Scottish Independence Is A Belief-only Policy.
Scottish independence has always been a belief-only policy with no knowledge-content at all, while it has recently become a question of which SNP leader/ex-leader is to be credited with its implementation, if ever. However, the policy of maintaining the United Kingdom can be re-cast as knowledge-only to the benefit of UKIP, were that party to adopt such a re-casting. In an article in the business section of the Daily Telegraph of 29/3/21 entitled “Independence risks economic havoc for Scots” Louis Ashworth and Tim Wallace refer to ‘three recent events which have changed the situation for Scotland since the SNP began its campaign for independence, namely Brexit, a Covid-enforced boom in debt, and a global plunge in oil prices, all of which make the prospect for independence significantly more challenging’.
As to Brexit, these authors recall that ‘the long-standing policy championed by Nicola Sturgeon, is for an independent Scotland to swiftly rejoin the European Union’; but that ‘analysis suggests taking such a step too quickly could have devastating consequences’; that ‘Scotland’s economy is hugely open, with imports and exports each equivalent to around 60% of GDP’; that ‘the country trades about three to four times as much with the rest of the UK as it now does with the EU’; that ‘because Brexit is believed to be bad, Scexit and rejoining the EU is believed to be good economically’, though David Phillips, associate director at the Institute for Fiscal Studies is quoted as opining that ‘he is not sure this is true’. However, trade modellers from the London School of Economics are quoted as saying that ‘secession would eventually slash income per capita in Scotland by as much as 8.7%’ in contrast to Brexit’s anticipated long-term hit of 2%’; that ‘joining the EU‘ would do little to mitigate the cost of Scottish independence’; that ‘it would shave this fall to between 6.3% and 7.6%’; and that ‘returning to the EU would definitely be worse than remaining in the UK’; and that ‘the EU would have to become Scotland’s most important trading partner’; that ‘Hanwei Huang one of the report’s authors says disentangling the Scottish economy would likely prove more complicated than Brexit’; and that ‘it would probably depend on the future relationship between the UK and the EU’; and that Ashworth and Wallace conclude that ‘the dangers of an immediate re-entrance to the EU show how much the economic case for Scottish independence has weakened since 2014 – even before factors such as the Covid-19 recovery are considered’. I would add that the EU may no longer welcome a Scottish accession given the EU’s own internal problems.
As to the Covid-enforced debt, Ashworth and Wallace recall that ‘this is the biggest peacetime budget deficit ever’; that ‘it has surged by more than a third, from £1.5 trillion in 2014 to more than £2.1 trillion now’; that ‘working out how to split this bill. built up over centuries, will be politically fraught and economically critical for a new independent nation trying to win the confidence of international markets’; that ‘in 2014 the devolved Scottish government suggested splitting it by “historic contribution” to the overall finances of the UK, arguing that since 1980 oil revenues meant that Scotland has chipped in more than the rest of the UK’; that this would result in Caledonia taking around 5% of the overall national debt’ that ‘Westminster argued this was spurious, as extra spending also goes north; that in addition, the sums change depending on the base year’; and that ‘counting only from 1990 to 2014 Scotland’s share doubles to almost 10%’; and that ‘this raises the debt share from £105 billion (5%) to £ 210 billion (10%)’; and that ‘an alternative would be to split the debt in proportion to the relative populations which at 8% for Scotland would make its share of the debt, £170 billion’; that ‘either way, investors who bought UK bonds would not see some morph into Scottish bonds’; and that ‘instead, Scotland would pay the interest on the agreed share of the debt, then potentially take some on as the bonds mature’.
As to the oil, ‘the North Sea is no longer the gusher it once appeared to be’, and Ashworth and Wallace thus note that ‘in 2014 oil prices seemed to be permanently high, with fevered talk of Brent crude reaching $200 (£145) per barrel: ideal conditions for financing Scottish spending for the years to come’; but that ‘prices tumbled (as belief in anthropogenic global warming took hold), dragging tax revenues from the North Sea to a small fraction of their old level’; that ‘investment has plunged, output is set to fall steadily’; that ‘the 2050 net zero emissions targets mean this energy source is now out of favour altogether’; that ‘a 2018 report from the Sustainable Growth Commission, established by the SNP acknowledge this shift away from fossil fuels’; that ‘before the pandemic,Scottish tax revenues per capita were a touch lower than those in the UK as a whole, while spending was higher’; that ‘Mairi Spowage at the University of Strathclyde notes that this extra spend means that Scotland typically runs a notional budget deficit around six percentage points bigger than the UK’s’; and that ‘we are told little about the the long-term sustainability of the public finances of an independent Scotland, because presumably different choices would be made and different priorities set’.
Yes, but I say that presumably we are told nothing of these potential differences because their revelation would reduce to zero the public appetite for an independent Scotland; that were the current belief/counter-belief debate as to whether or not Scotland should be an independent country, to be replaced with a definitive knowledge-only policy to remain within the United Kingdom, we would hear nothing more from the belief-only supporters of independence; and that were UKIP to adopt this newly definitive knowledge-only approach, it would greatly increase its electoral support in both Scotland and in the rest of the UK.
Again, an editorial/leading article in the Daily Telegraph of 31/3/21 quoted the Institute of Fiscal Studies in saying that ‘Scotland’s funding is 30% higher than the equivalent in England’; that this difference is almost entirely due to the relatively high levels of money allocated to Scotland by the UK Government through the Barnett Formula’; that ‘the net level from Scotland’s devolved taxes make only a marginal contribution’; that ‘the Scottish Government has been provided with an extra £9.5 billion to help address the Covid-19 crisis in 2020-21 and is set to receive a further £3.3 billion in 2021-22’; that ‘Scotland has also benefited from the UK investment in vaccine development and manufacture’; that ‘had the SNP managed to take Scotland out of the UK in 2014, it would be subject to the vaccine fiasco now on show on the Continent’; and that ‘the SNP is even using some of the Covid money to subsidise school meals and bus passes’. At this point, I would add that were the SNP to take Scotland out of the UK, the new naval ship-building programme for the Clyde and the Forth, would need to be re-located to England or maybe to Northern Ireland; and that similar considerations would be applicable to the current submarine base in the Clyde area, all of which would result in revenue losses for Scotland. Thus, I maintain that the current belief-only case for Scottish independence could be recast as a knowledge-only case for remaining in the UK. 3/4/21.