The long goodbye?

There were two programs on British TV last night, both looking at the various facets of Scottish Independence.

Shock horror!

Passions are aroused by the ‘yes or no’ question and some people are being nasty on social media.

No shock but possibly horrible:

Some people who are entitled to vote are being swayed by economic considerations but nobody actually knows the true cost of independance nor if it will benefit Scottish industry.

Intimidation?

Dispatches, a Channel Four program, looked at allegations of ‘people’ being intimidated by social media and ‘The Government’. The presenter tried desperately hard to present a balanced view but unfortunately what the program boiled down to is this:

If somebody publicly endorses a ‘no’ vote then people are rude to them on social media platforms.

If somebody publicly endorses a ‘yes’ vote then people are rude to them on social media platforms.

I should just clarify that ‘yes’ means yes to independence and ‘no’ means stay within the United Kingdom. Being rude encompasses name calling and making, apparently, death threats although this was only anecdotal.

The program then went on to consider the question of businesses in Scotland being pressured to either endorse a ‘yes’ vote or keep quiet. Strangely, this appeared to be a one-way process. The UK government in Westminster didn’t appear to have issued any ‘veiled warnings’ whilst the Government in Edinburgh appeared to be engaged in an active campaign of intimidation. This campaign appeared to be aimed at some academics, industry leaders and the leader of the Scottish Fishing Federation who dared question some of the figures being bandied around.

A fair number of people interviewed noted that the SNP was likely to remain in power no matter what the outcome of the referendum and expressed both concern and the conviction that those who raised their heads above the parapet and came out in favour of remaining within the union were likely to be victimised in some manner, post referendum.

To balance this, the program noted that some of the ‘yes’ campaigners were being funded by those outside of Scotland and that the Westminster Government had encouraged British diplomats abroad to put the message across that the UK would be better off as a whole, if Scotland voted ‘no’ to independence. Hardly surprising really and frankly didn’t appear to me to be much of a veiled threat. In the ‘dirty tricks’ match, the SNP/yes campaign won hands down, in my opinion.

Follow the money:

Then there was a BBC program, presented by Robert Peston, their economics editor and frankly was far more balanced and in a way, more  disturbing for it.

To sum up the figures, nobody actually knows if Scots will be better off as independent or as remaining inside the Union but there were a couple of indicators that really ought to give pause for thought in the voting booth. It also ought to be said at this point that although some people interviewed said they would be swayed more by economic arguments, i.e. if they thought they would be better off voting ‘yes’ then they would do so, most had a healthy scepticism about politicians and their grip on economic reality.

The SNP puts great store in establishing an ‘oil fund’ and points to the success of such funds already in existence, to name but two the one established in Shetland in the 1970s and in Norway, in the 1990s. This is all fine and dandy but two points emerged during the course of the program, although they weren’t shouted from the rooftops. The first point is that the fund in Shetland was established right at the start of the ‘oil boom’ and has been in existence for some forty-odd years. A similar point could be made about the Norwegian fund, which apparently owns around 2.5% of all publicly quoted companies in Europe. The second point that was made but not laboured is that both Norway and Shetland have comparatively small populations, so a lot of money–we are talking billions of dollars here–goes a long way. In both cases the money is directly filtered back to the population in terms of infrastructure, care of the elderly and provision for public services. There have been no massive ‘hand-outs’ in terms of tax rebates and the like.

Peston then looked at how an ‘oil fund’ would fare if it were established after a ‘yes’ vote. The point was made that either the fund’s capital must remain untouched and the income from the fund be used for various projects or capital be used for immediate needs. It is a case of either or– spending a bit of capital then hoping to live off the income from the remainder is not a viable option. Why not? Because the consensus of industry (oil industry) opinion is that whilst there are many decades of production left, the yield is actually declining and will continue to do so. Perhaps not dramatically, but there will be no new ‘boom’.

So what about business?

This was interesting but depressing, if you are planning on voting ‘yes’. One entrepreneur who has made his money in establishing care homes has done well for himself, was very bullish about independence. Everybody else interviewed varied between cautiously pessimistic and downright pessimistic. The head of a ‘Life Science’ company in Dundee opined that much of the research for funding came from other parts of the UK and an independent Scotland could not hope to replicate the funding. A computer games company ceo was more optimistic but did say that whilst it was good, business was not exactly booming. Then Peston looked at heavy manufacturing industry and this was a tale of woe. Manufacturing flourished in Scotland during the years of the nationalised industries in the UK but with privatisation came disinvestment and business failures. Partially due to the sources of raw materials needed being geographically distant from the manufacturing plants, with all the problems and costs that that incurs but what Peston didn’t say–but I personally remember–was trades unions actions. The upshot of this part of the program was that the one remaining ‘heavy industry’ in Scotland, BAE shipbuilding, would most likely relocate because historically the Royal Navy, for political reasons, has had ships build by UK companies, in the UK. If Scotland is not in the UK, then the inference was jobs/orders would be lost. Not immediately, but they would be lost. This would leave no heavy industry in Scotland and involve 3000 job losses.

 

On the plus side, there was talk of a re-emergence of the entrepreneurial spirit in Scottish business. However, even the most enthusiastic advocate of this felt compelled to say that there was a long way to go. He wouldn’t be drawn on how he would personally vote in the referendum but it was reasonably clear what he thought. As he said, a vote should be based on how the Scots see themselves, their cultural identity,rather than on economics.

The final section of the program looked at the cost of independence. Not the actual cost of setting up new government departments but rather how an independent Scotland would finance itself. In the opinion of a person who works for ‘the biggest bond-issuing company in the world’ (based in London, where else?) opined that a Scottish Government would have to pay a premium of between 0.5 an 1% to borrow. As he said, it might not sound much but when you look at the actual figures involved and the amount that would have to be raised to fund planned infrastructure projects, the numbers are somewhat daunting.

Then Peston looked at currency. This is also an area where there is a lot of name calling, but what it boils down to is the UK government would insist on certain economic policies if an independent Scotland wished to remain in some sort of Sterling Zone. Hardly independent then, as Peston said. What was unsaid was what sort of political pressure a UK Government would be subjected to by citizens of the UK when it came to saying yes or no to Scotland being in a Sterling Zone. I personally seriously doubt that voters in  England, Wales and  Northern Ireland would be happy about letting Scotland remain in the Sterling Zone, particularly as at some point they might be called upon to ‘bail out’ Scotland if their government gets it wrong. In the event of a ‘yes’ vote, public opinion would almost inevitably be, ‘if they want to be independent than they can have their own currency and leave ours alone.’

Pensions weren’t really spoken about, except to say that Scotland would have to fund them and at present, on average, £1200 per year per head more is spent on social services  in Scotland than in the rest of the UK. If this spending is to be maintained then the money would have to be found from somewhere, and it wasn’t immediately obvious where. The SNP think increased oil revenues will provide but that is by no means certain.

 

The final conclusion?

The most neutral conclusion, neutral in terms of political opinion, was that there wasn’t a great deal of difference between the economies of the UK and Scotland at the moment and that was likely to be the case  in twenty years time, with the caveat that an independent Scotland would be more likely to experience economic woes than the remaining parts of the UK.

The best summing up came from a Scottish entrepreneur. It’s a real gamble.

Are you feeling lucky, Jimmy?

 

 

 

 

 

 

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