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Scotland isn’t too wee for independence, but it might be too poor

Oct 18

Posted by Jeff in Constitution, Economy | 51 Comments

Are you Green or are you a Nat? It’s not at all clear if you can have it both ways any more. Indeed, even if you’re a climate change denying, windfarm hating petrol head, the numbers surrounding independence do look a bit shaky. And hat-tip to Tom Gordon’s excellent take down of Salmond’s clever ‘relative surplus’ language, given it loosened up my own thoughts on the matter.

The Scottish Government’s GERS report is the go-to source for reliable information about Scotland’s finances. The number of Nats who cite it in their arguments is evidence enough that it’s legitimate. For Greens who want Scotland to go it alone however, it doesn’t make for happy reading. Principles and aspirations will clash crudely over the question of oil.

Let’s start with a basic fact – if we burn existing oil reserves over the next few decades the effects on climate change would be catastrophic. We should stop drilling, well, now. The world should ideally come together, allocate existing oil reserves appropriately and get cracking with creating green energy on a global basis. Optimistic? Yes, if past global warming summits are anything to go by, but that doesn’t mean it shouldn’t remain as Plan A. We’re burying tomorrow’s future to avoid facing up to today’s inconvenient truth, and Scotland looks set to be at the forefront of that unpardonable folly if the SNP gets its way.

The basis of Scottish independence rests heavily on profiting from the black stuff under the North Sea over the next few decades so let’s look at the figures (taken from GERS):

With oil:

Scotland’s Income – £53.1bn
Scotland’s Current Spending – £63.8bn
Defence savings (after independence) – ~£2bn
Revised Spending – £61.8bn
Annual Deficit in an independent Scotland – £8.7bn

Scotland’s geographical share of oil revenues is £7.9bn which, if removed from the equation, would push our annual deficit out to £16.6bn in a single year. Probably higher through jobs lost, reduced investment etc being taken into consideration.

Our current share of the UK’s debt is estimated to be about £81bn, and keeping in mind that the UK Government has ~£60bn locked into RBS and Lloyds (the latter largely due to HBOS’ failings), an independent Scotland’s finances would be starting off in dangerously deep red territory.

‘That’s the way of the world’ many will say but, well, is it really? Proponents of independence talk about other countries who are able to make it on their own with similar population sizes to Scotland, so let’s look at some of them and what their levels of debt are:

UK – $1,592bn (~63% of GDP) (GDP ~$2,522bn) (excludes RBS/Lloyds intervention)
Scotland – $131bn (~61% of GDP) (GDP ~$215bn)
UK deficit – $201bn

Ireland – $228bn (~103% of GDP) (GDP ~ $221bn) (Deficit -$17bn)
Belgium – $484bn (~94% of GDP) (GDP ~ $515bn) (Deficit -$20bn)
Sweden – $191bn (~35% of GDP) (GDP ~ $545bn) (Deficit -$6.5bn)
Norway – $267bn (~55% of GDP) (GDP ~ $485bn) (Surplus $39.5bn)
Denmark – $141bn (~42% of GDP) (GDP ~ $332bn) (Deficit -$8bn)
Portugal – $264bn (~111% of GDP) (GDP ~ $237bn) (Deficit -$6bn)
Finland – $125bn (~48% of GDP) (GDP ~ $263bn) (Deficit -$5bn)
Czech Rep – $89bn (~41% of GDP) (GDP ~ $215bn) (Deficit -$8bn)
Slovakia – $42bn (44% of GDP) (GDP ~ $96bn) (Deficit -$2bn)
Slovenia – $20bn (40% of GDP) (GDP ~ $50bn) (Deficit -$0bn)
Latvia – $12bn (43% of GDP) (GDP ~ $28bn) (Deficit -$0.5bn)
Estonia – $1.6bn (7% of GDP) (GDP ~ $22bn) (Deficit -$0bn)

Debt balances – source: The Economist
GDP balances – source: IMF
Scottish GDP – source: Wikipedia
Deficits/Surpluses – Source: Wikipedia

(NB: I’m no economist, and finding a single, reliable source of the above information proved incredibly difficult. If there’s errors in the above, so be it, but the numbers are intended to be indicative and to form my own view of Scotland’s position in the world post-independence)

There seems to be two sets of European countries out there of similar size to Scotland – the southern states with small debt levels and small GDPs, and the Northern/Scandinavian states with higher debt levels but higher GDPs with which they can service these debts. Yes Scotland is looking to start a new country with high debt levels and a relatively low GDP. That would be a challenge and deserves considedrable scrutiny between now and 2014. I’m not saying it’s not insurmountable, but it puts Scotland in a more difficult place than most of our similar-sized European neighbours.

We have similar debt to Finland but they have a higher GDP (by $50bn) and smaller deficits. We have the same GDP as the Czech Republic but they have debt only two thirds the size of ours.

You could only say we are doing better than Ireland, Belgium and Portugal in the above list, three countries that don’t exactly have their economic problems to seek.

Further to this, and most worrying of all, is that Scotland would have to burn its green credentials just to go backwards slowly, rather than going backwards quickly. An annual deficit of about £9bn (assuming we do keep drilling) on top of a current debt of £81bn does not bode well for Scotland’s economic health.

I had always thought that polls would only show movement from No to Don’t Know or Don’t Know to Yes, but having finally looked through the figures, I can feel the resolve for my own would-be Yes vote draining away.

Now, the big argument the other way is that it is the UK that has driven us to this parlous state, an argument that I have a lot of sympathy with and a point that makes me disappointed and not a little bit angry with recent Westminster Governments. Scotland could chart a different path for itself more successfully than it could as a part of the United Kingdom, but Yes Scotland cannot pretend that it’s a clean slate. We would be starting from further back than any of us would have liked.

So, the ball is certainly in the SNP’s court to explain how a new country could swallow these figures and move on into financial health, and hot air around relative surpluses or green energy revolutions is not going to cut it. How would Scotland cut its debt levels and what is the business plan to get through the first 5, 10 and 20 years? Nothing short of that will suffice I’m afraid.

I have always believed that Scotland stands a better chance of making independence a success from a position of strength rather than weakness. These figures do nothing to change that view, quite the opposite in fact.

Too wee? Not necessarily.

Too poor? Right now…..? Yes.

A Soundbite for Scotland

Oct 16

Posted by Jeff in Constitution, Media | 18 Comments

Everyone loves a good soundbite. Even when they think it isn’t the right time, they just can’t help themselves (‘hand of history on my shoulder’ anyone?)

I suspect, with the starting gun for the independence referendum once again fired, we’re about to be hit with a blizzard of them with the various parties’ press teams having rhyming dictionaries bursting at the seams.

So, for a fun challenge on this day after the historic day before, and whether you’re pro-Indy or pro-UK or something else (pro-Devo Max I suppose), let’s have an open competition to get ahead of Salmond, Lamont, Cameron and co and find the best Scottish soundbite out there with 2014 in mind.

A (very) quick run through the past 13 years of devolved Scotland can get the ball rolling with several zingers from the past:

“we are in London not to settle down but to settle up for Scotland” – Alex Salmond, SNP, 2010

“Journalists have called me “the conscience of the Scottish parliament”, a role which I have been happy to fulfil.” – Robin Harper, Greens, 2003

“If you cut me in half, I’m a believer in the United Kingdom, it’s tattooed on me like a stick of rock” – David Cameron, Conservatives, 2010

“This parliament is the settled will of the Scottish people and I think we all have an obligation to make it work.” Tom McCabe, Labour, 1999

“We in Scotland will not be all that we can unless we lift our eyes to the horizon and look beyond our own set of circumstances.” – Jack McConnell, Labour, 2003

“”It’s not how you got there it’s what you do when you get there,” David McLetchie, Conservatives, 1999

“We’ve got what it takes” – SNP, 2009

‘My reason for being in politics is all about Scotland and its future. It is no secret that, as a teenager, I thought that the political creed of nationalism might offer that future. I also believed in Santa Claus.’ – Jack McConnell
“You can vote for more of the same, for business as usual, for another four years of the stale, grey porridge. Alternatively, you can vote to set Scottish politics on fire by voting for a dynamic new party that dares to be different.” – Tommy Sheridan, 2003

So go on then, what’s yours? Or if there are any from the past that are worth remembering, do add them below.

I have a soft spot for: ‘Scotland stands ready to embark on its unique choose your own adventure story’

If there’s enough takers, I’ll put out a shortlist one by one on twitter with the most RT’d being the winner. So do it, your nation needs you.

The Edinburgh Agreement

Oct 15

Posted by Jeff in Constitution | 45 Comments

Historic? Technically, yes. Shivers down the spine? Well, let’s not get carried away.

SNP members are making as much hay from today’s proceedings as they possibly can, while I’m sure David Cameron just wanted to sign the blinking thing and get away from the pomp and hyperbole as quickly as possible. Indeed, I’m sure the Prime Minister carefully considered whether he could send Michael Moore or Nick Clegg in his place and get away with it, but that would leave him open to charges of disrespect. So in he shall fly to Bute House, ballpoint at the ready, in a helicopter no less. More evidence against his supposed greenest Government ever…

So what does today mean? Well, Tom Devine is calling it the most historic day for Scotland’s constitution since 1707. One could argue that there isn’t much in the way of fierce competition for that accolade. Lofty words shall be spoken and neat soundbites delivered, but the bottom line is not what has been scrawled beneath these referendum rules but rather the absence of a decent debate for Scots to sink their teeth and minds into. Hopefully that will change in time but there is little of significance today, other than dotting the i’s and crossing the t on the inevitable.

I guess my sanguinity around today’s events stem from the impression that the only people truly enjoying them is the SNP and the party’s new found friends in the Yes Scotland alliance. Look to Catalonia and the one million people taking to the streets to demand their independence and compare it with today’s historic events that are passing by with merely a polite cough, shrugged shoulders and maybe, at best, a collective raised eyebrow from the public. The Nationalist call to arms is being met with a populace who just want to crawl back under the duvet.

It is important to remember that the SNP didn’t win this referendum through a groundswell of public desire for it, they won it by accident because Labour were a shambles and the SNP is competent at running devolved Scotland. There were more minds turned to the Council Tax freeze than independence at the ballot box last year, no matter how cutely those in the SNP may wish to argue the other way. The attempts to ‘big up’ this referendum process at each of the numerous checkpoints has always felt forced and at odds with a nation ready and willing to step up to being a fully fledged country. It is not difficult to imagine the quiet panicked voice at the back of Salmond’s mind – ‘this is too early, you never pictured it this way’, but on the dotted line he must sign and onwards he must march, like the charge of the light brigade, into seemingly inevitable defeat.

There’s no backup option now, the First Minister is as good as hurtling towards the earth with an obscured visor, hoping everything falls into place rather than making sure that it will.

There is, of course, 100 weeks to go. Arguments require to be made, doors require to be knocked and minds certainly require to be changed, but for Yes Scotland, today will only truly be historic when the people decide that they want it to be. We’re a long way from being at that moment so one can only hope that the Nationalist fireworks are kept in their boxes and the champagne on ice, particularly given that Salmond’s premature pride could, sooner or later, result in a very painful fall.

Amidst the slaps on the backs and the droves of column inches, all that has really been achieved today is a welcome closure over a process that pleasingly never descended into partisan trench warfare or childish name-calling.

All of that said, in a world where little girls can be shot because they talk of the importance of education and where bloodshed was the precursor to the Good Friday Agreement, let us at least be thankful that today’s Edinburgh Agreement has been delivered peacefully and skilfully from both sides of the debate.

The Goldilocks referendum

Oct 15

Posted by James in Constitution, Holyrood, Parties, Westminster | 13 Comments

Today’s much-trailed deal on the referendum is a good one, and it deserves a broadly non-partisan response today. Alex Salmond has persuaded David Cameron to give Holyrood the power to let the over-16s vote: this is a good thing. David Cameron has persuaded Alex Salmond to give up on the second question: this is a good thing too.

Remember also the progress on the wording? It seems a long time ago, but even last year the talk was still about  “open negotiations” rather than a clear question, and when that changed at Holyrood, UK Ministers spoiled for a fight. That fight is quite rightly off.

A sunset clause for 2014 is also a sensible move. I originally argued that the best timeline would be a public and relatively quick process to set a draft constitution, followed by as early a question as possible. That open public process has not been agreed, but now there are two years to try and secure it: that time may be necessary. On the flipside, although it would hardly be credible for the Scottish Government to delay if the polling looked bad, it’s best for that not to be an option.

The spending limits remain the last major element of uncertainty, with the SNP position set out here looking a bit like a low-ball: do they really want a limit below the donations their campaign’s already received? The limits do need to be tight enough to prevent Brian Souter or Lord Ashcroft from buying it, as the First Minister argues, but big enough that the campaigns can do what they need to do to get the message out, as the Electoral Commission are apparently arguing: all sides need to motivate their supporters and drive a substantial turnout.

Importantly, though, there is ( or “will be”, if you believe the press offices’ conceit) an agreement. No matter what your position on the outcome, no-one except the lawyers should want a referendum to be derailed afterwards by wrangling in the courts. And this means that there will be a vote, and barring reports of electoral misconduct or wafer-thin margins, we should get a nice clean result. Relatedly, it’s also one in the eye for Ian Smart’s long-term conspiracy theory that there simply will not be a vote. Oh yes there will, as they say.

It’s also good for the collective reputation of politics and politicians for two governments with two very starting points on this issue to have come to an agreement rather than it being collapsed into a blamestorming session. It’s genuinely impressive on both sides, which is why it’s a shame some refugee from The Thick of It had to tell the Guardian that they planned to “bomb [Salmond] with reasonableness“.

Now it appears we have a honourable process and a good outcome with a clear question, an outcome that’s neither too Nat-tastic nor one where the Yoonyonisht Conshpirashy has its thumb on the scales. Both governments have mandates, and there was no responsible alternative to this  real compromise, done in the national interest, whether you see that nation as Scotland or Britain.

Don’t believe the myth that Salmond never wanted his devo max insurance policy – but also don’t believe that Cameron’s comfortable with the timing, nor the extension of the franchise and the precedent it sets, despite the polling evidence that younger voters may favour his team.

The referendum can now go ahead on a fair basis. The phoney war is over. The long campaign proper is beginning, and it will take a bit more of this spirit to ensure the public aren’t turned off by it. Both sides need to try inspiring the public rather than scaring them, and keeping the focus on the genuine choice that’s to be made rather than slipping into the politics of fear. Bring it on.

A referendum is a perfect place to start widening the franchise

Oct 12

Posted by James in Constitution, Elections | 13 Comments

It seems likely that the First Minister will get his way and that 16 and 17-year-olds will also have their say in the referendum, subject to the practical concerns about registration set out here by Tom Peterkin and Duncan Hothersall. Those will have to be overcome and younger potential voters will have to be registered somehow or other.

This approach is hardly a Salmond conspiracy, either, given the most recent polling showing opposition to independence ahead by a factor of more than two to one.

It’s also not quite the first time under-18s have voted, as anoraks amongst you will recall. They’ve had their say not just during the health board pilots in Fife and D&G, but they can also vote for members of the Crofting Commission. Gripping stuff.

I’ve long supported extending the franchise to include those young people motivated enough to go and vote, not just because I don’t think age correlates directly with engagement or common sense, but also because “votes at 18” assumes there’s an election when you turn eighteen. With a four year term for a given institution, the average age of your first vote for it is 20. Now we’ve moved (unfortunately) to longer terms both for Westminster and Holyrood, the average age you’ll get a vote for the first time is 20 and a half. Even allowing 16-year-olds the vote for Holyrood would still give an average first voting age of 18 and a half.

So this would be good news all round, especially if is indeed part of a deal which sees a single clear Yes/No question on the ballot. It’s also the perfect place to start: if it’s frustrating for an engaged young person to miss out on a regular election, how much more frustrating would it be to miss out on what will hopefully be a one-off opportunity to help set Scotland’s course? It’ll also make the case for other elections – if young people can help make a decision this momentous, why not let them vote for their councillors and MSPs too?