So I read the whole of the Q&A section of today's White Paper on Scottish independence. I also read last week's report by the Institute for Fiscal Studies on the same issue. For someone not voting in next year's referendum, doing both these things may be considered a little odd, but the potential break-up of my country does remain a question of vital interest to me. That's not to say I have particularly strong views either way, just an ongoing curiosity about how this will affect me and the UK more widely.
Did reading both reports make the debate any clearer? In truth, not really. Two of the key problems for a future Scotland highlighted in the IFS report, declining oil production and a more rapidly ageing population compared to the rest of the UK, were either not fully addressed or glossed over in the White Paper. The WP just simply says that the ageing demographic is an "issue affecting every western country", hinting that an open-door immigration policy might be a solution to increasing the active working population, but on the issue of future oil production the report provides little clarity.
Both these issues matter because any attempt to make Scotland a "fairer and more prosperous country", as the SNP promises, is reliant on the country's ability to invest and spend. Even though I'm sceptical of the IFS projection that public sector net debt would be over 200% of national income within 50 years of an independent Scotland, it's pretty clear that any attempts to make the country more progressive and equitable would be seriously undermined by a worsening financial situation. Even in the best case scenario (high-scale immigration, stable oil production), the unique characteristics of Scottish society (no tuition fees for home students, free prescriptions) would come under threat without raising taxes significantly.
The WP says that an independent Scotland would aim for a simpler form of taxation compared to the UK model, and that it would cut corporation tax. Under devolution, and as part of the Scotland Act 2012, the country has already made a good decision to change from the UK's current “slab” (or threshold) stamp duty approach to a more progressive tax on property, similar to income tax. The WP notes that the Scottish Parliament currently has responsibility for 7% of taxes raised in Scotland (rising to 15% with the Scotland Act), and also states that there would be “no requirement to increase the general rate of taxation to pay for the services we currently enjoy in Scotland.” Again, this is seriously at odds with the IFS report, and makes trying to reconcile the two very hard.
Another key issue is the currency. This is clearly the main weakness in the SNP's case for independence. Having changed its policy over the years from wanting its own currency to joining the euro, the party's policy now is to remain tied to “pound sterling” (notable that the WP avoids any reference to the currency as the British pound, or GBP as it's known in the markets, GB or British now being dirty words no doubt). At present, it remains unclear what the UK government thinks about this proposal, though there are reports that the Treasury and Scotland's smaller neighbour Wales are both deeply opposed. If I was voting in the referendum, the fact there's so little clarity on this issue would be a big concern.
Connected to this issue is monetary policy and who will act as the "lender of last resort" for Scottish banks. This is crucial because, had Scotland been independent during the financial crisis, having to bail out RBS and Bank of Scotland (Lloyds) would have crippled the country's finances, or been impossible. The SNP is obviously aware of this risk and the WP proposes that any future support required to stabilise the financial system would be co-ordinated by the governments of the “Sterling Area”. In other words, the Bank of England, described as an “asset owned both by Scotland and the rest of the UK”, would be the lender of last resort to an independent Scotland. On issues of monetary policy, an independent Scotland would seek input into the governance of Bank of England; this seems quite a messy scenario and it's hard to see how such an arrangement would function in a period of crisis.
On other topics, there is some clarity. An independent Scotland would have to give up its seat on the UN security council, but would expect to remain a member of NATO. Likewise, Scotland’s status as an EU member would also appear to be secure post-independence (though not guaranteed). Some of the other topics raised include an increased focus on early learning and childcare (a key plank of the SNP's policy for a fairer society, and one to be applauded, but the report doesn't mention that education matters are already almost fully devolved in Scotland). The no tuition fees policy for home and EU students would remain in an independent Scotland, and full fees would continue to be charged to students from the rest of the UK. No passport would be needed to cross the border, and there would be no security posts at the land border with England. There would also be no change to the current system whereby someone from Scotland who is taken ill in the rest of the UK gets treated free of charge by local health services, and vice versa.
The WP report also proposes the creation of the Scottish Broadcasting Service, which in a joint-venture with the BBC would continue to supply original programming in exchange for access to the BBC in Scotland. An independent Scotland would also renationalise the Royal Mail, a policy that I agree with wholeheartedly (why stop there, what about the railways?), just like the SNP's plans to abolish the "bedroom tax" (it's worth noting this is also Labour party policy). The latter, along with a halt to the policy of Universal Credit, are two key elements of the SNP's push towards a fairer society and are to be welcomed. But then the rhetoric returns, with the SNP blaming inequality in Scotland on “almost 40 years of decisions at Westminster” (as with English nationalists, who see Brussels as the source of all evil, Scottish nationalists use Westminster as a dirty word).
Did reading both reports make the debate any clearer? In truth, not really. Two of the key problems for a future Scotland highlighted in the IFS report, declining oil production and a more rapidly ageing population compared to the rest of the UK, were either not fully addressed or glossed over in the White Paper. The WP just simply says that the ageing demographic is an "issue affecting every western country", hinting that an open-door immigration policy might be a solution to increasing the active working population, but on the issue of future oil production the report provides little clarity.
Both these issues matter because any attempt to make Scotland a "fairer and more prosperous country", as the SNP promises, is reliant on the country's ability to invest and spend. Even though I'm sceptical of the IFS projection that public sector net debt would be over 200% of national income within 50 years of an independent Scotland, it's pretty clear that any attempts to make the country more progressive and equitable would be seriously undermined by a worsening financial situation. Even in the best case scenario (high-scale immigration, stable oil production), the unique characteristics of Scottish society (no tuition fees for home students, free prescriptions) would come under threat without raising taxes significantly.
The WP says that an independent Scotland would aim for a simpler form of taxation compared to the UK model, and that it would cut corporation tax. Under devolution, and as part of the Scotland Act 2012, the country has already made a good decision to change from the UK's current “slab” (or threshold) stamp duty approach to a more progressive tax on property, similar to income tax. The WP notes that the Scottish Parliament currently has responsibility for 7% of taxes raised in Scotland (rising to 15% with the Scotland Act), and also states that there would be “no requirement to increase the general rate of taxation to pay for the services we currently enjoy in Scotland.” Again, this is seriously at odds with the IFS report, and makes trying to reconcile the two very hard.
Another key issue is the currency. This is clearly the main weakness in the SNP's case for independence. Having changed its policy over the years from wanting its own currency to joining the euro, the party's policy now is to remain tied to “pound sterling” (notable that the WP avoids any reference to the currency as the British pound, or GBP as it's known in the markets, GB or British now being dirty words no doubt). At present, it remains unclear what the UK government thinks about this proposal, though there are reports that the Treasury and Scotland's smaller neighbour Wales are both deeply opposed. If I was voting in the referendum, the fact there's so little clarity on this issue would be a big concern.
Connected to this issue is monetary policy and who will act as the "lender of last resort" for Scottish banks. This is crucial because, had Scotland been independent during the financial crisis, having to bail out RBS and Bank of Scotland (Lloyds) would have crippled the country's finances, or been impossible. The SNP is obviously aware of this risk and the WP proposes that any future support required to stabilise the financial system would be co-ordinated by the governments of the “Sterling Area”. In other words, the Bank of England, described as an “asset owned both by Scotland and the rest of the UK”, would be the lender of last resort to an independent Scotland. On issues of monetary policy, an independent Scotland would seek input into the governance of Bank of England; this seems quite a messy scenario and it's hard to see how such an arrangement would function in a period of crisis.
There's much more, obviously, and the report often repeats the assertion that many of the key questions about how to divide up UK assets and liabilities (debt) would have to be negotiated after the referendum. In other words, on many issues it's a step in the dark.
The WP report also proposes the creation of the Scottish Broadcasting Service, which in a joint-venture with the BBC would continue to supply original programming in exchange for access to the BBC in Scotland. An independent Scotland would also renationalise the Royal Mail, a policy that I agree with wholeheartedly (why stop there, what about the railways?), just like the SNP's plans to abolish the "bedroom tax" (it's worth noting this is also Labour party policy). The latter, along with a halt to the policy of Universal Credit, are two key elements of the SNP's push towards a fairer society and are to be welcomed. But then the rhetoric returns, with the SNP blaming inequality in Scotland on “almost 40 years of decisions at Westminster” (as with English nationalists, who see Brussels as the source of all evil, Scottish nationalists use Westminster as a dirty word).
In summary, I'm sure both reports are unlikely to be read in full by many people and that most Scots have already made up their mind one way or the other. On the evidence I've seen, and if I had to vote, it would probably be no. Not just because being part of a larger union means you can share and minimise risks, and have more of a say in an increasingly globalised world, but also because you get the impression that the SNP has not had enough time to prepare its case and because the benefits are not really radical enough. An independent Scotland would still use the British pound, backed by the Bank of England. Independent Scots would still watch the BBC and have the royal family as the head of state. Though the country aims to be nuclear-free, it still hopes to be protected by the major nuclear powers of NATO.
Obviously, I can see the appeal of banishing the Tories and their ideological attachment to austerity from my country forever, but one socialist ideal that I remain attached to is that the only "us" and "them" is created along financial lines, not geographical ones. I would also be deeply sceptical about Alex Salmond, who is using this process as a political power grab and who strikes me as a complete charlatan. I couldn't help noticing this story, in which he compares his mission for Scotland to that of independence in India, using the Nehru quote, "A moment comes, which comes but rarely in history, when we step out from the old to the new, when an age ends, and when the soul of a nation, long suppressed, finds utterance." Long suppressed! Please, give it a rest.
PS In researching this, I had the misfortune of reading some of the comments below articles in Scottish newspapers, and it's impossible to avoid noticing the superior tone many Scottish nationalists have towards their British neighbours, especially the English. Apparently, we're all warmongers. What, like Tony Blair and Gordon Brown? Last time I checked, they're both Scottish.
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