourist Scotland of mawkish Highlands painting, I've researched my way through the wooden-panelled rooms of the National Archives of Scotland in Edinburgh, shopped my way through Glasgow, swooped over Aberdeen in a tiny BA twin-prop, spoken at Glasgow Caledonian University and mooched around on the beach in Stonehaven. It's got everything, Scotland.

But the overwhelming sense of belonging it offered for this Briton of both English and Irish descent was throughout that this was our shared space, our collective place, the grounds for our comings and goings and meetings and leavings. Not 'I' or 'me' or 'we' or 'you' - not Scots and Welsh and English and (Northern) Irish. That was the point. The key. That the higgledy-piggledy people, the patchwork quilt, the grab-bag that makes no sense - in short, the British - were deeply connected in a place beyond and below words. That there was and could be no invisible barrier between Egham and Edinburgh, the Scilly Isles and Shetland, Ipswich and Inverness. That we'd never again raise anything as silly and old-fashioned and conservative and outdated as a border between us, just for the sake of a momentary dislocation in our politics. That our ties of blood and marriage and love and honour were so obvious that they needed no voicing. That's precious to more people than just me, and we shouldn't give it up.

All of which, I guess, adds up to this. With all the respect due another people's choice: if you can vote on Thursday, don't divide us. Keep us together. Stay. Just stay.

Please.

Monday, 15 September 2014

Reasons to oppose Scottish independence, #9: currency craziness


The ninth and perhaps most important reason why 'Public Policy and the Past' would hope for a 'no' vote in Scotland's independence referendum is the crazy currency uncertainties that have been allowed to creep into the debate. Now we wouldn't have been quite so categorical as the UK government in saying 'Scotland can't keep the pound. That's it'. It depends what you mean by 'the pound', what kind of timeframe we're talking about, and how it's all organised. Still, the wilful ignorance that the Scottish Government in particular seems to be indulging in has been if anything even worse than this organised hard-man act - for it seems to be hell-bent on setting out on the worst possible course.

Any formal Currency Union (CU) between the remaining UK (rUK) and Scotland is very unlikely except as a short-term expedient to preserve confidence during a transitionary period. It's not just the two likely UK Chancellors (George Osborne and Ed Balls) who've ruled it out. That'd be one thing. Politicians can go back on their words. But the Bank of England and even the officials at the UK Treasury (not given to explicit political pronouncements) have also said that it's not a runner. Mark Carney, the Bank's Governor, would clearly have to resign if there was a CU imposed against his clear and explicit wishes. So would many top-ranking civil servants. They won't have to. It's not going to happen, for two simple reasons. First, a CU between a very large, relatively diversified economy such as rUK's and Scotland's much more specialised, petrol- and financial services-reliant business sector is just not going to happen. It would require London to fine-tune the rUK economy in far too dramatic and stop-start a way to be sustainable. Interest rates shooting up and down with the oil price and the constant demand that the Scottish Government cuts spending (see our last blog) is just not a situation that can be allowed to happen. On either side. Secondly, a CU would require an 'independent' Scotland to give all her powers straight back to a joint currency board - without Scottish Members of Parliament or Scottish staff in the Bank to look after her interests at a more humdrum day-to-day level. The country would have even less power than now - faced with a set of rUK decision-makers who, politically and economically, have absolutely no incentive to help them out.

So two options are left. The first is known technically as 'sterlingization' or the 'Panama option'. The second is a new Scottish currency. The first is very, very risky indeed, and just involves using sterling whatever the Bank of England says. It is possible - though the Scottish Government's own working groups on independence ruled it out. But it's fraught with nasty surprises. Once again, Scotland would have no power over its monetary fate. It would have no control over its own interest rates, and precious little opportunity to bring pressure to bear on the Bank of England to take account of its views. It would lack a central bank as Lender of Last Resort, and although London would probably step in if there was another banking crisis (as it did in Dublin), there's no guarantee of that. In the interim, Scotland would need to build up quite large reserves - of maybe £40bn to £50bn - to defend itself in the event of a crisis. Where would all that come from, when you can't print your own money and only maybe £4-5bn comes to you as your population-based share of the UK's reserves? Out of Scotland's public sector budgets, that's where - from nurses, doctors, teachers, lecturers, firefighters and the police.

All this is, by the way, the main reason why financial services companies such as banks are preparing to leave Edinburgh if there is a 'yes' vote - because, legally, they have to have recourse to a Lender of Last Resort, and a state has to have one anyway to get into the European Union. Sterlingization would be okay for a few months, a year or two at most, but Scotland would be far too exposed to the inevitable storms of international capitalism to make it stick year-in and year-out.

Which brings us to the likely outcome in a few year's time. The Scottish Government will set up Scotland's own central bank. It will issue its own currency and apply to join the Euro (which Scotland will probably have to do anyway if it's to get into the EU). This, too, is fraught with problems. The first is the inevitable devaluation and lower credit rating that a new currency will be subject to - 10% to 15% is likely. But that's not the worst part. Scotland's exporters would be rubbing their hands with glee, likely to do well out of a weaker currency. That would more than offset the transaction problems of dealing with rUK buyers and sellers. No. The problem would be the interest rate hikes that Scotland would have to impose to defend its new currency, all the steeper because the flight of banks and other finance institutions might have robbed her of up to 15% of her trade in the first place. The 'yes' camp always says 'yes, well, these are brass plate operations - the jobs won't move'. But the trade will. It'll be registered in rUK - forcing interest rates ever higher to attract capital and depress consumer spending, a necessary step to divert resources to desperately-required exports.

The main distraction here has been that Alistair Darling, the leader of the 'no' camp, allowed the phrase 'of course we could use the pound' to escape his lips during the second televised debate in late August. What he actually said was 'we could use any currency, even the ruble, but we wouldn't want to on these terms'. He was right. But from that moment, the Scottish National Party and its allies battened down the hatches, put their hands over their ears and said 'la la la, that's settled, can't hear you' and the like. Alex Salmond, Scotland's First Minister, says that 'we'll share the Bank of England', 'we'll both have the pound' and (in his more expansive moments) 'it's Scotland's pound'. Except it's not. It's not an asset. It's legally an institution of the continuing state, rUK, which can do what it likes with its monetary infrastructure if and when Scotland does actually leave. That's the harsh reality. Mr Salmond can threaten to default on Scotland's share of the UK's debts (actually, he seems to have been downplaying this recently), but it's not a bluff that can possibly be taken seriously. A new state can't default on its debts. It would be an act of financial self-harm unparalled in the developed world's recent history.

Mr Salmond wants to ignore all this. He wants to say that the currency issue has been answered. Except that it hasn't. It remains a real and present danger to Scotland's prosperity.

It is not the least of Mr Salmond's many blunders during these long debates that he has not been frank about this from the start. The 'no' camp's official campaign has been rightly denigrated, focused on saying 'no you can't' do this that and the other from the start. Complacently not organising on the ground until it was nearly too late. Losing lots of the set-piece debates on television. But Yes Scotland has made a series of own goals as well. Had the 'yes' campaigners said from the beginning that 'we're (eventually) going to have our own currency', and/ or accepted that this was but a stage on the way into the Euro, then this blog - and many other commentators - would have had much less problem with their entire case. But they couldn't and wouldn't say that, because they knew the Euro was unpopular. So they've got themselves in a mess. If they win on Thursday, they'll have got all Scots - and their mortgages, savings, shareholdings and jobs - in a similar tangle.

The fog of battle will take some time to lift, but when it does after a 'yes' vote we'll witness many years of hardship for the Scottish public sector, burdened by a lower credit rating, budget cuts to reassure investors, the requirement to build up a big foreign exchange reserve and the need to make space for export earnings that have in some cases fled south to Newcastle and London. That's why Nobel Laureate (and favoured lefty) Paul Krugman has begged Scots to vote 'no', in their own best interests: because the network of efficient, well-funded public services on which their successful economy has increasingly come to rest might be threatened in the inevitable chaos. The 'upward spiral' of Scandinavian-style Nordic welfare capitalism, which depends on just such high-quality public goods to bring together different interest groups and businesses - encouraging them increasingly to co-operate with and trust one another - will be critically imperilled at the very birth of the new state. Many years might pass before an opportunity comes along to glue them back together.

Scotland can 'keep the pound'. It's just that there'll be fewer of them to go around - and that the bitter realisation of the 'yes' camp's false prospectus will darkly colour and infect the first independent years of a divided people.

With this, the analytical and factual case rests. We hope that we have, respectfully but decisively, dissected most of the 'yes' camp's claims. Next time: the emotional case for the Union. Stay tuned.

Saturday, 13 September 2014

Reasons to oppose Scottish independence, #8: Scotland's fiscal balance


Right, now we're getting onto the biggies in the debate over Scottish independence. The first of the really, really (really) big reasons to oppose independence is that it will make poorer Scots worse off and potentially eviscerate Scotland's public services. A bold claim, but hear us out here.

The main reason for this is that the central reason Scotland has been able to aspire towards economic independence over the last few decades is North Sea oil and gas. The black gold has flowed in for decades now, making Aberdeen (for instance) a very rich city indeed - if you have a job in the oil industry, that is. It's bringing in between £5bn and £6.5bn to the Treasury every year as we speak - quite a lot of money in a country with a tax take of around £46bn, we're sure you'll agree.

Now it's true - as Scottish Nationalists have absolutely rightly pointed out for many years - that this would have made Scotland very rich in the 1970s. Perhaps, like Norway, an independent Scotland could have built up an oil fund and invested the money - all the better to spend when a recession called for it. But those days are long gone, and they're not returning. Given the present state of Scotland's precious energy reserves, estimates of her tax take for the next few years vary - from £4bn to £6bn. Few think that the Scottish Government will make its ambitious targets for oil and gas revenue. Even if we split the difference between the outliers among what projections we have, that means cuts. Lots of cuts.

Let us be clear here: Scotland is not a supplicant or a 'drain' on the rest of the UK. Her 'net fiscal balance' (the gap between her income and outgoings) has in some of the last few years been better than the rest of the UK's (rUK's) - meaning that she's 'contributing' more than others. Her tax take is bigger (per head) than anywhere else in the UK except London and the South East. Scotland's long been a key part of what success the UK economy has enjoyed, overall. The country has a high per capita income. She is full of innovative industries. She has a really strong brand. Oil, gas, tourism, whisky, high-tech manufacturing, new green energy production and education would eventually make an independent Scotland one of the richest nations in the world. Things would be fine - eventually. Some of the more apocalyptic statements from our banks are a bit overdone. Deutsche Bank's assertion that Scottish independence would be as bad a decision as the UK's return to the Gold Standard in 1925, or even the Federal Reserve's disastrous reaction to the onset of the Great Depression, are some way wide of the mark. Gross Domestic Product fell by 4% and 29% in those crises; that is unlikely this time, though there may well be falls in GDP (and renewed recession) if things go badly. The problem is how we get from here - with a budgetary reliance on oil and gas - to the 'there' of a Scottish economy that's broadly deeper and more able to handle rapid changes on the international exchanges and markets.

Because North Sea oil and gas prices have been falling - even further and faster since this referendum campaign began. Were we to experience an oil price shock downwards on the scale of the mid-1980s, Scotland would be in deep trouble indeed. And although estimates of reserves quite properly vary (and therefore the tax take will be different depending on who you listen to) the key point to take away is that this is a highly unstable and moving target. There may be more in there. There may not. The highest estimates of the Scottish Government are clearly unrealistic. And if oil prices do fall in the next few years, there won't be any incentive to extract more. Quite the opposite. Want to plan your budget three to five years ahead, before Scotland's economy is diversified? Impossible. Far better to be inside a customs and currency union that allows for slower diversification and for more sharing of economic risks and shocks.

The upshot? Scotland's budget balance is deteriorating, and looking strategically at the oil and gas market might deteriorate even further (as it has been doing for some time) if US and Canadian shale gas and fracking fields continue to come on stream with such rapidity. The much-respected Institute for Fiscal Studies has been doing some good work on this (you can download one of the key reports here) and they reckon that Scotland's budget deficit in the first year of independence might be rather worse than we've hitherto thought, at £8.6bn. Scotland's budget balance was some 5% worse than the UK's as a share of GDP in 2013/14. That might mean that Scotland was in the red on present figures to the tune of £6bn more than the country taken as a whole, a gap that must be closed eventually - especially if the 'yes' camp are really serious about a Currency Union (which they can't be, but more of this next time).

Consider for a moment. The entire Scottish Further and Higher Education budget for fiscal year 2014/15 is just a shade under £1.6bn. Think that free university tuition is safe as oil prices shoot up and down? Think again. Just as left-leaning 'yes' supporters have closed their eyes to Scotland's real economic identity as a petro- and financial-services economy, they want to say that they are the real friends of public spending - that they will 'defend the NHS from privatisation', from instance. This is - how shall we put this? - false. A fiscal hole of the order of £6bn means that all the things they hold dear - free prescriptions, free university tuition, free care for the elderly at the point of use - might have to go. They'd certainly be under threat, and a new independent Scottish Government would face deeply invidious choices that would, within a year or two, lead to a sense of deep disillusionment, even fury, north of Berwick and Carlisle. That'd be for Scots, of course, and they're likely to sweep whatever government is in power at that point from their offices. That'll be good for them. But they won't be able to avoid the hard choices that the relatively light and the relatively fair Barnett formula has provided for them in the last few years.

We're going to come on the banking structure in our next post (really, don't get us started), but note also that this is even without having to build up a currency reserve, run a public spending surplus (or smaller deficit) to prevent capital flight - or spend money on transition and administrative costs. That's tens of billions more on your cuts for you. Think that an independent Scotland would be a 'Nordic' social democracy? Think again. Any such move is likely in reality to mean that austerity would get even worse - a cruel trick to play on all those 'yes' voters who will turn out on Thursday to vote for a better future. Now it might be worth it to be free - to be independent - but we're willing to bet that most Scots who lose their jobs, benefits or services won't think so.

We offer you this closing thought: you can't eat a flag.

Friday, 12 September 2014

Reasons to oppose Scottish independence, #7: 'yes' can't have its cake and eat it


The Scottish independence referendum remains very tight in terms of its final result, and it almost certainly will do now right up until polling day itself. We are unlikely to know who has actually won, or be able to predict with any confidence who's going to win, until 5am on the morning of 19 September - when the city of Glasgow is due to report its results. Stand by for a rollercoaster over the next few days, with most polls showing 'no' with its neck just out in front a little bit, but maybe one or two surveys showing 'yes' with a tiny lead. It's going to be one of those nailbiters. Which is hardly good for Scotland or the rest of the Union (rUK), but still, that's democracy for you.

Here's our seventh thought for you if you really still are contemplating a 'yes' vote: the 'yes' camp is trying to have its cake and eat it, and it shouldn't be able to get away with their evasions scott free. Oh don't worry, they say, there'll still be the Queen, still be the pound sterling, still be no borders and no travel restrictions, still be the same or better levels of public spending. There'll still be access to all of Britain's shared services and institutions, such as its big supermarkets' distribution networks, the British Broadcasting Corporation (BBC) and the UK's energy market.

None of those institutions are free from their own problems, to say the least, but Scots seem genuinely to value and regard them. Trashing them would hardly amount to a referendum-winning strategy. Saying that everything will be fine is designed by the 'yes' side to soothe voters who would inevitably otherwise be worried about taking a huge leap in the dark. Except that they should be worried, because almost none of the assertions above are definitively correct. Scots can't rely on any of the promises of the 'yes' campaign before any treaty negotiations are over; before a constitutional convention has worked out the basis for a Scottish state; and before that has put (probably) to a referendum of all Scots and a Holyrood General Election. And it is curious that, in a campaign dedicated to saying 'oh, horrible Tories, horrible Tories' all the time (as Alex Salmond did in the second televised debate), the separatists and their leaders continue to insist that they would make great gains at the negotiating table. This despite the 'other' side being staffed by a Conservative-domianted rUK negotiating party that might just shrug and yawn whenever the Edinburgh team made demands.

Let's take these three instances one by one. First, the supermarkets. They're hardly paragons of virtue, but their costs are supported by massive distribution networks. Place a border in the way, and you imperil that - as the supermarkets themselves have been encouraged to say by the 'no' campaign and the government in London. Differential pricing in international markets is adopted as a matter of course across most of the European Union. Costs might well rise (though we should, in the name of balance, note that some others might fall if Scots-produced groceries stay more generally in Scotland, for instance). Higher supermarket prices - tougher, of course, for poorer than richer Scots - may well be the upshot overall.

Then, the BBC. The Scottish Government proposes setting up its own state broadcaster after independence, using BBC Scotland as its seedcorn. So far, so good. But there's just no way that BBC Scotland could make the same raft of programmes on its existing budget. It would rely on a joint venture with the BBC in rUK to deliver all the other programming - except that no-one south of the border has agreed to any of that, and they don't have to if they're dealing with a new state. Something will probably be stitched up, but if rUK doesn't want to play ball (and stripped of Scots Members of Parliament, there's absolutely no reason why it has to) the new SBC will be buying in BBC programmes or relying on individuals to just download the BBC as a whole via cable, rather as consumers do in the Republic of Ireland. Neither alternative will deliver the economies of scale that the BBC as a whole has managed.

Now, lastly, the power market. The National Grid itself is in precious need of upgrades, and little thought seems to have gone into how to pay for (and how to pool the payments for) the cross-border infrastructure in the event of two successor states requiring to co-operate; Scotland will need transmission upgrades more than rUK, if it wants to sell its electricity cheaply and efficiently, and it might get left with the bill. Not only that, but large amounts of the structural organisation and funding for Scottish renewables has come from rUK, which will have to be disentangled, very slowly - still leaving a lot of the companies involved south of an international border whether Scotland quickly re-enters the European Union or not. The SNP says that there will just continue to be a 'UK-wide' energy market - unlikely, firstly because there won't be a UK (or at least one containing Scotland), and because transaction costs in the inevitably different regulatory regimes are bound to rise.

The reality of higher prices and poorer services are not exactly electoral gold. The 'yes' campaign doesn't want to face them. Ask yourself: what do you do instead? You lash out. You go on the offensive against journalists who ask you questions, as the First Minister did the BBC's Nick Robinson at a deeply strange and confrontational press conference yesterday. You threaten businesses helping the 'no' side with retribution after a possible 'yes' win, all the while pushing forward your own 'businesspeople' via Business for Scotland - which, given their roles and experience, is a pale imitation of a Scottish business platform if ever there was one. You organise piped marches on a distastefully-named 'short walk to freedom' to the polling stations. You talk about 'team Scotland' as if that was just you and your 'side', rather than all Scots.

Now a lot of this comes just from the overheated tempers of a critical campaign boiling over. Most of it will calm down again. Who now remembers the 'war of Jennifer's ear' from the 1992 General Election, for instance? Or the way in which Labour was initially put on the back foot over its remaining links with the unions in the 1997 election campaign? Historians, that's who, and it's their job to keep those memories going.

But all the nastiness and the snarling still exposes the central incoherence at the heart of all so-called 'civic' or 'liberal' nationalism - that it must say, of necessity, that the nation or people being defined are in some way different to others. Better? Maybe not. But different, all the same - a revelation that true believers must believe to be sadly lacking in non-nationalists, who must in some way be less truly 'national' than them. It's linked to the other contradiction exposed today - between the language of reassurance and the reality of schism - because it's at moments like these that the mask slips. It's only now, as we look out over the cliff edge towards the creation of two new, poorer and weaker states, that the reality of that national divorce as it will truly feel is revealed: nasty, brutish, and long.

Thursday, 11 September 2014

Reasons to oppose Scottish independence, #6: the road to European Union membership will be long and hard


Our sixth reason for urging a 'no' vote in Scotland's 18 September independence vote is that country's membership of the European Union (EU). It's a deal that Scotland gets quite a lot out of - in terms of regional infrastructure spending and access to markets, for instance. Outside the Common External Tariff that the EU throws around its markets, Scotland would find it much tougher (though not impossible) to make its way in the world. So would the rest of the UK (rUK) by the way, but that's an argument for a 2017 referendum on the UK's membership as a whole. If the UK as we know it now still exists, of course.

Anything that endangers this membership, or even drags it through negotiating chambers and courtrooms, will therefore do short- to medium-term damage to Scotland itself.

And that's what independence does threaten. Constitutional scholars almost all accept that Scotland will have to re-apply as a new member using the so-called 'Article 49' procedure for accession states. Since Scotland has not existed as an independent state for hundreds of years, it will be England, Wales and Northern Ireland who will be the 'continuing' member. Scotland will have to get in from the outside. Recent attempts to imaging short-circuiting this process via 'Article 48' of the EU treaties, which cover treaty revision, are deeply unconvincing, since that part of the texts deals with relations with outsider organisations and groups - not with a new state trying to get in. Or, in Scotland's case, get back in. It'll be complicated. It'll take a long time.

Now it's quite true that, in the end, all these issues will probably be ironed out - though it's possible to find more than a few big players who say that Scotland might be left out in the cold altogether, a quite disastrous outcome that must cross many Scots' minds in their deepest nightmares. Only Spain truly stands in the way, and who knows how that state's struggles with its own separatist movements will play out? Spain's worries about Catalonia might be over, or much reduced, by the time of an independent Scotland's membership. Italy and Germany may well raise no objections. Excluding Scotland would fly in the face of the EU's own founding principles - of democracy, and the fundamental rights of all it citizens, including Scots. But the intervening period of negotiations may well be very tough. European Commission officials are letting it be known that they think five years is a realistic timeframe. Any post-'yes' Scottish government has little hope of meeting its self-imposed deadline of March 2016 for independence, a date that will almost certainly have to slip back into 2017 or 2018. But that still means that there'll be a gap between Scottish statehood and EU membership.

In the interim, Scotland may well have to accept two measures that her voters won't like - first, the Euro (which is at least a plausible alternative to the present Edinburgh administration's absurd and unworkable plans for so-called 'sterlingization'), and, second, the Schengen Agreement on the free movement of European citizens. Since polls suggest that the majority of Scots dislike both ideas, the initial independence party would have ended up in one great big hangover. Try selling that to businesses and families who do most of their business with rUK rather than the rest of the world put together, let alone the Eurozone on its own (the second link there opens as a PDF).

'Special measures' will also be needed to bridge the gap between Scottish statehood and EU membership, but because this hasn't happened before, no-one is quite sure what these are or might be. Scottish citizens will have to be guaranteed the travel, movement and welfare rights that EU citizens enjoy without quite being actual citizens of the Union for a year or more. That might well hold as a sticking plaster solution, but it'll be one more thing that the rUK negotiators will be able to hold over the Scots in the long and acrimonious divocrce that this will become. Scots-born UK citizens living and working across rUK, or indeed the rest of the EU, should beware.

Although there is of course the obverse risk that the UK in total will leave the EU after any 2017 referendum, this seems unlikely: recent polls show that voters will probably vote to stay (especially if the Prime Minister recommends staying in), while if Scots do leave and set up their own state, they only make rUK's exit more likely - cutting them off from the majority of their markets and raw materials. Far better to stay and fight for the wider good.

Scottish enthusiasm for 'Europe' has become one fixed point of that country's new and more confident identity. It would be tragic if the ultimate expression of a nationalist surge that misinterprets that transformation should rob them of that confident, cosmopolitan liberalism - that 'Europeanism' - that they have come to think of as uniquely theirs.

Wednesday, 10 September 2014

Reasons to oppose Scottish independence, #5: the details don't add up


What was and is it for, all that training in quantitative methods, all those efforts to write better and analyse others' writing, all those long hours staring at the stats tables and economics graphs? What does being a public policy expert really mean, if it is not to look at the details and point out where they need fleshing out?

Nothing, that's what - and so it is with the 'yes' campaign's offering on Scottish independence, so shot through with holes that it makes a swiss cheese look like a superdense dwarf star. One (albeit partisan) commentator has labelled it 'weapons-grade drivel'. To be honest, that's a bit unfair - the Scottish Government published a massive door-stopper of a White Paper, Scotland's Future, to ward off many of these accusations, and it makes a good stab at answering quite a few of the obvious questions involved in setting up a new state. It's backed up by a whole library of never-read but impressive-looking background studies, too.

A lot of effort has gone in there, but that's not the problem: the problem is the 'yes' campaign's dishonesty in pretending that much of Scottish life will remain the same after a seismic and fundamental upheaval. That's where 'no' is going wrong, by the way, with its counter-offer of more devolution, because that puts the spotlight right back on 'Westminster politicians' that no-one likes or believes any-more, allowing nationalist claims to remain shrouded in obfuscation, doubt and downright untruths. But we digress.

Scottish independence may well be desirable. That's for Scots to decide. In the long term, perhaps that'd settle our problems of overlapping competencies and competing loyalties. We doubt it here at 'Public Policy and the Past', but there's at a highly respectable case to be made for that position. But it must be done properly. It can't just be an act of faith. And we would advise very strongly against anyone buying on the basis of today's prospectus.

Let's just take a few isses at random, shall we? Three spring to mind instantly that will cause Scotland and the rest of the UK (rUK) immense headaches if we do move to independence negotiations in a couple of weeks (and then stay at it for a couple of years).

First, universities. It is deeply unconvincing for the Scottish Government to claim that everything can go on as before if Scotland does become an independent state. rUK students would automatically become foreign students from another EU state; they will, in principle, then be entitled to freedom from tuition fees. That's it. That's the bottom line. No amount of hand waving, no evasions or or denials can change that single fact. What does that mean? It means that they will be entitled to free tuition in Scotland under EU rules, and there'll be nothing that either set of negotiators can do about it. Scottish universities would have to declare themselves legally 'distressed', probably on a case-by-case or time-limited basis, to get round this, which isn't exactly a PR coup in the making. We leave to your imagination the chaos this will cause in Scotland (which will no doubt have to cap student numbers severely, without being able to discriminate between Scottish and rUK students under EU law) and in rUK, which will see student numbers fall. Do Scottish voters know that the unintended consequence of this will be fewer free university places, and not the guarantee of that right in a future Scotland's constitution (which is not the 'yes' campaign's to promise anyway)? If not, they should be told.

Next, research policy. Scotland's extremely successful university and non-university research base does very well out of the United Kingdom's research council funding system, gaining more cash than their per capita numbers or level of pump-priming state investment would suggest. That's because Scotland has a vibrant, cutting-edge base of new industries clustered around world-class universities. Now the Scottish Government and the 'yes' campaign again reassure us that nothing will change - that Scottish researchers will still be able to apply for UK Research Council grants. They've been chuffing down some seriously powerful hallucinogens if that's what they really believe. No new rUK state is going to allow a competitor anywhere near its research funding, and although of course cross-border collaborations will continue, the bureaucratic rules and form-filling that will involve will grow and grow as the two new states drift apart. They're bad enough already. Trust us on this one. What will actually happen is that Scottish science funding will fall, or that the Scottish Government will have to make that difference up - along with all the other spending pledges they've made, from better childcare facilities to higher pensions. Can someone please tell me why you'd pull out of a science funding system where you took all the prizes? Anyone? Oh, I forgot - tumbleweed can't talk.

Then let's move on to pensions. Scottish Chartered Accountants have asked four really, really boring questions about these (you can download the full report there if you'd like) - on cross-border arrangements, the compensation regime when things go wrong, moves towards a single-tier state pension that are already underway, and the possible costs of different tax relief regimes. Now you've probably already dozed off on those dread words of tedium, but bear with it. What the chartered accountants were basically saying (and answer there has come none) is that EU law means that cross-border pensions must be fully funded. This would plunge many schemes based in Edinburgh, but with rUK members, into enormous deficits given the stringent rules applied. There would again be nothing that rUK or Scottish negotiators could do about it if both states wanted to obey EU rules - which Scotland must if it wants to stay or get back in. Welcome to a world of higher pension costs in a market that already fleeces consumers on charges. How will funds be asked to cope with higher costs from different regulatory regimes, when and how will Scotland set up a new compensation safety net - and how will tax reliefs be managed as Scotland's and rUK's pension arrangements drift apart? This hasn't mattered inside one state. You can just invest where you like. Now it will matter, to the detriment of anyone on either side of a new border who's been foolish enough to leave their cash in the 'wrong' state - one reason why Standard Life has today announced plans to move its headquarters to rUK if Scotland does indeed vote 'yes'. Pension state liabilities are another matter, but untangling National Insurance liabilities will undoubtedly be a nightmare. What happens if you'd paid half your NI in Scotland, and half in rUK? No-one seems to know.

We could go on, but fear it'll be too boring. All of this would get worked out in the end - a pensions crisis, for instance, would be far too painful for anyone to contemplate - though in terms of cases one and two, it's hard to see how Scotland's high-tech industrial future is served by independence in the short- to medium-term. But the examples are just indicative. Ask yourself this: if university, science and pensions policy looks so shoddy, what else is hiding out there?

Tuesday, 9 September 2014

Reasons to oppose Scottish independence, #4: it is not the Scots' 'settled will'


A nation is a construct: a living, breathing, warts-and-all set of contracts between human beings. It must be held together by ties of fellow-feeling, loyalty and reciprocity, especially if it is to exist and thrive within the framework of a new and fledging state.

A newly-independent Scotland looks like it will lack that feeling of 'all-in' communality - that sense that all citizens are part of it, have agreed to its nature, and assent to its traditions. It's be a major problem of state-building in the years ahead if Scots do vote to secede from the United Kingdom.

Take a look at the results of the 1997 referendum on devolution. You can look it all up local authority area by local authority area if you really want, but we'll save you the bother. Every single area voted for both the creation of a Scottish Parliament and for that new parliament to have tax-raising powers - except Orkney, which demonstrated its traditional independence of Edinburgh by (narrowly) voting against the tax-raising powers. It was and had long been the 'settled will' - in revered Scottish Labour leader John Smith's words - that Scots should govern their own domestic affairs, while remaining in the UK for the purposes of running the social security system, organising Britain's defences and managing the currency.

No such consensus exists today. We know from previous polls (though they are all a bit out of date) and other evidence that (at the very least) the Borders, Fife, the North-East including Aberdeenshire and Orkney and Shetland will all vote no. Other areas look perilously close. Only in central Glasgow and in Dundee can the 'yes' camp really be sure of carrying the day and (seeing as a great proportion of Scots live there) that might be enough. Even the capital, Edinburgh, may vote 'no' - leading one to wonder what it is to be 'Scottish', and where and how 'the Scottish' live, breathe and define themselves.

In so far as any agreement does unite Scots, three-option opinion polls show that by far the greater number of Scots would rally round the option of 'devo max' - for everything, including tax and borrowing powers, to be run from Edinburgh. Only responsibility for defence and the currency would remain in Westminster. It is this deep longing to remain within the British 'family of nations' that explains Gordon Brown's last minute intervention in favour of a (watery) form of 'devo max' - which may or may not come too late - as well as the Scottish National Party's (deeply suspect) promises that they will 'keep the pound' and maintain some completely nebulous 'social union'.

But that option isn't on the ballot paper. David Cameron and Alex Salmond went for a high-stakes all-or-nothing shoot-out in the Edinburgh Agreement under which we now labour, and that's all there is to it. Scots have to decide how best to get to their desired destination: independence under the same monarch, trying to use the pound without any control of the Bank of England? Or Mr Brown's 'devo max' plan, hurriedly assembled but passionately advocated by the former Prime Minister himself? Here at 'Public Policy and the Past', we would suggest that the latter option is more likely to unite rather than divide Scots, lessen the finger-pointing and the raging, and form a good, sound basis for co-operation in these islands. It is up to Scots themselves, but if they are happy to go it alone on the say-so of Glasgow and Dundee alone, their road to statehood may be a steep and bitter one indeed.

One thing's for sure: the fate of the United Kingdom now rests on this single question.

Sunday, 7 September 2014

Reasons to oppose Scottish independence, #3: no-one else wants a divorce


Scotland's independence referendum is a matter for Scots alone, right? Well, up to a point. As Public Policy and the Past has noted again and again, it affects everyone in these islands - and further afield, of course, from Catalonia to Northern Italy. You could think of it this way, if you'd like: Conservative governments will be more likely in London; austerity policies more deeply entrenched; any use of the pound by Edinburgh (even if there is formal agreement on that, which is an open question) likely to enforce that in Scotland whatever its constitutional status.

There may be little point in mounting all these arguments, of course. The impression is rapidly growing - though fuelled statistically as yet by little more than polls conducted by a single firm (YouGov) - that the Yes campaign is building up a decisive head of steam. Its personal contacts with voters, its word-of-mouth use of social media, its (apparently) optimistic message, its simple question ('do you want to govern yourselves?'): they might all be too much to resist. It may be too late to save the United Kingdom, and of course if that's right, so be it. It's certainly become far too close for anyone at all to call.

But let's zoom in on what other Britons think of all this, shall we? Breaking up what is after all their country too will involve them intimately, because they'll elect the MPs and the government who'll conduct post-'Yes' negotiations. We used to think that the peoples of this UK's other countries were a bit indifferent to Scottish independence. 'Well', they'd say in our mind's ear, 'if the Scots want to go, let them go. Good luck to them'.

Nothing could be further from the truth. English and Welsh voters have been found to oppose Scottish independence by a gap of 55 per cent to 15 per cent, and Welsh voters (of course understanding what fate has in store for them if they are left alone with England for company) by an even more decisive 62 per cent to 16 per cent.

This is not a matter of Labour's leader, Ed Miliband, sending 'his' MPs 'up' to Scotland to make the case for the Union. It's not a case of mounting some hurried and unconvincing plans for a constitutional convention. It is actually about what is an organic web of thick and dearly-bought relationships: emotional, social, intellectual and personal bonds on many levels that will remain whatever happens politically, but will be shaken to the core nonetheless by this potential upheaval. It's about what will feel like a deep wound and a painful, lascerating rejection to the other peoples of the UK - including those Scots-born and Scots-descended inhabitants of England, Wales and Northern Ireland, who might in some cases automatically be deemed to be Scottish citizens without any say whatsoever in the matter.

In short: everyone else wants Scots to stay in this strange, lop-sided, gnarled old confusion of a state. It's not too late. Scots can still heed those calls.

Saturday, 6 September 2014

Reasons to oppose Scottish independence, #2: Scotland's security


As the carnivalesque Scottish 'Yes' campaign for independence rolls on, and appears to make further gains, it's still worth stopping for a moment and pointing out that very few of their plans have really been tested by a commentariat increasingly inclined to accept a decision of heart over head. Having lost many of the key intellectual and statistical battles, 'Yes' is now attempting - with much success - to create a kind of emotional bandwagoning effect, in which to be 'Yes' is to be 'Scottish', left-wing, progressive, go-ahead and reformist. They reject the overt 'Englishness' of national UK leaders, including that of Labour's metropolitan, London-based Ed Miliband. Vote for us, they say, and there definitely won't be any more Conservative governments in Scotland (not that they can actually say this, since that depends on what Scots voters want over the next few hundred years, rather than just our own short lifetimes). In so doing, they ignore all the evidence that an overall Conservative majority at Westminster is extremely unlikely. Vote for us, they say, and all your economic worries will go away - without a shred of evidence that that's really the case.

It won't wash. Last week we took a look at the implications for the rest of the UK if Scotland does decide to go it alone. They were mainly negative. Over the next few days we're going to examine the implications for both 'rest of the UK' (rUK) citizens and - much more important, let's face it - Scots themselves.

Today: security, defence, security and our alliances. Scotland's Yes campaigners imagine a 'Danish-style' option, or perhaps one between situated between the peacekeeping duties of the Irish Defence Forces and the Danish forces integrated into the North Atlantic Treaty Organisation (NATO). Those roles might be well suited to a smaller nation's resources, and to its ambitions and self-image as a more liberal and less aggressive new nation than the one it has just left.

Getting from here to there will be the problem, especially at a moment of grave danger on many fronts. Setting up a new intelligence and signals organisation? New security forces? New liaison with past colleagues in rUK? It seems like an unnecessary reach. That's why it's clear that there aren't many world leaders queuing up to back a Scottish 'yes' vote. President Obama has made clear that the USA hopes for a 'no' vote. The Chinese have done the same. Tony Abbott, Australia's right-wing Prime Minister, has weighed in too - in his own clumsy and probably self-defeating manner. They're not easy bedfellows, those three, though their rare unity should tell us something: that the world is watching, and hoping that Scots vote 'no'. The Canadian Prime Minister, Stephen Harper, perhaps summed up world reactions best when he said: 'a strong and united United Kingdom is an overwhelmingly positive force in the world... There’s nothing in dividing those countries that would serve either greater global interests or frankly the interests of ordinary people in these countries'.

Now 'Public Policy and the Past' isn't much of a fan or either Mr Abbott or Mr Harper, whose brand of neo-liberal right-wing populism is damaging the social cohesion and political fabric of their respective countries. But here they - and the Americans and Chinese - surely have a point. Scotland's Scottish National Party government imagines a ten-year transition to the existence of a Scottish defence force, and key details (training, infrastructure, bases) remain extremely vague indeed. Scotland will require more than just a small naval patrol force to help secure the northern sea lanes if we do enter a third Cold War with Russia, that's for sure - as she'll find out when she applies to join NATO, and gets told (as a new applicant) that she must radically raise her planned levels of defence spending. On this, as on so many other grounds, Scotland's new grass-roots Left, today busily campaigning for independence, should be careful what it wishes for: the reality is likely to be very different from today's dream of a more egalitarian Scotland.

Even on Trident, on which regular readers will know we're very sceptical, there's more feeling on display here than thought. Scots are told that this expensive and dangerous weapons system will definitely be expelled from its present bases at Faslane if they vote for independence. Let's leave aside the fact that most Scots think that they'd rather keep the weapons, thank you very much (opens as PDF). Let's look at the strategic implications. The rUK establishment is unlikely to give up Trident quite so quickly or so easily - or without trying to charge Scots for its relocation in any Treaty negotiations. Edinburgh will need an Act passed at Westminster before it can declare independence, by the way, so trying to force anything out of any likely agreement seems like a bit of a busted flush from the start. Anyway, the rUK navy will almost certainly just move the submarines to Plymouth, increasing their upgrade's cost by a third, sure, but hardly ruling out that option on grounds of cost alone. We would submit that having your next-door-neighbour continuing to be armed to the teeth with nuclear weapons, without any say whatsoever over their use, replacement or design, is more dangerous than staying in the UK. Any accident or use is unlikely to stop at Scotland's border, as if an invisible screen had been put up at Berwick and Carlisle. Nor will Scotland, as a member of NATO, be able to stop other NATO members' nuclear-armed vessels docking at its ports.

And there's more. Not only would we face years of disruption if there is a 'yes' vote in a couple of weeks time (the next Westminster Parliament would be able to do very little except negotiate the exit treaty), but the force of Britain's best ideas - national sovereignty, the rule of law, cross-border co-operation, free trade and the freedom of the seas - would take an enormous knock. Ask yourself this: what do you think that President Putin will think, if and when he hears about a 'yes' vote? Will be frown, at the apparent success of smaller nations' desires to be free? Or smile, at his new rivals' and opponents' distress? I think you know the answer, deep down.

Independence? Our joint defences will be deranged at a perilous time. Our allies will be appalled. It isn't much of a prospectus for a new nation, really.

Next up: number three, 'everyone else wants you to stay'.

Thursday, 4 September 2014

Reasons to oppose Scottish independence, #1: it's not just Scotland's Union


So we said yesterday that we'd start getting up to speed on this decisive autumn, and we mean to be as good as our word. First up is the Scottish independence referendum, which appears hour-by-hour, statistic-by-statistic, poll-by-poll, to be slipping away from the 'No' camp. Energy and morale is fizzzing into the 'Yessers' as their poll deficit shrinks. They might well just do it now, and even if they don't, no doubt they'll feel that they've laid solid groundwork for one more heave next time. If there is a next time.

'Public Policy and the Past' is here to tell you that the Yes camp's prospectus is a bad one as it stands. Independence on some model is well within Scotland's ambit, of course, and might even be desirable in the long run. But in these circumstances, knowing what we know now? Well, the case has not been made. And how. Over the next two weeks, running up to polling day, we'll be taking a look at ten reasons why this is so, ranging from the currency, to oil revenues, to Scotland's armed forces and place in the world, and all the way through to immigration and citizenship policy.

Let's start outside Scotland though, shall we? The first reason this is such a bad idea is the effect on Wales and Northern Ireland - and on great swathes of England.

Let's take Wales first. The Welsh First Minister has made quite clear his opposition to the idea of Scottish independence, and even threatened to block any currency deal (not that he's got the power to do so, but still). Why? Because Scotland's exit from the UK will leave Wales nearly alone with England, that big brother in the bed, with even fewer sympathetic MPs in the Commons to boost its people's interests. And the much-discussed funding formulae may suffer too, if Scotland does go it alone: with a smaller UK budget, its slice might be smaller.

The situation in Northern Ireland might be even more serious. Now, no-one seriously expects a return to large-scale violence any time soon, if ever. That poison may have been drawn. But the effect on the Province of the break-up of the British state is highly unpredictable. Will Loyalists feel pushed into a corner, or a trap? Will the power-sharing Executive be disrupted, for instance over its budget, or over any travel and citizenship implications of Scottish statehood? Maybe not, but does anyone really want to push it?

And then there's the effect on 'British' identity in England itself. The UK has been pretty successful in integrating minority immigrant communities via the idea of 'Britishness' instead of 'Englishness', since the former concept seems so much more general, welcoming, overarching and above all non-ethnic than the latter. Now it's perfectly possible, as the singer and political activist Billy Bragg has argued, that there might be an upsurge in more radical grass-roots 'Englishness' after a Scottish 'yes' vote, but do you want to bet on it? Years of divisive negotiations would lie ahead, and there would be lots of reasons to blame the 'other side' for their difficulties or even failure. Not much of an environment to foster a more inclusive Englishness in, really.

So, Scottish voters: the decision is, quite rightly, yours. But the first reason to be sceptical about independence is having a thought and a care for your fellow citizens in Wales, Northern Ireland and England.

Next: Scotland's place in the world.

Wednesday, 3 September 2014

This decisive autumn


As the weather cools, and the nights get longer, so the question will now become: what sort of a nation will the United Kingdom become over the next year or two? Might it even cease to exist? Because this political season bids fair to be the most important for a generation. The nation-state that was created in 1707 might finally come apart; we'll get a much better view of the likely contours of the next General Election, whether or not Scottish MPs will really serve a full term; and we'll see more clearly whether Britain wants to be a European power or an off-shore 'global' player.

First things first: in fourteen days, Scottish residents will have their vote as to whether they want leave the UK. Right now, the odds are rapidly shortening that they will, as the polls narrow and the Yes camp make great big inroads into Labour's working-class support base. Long-time readers will know that Public Policy and the Past thinks that any such vote would be a seriously unwise leap in the dark, but one thing's for sure: even a narrow No vote will change this country forever. 'Devo max', the promised devolution of almost all the British state's remaining Scottish functions to Edinburgh in the even of Scots opting to stay, will inevitably accelerate calls for English, Welsh and Northern Ireland devolution, and accelerate our movement towards political differentiation and specialisation. We'll be covering this one in detail over the next two weeks, and enumerating the reasons why we think a 'No' vote is for now much the most attractive option for Scots themselves. But the momentous nature of the choice, and the knife edge on which the vote now rests, could not be clearer.

We'll then move on to the party conference season, which will witness the usual poll volatility as each party tribe has its say. Only once those numbers have settled down, at some point in October, will we have a really good idea where we stand as we prepare the launch-pad for the 2015 UK General Election. Will Labour be able to consolidate its narrow but stubborn lead in the polls? Commenators have opined for years that Ed Miliband is too unpopular, and Labour too tainted by the financial crisis that blew up on its watch, to be re-elected so soon. But they're having a pretty good stab at it, and their discipline and hard campaigning are sure to be favourably compared by the electorate to the chaos on the political Right.

It'll be a critical election, because then we're onto the third leg of the hard choices before us: will we have a referendum on the UK's membership of the European Union? Scotland leaving the Union will of course make any motion to leave more likely (and cause all sorts of headaches for a newly-independent Scotland), because Scots are more likely to think favourably of 'Europe'. If they've left, and/ or the Conservatives can somehow push towards an overall majority, we're likely to have a referendum that will be no cakewalk, and which will probably be extremely tight. Labour have promised that there'll be no plebiscite if they win the election. Alternatively, if David Cameron is still Prime Minister, and he recommends a vote to stay in, then in we'll stay; if his promised renegotiation fails, or he's replaced by a harder-line Euro-sceptic, then out we might come.

So that's it then. Not much to decide then, eh? Should the Union between England and Scotland (and Wales and Northern Ireland) continue? Who should govern the UK, rump or otherwise? And should it be a European power at all? There's been nothing like this conglomeration of choices since perhaps that great period of economic, social and constitutional crisis 1973-76, when the explosion of Northern Ireland's 'troubles', indecisive elections, the rise of Scottish nationalism and the European referendum of 1975 challenged Britons to ask basic questions about who they are and what they wanted.

Stay tuned. It's likely to be quite bumpy.