Tuesday, 17 May 2016

An Open Letter to Nicola Sturgeon

Dear Nicola

First of all let me congratulate you on being returned as Scotland’s First Minister. Your party received a lower share of the combined vote than in 2011, you have fewer MSP’s and no longer command a majority - but nevertheless you can rightfully claim a strong mandate to implement your manifesto commitments.

So I’ve been checking the 36 “Next Steps” that were detailed in your manifesto, and see that independence is only mentioned in the very last one.

It would be nice to think that the other steps - things like investing in our NHS, improving our education system and creating a positive climate for business - are indeed more important for you right now than revisiting a debate you so recently lost. But if the headlines1 you’ve been making since the election are anything to go by, the question of independence remains a little higher than number 36 on your actual to-do list.

I’m teasing of course. The SNP’s formal constitution makes clear2 that independence is the first of only two objectives for the party (the second being the rather nebulous “furtherance of all Scottish interests”) - so of course independence is high on your list.

That 36th step in your manifesto talks of ”persuading a clear majority of people in Scotland that independence is the best future for our country".

Whether or not independence actually is the best future for our country is obviously not a question you’re willing to contemplate. You start with what for you is an unchallengeable conclusion and you work your way back from there.

This is hardly surprising. You joined the SNP when you were 16 and became their youngest ever parliamentary candidate as a 21 year-old. It’s probably fair to say you’ve dedicated your entire adult life to the party, that you’re wedded to the cause. In your position you have to show an unwavering belief that no matter the question, no matter the economic context or consequences, independence must be the answer. You clearly can’t ask whether separation from the rest of the UK actually is in our best interests - it’s an article of faith that it simply has to be.

So here’s what you need to understand to persuade people like me, people who don’t do blind faith.

You need to understand that we noticed your economic case relied on £6.8billion to £7.9billion of oil revenues every year3. We didn’t fall for “oil is just a bonus” because we saw that we’d need those revenues (and more) to continue enjoying the high levels of public spending we currently receive. We’ve noticed what’s actually happened to oil revenues, so know your suggested gamble wouldn’t have paid off. Those of us who’ve dug a little deeper also realise that the high extraction costs associated with our relatively mature oil reserves means that even a dramatic oil price recovery wouldn’t see North Sea tax revenues return to their historic highs3.

You need to understand that we know the UK currently transfers over £8bn a year to Scotland3. You know that too of course, because you worked hard to ensure that transfer remained in place when you negotiated the fiscal framework with Westminster. Some of us don’t see this transfer as anything to be embarrassed about either. We know that revenues generated from oil found in Scottish waters allows us to argue that (cumulatively) we’re net contributors to the UK since 19803. You need to understand that people who don’t share your ideological position see receiving funds from the rest of the UK now as the sensible result of neighbourly pooling & sharing of our resources then.

You need to understand that we know why you’ve stopped talking about “full fiscal autonomy”. We know that if we were to pay for our public expenditure with the taxes we raise in Scotland we’d have to find annual savings (or tax rises) of £8billion – 10billion a year just to match the deficit levels of the rest of the UK3. We remember that your own notoriously optimistic White Paper identified just £0.6bn of net savings (primarily from defence cuts) and you will have noticed how unenthusiastically voters reacted to Labour and the Liberal Democrats proposing we pay just £0.5bn a year more in tax.

You need to understand that we’ve also worked out that to raise those taxes simply by growing Scotland’s onshore economy faster than the rest of the UK would, even optimistically, take generations to achieve. We’ve worked that out because we read your Independence White Paper and we did the maths3.

You need to understand that we’ve seen through the barrage of misinformation that’s been spread on social media. We know that England’s costs aren’t unfairly allocated to Scotland in the GERS figures that your government produces. We know that myths about missing whisky export duties or taxes allocated based on corporate head office location are simply nonsense.

So before you look for a fresh set of Nobel laureates to try and come up with a workable currency solution, you need to address this simple truth: many of us have considered the idea that independence might be best for Scotland and have rationally concluded that, whatever the weight of emotional argument on either side, the economic case is overwhelmingly against separation. To be fair I’m sure you understand this way of thinking as as you seem to have grasped it in the context of the EU debate.

Of course you might rightly argue that this is about more than simple economics - but in that case you should have the courage and integrity to be straight with people about the fact that we’d be paying the economic price for independence for many generations to come.

This is the acid test of your faith: are you confident enough in your emotional case to be honest with us about the economic reality?



***


1. Recent Headlines

2. Extract from SNP constitution
The aims of the Party shall be:

(a) Independence for Scotland; that is the restoration of Scottish national sovereignty by restoration of full powers to the Scottish Parliament, so that its authority is limited only by the sovereign power of the Scottish People to bind it with a written constitution and by such agreements as it may freely enter into with other nations or states or international organisations for the purpose of furtheringinternational cooperation, world peace and the protection of the environment.
(b) the furtherance of all Scottish interests. 
I remain confused as to whether the personal statement from Nicola Sturgeon under the "constitution" link on the  SNP website has formally been adopted by the party as their new constitution. A very strange formal constitution and a very low-key change if it was
3. The Price of Independence 






63 comments:

Anonymous said...


Some of us have also worked out that staying as part of a group of countries within the United Kingdom also provides us as individuals with the relative safety of being part of a much larger and much wider industrial base than what Scotland could ever be. This is because quite simply because many potential start-up Scottish companies producing goods to sell in Europe and elsewhere would always have higher transport costs to sell their goods into Europe compared with companies producing the same goods in other locations further South in the UK who also would be selling to those same markets, thus putting some types of businesses in Scotland at a Geographically competitive disadvantage to ones further South located nearer to the same European markets. More expensive transport costs could be offset of course by lower labour costs in the more Northernly companies but its unlikely Scots would want to earn less for comparable work than their Southern neighbours, suggesting Scots work any harder than other people anywhere else in the UK is a smoke screen that doesn't really stand up to scrutiny. Manufacturing plant works no better or more productively in Scotland than anywhere else therefore this item is on the whole a constant for the companies in either location. The only real variable is Labour costs.(Commodities bought via worldwide markets to manufacture items generally are almost an equal cost for both competing companies too)
The dangers of trying to win any future Trade war with a more Southernly neighbour approx 10 times the size of an Independent Scotland simply because of a mistaken and political parties Utopian flawed dream don't bear thinking about, both countries involved would both end up being losers but the smaller one with naturally less competitive cost access to European markets would be the bigger loser of all. Pride often comes before a fall and more often than not its a fall that could be easily avoided in the first place by using simple commonsense in these matters.

Edwin Moore said...

Fab Kevin thanks

RJL said...

Bang on the money with this, Kevin!
Thanks

Anonymous said...

"You need to understand that we know the UK currently transfers over £8bn a year to Scotland"

Scotland is part of the UK, so this makes no sense.

But ignoring that, how much has Scotland in the past transferred to "the UK"?

For example, how much do Scots pay for Trident, London Olympics, Infrastructure in "the UK" like motorways and trains that don't reach Scotland, tax cuts for the rich under the Tories, the Iraqi war - all things not supported by a majority of Scots. How much did Thatcher destroying manufacturing in Scotland cost us?

We've been paying for all this for a VERY long time.

Can you work out how long this 8bn figure applies to. Can you also add up all of the above? Surely it's better for a serious economist to think of a country's finances in terms of decades and centuries rather than the odd year or two?

Alex Gallagher said...

Excellent. You could frame it terms of a Vow, and ask if she'll sign it.

Br.u.ce said...

Very well put, Kevin.

Kevin Hague said...

If only you'd read the whole piece.

cujimmy said...

That's a shame. I thought there was going to be real advice, based on your much-vaunted business acumen and grasp of figures.

Like how Scotland could move from deficit to quits, or at least a manageable deficit, instead of being in hock for perpetuity, reliant only on the UKs ability to borrow even more money to keep the whole shebang going - over a trillion in debt to date and still rising.

Like how Scotland should be shaping its business and industry strategy to meet the demands and assets of its widely diverse geography, based on a good working knowledge of what those demands and assets are.

Like how Scotland should be out there in the world bringing inward investment to Scotland, without permission from mammy as to where it goes and with whom it meets.

Like how Scotland should at least try and be like Germany, and develop an energy policy to generate so much excess energy from renewables that it can actually give it away - or at least, more than afford the rampantly unfair and skewed payments to be on the National Grid.

But of course you wouldn't be giving any of that advice. Because you don't want an independent Scotland. You want a dependent Scotland. (N.B. - etymology of to depend - to hang from). This is how to keep it in the Union. And that's your raison d'etre, for your belief in the Union is no less fundamentalist or irrational than any Nat's belief in an independent Scotland. Your unionism is as ingrained as Scottish Nationalism is ingrained in Nicola.

Oh, and if you want to see less headlines about referendums, have a wee word with Ruth and Kezia. They seem to be responsible for most of them.

Anonymous said...

Yer a rocket, Kev.

BigGLaw01 said...

Great piece. Well done.

Anonymous said...

Anonymous at 14.00. "For example, how much do Scots pay for Trident, London Olympics, Infrastructure in "the UK" like motorways and trains that don't reach Scotland, tax cuts for the rich under the Tories..." It seems quite extraordinary that people still do not realise GERS - the figures produced, by the Scottish Government, which show the scale of deficit iScotland would be managing - takes account of factors like these. London Olympics - not paid for by Scotland at all. Infrastructure costs are attributed on the basis of assumed benefit, so for HS2 Scotland contributes a tiny % and on Crossrail nothing at all. On tax cuts for the rich, well good grief, if you don't like them why don't you ask John Swinney why, when given the chance to redress the imbalance, he chickened out and kept Scottish tax rates the same as rUK?? And appears determined to keep doing so? The correct figures are easily available if you want to find them, you could answer the Trident question for yourself with about five minutes' research at most on Kevin's blog (and inconveniently you'll find the figure is a lot less than you think). But I guess it's more satisfying to keep trotting out the same old grievances and long-disproved economic untruths like Business for Scotland. rocoham

Peter A Bell said...

I very much look forward to the next referendum campaign when Kevin Hague and his fellow British nationalist fanatics will have the opportunity to sell to the people of Scotland their mindless dogma of THE UNION AT ANY COST!

Anonymous said...

Predictably, dear old Peter (the shouty one in the stained and slightly whiffy armchair next to the mop cupboard) entirely misses the point. The nurse will be along in a minute with a cloth, Peter.

Meanwhile ... no-one here, least of all Kevin, is arguing for the Union "at any cost", quite the reverse. What IS being patiently argued is that those proposing a radical change from a known status quo (the Union) should be honest about the impact of that change, should show what their working economic, social and political model for the new status quo would look like, and set out how (ie not just wishful thinking) it would be created and over what time period. Needless to say, nothing of the sort has been produced by the SNP since the entirely discredited "white paper". The onus is not on Kevin to prove a case as some appear to believe, it lies with those who continue propose independence irrespective of all other considerations, in other words the SNP and its supporters. Indeed it is they who exemplify the "at any cost" dogma, as their reckless, uncaring and downright untruthful campaign before the referendum so vividly demonstrated. And as Sturgeon so irresponsibly continues to do. rocoham

Anonymous said...

" Peter A Bell said...
I very much look forward to the next referendum campaign when Kevin Hague and his fellow British nationalist fanatics will have the opportunity to sell to the people of Scotland their mindless dogma of THE UNION AT ANY COST!"
==============================================================================
That's just so funny when Peter A Bell himself is a well known SNP Flag waver and major deliberate spreader of "Business for Scotland" misinformation and other false propaganda like "£8.3bn Better off ?" (http://chokkablog.blogspot.co.uk/2014/08/83bn-better-off.html ) that can be found clearly de-bunked on this blog and others...use the Search box to find it here and other "Business for Scotland" "imaginary Facts" from the SNP's wing for spreading false propaganda http://chokkablog.blogspot.co.uk/2016/05/business-for-scotland-where-are-they-now.html

Peter is so deluded by the SNP he cannot even see when he is being deceived by his own Party https://mainlymacro.blogspot.co.uk/2014/09/scotland-and-snp-fooling-yourselves-and.html

..or even when Sturgeon herself has said their White Paper is no longer fit for purpose
http://rattle.scot/how-to-answer-the-9-billion-question-over-independence

Peter A Ball not only continues to deceive himself but also deceives a great many others in his social media circle with his inane wittering's.

Perhaps Peter should start by reading Kevins Blog "The Fabulously Absolute SNP " where Kevin gave an SNP MP the oppertunity to convince him that Independence was the right answer for Scotland. http://chokkablog.blogspot.co.uk/2015/10/the-absolutely-fabulous-snp.html and see that it is not Kevin who has the closed mind.

Anonymous said...

"Blogger cujimmy said...

"Like how Scotland could move from deficit to quits, or at least a manageable deficit, instead of being in hock for perpetuity, reliant only on the UKs ability to borrow even more money to keep the whole shebang going - over a trillion in debt to date and still rising."

That will be including the £15 billion deficit that Scotland just contributed to that debt too last year and will contribute more debt to for the considerable future ..even when RUK breaks even ?

"Like how Scotland should at least try and be like Germany, and develop an energy policy to generate so much excess energy from renewables that it can actually give it away - or at least, more than afford the rampantly unfair and skewed payments to be on the National Grid."

Not that long ago Scotland was an excess producer of Electricity, it is the SNP that has had a major part in turning that around so that Scotland will soon end up being an energy importer from guess who ?...England..Wave a Saltire and give three cheers for the SNP and Fergus Ewing on their wonderful success on ruining the Scotland's Electricity Infrastructure. http://www.scotsman.com/news/brian-wilson-energy-switch-shames-scotland-1-3865703

Anonymous said...

I like how someone asks how much does Scotland pay towards trident.. a weapon system with the majority of its jobs and local investment geared towards Scotland. The Gers reports include all these figures in them. As to this being an odd year or couple of years where the rest of the UK has supported Scotland..
2014-2015 deficit £11.9 billion
2013-2014 deficit £9.8 billion
2012-2013 deficit £8.6 billion
2011-2012 deficit £7.6 billion
2010-2011 deficit £10.5 billion
2009-2010 deficit £9 billion

How many odd years or couple of years do I have to go back? And that's with all geographic "bonus" oil.

Anonymous said...

Anonymous at
17 May 2016 at 14:00 said...

"For example, how much do Scots pay for Trident, London Olympics, Infrastructure in "the UK" like motorways and trains that don't reach Scotland, tax cuts for the rich under the Tories, the Iraqi war - all things not supported by a majority of Scots. How much did Thatcher destroying manufacturing in Scotland cost us?
We've been paying for all this for a VERY long time."

This is absolute nonsense and this misinformation probably came from "Wings" direct or his "Wee Blue Book on Nonsense" or "Business for Scotland" which has been exposed as being wrong many places i.e. here http://chokkablog.blogspot.co.uk/2015/10/wings-and-his-wee-blue-book-of-errors.html

and here https://whytepaper.wordpress.com/2015/09/13/meme-busting-wings-over-scotland-infrastructure-spending/

and here https://mainlymacro.blogspot.co.uk/2014/09/scotland-and-snp-fooling-yourselves-and.html

This is in fact exactly the kind of deliberate misinformation being spread on Social media that Kevin actually already detailed in this Blog. "Boom"

"Can you work out how long this 8bn figure applies to."
It's a long term structural deficit that has applied for a long time,every year.
Why don't you try reading Kevins blogs rather than just attacking with false information ?
Can i suggest you start with these video's ? https://www.youtube.com/watch?v=GRFlR8RhKSg&index=1&list=PL-7OVl8SEba2KyZQc5Jkw8XuhfRTtrL3k

Kevin Hague said...

you've not read this blog much have you Peter?

Peter A Bell said...

Kevin

I've read way more of your demented British nationalist crap than should be asked of anyone. Enough to know that you are very much a figure of fun among informed political commentators. What a pity you yourself are oblivious to this.

Naaah! Not a pity at all! It's much funnier this way.

Max Bennie said...

"I very much look forward to the next referendum campaign when Kevin Hague and his fellow British nationalist fanatics will have the opportunity to sell to the people of Scotland their mindless dogma of THE UNION AT ANY COST!"

That's the problem with nationalist fundamentalists like Bell - they have no sense of irony whatsoever.

Anonymous said...

You should be looking at the whole piece and bigger picture framed within a an E,U and world context.

Anonymous said...

Really Peter you will have to do much better than trot out the same old tired stuff you endlessly spout. You 'Independence at any cost' fanatics are just plain deluded fools. You are prepared to follow the emotions and ignore the cold, hard economic facts that will bite you in the unlikely event independence ever happens. Still, don't let facts and rational argument get in your way, might spoil your idiotic ramblings and delusions.

Kevin Hague said...

I'll take your word for it Pete - you seem like a guy who definitely knows informed political commentators (who I imagine follow your insightful commentary very closely)

Anonymous said...

As Peter's latest reply demonstrates yet again. rocoham

Anonymous said...

Anon@17/5/16:1400:

""You need to understand that we know the UK currently transfers over £8bn a year to Scotland"

Scotland is part of the UK, so this makes no sense."

It doesn't make any sense to YOU. Your sentence was incomplete, so I've done you the honour of finishing it.

Judging by your following comments regarding Olympics and HS2, it's clearly evident why it doesn't make any sense to YOU.

I'm assuming you're extremely new to politics and the goings on in the SG. Understandable - everyone starts somewhere, even if it's Facebook.

Your starting point (as I believe already indicated) will be GERS and methodology, which can be found on the Scottish Government website (I won't post the URL as I feel that's cheating; you need as much training on using the Internet as time will allow). Understanding these two factors alone will be more than enough to make sense of Kevin's comment. It'll also explain why your comment regarding HS2 and Olympics is total nonsense. A little piece of advice: Facebook is not a news source. It's a social media space.

It's slightly embarrassing in this day and age where we have folk like yourself completely UNWILLING to scrutinise data provided and instead, attempt to use it as the basis of an argument.

cujimmy said...

Still waiting on actual advice on how Scotland can reduce its deficit...

Anonymous said...

Ask the SNP about their economic plans. They're the ones proposing that it will all magically work out for the best. rocoham

Max Bennie said...

"I've read way more of your demented British nationalist crap than should be asked of anyone." Well if you're so convinced that Hague's analysis is "crap", then why not try actually challenging it instead spouting your usual platitudinous nonsense?

"Enough to know that you are very much a figure of fun among informed political commentators. What a pity you yourself are oblivious to this." Like I said, fundies like Bell have no concept of irony. Hell, the fact that he appears to consider himself an "informed political commentator" is a barrel of laughs in itself.

Kevin Hague said...

I thought I'd been clear on this - spend less or raise more in taxes. It's not complicated.

James said...

The problem here is that the SNP have boxed themselves in. Deficit is going to rise year upon year.

They are 'championing' themselves as anti-austerity while robbing Peter to pay Paul behind the scenes to keep their pyramid scheme last as long as possible. So they cannot put their hands up & say sorry, we misled you & are now going to cut the absolute sh1t out of everything in order to tighten their belts.

On the other hand, raising taxes is going to see them lose votes, see jobs & businesses move south to a lower tax environment & a much larger customer base awaits.

If the SNP had half a brain then they could have had a far stronger case for indy. They could have came in. Kept their heads down & used the UK economy, influence to diversify our own economy away from oil, whiskey etc. Given how intertwined our economy is with that of rUK, then they increasing business with ROW should have been high on the priority list seeing as their plan was to divorce us from our primary market. While slowly working to increase our companies, exports, goods & services abroad over a sustained period of time, it would have showed their competence level. Then after a proven track record under their belt, a diverse economy able to withstand reduced business with rUK, they would have had a far stronger case for separation. Then in 2025/30, went for a referendum.

Had they done this & shown competency with a strong diverse economy behind us. I would have voted yes, as well as many others who voted NO.

Instead they have came in, meddled with absolutely everything just to try & make us so different to the rUK. Now their tinkering is starting to show in every service & it's only going to get worse. Our declining economy is now a snowball that is rapidly picking up pace down a mountain. As is life, when your down, it never rains but pours. Their neverending gamesmanship, pr spin with indy & playing blame game with the evil Westmonster is only going to make it all worse.

Only way they can save it now is to cut the indy talk. Say cuts are needed to balance the budget & seek to repair relations with WM & the business community. They won't do that though because it would decimate their voter-base, so they'll continue on as until enough people have no choice but to realise they've been caught up in a pyramid scheme that played on their sentiment rather than their sense.

Tam Jardine said...

We have to improve exports by supporting businesses that export, make Scotland a more attractive place to do business and live. We need to rebuild our infrastructure- roads, rail, connectivity, the electricity grid, pumped storage and become the renewables powerhouse of Europe. We need to attract skilled people from elsewhere and encourage our bairns to stay. Change our spending priorities.

I get you think our economy is in a bad way & that you think we would struggle. The thing is that there is no Scottish economy apart from an estimate. We are part of the UK and it is almost impossible to extricate the component economies with accuracy. I looked at GERS and there is stuff in there I couldn't explain (contributions towards English and Welsh teacher's pensions?) and other strange stuff I just don't understand. I know it may sound weird but people are not just going to say: "ok- we're shit" and scuff their feet. We shouldn't be shit. Are we shit? And if we are- why are we shit? If we are- how do we stop it being shit?

The graph I have seen on a few of your posts which shows how abysmally we apparently fair in comparison to even the weakest economies of Europe kind of sums it up for me Kevin. The only non-unitary authority is Scotland. The only country where we have to rely on these percentages and complex divisions of expenditure and revenues is Scotland. I would suggest that the least reliable figure on that graph is Scotland's deficit/GDP. Can we at least agree on that?

Of course one of the most significant issues as I see it is that we have significantly lagged behind the rUK in terms of population growth and arresting the relative decline is surely huge. If you are considering the GERS figures everything is stacked in favour of the one (Scotland v rUK) who has a growing population. The area where a low population is a good thing is the oil revenue figure per capita and that is lousy right now- everything else favours an increasing population. Services are used more efficiently in more densely populated areas and a whole range of tax revenues benefit from population increases.

I downloaded population levels for a list of 227 territories and countries from wikipedia. I deleted the UK and bunged in the data for Scotland, England, Wales and Northern Ireland and started sorting it by population change for given periods. For the period 1950-2000 there were only 2 territories on Planet Earth out of the 229 where the population fell. In the bottom spot with a population decrease of 71% was Montserrat. 2nd bottom is the country you assert has been benefiting from all this pooling and sharing. Scotland's population shrank by about 2% in that period.

I know population growth alone does not a strong economy make but if you are telling me that we are 'Better Together' when our population growth during the 2nd half of the 20th century is sandwiched at the bottom of the international table between a remote island where half the landmass was rendered uninhabitable by a massive volcanic eruption and almost all the population made homeless by Hurricane Hugo... between that and tiny St Kitts and Nevis then I just don't buy it.

The tories through the 80's, were subjecting the Scottish block grant to invisible reductions amounting to £100s of of millions and even effectively suspended the Barnett Formula- they were crucifying Scotland at the time we were sharing all that oil. During "peak oil" 1985-86 after George Younger had given up every concession the treasury asked they wanted to bring in a new 'needs assessment' to to justify a massive one off reduction. George Younger was at the point of resigning over Scotland's treatment at the hands of the Treasury.

If we are in a crap position I would suggest keeping everything the same is the very last order of the day, and keeping our tory masters down south in charge of the big stuff is just about the craziest plan anyone could conceive.

cujimmy said...

" spend less or raise more in taxes. It's not complicated."

Fair enough. So how would the deficit be narrowed using the present fiscal arrangements? What and how would you cut/raise taxes on? And to what extent would they be effective, given that there is still a substantial part of tax/spend still being decided by the UK government?

Kevin Hague said...

I'd address the issue at a UK-wide level. I don't see pooling & sharing to redistribute wealth across the country as a problem per se - it only becomes a problem if you cut the ties and make Scotland independent si it can;t happen.

I've been very consistent that I believe those who can afford it (individuals and businesses) should pay a little more tax (nationwide) and we should maintain a tight rein on public spending while prioritising education and health.

Scotland specifically needs to fix education and change our national attitude away from perpetual grievance. I'd hope our youth could emerge from education not full of excuses for why we can't succeed but fueled with ambition, energy and entrepreneurial zest.

If I ever stand for election I'll write a manifesto - until such time, I don't feel that's really my job. More important I focus my energies on maintaining and building the businesses I run which is, after all, my real job.

Anonymous said...

Tam, A. if the figures (GERS) are so unreliable, it was fairly stupid of the SNP to base their case for independence on them, wasn't it? The fact is, lots of bright people collate lots of sound information to come up with those figures, they are endorsed by Scotland's senior government economist, and while (as always) there is room for doubt, they are well sound enough to make informed economic decisions upon, which is of course what they're for. So unless you can point to any better data sources, they are as good as we will get.

B. Let's stop beating ourselves up with the idea that we are in a crap position, we're not. We are in a very good position *as part of the UK*, which funds the inherently higher costs of public services in Scotland. That's what pooling and sharing in a Union is all about. We have a parliament with huge devolved powers, and it's long overdue for some of them to be used by the SG. Our economy, even without oil and with the uncertainty of neverendums throttling inward investment, is inherently strong. We just cost more per head to run, that's all. We're only in a crap position IF you think independence is the only way forward, and that it will immediately answer all problems and make us all rich and happy without any pain or effort. In that case, yes, I wouldn't start from here, but here we are.

But hey, if you just want to bang on about "our tory masters down south" then go ahead. It's a lot easier than holding our own government to account, isn't it? rocoham

Anonymous said...

Oh, and by the way, this may help. http://www.telegraph.co.uk/comment/columnists/alancochrane/3559155/SNPs-old-Conservative-tale-is-simply-not-true.html rocoham

David GREEN said...

Dear Kevin, A few comments. I probably wouldn't have written the open letter in quite the way you did, but your essential point was spot on. If you believe, like Sturgeon, thatScottish independence is axiomatically better than anything else, then everything else becomes a subsidiary proposition. That is not, in itself, bad. But if you believe that the secondary consequences of Scottish independence, such as losing 12% of Scottish Government revenue through cessation of the Barnett transfer payments from rUK, just might make people doubt the wisdom of the primary axiom, then you have to start lying or ignoring the fact. This is clearly SNP policy, which suggests they don't really believe the primary axiom, i.e. Scotland is better independent under all foreseeable circumstances, is actually that efficacious as a policy.

Like many, I suspect, I was amused at Salmond's claim that the SNP majority at Holyrood had been lost to the unfair workings of the Scottish electoral system. I just loved the idea that the SNP majority in 2011, on the back of less than 50% of the votes, had more validity than the 63 seats the SNP got in 2016. By my calculation, the SNP should have got about 59 seats both times, which suggests the voting system favours the SNP disproportionately. So much for the moral high-ground.

I am also puzzled by Sturgeon moving Swinney sideways to Education and Swinney apparently happy to go. I am not sure I believe the rhetoric. Bottom of the published Cabinet list, and losing the Finance portfolio. Give me a break. From the outside, Swinney looked like a safe pair of financial hands. Some possible explanations? First is that Swinney actually wanted out. He can see nothing but tears in the SNP's current financial position, particularly if Sturgeon is determined to return to the Constitutional debate. Someone, somewhere in the SNP is surely going to start questioning the wisdom of shelving the Barnett transfer, and Swinney strikes me as someone who might just do that, despite his fanaticism. As for the two deadbeats who have to pick up the economic and finance portfolios, one can only feel sorry for the suckers.

Finally, we have the SNP shenanigans at Westminster. I have long said that, once the Scotland Bill was passed, there would be nothing much for the Westminster SNPs to do except be spiteful in the chamber; and outside of it? Well! As an outsider, I have always wondered what the 'long-legged beasties, and things that go bump in the night' might refer to. Now I know!

Tam Jardine said...

rocoham 2:59 & 3:04

Thanks for responding. I was trying from my own, albeit limited insight to respond to Kevin's article and I made 3 substantive points and it might help to be clearer. Number 1- that the only non-unitary authority out of Kevin's list of EU countries is Scotland and as such it is the least reliable example. I didn't traduce those figures but instead stated that A. I didn't understand them and B. that they were the least reliable figures as we are not a unitary authority. A is undeniable! but B you have not disputed nor could you. You do agree that Cyprus, or Malta, or France's deficit to GDP ratio is more easy to calculate accurately than Scotland, aye?

Number 2- Scotland's population through the second half of the 20th century (from a list of 229 countries and territories in the entire world) has suffered from the second worst growth: only better than a tiny island that was half destroyed by volcanic eruption and flattened by a hurricane. You don't dispute that as it is indisputable. I am suggesting that a population not just in relative decline compared to her neighbours but in actual decline over that period has been badly governed. Do you dispute that?

Number 3- Westminster and "our tory masters" as I put it were conducting a concerted campaign throughout their tenure from 1979 to reduce significantly the block grant in Scotland and in doing so killed growth in the Scottish economy through invisible reductions and cancelling Barnett consequentials.

You think this is something I've heard on the internet? Perhaps you rocoham consider an opinion piece written by Alan Cochrane of the right wing telegraph in 2008 to be a sound source of information on this subject? I read extensively from the data release from the national archive of confidential papers from the Prime Minister's office (released on the 30th December 2015). Feel free to check it out: http://discovery.nationalarchives.gov.uk/details/r/C15189606

Of the 3 issues I addressed in my piece on the first you made a good point (GERS are the best set of figures we have) but avoided what I was actually saying, the second you ignored completely and the third you are, in actual fact completely ignorant of the facts and wrong. Not your fault on the third as it is not widely known information.

But I get we are approaching this from different viewpoints- that is just part of discourse. I am a lttle tired of the indy echo chambers and am trying to address some of these important subjects in a grown up way.

I hope my response helps. Tam.

Anonymous said...

Thanks Tam. I agree we are approaching this from different viewpoints, so let's take that as a given in addressing your three points.... As you say, Scotland is not a unitary entity in terms of public income and expenditure figures, so yes, disaggregating them from those of the UK as a whole will always raise some potential issues of interpretation and allocation. However, the methodology used by GERS to do so is set out very clearly, has been carefully inspected and fine-tuned over many years at the behest of the Scottish Government which has an interest in their accuracy, and (as said) produces as accurate a picture as we are likely to get. I can't agree that means they are intrinsically unreliable. Or particularly confusing - what part did you not understand?

On your other two points, perhaps you can direct me to the specific page(s) of those Cabinet papers (thanks for the link, but there's a lot there) which provides the clear evidence that Scotland was in any way being singled out amongst more general expenditure cuts and what those invisible reductions actually were - I'm happy to concede the point if so (and be less completely ignorant and wrong). BUT more generally, and maybe to save you the bother, on that and on declining population, so what? We're not back then, we're right here and now. What has happened, right or wrong, is water under the bridge. Any case for independence has to be made starting from where we are now, with the situation as it is, not where we might wish to have been if only. There's more than enough backward-looking, finger-pointing grievance fouling the water already, even if that's not your intention. Should we not start looking forward and facing reality, whatever side of the independence debate we're on? rocoham

User512 said...

In response to Tam Jardine:

You do agree that Cyprus, or Malta, or France's deficit to GDP ratio is more easy to calculate accurately than Scotland, aye?

There are fewer estimates that need to be made calculating an independent state's finances. But I'm not sure that's a point a nationalist should be making. Who calculates GERS? The SNP government. If they are forced to estimate some figures, are they like to over or under estimate? I'd say that the figures produced by an SNP government are more likely to favour Scotland than the rest of the UK.

Number 2- Scotland's population through the second half of the 20th century (from a list of 229 countries and territories in the entire world) has suffered from the second worst growth: only better than a tiny island that was half destroyed by volcanic eruption and flattened by a hurricane. You don't dispute that as it is indisputable. I am suggesting that a population not just in relative decline compared to her neighbours but in actual decline over that period has been badly governed. Do you dispute that?

Scotland's population went from 5.1 million in 1951 to 5.3 million in 2011.

I think you are making a false comparison (not deliberately). Moving between sovereign states is difficult. Moving from one part of a sovereign state to another is not. The world population has increased and so the population of every sovereign state has increased. But many countries have had significant internal migration that has reduced the population of individual regions/provinces/countries.

For example, West Virginia has suffered an absolute decline in population over the same period, from 2 million in 1950 to 1.8 million now.

Several of Spain's autonomous communities have also suffered declines. Extramadura went from 1.38 million in 1960 to 1.11 million now.

Abruzzo in Italy had a population of 1.28 million in 1951, by 2001 it had declined to 1.26 million, although it has recovered since to 1.34 million.

Scotland's slow population growth isn't unique when measured against other sub-national territories.

Number 3- Westminster and "our tory masters" as I put it were conducting a concerted campaign throughout their tenure from 1979 to reduce significantly the block grant in Scotland and in doing so killed growth in the Scottish economy through invisible reductions and cancelling Barnett consequentials.

Barnett has always been tinkered with because otherwise it would have increased the differential Scotland receives even further. Scotland went from having 70% of EU per capita income in the early 1970s to 100% today. There is little doubt amongst experts who have studied Barnett that it delivers more cash to Scotland than a needs based formula would.

According to the SNP government's figures going back to 1980, Scotland's share of UK spending was 8.46% in 1980. It then increased to an average of 8.72%, and didn't fall below the 1980 level until 2008. It hit a peak of 8.83% in 1988, declined slightly before reaching more than 9% in 1997. So any changes your "tory masters" made in the 80s at worst only reduced the rate of growth in Scottish spending relative to the rest of the UK, they actually continued to increase Scottish spending faster than overall UK spending.

Tam Jardine said...

rocoham

Thanks- I am not sure if I have made myself unclear on the GERS thing. I find the figures confusing because there are items on that massive spreadsheet which I know not why they are there and others I simply do not know what they are for but that is my fault as I have not read up on the methodology. I would be happy to accept that they are produced by folk who know what they are about.

I see a graph produced by Kevin showing Norway with a massive positive deficit to GDP ratio of +10% or whatever and this gentle curve down to Scotland- the diametric opposite at -10% suggesting we are the worst economic basketcase in the EU and I draw different conclusions from those intended. Firstly- I question if that can be the case and secondly I question how we have got in this situation. This is not to disparage Kevin: I think if anyone presents evidence that conveniently favours their case it is open to question and whilst I can believe we have a strong GDP the deficit figure of £15 billion (or rather whatever it was in 2014) I think is questionable to use in trying to paint a picture of the starting point for independence.

Why? It is a little like judging the economy of one of the former soviet satellites- smaller components of a union get lumped with vast sums of spending they would not otherwise have had. We are a smallish resource rich country on the periphery of where you want to be in the world: Northern Europe. And yet when we are being judged we factor in for example the vast debt run up by westminster, our share of the 5th largest military budget in the world and not one, not two but 3 parliaments.

Our expenditure waaaay exceeds what is reasonable for a country our size for these reasons so I would suggest that whilst perhaps Kevin's graph is accurate it is unrealistic to consider this position as our starting point. It would be our finishing point as billions and billions of expenditure would simply cease being on day 1.

On the cabinet papers- check out PREM 19/1922. You could look at a couple of letters- Page 155 begins George Younger's letter where he displays his exasperation having conceded "invisible spending reductions" and suspension of the Barnett formula only to be faced with a further "needs assessment", sent days before he is moved into Defence. You could read Malcolm Rifkind's bemused letter, early on and new to the job amazed at the concessions made by his predecessor (page 127). I am vexed as the 2 docs I wanted you to see (the smoking gun) are in PREM 19-1453 which I think I had to pay for (from an older archive) where the treasury bares its teeth. Let me know if you are interested and I can send it somewhere.

I agree with you that we need to look forward but if we don't examine the past we are doomed to make the same mistakes. Why has Chilcott bothered writing a report? Iraq is in the past etc etc. Water under the bridge this stuff may be but that doesn't mean the truth should be concealed. Dead or old treasury chief secretaries and their staff from the eighties are impossible to be angry with and it would be pointless to do so anyway.

I and many others have a vision for this country and it may seem dewy eyed or unrealistic to some but I genuinely believe this project could be the best thing to happen to Europe. Imagine a new vibrant country emerging and leading the way in terms of human rights, renewable energy, environmental concerns and ethical foreign policy. We can start again and shed the baggage of grievance and the cringe, shed the animosity and actually show the rest of the UK that there is an alternative to rule by the elite for the elite. God knows the people of England, Wales and Northern Ireland need someone to show the way.

Anonymous said...

"Blogger cujimmy said... (and Tam might like to check these URL's too)
Still waiting on actual advice on how Scotland can reduce its deficit...
18 May 2016 at 06:12"
====================================================================================
CuJimmy, perhaps you should be looking at what a YES supporting economist suggests to fill the approx £9 billion scottish spending gap here ? Would Scots find paying more taxes and haveing more cuts accceptable ?
http://rattle.scot/how-to-answer-the-9-billion-question-over-independence

Tam ...WM has hardly been "stopping" people coming to Scotland, most immigrants choose where they settle themselves ..could it be that many Scots Nationalists attitude to "Foreigners" (often seen on Social media) could be affecting them from settling here ?
The changing Scottish Demographics were always highlighted as a problem for an Indy Scotland
https://mainlymacro.blogspot.co.uk/2014/09/scotland-and-snp-fooling-yourselves-and.html

Anonymous said...

Tam, with respect, the rest of the UK already knows perfectly well that there is an alternative to rule by the elite for the elite. The challenge, as with most things, is to bring it about and in doing so not make everything far worse for ordinary people. There is no evidence that "many people" in Scotland are remotely ready to accept the decades of massive stringencies - tax hikes and cuts to public expenditure - that would be involved in creating this "new vibrant" progressive independent Scotland. Everybody loves a good vision until they are asked to make sacrifices for it, and then short-term self-interest takes over, just as much in Scotland as anywhere else in the UK. I don't deride your vision at all, while not sharing it, but frankly a vision is the easy bit. The pain and hard work is all in turning it into reality, when the bills actually have to be paid. When the current Scottish government can't even bring itself adopt a marginally higher tax rate (while holding a huge majority, still being part of the UK and massively subsidised/cushioned through Barnett) for fear of the potential repercussions, I wonder just how bold an independent (and much more economically vulnerable) Scotland would ever actually be. And just how far away the first practical steps will be towards making Scotland genuinely less dependent on rUK (=London), rather than just moaning about it, as well as setting the global benchmarks you believe it can. A very long way, I suspect.

PS Cutting APD is not the best start to leading the world in respect of environmental concerns. And an exemplary ethical foreign policy may possible require being more diligent over the trade deals we do with certain companies in China.

rocoham

David Green said...

There seems to me to be no issue where Sturgeon can be in agreement about the aims, but where she thinks a bit of division is also needed. Especially if it involves her Pavlovian enemies, the Tories and Treasury. This time, it's the EU Referendum. Miss Sturgeon is reported as disliking the UK Government's Remain campaign because she thinks it insults the intelligence of voters. She particularly dislikes Treasury reports that rubbish the case for Brexit.

These views are, perhaps, not surprising. SNP policy on almost any issue is an insult to anyone's intelligence, and the economic case for independence, particularly so.

Her motivations are, as always, self-centred and narcissistic. She doesn't like Treasury reports in the case of the EU Referendum because, if they prove to be effective there, then who knows, they might prove effective in damaging the case for Scottish independence in IndyRef2. After all, the economic case for the No vote was largely accurate, whereas the SNP economic case for a Yes vote was a mendacious work of fiction. Far better to damage the Remain campaign by turning up in London to try and give the Treasury dog a bad name (and possibly give Hosie a bit of stick on the side). To an Englishman, it looks like another pathetic attempt to try and scupper the Remain vote in rUK in order to bolster the case for IndyRef2.

theambler said...

I am constantly amazed at the similarities between the current EU referendum and the independence referendum. Many of the themes and slogans are the same, albeit spouted by an entirely different segment of the population. All analyses in favour of staying the EU are 'scaremongering' brought about by corrupt institutions that take money from 'Brussels' [='Westminster']. All problems either do not exist or can be ignored so that 'sovereignty' can be restored.

One of the best things I read recently was by the FT's Janan Ganesh, who wrote the following paragraph that could easily apply, with minimal editing, to most single issue political movements:
"There is a class of people in politics for the frisson of belief, for communion with the like-minded, for anything but the tedious amelioration of material life for most people. There are Remainers who think household finances too tawdry a theme for a campaign that should major on European civilisation and the epic sweep of history."
https://next.ft.com/content/1fe4e0ec-1e96-11e6-a7bc-ee846770ec15

theambler said...

I am constantly amazed at the similarities between the current EU referendum and the independence referendum. Many of the themes and slogans are the same, albeit spouted by an entirely different segment of the population. All analyses in favour of staying the EU are 'scaremongering' brought about by corrupt institutions that take money from 'Brussels' [='Westminster']. All problems either do not exist or can be ignored so that 'sovereignty' can be restored.

One of the best things I read recently was by the FT's Janan Ganesh, who wrote the following paragraph that could easily apply, with minimal editing, to most single issue political movements:
"There is a class of people in politics for the frisson of belief, for communion with the like-minded, for anything but the tedious amelioration of material life for most people. There are Remainers who think household finances too tawdry a theme for a campaign that should major on European civilisation and the epic sweep of history."
https://next.ft.com/content/1fe4e0ec-1e96-11e6-a7bc-ee846770ec15

Robin said...

Yes, the FT's on good form at the moment. I liked this piece also on the collateral damage from Leave's loud assertions that any institution that contradicts or disputes their viewpoint must by definition be corrupt or biased. Also has some resonance with Indyref, I think.
http://on.ft.com/1WjgT7S

Anonymous said...

The Nationalist cause is an emotive one that the SNP tried to couple to economics. The reason is probably a simple one, its difficult to fight to be free when you are already free. The fight isn't for freedom it then it has to offer benefits and in todays World that tends to come down to being rewarded.

I fear the SNP fear the consequence of being honest. Its a pity FFA wasn't established, forced upon the SNP now rather than as they proposed a time of their own choosing, as that would indeed make for an honest argument. The Nirvana basis for SNP led independence is dead, as I expect the prospects for the SNP are equally poor. As soon as independence becomes a discredited option then it is hard to see how the broad church that is the SNP can maintain its strangle hold on internal opinion that is very likely to fracture.

Tam Jardine said...

User512 20 May 2016 at 15:44

Apologies for the slow response.

1. My original point was that the most unreliable figures on Kevin's graph of deficit to GDP were for Scotland as it was/is the only country that is non-unitary. And you concede this point which is good as it is self evidently the case. My questioning of the accuracy of GERS has been criticised further up this thread and amusingly you yourself are now questioning them: which one is it to be?

Much has been made of the Scottish Government's reliance on GERS figures in the White Paper (and subsequent sets of GERS figures used to contradict arguments made in the White Paper). The same criticism has to be applied to unionists. Either you consider the figures to be accurate and rely on them for your argument or you do not consider them accurate and do not rely on them. You can't have it both ways.

It is a wee bit like the "once in a generation opportunity" thing. I have spent a large part of my adult life hearing and reading just about every sentence uttered by Alex Salmond criticised, derided and questioned. He makes a fairly obvious point that in his opinion the referendum was a once in a generation opportunity (presumably to focus minds on the decision and motivate the population) and it is held up like Moses bleedin tablets of stone!

It seems to be the only thing that he has ever uttered that unionists believe to be gospel! All I ask for is a little consistency of approach.

By the way- I would argue that the EU referendum (for anyone wishing to vote Leave) IS a once in a generation opportunity but as a democrat it is obvious that another vote is possible as early as the next parliament. How could the situation possibly be any different?

Anyway- my point is-you think the Scottish Government has if anything fudged GERS to paint a less bleak picture of the notional Scottish economy. They didn't do a very good job last time round then, did they! And if the Scottish Economy is in even worst shape than Kevin's graph suggests - you presumably voted in 2014 to keep everything exactly as it was?

That is what I do not understand about the unionist proposition. You want to build support for the union ? The way to do it surely to demonstrate that we are doing well and that 300 years of union has NOT left Scotland with a basket-case economy. Yet all I hear is how crap our "sub-national" economy is.

2. So your position- The GERS figures are inaccurate and if anything paint a rose tinted picture of our bleak economic position. Scotland's decline in population in the 2nd half of the 20th century and subsequent growth following devolution (presumably due in large part to economic migration from Eastern Europe) is fine because we are a "sub national territory" and other territories have suffered decline. Fine. My interest is Scotland and so from my narrow minded perspective decline in my country when administered by her larger neighbour is not fine. I considered 1950-2000 rather than 1950-2015 because it seemed to make my point better. You look post 2000 and you start to see the influence of the Scottish Parliament and the big influx of immigrants in the reversal of decline. 1950-2000 is on Westminster alone.

3. Re the "tinkering" with Barnett (as you put the deliberate depressing of growth in the Scottish economy in the 1980s by the UK Treasury) I would ask you to check out the George Younger letter I mention in my posts above as the then Secretary of State for Scotland was completely at odds with your position.

Re the figures you quote I would be interested to know the source as I would like to compare the figures with Younger's own figures and his despair at how growth in Scotland was being suppressed by the "invisible spending reductions" and cancellation of Barnett on out of control local authority spending in England.

Thanks for your interesting response. Enjoy your weekend.

Kevin Hague said...

I'm afraid you're completely missing the point about how people like me use the GERS figures. I explain it fully in the detailed report The Price of Independence - I strongly recommend you take the time to read it

This is an extract:



We should be very clear about what this analysis of historical fiscal data can and cannot tell us. The figures only tell us how an independent Scotland’s finances would have looked if we had already been independent but were still raising taxes and incurring public spending (including reserved expenditure) as we have been as an integral part of the UK. We are looking at what in financial accounting terms would be considered pro-forma accounts.

The figures do not tell us what the future accounts of an independent Scotland would look like. They do however describe the starting point (the “run-rate”) from where we can start to consider the possible impact and fiscal implications of independence.

Precisely how independence would change Scotland’s economy is of course a hugely complicated subject that would require us to consider, amongst other factors;

• The outcomes of uncertain negotiations around issues such as currency, inherited share of

• The explicit tax and spend choices that the government of an independent Scotland might

• The impact of factors outside the Scottish Government’s direct control such as how debt and EU membership make. Although inevitably constrained by the result of the negotiations above, these would include decisions around wealth redistribution, defence, industrial and economic policy, international affairs, debt and deficit management, social policy priorities and much more.

• The impact of factors outside the Scottish Government’s direct control such asow businesses and the labour force would respond, international energy prices, international credit ratings and Scotland’s cost of debt

• The cumulative effect of all of the above on Scotland’s economic growth

The potential upsides and downsides of all of these and more was the subject of much debate during the independence referendum. This report does not attempt to re-run those arguments.

With all of these caveats given, it is worth noting that those commentators who suggest that “the GERS figures tells us almost nothing that can be related to the finances of an independent Scotland”12 are insulting not only the intelligence of their readers but the also the Scottish Government’s statisticians and the authors of the Independence White paper (which cites GERS figures on no less than 15 occasions and used them as the basis for the economic case presented). To deny the validity of the GERS data would be to deny the source of the data that gave rise to such observations as:

 “Scotland is the 14th richest nation in the world”

 “Scotland’s GDP per head is £2,300 higher than the UK as a whole”

 “[Scots have] paid more tax per head of population every year for the past 34 years”

 “Scotland more than pays her way in the UK”

Anonymous said...

Good grief Tam, your "GERS is accurate/inaccurate" line of argument is getting tedious. A. As it is not an independent entity Scotland's public finances are, obviously, substantially integrated into those of the UK as a whole. B. So in order to disaggregate figures which can be reasonably confidently attributed to Scotland and used as the basis for economic planning, a methodology called GERS is employed, not least by the Scottish Government. C. While this cannot be 100% accurate it is nevertheless completely robust, fine-tuned and precise enough for purpose. ["Accuracy" is not an absolute condition but a utility; its adequacy depends on the use it needs to meet. Is a sat-nav system which only gives a position correct to ten yards "inaccurate"? For a driver using a road system no, for the military using guided missiles yes. Do you not look at your watch because it gains 5 seconds a day and thus is "inaccurate"?] GERS is just fine. D. There are just as many if not more potential areas of ambiguity, manipulation and "inaccuracy" in unitary national public finance accounts - see various devices used by governments to manage expenditure "off the books", or as with Greece to make their finances appear to fit EU entry criteria. E. So a "unitary = accurate, disaggregated = inaccurate assumption is simply not the case. F. There is no inconsistency in claiming GERS is accurate while finding flaws in the SNP's case for independence based on them. The SNP cherry-picked from GERS the figures and date ranges that suited them, and omitted those that didn't. It was not GERS that was wrong, but the SNP's use of accurate figures to draw wildly self-serving conclusions and forecasts. G. The logic of your position appears to be: we will never know what the accurate figures are until we are independent. That is both untrue and illogical. The figures are plenty accurate already. And if you want to build a case for independence you need working figures in advance to inform public choice, not after the event when it is too late. GERS gives you those figures, now. So can we put this to bed, please? rocoham

Tam Jardine said...

Rocoham

We seem to be at cross-purposes. I was replying to User 512 above who suggested that "I'd say that the figures produced by an SNP government are more likely to favour Scotland than the rest of the UK." Having been jumped on for questioning GERS earlier I had to respond to someone suggesting that the GERS figures were skewed to FAVOUR Scotland. I am surprised no one else did!

I was happy we had reached a kind of understanding that the GERS figures were as accurate as we were going to get and we could move on.

As Kevin points out "The figures do not tell us what the future accounts of an independent Scotland would look like. They do however describe the starting point (the “run-rate”) from where we can start to consider the possible impact and fiscal implications of independence."

I would stress that from the moment of independence they will change dramatically as money going south will end immediately and money travelling north will end. We would for example have no further contributions towards Westminster or any of it's ministries, or the National Debt in the case of no currency union taking place. Our contributions to the MOD would end (perhaps this would be phased in- who knows).

In the place of all of these agencies and bodies this large amount of spending by the UK government on Scotland's behalf a different amount of money would be spent by Scotland in Scotland to fulfil the functions of state no longer provided by Westminster. So as snapshots go I would suggest it is a look at the end rather than the beginning.

I would agree you need working figures in advance but as Kevin points out they do not tell us what an independent Scotland's finances look like.

The reason I posted anything on here is because I read Kevin's The Price of Independence and within that report there is a graph which show Scotland miles off the bottom of the league table of EU countries. I understand from Kevin's piece that this forms part of his snapshot of the beginning of independence and is useful if you are of a mind to retain the UK in tact as it suggests (even though it is not Kevin's intention to do so) that we are in a perilous financial state.

If you are coming at it from the point of view of someone like me who wants Independence and who has a vision for our place as a successful Independent country within the EU- your reaction will be different. It is natural to say- is this a suitable method to use? How accurate is it? Why are we at the very bottom of the graph and Norway is hidden away to the left out of view? Our GDP seems to be OK so why is our apparent deficit so extortionate that this graph paints a very bleak view. This is not some absurd flight of fancy I am on!

If my marriage was on the rocks and I looked at an analysis of my households finances and found that I would personally be in a ruinous state immediately after leaving the family home my reaction might be: I am Better Together but It might equally be- Why am I seemingly in such a perilous financial state? I might also want to understand the methodology used to calculate this bleak picture. What I am saying is not mental.

I know there is an opinion abroad that all Independence supporters are unthinking zealots who are brainwashed with ideas of a prosperous independent Scotland that are detached from reality. I am under no illusion that there would be difficulties, particularly if Westminster continued with the same intransigence and borderline belligerence they displayed during the Indyref.

Anyway- I hope that clears up any confusion. Cheers

Anonymous said...

Dear Tam,
"administered by her larger neighbour"
England does not administer Scotland. Where did you get that idea from? They are both part of the UK, and administered by the UK and Scottish Govts.

"you presumably voted in 2014 to keep everything exactly as it was?"
The UK remains one of the world's major economies:

https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

As the GERS figures show, Scotland generally gets a good deal as part of this robust economy. Revenue is good, but expenditure (drawing on general UK revenue) has most often been higher.

Given that the UK has (literally) a queue of people trying to get in, I have to wonder what your motivation for changing the situation is.
Is it:
- the GERS figures?
- to grab a bigger portion of North Sea Oil?
- to get a Labour government?
- to hope to improve the fecundity of the Scottish population?
- to have politicians of higher morality because of their Scottishness?
- to have elected representatives that are just like you, because they're Scottish?
- to prove it can be done?

That's all the possible reasons I can think of, and I don't see why you find any of them compelling. We're in the UK, and life is good by any reasonable measure. Yes, there is room for improvement, but I think you are taking a good thing for granted. Perhaps I'm missing something?

David GREEN said...

I see Keith Brown, the new Scottish Cabinet Secretary for the Scottish Economy, is due to give a speech this afternoon on the steps he proposes to use to revive/rejuvenate the Scottish Economy. It will be interesting to hear what he proposes, particularly if it requires the SNP to re-examine its shibboleths, of which it has many.

Viewed from a detached position, one could argue that Scotland has many of the economic problems vis-à-vis rUK, that Spain or Greece, say, have relative to the Eurozone. In both cases, their economies have an exchange rate, relative to the currency whole, that is arguably too high. This leads to higher wages relative to their outputs, and a loss of competitiveness, both in overseas and domestic markets. A sign of this loss is an increase in unemployment. Scotland is showing these signs. It is compounding them by keeping taxes high and maintaining high government expenditure in areas that contribute little to improved productivity, but fall into the "nice to have"category. Its failure in this area is reflected in massive budget deficits. All the countries I have mentioned, and more, have tried to solve their currency problems within a fixed exchange rate by internal devaluation, reducing wages in nominal as well as real terms in a period of nearly-zero inflation. It leads to a lot of social unrest and, in the case of incumbent governments, a risk of loss of office. Keith Brown has got try and square this impossible circle.

Salmond, not surprisingly, got the currency issue completely wrong. He wanted independence (which would lose the Barnett top-ups) but to keep the Scottish pound pegged to Sterling. What any intelligent economist would have suggested was that he float the Scottish pound within a regionally autonomous region of the UK. He probably wouldn't have wanted that, and neither would rUK. So Scottish independence would simultaneously have removed the Barnett transfer payments and allowed the currency to float. It would have been quite some economic shock, but it would have had the merit of allowing Scotland's pound to float and for Scotland to become more competitive economically. Unfortunately, pretty well everyone in Scotland would have been considerably poorer for some time.

So, if we assume that loss of Barnett and a floating Scottish pound are out, then where does Keith Brown start? Well, if the SNP is going to run huge budget deficits, then it could start by making sure that the deficit arises from investment in the right places; i.e. investment that creates a decent return. Dump the shibboleths of free university education, doctors' visits, etc. Even socialist France charges to see the GP, and a lot else besides. Then start reducing business taxes. And if it means removing SG freebies from the Scottish chattering classes, so be it. For myself, the endless 'austerity' rhetoric needs to be cut back as well. It is mostly SNP cant.

Alex Gallagher said...

Tam
I'll let Kevin and rocoham deal with the actual economics.

The only thing I will say about GERS is it didn't exist before 1999. The SNP insisted on it. They probably hoped it would prove their belief that Scotland gets a raw deal from the UK. The Nationalist economists Jim and Margaret Cuthbert were on the group that set up the method and reviewed and commented on the numbers. In 2006 the Cuthberts quit, stating that the figures showed Barnett and other UK public spending was crucial to meeting a "well established funding gap" in Scotland's economy. So GERS didn't show what the SNP wanted, if anything the opposite, but they're stuck with it.

As for the political side. you say;

"I have spent a large part of my adult life hearing and reading just about every sentence uttered by Alex Salmond criticised, derided and questioned. He makes a fairly obvious point that in his opinion the referendum was a once in a generation opportunity (presumably to focus minds on the decision and motivate the population) and it is held up like Moses bleedin tablets of stone!

It seems to be the only thing that he has ever uttered that unionists believe to be gospel! All I ask for is a little consistency of approach."


It wasn't just Salmond and it wasn't just a casual remark. Sturgeon (Minister for the Referendum, lest you forget) said it many times and on many platforms. It was in SNP printed material. Crucially, it was in the White Paper, so it was a formal part of the SNP case for "independence". It was central to the Yes campaign. It was indeed one of their bleedin' tablets of stone. Now they want to renege and it seems that's ok with you. But it's not ok with me or the majority of Scots.

You want to build support for the union ? The way to do it surely to demonstrate that we are doing well and that 300 years of union has NOT left Scotland with a basket-case economy. Yet all I hear is how crap our "sub-national" economy is.

It's not about whether we have "a basket case economy". No doubt it's not perfect, and we can always point to problems. It's about whether Scots (me, you, our families and friends and neighbours and townspeople and fellow countrymen) would be better or worse off. The economic facts show we would be economically worse off. The Cuthberts acknowledged that, years ago. Even Sturgeon tacitly admits it by suggesting a relaunch of a new approach to "independence" starting this summer. If the previous case was so watertight, why change it?

Kevin Hague said...

Tam

There is one problem with the logic as you present it - the Yes campaign had the opportunity to propose all of the things you do and in most cases did (currency being the obvious exception, for obvious reasons) - and when they added that lot up they optimistically arrived at £0.5bn of savings which - frankly - don't make a dent in the figures.

This is the issue - all of the talk of "contributions towards westminster & its ministries" and "the MOD" sounds great until you add it up and compare those theoretical savings with the deficit gap.

I can't emphasis enough how optimistic the White Paper cost assumptions were (see chokkablog passim) and they still felt the need to include c.£8bn of oil revenues in there to attempt to make the figures palatable.

As for blaming all of this on Westminster "intransigence and borderline belligerence" I can only assume that's intended as humour - a more intransigent and (way-past border-line) belligerent stance than that of the SNP would be hard to even conceive.

Tam Jardine said...

Alex Gallagher

You say: "The only thing I will say about GERS is it didn't exist before 1999. The SNP insisted on it. They probably hoped it would prove their belief that Scotland gets a raw deal from the UK." Well that is simply not true according to the Cuthberts whom you then proceed to quote. Here is what they say about the origin of GERS:

"The very first GERS report was published in 1992. Its purpose was to estimate the general government borrowing requirement for Scotland, or, as GERS put it, Scotland’s “fiscal deficit”. This is the difference between the amount of expenditure undertaken by government on behalf of the people of Scotland, and the tax and other public revenues attributable to Scotland.

The motivation for producing the initial GERS was political. GERS had been commissioned by the Conservative Secretary of State for Scotland, Ian Lang: and this is what he said about it, in a leaked memorandum to John Major:
“I judge that it is just what is needed at present in our campaign to maintain the initiative and undermine the other parties. This initiative could score against all of them.”

As for your political point- I am not sure where you are going with it. Ruling out a second referendum for a generation was central to the Yes campaign? You may want that to be the case but it most certainly was not. How can anyone rule out a second referendum? The truth is no-one had the power to do so and no one did. That you want people to have ruled out a second referendum does not make it so. There were opinions of course, there was an ad campaign based on "One Opportunity" which I remember because I pushed hunners of those leaflets through doors. My point remains valid- you dispute everything in the White Paper with the exception of one line which you distort to make your point- where on earth is the consistency there?

Hibs had One Opportunity- a great opportunity to win the Scottish Cup last Saturday as did Rangers. Neither side might have the opportunity again for a generation but it is hardly ruled out and certainly I can imagine Stubbsy telling the team before the game what a massive opportunity they had - one that might not swing round again for them. Can you imagine Warburton will now permanently withdraw Rangers from the Scottish Cup? Or for a 15 years or 25 years or whatever?

I'm being flippant as I know its such an important argument for so many on the unionists side. Maybe the SNP let it go unchallenged so often because they don't mind their opponents painting themselves as anti-democratic. There was no promise, nor could their have been or ever be. Nobody gets to write the rules of sovereignty of the Scottish people in this way.

I would have thought the Better Together camp would be relieved to have the chance for another crack at trying to make a positive case? I waited 3 years in vain to hear it.

As for Nicola Sturgeon tacitly admitting we would be worse off economically because she wants to take a fresh look at the Independence arguments I fail to see that leap. It is the least controversial idea possible to look again at an approach if it has not been as successful as you would like. I would be amazed if Nicola Sturgeon said- OK we lost the last referendum so lets NOT take another look at the case.

Anyway- thanks for coming back to me.
Tam

PS- It is not my intention to post so many things on this thread but people keep replying and it is an interesting discussion. As long as I am not pissing people off I will try and address the points raised to the best of my ability.

theambler said...

"Viewed from a detached position, one could argue that Scotland has many of the economic problems vis-à-vis rUK, that Spain or Greece, say, have relative to the Eurozone."

One extremely major difference is that we have a fiscal union with the rUK, and Greece does not have one with rEU. That fiscal union (that manifests itself as Barnett) prevents Scotland from ending up like Greece when the oil price is low. Fiscal union is proposed as a solution to the current problems Greece has, but it won't happen because Germany would never agree to it.

This is what angers me about the economic plans during the independence campaign: Salmond could see the problems Greece had with it's economic arrangements, but he still decided to go along with the same arrangements. Some of the literature put out before the campaign suggested we could not end up in a 'Greece' situation, but we now see how counterfeit this claim was.

Anonymous said...

Tam, thanks. Moving on then, and (I think) agreeing that GERS figures are sufficiently robust for purpose, we arrive at the argument that GERS largely shows Scotland as part of the UK's macro-economic and political policy picture, whereas an independent Scotland could/would make very different economic/political choices from rUK and its financial situation could/would therefore be much better.

The difficulty with this line of argument is that, as Kevin has just pointed out, no-one yet has made the numbers add up. At the heart of the problem lies the expectation of independence in the white paper, which disgracefully promised that achieving it would involve no loss, hardship or effort, would enable even more "progressive" policies (ie freebies), could all be done at a bargain price and within 18 months, and would make everyone in Scotland RICH as well as "free". A big Giro, the moral high ground AND one in the eye for the English oppressors, was what the white paper offered. No wonder so many signed up. There was no downside or risk to independence at all. It was too seductive a picture for its political authors now to have to confess that it was, even at the time, recklessly over-optimistic and misleading.

Now the reality of the numbers is all too apparent so also is the huge downside and the risk (not to mention the full extent of the calamity averted by the No vote). An independent Scotland would be faced with some very tough choices indeed for a considerable time. Nobody is saying they could not be made IF the eventual goal were worthwhile and the people agreed. But equally, no-one has set out a remotely credible sustainable economic picture of an iScotland end game (arguing for independence in principle for its own sake, and damning the consequences doesn't count), or of the inevitably complex, hard and long path by which it might be achieved.

Scotland would certainly have to do things very differently if independence were ever to be a reality, differently not just from rUK but also from the blissful pain-free utopian fantasy painted by the white paper. It would involve tax increases and expenditure savings to orders of magnitude way beyond the tinkering mentioned so far. But I don't hear Sturgeon mention any of this, or dealing any more honestly with the Scottish people about what independence might require of them. I don't see any indication that Scotland is being readied to stand on its own two feet, in fact the reverse: the FM was recently crowing about the even more generous subsidy she squeezed out of Westminster. Until the Scottish Government sets out a more honest, responsible case for independence that deals in realities rather than wishful thinking I shall continue to believe that the SNP's real interest in independence is that it should remain forever out of reach - a juicy bone to keep dangling in front of their followers, a nationalist grievance to keep festering, and a handy stick with which to beat Westminster for yet more favours. Not something ever to be addressed with honest intent, and certainly never made to happen. rocoham

Andrew Illius said...

It would be great if ScotGov would come up with policies that moved us from deficit, shaped our business and industry strategy to turn us back into an industrial powerhouse, properly repaired education etc etc (all of which could be embarked on without further constitutional change), but it doesnt seem likely when there is only really one topic in Scottish politics - Independence. And the SNP put it there, not the opposition.

Unknown said...

Of course, another way would be to abolish the Scottish Assembly, and become fully integrated with rUK economy as we used to be, because the UK as a whole is reducing its deficit year on year.....

Jason Fletcher said...

I like I've been shot down in flames so I'll start name calling. Like the article BTW. It is for the indie crew to set the case not us the public.

Arbo regular said...

I notice that Kevin says Sturgeon got the independence bug at 16, that didn't coincide with Mel Gibson's portrayal of Braveheart did it?
I hope not because she'll always be a Krankie to me.

Anonymous said...

Arbo. You flatter Nicola. DoB 19/07/70. Braveheart 1995.