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

• Nicola Sturgeon: SNP leader rules out Holyrood coalition and vows to build independence case - IBT, 06/05/2016
• Scottish National Party leader Nicola Sturgeon says party will seek to 'persuade not divide' electorate on independence - Breaking news, 06/05/16
• Defiant Nicola Sturgeon; I’ll persuade not divide - Herald, 07/05/16
• Nicola Sturgeon vows to keep making the case for independence after failing to win an SNP majority - The National, 07/05/16
• Minority government will not be barrier to second independence referendum - The Press & Journal, 07/05/2016
• Nicola Sturgeon Confirms Intention to Relaunch SNP’s Independence Campaign - Herald, 08/05/16
• Sturgeon says summer independence Drive will go ahead - STV, 08/05/16
• Nicola Sturgeon Confirms Intention to Relaunch SNP’s Independence Campaign - Huffington Post, 08/05/16
• Nicola Sturgeon to launch new Scottish independence campaign - The Scotsman, 08/05/16

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 

Business for Scotland: Where are They Now?

Followers of chokkablog will be aware that Business for Scotland is an SNP front designed to give the nationalist cause a veneer of business respectability. As this blog detailed back in June 2014, their membership was fleshed out with non-business people alongside (often well-meaning and decent) small businesses who had no interest in trade with the rest of the UK.  In August 2014 this blog went on to highlight the closeness of their ties with the SNP.

Following the 2016 Scottish Parliamentary elections I thought it might be worthwhile to do a "where are they now" update on some of the key players.

Let's start with the founding Directors of Business for Scotland (BfS) who were in position as of 11/2013;

• Gordon MacIntyre-Kemp: a failed SNP councillor candidate, although he resigned as a director in March 2015 the BfS website still lists Gordon as chief executive. He appears to continue to spend his time churning out pseudo-economic, ersatz-intellectual waffle for both the BfS website and the not-so-discerning readers of his regular column in SNP fanzine "The National"
• Jim Mather: the former SNP Minister for Enterprise, Energy & Tourism, Jim resigned as a Director three months after the independence referendum. Maybe he felt he no longer had anything to add?
• Michelle Thomson: Yes that Michelle Thomson. After leaving her role as Managing Director of BfS (three months after the referendum) Michelle was elected as an SNP MP in 2015 before being suspended from the party as police investigate her property dealings
• Ivan McKee: Ivan also resigned from BfS three months after the referendum. After providing support for the SNP at Westminster (which Michelle Thomson described as "invaluable") Ivan has now been elected SNP MSP for Glasgow Provan
• Ian McDougall; You know what's coming don't you? Ian resigned from BfS three months after the referendum. He was selected as an SNP list candidate for West Scotland in the 2016 election (but failed to gain a seat).
• Tony Banks: Tony founded Balhousie Care Goup which is "one of the leading providers of care for the elderly in Scotland" and as a result (as explained in its most recent accounts) has "a significant level of income generated through local government and across of range of local authorities". Tony also resigned as a director of BfS three months after the referendum. He went on to back Stewart Hosie's bid to become deputy leader of the SNP before presumably focusing his attention on such matters as digesting the findings of the Scottish Government's Care Standards Review which was published in April 2015.
• Les Meikle: Les is MD and owner of Wise Property Care, a company with "branches throughout Scotland". Les also resigned from BfS three months after the referendum.

So of the seven Directors who were in place in November 2013 all but one resigned in December 2014. Since then one was elected as an SNP MP, one as an SNP MSP and one was a failed SNP list candidate.

But wait, there's more ...

• Richard Arkless: Richard was an active member of BfS during the referendum (he spoke against me at a Business Insider debate) and was elected as an SNP MP in 2015
• Michelle Rodger: was also an active member of BfS during the independence referendum and became a director of BfS in January 2015. Michelle was selected as an SNP list candidate for West Scotland in the 2016 election (but failed to gain a seat).
• Sarah-Jane Walls: although her profile seems to have been removed from the BfS site, Sara was listed as a member in 2014 and appeared on TV as a "Leisure Industry Businesswoman" (although she might more appropriately have been described as a Yes Scotland Board Member). According to the Herald she became an SNP member "who has set her sights on Westminster and is one of a number of candidates in the running to be the party nominee in Stirling". This did not work out well.

Finally - for those thinking this apparent party affiliation may be just a series of concidences - the Herald revealed after the referendum that SNP Chief Executive Peter Murrell was personally providing guidance on the structure of the board and how they focused their activities.

All of which means you might be surprised to learn that the description appearing on Business for Scotland's About Us page still¹ reads

"Business for Scotland is an agenda setting, independent and political party neutral business network and business policy think tank."

I guess you just have to laugh and hope nobody reading the biased misinformation they produce is fooled anymore.

1. 13/05/2016

The SNP: Running to Stand Still

Here’s how the SNP describe last week’s election result:

“The SNP has won an historic third term in the Scottish Parliament with 63 MSPs, over a million votes in Scotland’s constituencies – a first – and the highest share of the constituency vote ever achieved” - SNP Press Release

Of course there have only ever been five Holyrood elections, so the SNP’s achievement is “historic” and their constituency vote share the highest “ever achieved” only in the context of a rather short period of time, but nevertheless the statement accurately describes how the SNP have cemented their position as the dominant party in Scottish politics. But politics is all about the narrative, all about momentum and the direction of travel and (whisper it) the SNP are moving backwards.

Having 63 MSPs represents a loss of 6 SNP MSPs since 2011 and means they no longer command an overall majority at Holyrood. Coming within just 2 seats of retaining a majority in a voting system which is specifically designed to avoid that outcome is undoubtedly an impressive achievement, but it is also undeniably a step backwards.

Over 1 million constituency votes is a good headline number, but let’s not forget that it would have taken over 1.8 million votes for Yes to have won the independence referendum.

The SNP’s 46.5% constituency vote share was marginally up from the 45.4% they achieved in 2011 and compares extremely favourably with the 36.9% share with which the Conservatives won the UK general election. But you’d need to have been living in an isolation chamber for the last 3 months not to be aware of the “both votes SNP” campaign which focused on ensuring their supporters voted SNP on both constituency and regional ballot papers. Despite this, their share of the regional vote actually declined from 44.0% to 41.7%.

Add together the constituency and regional votes and the SNP’s combined vote share fell from 44.7% to 44.1%.

So the SNP achieved a thumping victory - but compared to 2011 they received a lower vote share, won fewer seats and lost their parliamentary majority. They can spin their “historic” victory as much as they like, but it is an observation of objective fact that the SNP are in a weaker position now than they were in 2011 prior to the independence referendum campaign.

As for the opposition, the Scottish Conservative & Unionist party saw a spectacular surge in their support while Scottish Labour took a pasting. This has gifted the SNP an explicitly unionist opposition who have to defend the current UK government’s record. It will now be easier than ever for the SNP to deflect attention away from their own record in office by rerunning tired independence referendum arguments and training their fire on the Tories.

Among the also-rans, the Greens passed the Lib Dems who effectively stood still. Some Nationalists argue that if you include the 6 Green MSPs you can say that “independence supporting parties” hold a majority at Holyrood. The problem with this argument is that every SNP or Green vote is not a vote for independence and that these parties combined still hold two less seats than they did in 2011 - so even on this measure support for independence has declined below 2011 levels.

So what does this mean for the prospects of a second independence referendum? Scots voted No to independence when presented with a case that assumed we’d benefit from £6.8 - 7.9billion a year of oil revenues. It’s now clear that the true figure is in fact going to be close to zero for the foreseeable future. That’s a difference between what the Yes campaign claimed and the inconvenient reality of around £1,500 per year for every man woman and child in Scotland. This is before we even start considering issues like what currency we’d use, what would happen to our EU membership terms and other costs of separation. The base from which the SNP have to argue we’d build following separation from the rest of the UK is far worse than they previously assumed. The economic case for independence lies in tatters and Nicola Sturgeon knows it.

The problem for the SNP is that they’re a one-trick pony. Their electoral success shows that it’s been a very good trick, but if you try to repeat any trick too often people eventually work out how it’s done and the magic is ruined. This particular trick only works if you have a credible economic case for independence, and that simply doesn’t exist.

In response to this problem Nicola Sturgeon has said the SNP will:

“undertake new work, starting this summer, with the aim of persuading a clear majority of people in Scotland that independence is the best future for our country”.

It's a shame that our First Minister isn't able to even consider the possibility that separation from the UK (like separation from the EU) may not in fact represent the best future for Scotland.

We can only live in hope that, despite their obsession with rerunning arguments they’ve already lost, our newly elected Scottish government finds time to use their extensive powers to improve the lot of those for whom they’re meant to be governing.

****

This article appeared in the Daily Record on May 14, 2016