Sunday, 31 May 2015

Circles Within Circles

I spent my high school years living on the Inner Hebridean island of Islay.

My school bus-route skirted the shores of Lochindaal - a magnificent sea loch which is home to thousands of barnacle geese in the winter.  The journey would take about 45 minutes. Of course the nearer I got to home the emptier the bus would become and I'd gaze out of the window and let my mind wander.

Did she really smile at me today as she got off the bus? Of course not, she's just being polite. Way out of my league.

The last few miles of the journey were on single-track roads. That's when I'd transport myself through the window and travel along the wires strung between the telegraph poles. With enough mental effort I could keep up with the bus through a combination of running & speed-skating, jumping when the wires crossed the pylons, surfing when they sloped downwards. It passed the time.

Forgive the whimsy, but these memories have been roused by debates I've become embroiled in recently. Let me explain.

Think about the average transport cost of getting pupils to school when the communities served are remote and the travel distances long. Think what it costs to build and maintain miles of roads, some of which serve just a handful of people. Think about the telegraph line and power cable cost-per-person when delivering these vital services to remote areas.

With islands of course you have the added costs of sub-sea interconnects for power and telecoms, you have ferry subsidies. One of my summer jobs involved driving the hospital van to take laundry to the mainland, staying overnight and returning with clean laundry and fresh hospital supplies. Break a leg on Islay and the air-ambulance will fly you to Glasgow.

These are all illustrative examples of what we mean when we say that Scotland is a high "cost-to-serve" country. We have island communities and remote rural villages, our population density is only 20% as high as England's. It's inevitable that - if we are to come close to delivering equal service levels - our infrastructure and service costs will be higher on a per person basis than the rest of the UK.

As I've shown elsewhere on this blog (> Full Fiscal Autonomy For Dummies), this higher cost-to-serve is the main cause of the potential £7.6bn "black-hole" that Scotland would face if we were to be fiscally autonomous. Actually I don't like the tabloid friendly hyperbole of "black-hole" - let's just say "that would make us £7.6bn worse off".

Which is where we come to the dreaded "subsidy" word.

Nobody likes to think of themselves as subsidised and island folk are no exception - subsidy is a word laden with negative connotations.  So in the context of the devolution debate and with my island upbringing you'll forgive me if I wearily suggest that I've kind of been here before.

Those of you who read my blog regularly will be aware that - when debating Scotland's national accounts (GERS) - I have been trenchant in my criticism of those exploiting confusion over how whisky duty revenue should be attributed.

Islay is home to 8 active distilleries and it used to be said you couldn't buy a blended whisky in Scotland that didn't contain at least one Islay malt. So it's perhaps not surprising that  - normally when complaining about poor road surfaces or frequent power cuts - Ileachs are inclined to mention the amount of whisky duty the island generates on behalf of the Scottish government.

I have a confession to make here: as a teenager I never questioned that logic. So I really do understand how compelling that feels as an argument. I get why, in the context of the Scottish independence debate, some grievance seeking nationalists instinctively feel they should be able to claim any UK duty paid on whisky as "ours".

I won't waste time here explaining why whisky duty generated from sales of Bowmore whisky in Edinburgh is no more "attributable to Islay" than the duty charged on Scottish whisky sold in a London is "attributable to Scotland" (or indeed the duty on Russian vodka sold in Glasgow is "attributable to Russia"). Duty income is generated by the consumers buying the product (in whatever territory they may be). If you doubt this see the addenda to this post > Sowing The Seeds - it covers the logic and various arguments around attributing consumption taxes in soul-sapping detail.

Of course the whisky industry does create huge value, most obviously through direct employment, associated support industries and corporation tax. But if we're to draw the analogy of "Islay is to Scotland what Scotland is to the UK" then all of those sources of value are already correctly attributed in the GERS numbers.  But let's not get lost in the technical detail again - this is all a side issue compared to the point I want to make.

If you ran the pro-forma national accounts for Islay I imagine they would show that Ileachs would be worse off independent than remaining in Scotland. Does that mean we should accuse Ileachs of being "subsidy junkies"?  Is that a sad indictment of Scotland's treatment of the island over the last few hundred years? Of course not. In fact that observation should be a source of celebration, it's an illustration of how well our sharing society works.

It costs more to get kids on Islay to school than kids in Glasgow, it costs more to fly someone to hospital than to drive them. But I'm guessing that most Glaswegians don't give that a second thought. The principle that all citizens within our nation should be entitled to a good education and reasonable quality of healthcare is so engrained that it barely needs to be argued for.

Within a nation, we don't draw circles around groups of people and say "you're not paying your way". There will always be circles we could draw within a national map that will define net contributors and net beneficiaries. We don't do that because - I hope - it's instinctively the wrong thing to do.

But the devolution debate has been characterised by cries of "it's our oil" on one side (when the oil revenues are high) and "you're subsidy junkies" on the other (when the oil revenues are low).

It appears to me that the nationalists have been responsible for framing the debate in these blunt "economic value transfer" terms. So it's rather ironic that - having set out their grievance-stall based on the fact that Scotland contributes more than it get's back - the resultant focus on our finances has demonstrated that in fact the reverse is currently true.

Don't get me wrong: I think we should know what the simple financial implications of fiscal autonomy (or indeed independence) are, we should understand our pro-forma stand-alone national accounts. Indeed most of my blogging activity has been taken up by trying to ensure that we are honest with voters about what those numbers show us. But to allow the debate to be couched in these bean-counter's terms, to suggest that the right answer is simply a question of working out which solution makes us richer now (or might make us richer in 10 years' time) is surely wrong.

Once you pass a certain threshold of personal comfort and security it is - I hope - a natural and fundamentally decent human trait to want to look out for those who are less well off than you. That's why the welfare state exists, that's why we have the NHS.  It's why we have Universal Service Obligations around essential utilities, so that those who live remotely aren't financially penalised.

Of course there are pros and cons of throwing your lot in with a wider group. If you don't have sufficient political influence or fiscal control, how exposed are you willing to be to the downsides of others' actions?  We'll hear plenty more on this topic during the EU referendum I'm sure.

But putting the politics to one side, our willingness to throw our lot in with others - to "pool and share" - is, I suspect, largely dependent on our intuitive sense of likely reciprocation.

Which is where we come to the joyously positive example of the United Kingdom and how well it's worked for both Scotland and  the rest of the UK.

When the windfall gain of North Sea oil appeared in the 1980's it meant that Scotland became a massive net contributor to the UK, we more than paid our way. We shouldn't feel aggrieved that that happened, we should celebrate it. We should no more resent the periods when we contribute than we should be embarrassed by the periods when (like now) we benefit.

Over time wherever you draw those circles on a map there's a chance that net beneficiaries may become net contributors and vice-versa.

For me that's why - whether we're discussing Scottish independence or EU membership - the objective should be to draw wider more inclusive circles, not smaller more insular ones.

46 comments:

Anonymous said...

Succinctly put Kevin and so very true. It's a point we weren't very good at making last year with the Better Together campaign - those that voted No understood why but somehow our understanding and message got 'lost in translation' as we fought from a negative perspective. Ironically the same message contained in your blog is being spouted by Sturgeon and Co as the reason why Scotland wants to remain as part of the EU! So much in fact she is in Brussels to make this very point.

Terry Summers said...

Kevin,
This blog and your last couple of blogs are the makings of a fine political campaign that could burst the SNP's bubble. No wonder the cyber*wats are blocking you on twitter, it must be killing them to read this and realise everyone else can too.
Keep up the good work.
Cheers
Terry

Sean Kerr said...

Another excellently conceived and written blog. Keep up the great work!

Sean Kerr said...

Another excellently conceived and written blog Kevin. Keep up the great work!

Adrian Simmons said...

A lovely post but there two points it fails to address.

Firstly, you're talking from a historical perspective, increasingly the sharing part of pooling and sharing is reducing: closure of coastguard centres, army bases and RAF bases, cuts to welfare that disproportionately affect Scotland – I could go on but you get the point. Just because the Union has served Scotland well in the past doesn't mean it is now or will continue to do so.

Secondly you're talking from the perspective of someone who is successful and doing perfectly well in the UK as it stands. Vast numbers of people aren't and a great many of them voted Yes in the indyref and SNP at the GE. A "a fine political campaign that could burst the SNP's bubble" as Terry Summers puts it, requires not just economic point scoring (something you've correctly expressed in this post) but building a coherent vision of how the UK is going to improve those people's lives. Right now none of the unionist parties is even really talking about this, there is no vision, economic or otherwise for moving forward.

Murray said...

Exactly!
It also works at an individual level. From childhood (things like education being paid for by taxpayers), then normally you grow up to become a taxpayer, possibly going through levels of income which determine how much you put back into society. Wheels within wheels.

Anonymous said...

As Scotland does not have much in their way of devolved economic powers the real question is whether Westminister administration has maximised Scotland's economy. When you look at these over spend on London infrastructure per capita and the over reliance on financial sector it's easy to think things could be better. That also applies to much of England Wales and NI

EricF said...

Kevin

I read your blog reasonably often – as an unrepentant Yes voter and SNP member not, perhaps, for enjoyment, but it is informative and challenging to the mind-set of someone like me, and that can only be a good thing. Regarding the detail you consistently include I can only salute your indefatigability, as was once said.

This, your latest contribution, portrays the Union as a perfect machine of circles within circles, like a beautiful invention of perpetual motion. I guess I'm making this comment now as, like your blog generally, I feel it begs fundamental questions. Any machine only works as well as its operator directs it. And that is why I find the blog, a bit like they used to say about Chinese meals, initially impressive but ultimately unsatisfying. Your consistent focus is on the governance of Scotland, and within that, pretty much on GERS figures. That's fine – actually that's very useful, and your analysis is certainly helpful in keeping a balanced view of the whole independence project. Why do I find it all fails to change my mind? Like leaving a Chinese restaurant of old (they're much better now), I still need to open a packet of biscuits when I get home. One or two thoughts:

a) An exclusive focus on GERS at the expense of similar depth of analysis of the UK balance sheet means there is a lack of context to your observations. It's not possible to come to conclusions on Scotland's economic position if the status quo alternative isn't analysed in equal detail alongside.

b) Scotland is surrounded around the North Sea by countries of a broadly similar size who appear to manage their affairs very well. Could Scotland also manage its affairs very well if independent? If not, why not?

c) If Scotland's economic position is unhealthy, is this as a result of decisions made at Westminster, which has held, and continues to hold, the macro-economic levers which drive Scotland and the rest of the UK? If not, what is it that makes Scotland fail?

d) May's Westminster election showed graphically Scotland's position within the Union. Whatever you may think of their politics, the SNP won 56 out of 59 seats. And yet the question now is – how can they possibly make their voice heard in a parliamentary chamber where they are so completely out-numbered? How does it make sense for a country to vote overwhelmingly for one programme of government and then send its representatives 400 miles and more south to sit in a parliament where it has no power to implement that programme?

Consider Norway and Sweden. Would it make sense for Norway to abandon independence, dissolve its parliament (maybe maintain a devolved body for certain domestic purposes) and send its MPs to the Rikstag in Stockholm where, as a minority, they would try to influence macro-economic policy (and foreign affairs etc) for Norway? Think of the circles within circles! As someone who's good with figures, could you estimate the result in Norway of a referendum that proposed such a thing? Why do you think that would be?

Murray here said “Exactly! It also works at an individual level...” That's exactly the point – it doesn't. When an individual grows up and decides it's time to leave home then that's what they will do, and what they should do. Dire warnings from kindly Uncle Kevin about all the possible pitfalls that await them won't dissuade them, and neither should they. When its time to make your own way in the world, to achieve a measure of independence in your life, who on earth is going to try to persuade you not to bother?

EricF said...

Kevin

I read your blog reasonably often – as an unrepentant Yes voter and SNP member not, perhaps, for enjoyment, but it is informative and challenging to the mind-set of someone like me, and that can only be a good thing. Regarding the detail you consistently include I can only salute your indefatigability, as was once said.

This, your latest contribution, portrays the Union as a perfect machine of circles within circles, like a beautiful invention of perpetual motion. I guess I'm making this comment now as, like your blog generally, I feel it begs fundamental questions. Any machine only works as well as its operator directs it. And that is why I find the blog, a bit like they used to say about Chinese meals, initially impressive but ultimately unsatisfying. Your consistent focus is on the governance of Scotland, and within that, pretty much on GERS figures. That's fine – actually that's very useful, and your analysis is certainly helpful in keeping a balanced view of the whole independence project. Why do I find it all fails to change my mind? Like leaving a Chinese restaurant of old (they're much better now), I still need to open a packet of biscuits when I get home. One or two thoughts:

a) An exclusive focus on GERS at the expense of similar depth of analysis of the UK balance sheet means there is a lack of context to your observations. It's not possible to come to conclusions on Scotland's economic position if the status quo alternative isn't analysed in equal detail alongside.

b) Scotland is surrounded around the North Sea by countries of a broadly similar size who appear to manage their affairs very well. Could Scotland also manage its affairs very well if independent? If not, why not?

c) If Scotland's economic position is unhealthy, is this as a result of decisions made at Westminster, which has held, and continues to hold, the macro-economic levers which drive Scotland and the rest of the UK? If not, what is it that makes Scotland fail?

d) May's Westminster election showed graphically Scotland's position within the Union. Whatever you may think of their politics, the SNP won 56 out of 59 seats. And yet the question now is – how can they possibly make their voice heard in a parliamentary chamber where they are so completely out-numbered? How does it make sense for a country to vote overwhelmingly for one programme of government and then send its representatives 400 miles and more south to sit in a parliament where it has no power to implement that programme?

Consider Norway and Sweden. Would it make sense for Norway to abandon independence, dissolve its parliament (maybe maintain a devolved body for certain domestic purposes) and send its MPs to the Rikstag in Stockholm where, as a minority, they would try to influence macro-economic policy (and foreign affairs etc) for Norway? Think of the circles within circles! As someone who's good with figures, could you estimate the result in Norway of a referendum that proposed such a thing? Why do you think that would be?

Murray here said “Exactly! It also works at an individual level...” That's exactly the point – it doesn't. When an individual grows up and decides it's time to leave home then that's what they will do, and what they should do. Dire warnings from kindly Uncle Kevin about all the possible pitfalls that await them won't dissuade them, and neither should they. When its time to make your own way in the world, to achieve a measure of independence in your life, who on earth is going to try to persuade you not to bother?

Anonymous said...

Right at the start of the indy campaign I said the only way to benefit would be to move to the central belt. Not much seems to leave there. Aberdeen has a lot of oil money, but not everybody is on oil wages we have a lot of deprived areas. From the Oil revenues, they have provided a lot into the pot over the years, but they are consistently one of the lowest funded local authorities.
A new bridge into the capital, no problem, Holyrood will pay for that, bypass round the European oil capital, you have to stump up over £70 million each from Aberdeen and Aberdeenshire local gov. who cannot raise income because the SNP froze the council tax for everybody.
On the SNP "its ours we want to keep it" reason for indy, I wonder how well the central belt would fair without the pooling and sharing from Oil, Whisky, fishing and agriculture revenues to name but a few

J. R. Tomlin said...

Ah. I understand. You are for a world wide government which would be the widest possible circle in today's universe.

Nick said...

As a Tory voting Englishman I guess my endorsement isn't going to help Kevin very much. I suspect my politics are - in left/right terms - somewhat different from his. But I certainly agree with him in terms of the pooling of affluence.

Living in NW England I'm well aware of the tax revenue that comes leaching our way from other, richer parts of the UK, notably the South East. I'm happy my region benefits from that arrangement, just as there are other regions which are worse off (Tyne and Tees? Wales?) and which perhaps get a leg up from us. That's one of the most powerful arguments in favour of the Union.

At the micro level I'm happy as a higher rate tax payer that my income goes to pay for services I'll probably never use. As it happens I don't begrudge Scots the Barnett formula, at least not in principle - again it's about pooling of wealth. I would of course like most Englishmen like to see it applied fairly across the UK, taking better account of need, and I wish the Nationalists would understand that while there might be a case for some cross-subsidy in a Federal system, after Independence it would cease forever.

One of the many ironies of the rise of Nationalism is that one of the SNP's principal arguments is that Scots put in more than they take out. Of course this blog has shown persuasively that this generally isn't true, but let's assume for a moment that it is. It's an argument that could be run much more convincingly by the South East of England. And what would we make of that? What if Surrey demanded independence on the basis that they "put in more than they take out"? I don't suppose for a moment it occurs to anyone in the stockbroker belt to make such a demand, but if they did, how would they be howled down as greedy Tories.

So the Nationalists want to be free of Tory rule forever. Fair enough. But why rely on an argument that - however misconceived it turns out to be - in its greed and disregard for people worse off in other parts of the UK it out-Tories anything the Tories have ever dreamed of?

Anonymous said...

Excellent blog and responses. The pooling and redistribution of wealth is something the vast majority of people within the UK can agree upon. As mentioned, this redistribution should be fair throughout the whole of UK and not simply across national boundaries. I agree with Kevin that claims about "our oil" was met with counter arguments of "benefit dependency" especially amongst the Tories increasingly excluded from Scottish politics. Clearly, there is a massive imbalance in the UK economy with London and South-East monopolising much of the economic growth in the UK and sucking in young talent from across the UK but it is consequently suffering severe consequences itself with significant transport, housing and environmental problems. Unfortunately, Tory plans to rebalance the economy are completely inadequate.

Anonymous said...

It is obvious after tonight's nonsense that you are being used for ulterior motives. This has McT's dirty fingerprints all over it - see his Australian exploits. All done to whip up a frenzy creating further conflict between you and WoS. Wall to wall MSM coverage tomorrow and next step will be questions in Holyrood and Nicola S will be asked to comment on some embarrassing question from Kez and co about cybernats blocking free speech. Wait and see.

Anonymous said...

It's all perfectly logical if and only if, you consider the UK a forward thinking, honest, society. I don't. And the size to population argument doesn't bear international comparison, Norway and more so Sweden are enormous in comparison yet have endeavoured to provide a better distribution of wealth and amenity.
It is I'm afraid, still down to cringe

Anonymous said...

Excellent blog, keep on knocking down the SNP's lies and half truths one by one.

Martin said...

EricF,

I think you're putting forward a number of straw-man arguments.

With regards to Kevin's focus on GERS, it's because it's the best data we have to predict the immediate state of an independent (or FFA) Scotland. Being generated by the Scottish government it also has the benefit of not being biased towards Westminster. You'll note that Kevin always uses the GERS definition of the geographic share of oil, even though in the event of independence that would be a matter of debate. Moving forward in time, an autonomous Scottish government could make different choices to the UK, but Kevin has repeatedly addressed this also. Anyway, what analysis would you like about the UK balance sheet, and how would this help?

As to other countries nearby being successful, we have to be careful to understand what success means. If it means living within ones means (i.e. over the long term, paying off debts) then yes it's perfectly possible for any country to be successful. But once you start including things like a free at the point of service NHS, a public pension etc. then other countries may have had to make different choices to balance the books. I don't particularly like the choices made by the Thatcher government in the 80s when oil was abundant, but there's not much we can do about that now.

To your other point, I don't believe that Kevin has stated that Scotland's position is unhealthy. Surely the whole point of this article is that because of the support of the rest of the UK from time-to-time, Scotland's position, despite disadvantages of geography, is healthy, and benefits from higher spending.

As for your fourth point about 56 out of 59 MPs, I think everyone including the SNP would agree that the UK's broken electoral system has prevented the 50% of voters who didn't vote SNP in Scotland from being adequately heard. As for the SNP not being heard, you could say the same for MPs from all over the UK that didn't vote Conservative. Why is this a particularly Scottish problem?

Finally you bring up Norway and Sweden. I'm curious. Are you a European Unionist? Did you choose Norway as a non-EU member as an example because of this? Regardless of anything, you have to accept that England/Wales and Scotland share an island. Scotland's number one trading partner will very likely always be England. Norway has had to accept paying fees to trade in the EU, and whole rafts of EU rules, even though they do not want to be part of the EU. I can't see how iScotland wouldn't have to do the same with the rUK. It would be a very poor form of independence, just as the SNP proposed last year, with macroeconomic policy being set by England.

In conclusion, I hope you continue to read Kevin's blog and I think it's great that you don't dismiss it out of hand. I think there's a valid constructive debate to be had about the best way forward, and it depresses me when the debate is reduced by demagogues such as the man from Bath into ill-informed, prejudiced lies that are deliberately spread to poison the well. Also, you have to remember that some people would take independence if it meant living in a cave. I believe it's important to fight such ignorance as best we can, and Kevin does an excellent job here in doing so.

bucksboy said...

"the SNP won 56 out of 59 seats... how can they possibly make their voice heard"
Nicola Sturgeon told MPs that Scotland's voice would be heard in Westminster "more loudly than ever before". One of you is wrong.

"what is it that makes Scotland fail"
The NHS and the education system have under performed compared to the rest of the UK, you know what they both have in common.

"Would it make sense for Norway to abandon independence"
In Scotland independence made sense to only 37% of the electorate, in Norway that figure was closer to 99%. You're not comparing like with like.

"Why do I find it all fails to change my mind"
This generation had its chance. It's up to the next to decide if they wish to spin that wheel once more, until then the Edinburgh agreement and the will of 63% who were eligible to vote in the referendum sticks.

Looking forward to greater sharing and integration across the UK, Europe and beyond.

Terry Summers said...

Kevin,
Yesterday morning I signed a petition calling for Nicola Sturgeon to resign, it had 2000 signatures, by tea time when I revisited it had been blocked and this message was being displayed . Is there a pattern developing. Have the Cyber*twats been busy again?
https://you.38degrees.org.uk/petitions/nicola-sturgeon-must-resign
Cheers
Terry

Anonymous said...

Given the massive overspends on the Parliament building and the Edinburgh trams, I have to wonder where the nous to maximise Scotland's economy is going to come from? Not from Edinburgh, it would seem.

john.little21 said...

Even in the terms of the Nationalist framing of the debate, Scotland is not 'subsidised'. The UK is a pooled economy and the shareholders of it have a return on their investment. Average UK invisible earnings each year are about £96bn- each year and every year. Scotland gets her share of that - not as a sub but as her right. That's not from other UK tax payers but from abroad. FFA would cut Scotland off from that- and redesignate it as 'Federal' money to be applied for. It would come, but would have strings and would then be a subsidy, not a right.

Anonymous said...

There is another deeper historical geographical issue to contend with. Scotland's contribution to the wider pool is in itself dependent on her relationship with England and always has been, and can only be so, given the inescapable logic of natural trading partners. Scotland's prosperity requires England and in turn England very much benefits when Scotland is prosperous. This is the 'existential' conundrum that faces nationalists. That even with independence, Scotland would still be 'weighted' by what England does. Comparisons to near neighbours in Scandinavia are pointless as their circumstances are entirely different. With the exception of Norway, who will soon have to diversify and also 'pool and share' in European/ Scandinavian sense (Oil funds do not provide jobs, nor does relying on one main industry, diverse and diffuse economic networks in optimum currency areas do), all small countries that are economically successful (and not simply tax havens) sit at the confluence of major trading routes. e.g) Scotland's trade is 65% to UK, where as Denmark's is balanced between UK/low countries to the East, Germany to the South, Sweden North and the Baltics west. Copenhagen is a quintessential Hansiatic trading city, like Hamburg. Glasgow isn't.

So tit for tat arguments about oil or subsidy, whiskey or financial services, who provides what and who benefits most in the UK is irrelevant as far as the wider inescapable economic systemics are concerned. Interdependence is not a choice, therefore it has to be managed well, and that now, at this juncture in time, means constitutional reform, but not independence.

Peter said...

EricF - Double post, gaggdavvitt!

On this morning particularly, I feel I have to say your critique of Kevin's posts appears to presuppose a narrow "economism" is the (only) motive force behind his blog.

It isn't. And I don't think his clarifications of figures, risks and potentials - as opposed to a mixture of blithe assumptions, mystifications, vital omissions and glaring errors of accounting (for the purpose of ideological and single-minded political advantage) - would be anything like sufficient emotional-spiritual motivation for his scrupulous and fair-minded work on this blog. Dry calculations alone are not a life force. They would not explain what he does in his spare time.

As far as I can assess, and as others have said, such work is based on a love for Scotland, for the many parts of Scotland, and for a wider and more broad-minded country (as opposed to adherence or obedience of a far narrower and more narrowly-focused party) - and a desire that myths, fictions and party appropriations in the name of the people are not the last word on either Scotland, or the UK.

Very much spirit of Charles Kennedy, however unpopular that may currently be.


Kevin - who is well able to articulate his own views - may well correct me if I have misunderstood this.

Anonymous said...

Very good blog. To your excellent point that

Within a nation, we don't draw circles around groups of people and say "you're not paying your way".

I'd add that, as an Englishman who considers himself British (equally English, and increasingly also European) and part of a British nation, as do many of my countrymen (English, that is ... God this is confusing!), the sense of national identity is what this all ultimately boils down to, and why many of us south of the border have found the whole matter confusing and a little saddening.

For me, it's the same feeling I had when, as a child, I learned about the 'Anyone But England' tendency in Scotland re: football. Many down here will happily support Scotland (and indeed Wales, N. Ireland) as fellow Brits, as long as it's not against England (see also Andy Murray, etc.). and I had assumed, naively perhaps, assumed that this was reciprocal.

So anyway, this is a very good post in that it get right to the core of what nationalism is ... keep it up!

EricF said...

Hi Martin and Peter

I'm sure Kevin is motivated by more than the desire to pore over accounts. The unionism of all here, and the desire to promulgate it, is quite obvious, and perfectly honourable. However, the substance of the blog is sharply focused on accounting – well pretty much all the stuff I've read here is. The points I attempted to make were, in my view, crucial to the perception of the whole question of the desirability or otherwise of independence for Scots living here. They certainly aren't meant to be “straw men”. Sometimes folk do have to get their heads out of accounts books and look at a wider picture. Nobody ever scaled the barricades demanding a more accurate delineation of VAT receipts.

Peter, you'll perhaps forgive me if I find your characterisation of the debate as between “clarifications of figures, risks and potentials” and “a mixture of blithe assumptions, mystifications, vital omissions and glaring errors of accounting (for the purpose of ideological and single-minded political advantage)” as not just closed-minded, but ungenerous and deeply depressing.

What would I want for the UK to put GERS in context – well, analysis of the equivalent figures, I suppose: revenues, expenditure – also general state of the economy, debts – public and private. The basic point is that we need to understand the UK economy as completely as we do the Scottish economy if we are to make decisions on how we plan our future. A sole focus on GERS doesn't provide that context. Even so, I might add, GERS figures are a statistical measure of how things are right now (or at least, over the past year), and do not by themselves determine our future. We then have to factor in what decisions are made, by whom, for what purpose and so on.

I mention the small independent countries that surround the North Sea not to initiate a discussion on what they pay to the EU or even the specifics of their trade balances, but simply to point out that they appear to manage their affairs well. They are very successfully independent. So why not Scotland? Norway and Sweden effectively share an island too – a long peninsula with a small, frozen northern land attachment to the European land mass. One key difference between Norway and Scotland is that Norway has been independent now for over a century. A 99% vote against a notional union with Sweden might give us an insight into how precious the Norwegians regard their independence. I'd say a 99% estimate might be a wee bit on the low side.

You say Kevin never says Scotland is failing, but if the consistent theme of a blog is how the figures show that Scotland would really struggle under independence, then there has to be some underlying structural issue with the Scottish economy. What is it? Why is it?

For any country to effectively sub-contract its governance to another country, there have to be demonstrable, overwhelming advantages. When I consider the position of Scotland relative to our North Sea neighbours, I confess I fail to see them.

Philip said...

@EricF,

Your final paragraph gets to the heart of what this is all about. Your view that Scotland sub-contracts its governance to "another country" is based on a nationalist premise which we unionists don't accept. The whole point of unionism is that the UK is a single country, or state if you prefer, with a single currency and tax system which underpin equal citizenship for everyone. All voters are equal whether in Inverness or London and the argument that Scotland never gets the governments it votes for is as meaningless as saying Yorkshire never gets the government it votes for. None of which is to deny local differences in political outlook or culture or the benefits of local policy making where appropriate. Being part of a wider UK market and society makes economic sense unless you’re primarily motivated by questions of identity. For Scottish nationalists that sense of identity sees a nation subjugated whereas a unionist sees a shared national project in the UK without his/her Scottishness being called into question or affronted in any way. Sadly, Scotland has become more divided than ever on this basic question with increasingly entrenched camps. How this story unfolds in future depends on those in the middle without strong feelings of identity either way and they care more about the books than you or I do. That is why so many fallacies are circulated and why Kevin’s forensic work is so valuable.

M62 Scot said...

To Eric,

From what I can see Kevin is passionate that people in Scotland and anywhere else for that matter are properly informed. It's a question of who you believe. That his blog reveals the Yes campaign/the SNP's economic case for independence to be predicated on misrepresentation, false accounting and blithe assertion is not his fault.

That their associated political case rests on the resulting bitterness, grudge and division should be a real source of worry to those of you who seek a brighter future for Scotland.

I'd say this is explanation enough as to Kevin's focus on GERS and his gratifying obssession with accuracy. He makes his case and has the Scots Govt's figures to back him up. If the logic for independence is as strong, robust and unquestionable as many claim they should embrace his critique and dismantle it. That they choose instead to orchestrate attempts on Twitter to prevent links to here should speak volumes to any fair minded person.

You finish your last piece with "For any country to effectively sub-contract its governance to another country, there have to be demonstrable, overwhelming advantages. When I consider the position of Scotland relative to our North Sea neighbours, I confess I fail to see them."

That you would see Scotland sub-contract its governance to the vagaries of the international money markets or indeed the German Chancellor beggars belief. But that's where we started....

nick s said...

EricF - you write "the consistent theme of (the) blog is how the figures show that Scotland would really struggle under independence".

That's because Scotland really would struggle.

Why? Because its old heavy industries have been lost to the Far East, and the public services it enjoys now would be harder to pay for as it lost the revenue-raising support of the South East of England. It couldn't afford the public services it has now, let alone the ones the SNP tells you it could have post-Indy.

Add to that the following by way of a selection. Scotland would not - on current SNP plans - have its own currency. It would have no central bank, no lender of last resort and have no control over bank base rates. For that reason mortgages would be more expensive and harder to come by as lenders factored future currency uncertainties into their plans. Edinburgh's financial services industries would tend to slip southwards to rejoin the same jurisdiction as the majority of its client base.

It's for these reasons and others that Paul Krugman wrote that iScotland would be "like Spain without the sunshine".

Moreover, the Scottish population has a more elderly age profile, is less healthy than rUK and has extra costs of delivery based on lower population density.

In other words the cost of running Scottish services post-Indy would go up at exactly the same time as Holyrood's income stream went down.

For what it's worth, the people on whom this disaster would fall most heavily would be the very same people whose abandonment of Labour has driven recent SNP successes. Not the wide-eyed and prosperous liberal middle classes but the urban poor. Go figure.

Why can't Scotland be more like Sweden and Norway? Different culture, different industries and - crucially - different tax rates. Ordinary people in those countries pay much more tax.

And what happens when you have a land border with modest cultural and effectively no linguistic differences where tax rates on one side are much higher than on the other? No need to answer that one.

Incidentally those who talk up the Scandinavian paradigm tend to be ignorant of recent political trends across the North Sea, where on my reading the Social Democratic consensus is beginning to fray. Where, incidentally, the Swedish government won plaudits for reining in spending before the financial crash. The days of Scandi generosity may well be over.

Actually I can think of a way in which Scotland could prosper. That's by running a low-tax low-regulation small-government economy. That might once have been what the Tartan Bullfrog wanted. Not for nothing were the SNP once known as the Tartan Tories. But it isn't what La Sturgeon wants, and it isn't what has propelled the SNP's electoral success. That's been powered by notion that by getting rid of the English Scotland can have better government services and more generous welfarism. As far as that implies more spending, it is as comprehensive a false prospectus as I can imagine.

If I were you I'd ditch the Indy demand and start agitating for FFA with balancing transfers. That's about as good as it gets for Scotland - federalism plus a bit of continued subsidy.

If I can ask a personal question, your posts give the impression of a person with many questions to ask about the economics of Independence. Commendably honest of course, but wasn't the time to ask them before you decided to become a Yes voter?

Nial said...

Eric said.....

"You say Kevin never says Scotland is failing, but if the consistent theme of a blog is how the figures show that Scotland would really struggle under independence, then there has to be some underlying structural issue with the Scottish economy. What is it? Why is it?"

This is the whole point of the blog post you're replying to, have you not read it?

Scotland's economy generates roughly the same as the rest of the UK per head.

What causes the imbalance is the extra money spent to provide services is a geographically distributed country.

We could survive on our own feet but it would mean a drastic reduction in those
services / social support. As an example in Norway you're expected to move
across the country to get a job before going on the dole, Denmark has _100%_
tax on new cars.

Kenny Mactavish said...

Eric, you wrote:

"For any country to effectively sub-contract its governance to another country, there have to be demonstrable, overwhelming advantages. When I consider the position of Scotland relative to our North Sea neighbours, I confess I fail to see them."

Now of course, you're a committed Nationalist and you make no bones about it. In being so however, you will accept that this frame of reference is inescapable for you. It is in your bones.

A growing source of interest to me since becoming ensconced in Scotland's identity crisis is in watching how our emerging “two tribes” engage with actual and dawning realities, as opposed to the spin and dog-whistling of their chosen ideologues.

I have yet to see any wavering in any Nationalist's commitment to "the overriding cause". Nothing, no matter how persuasive, can disturb the Nationalist frame of reference or deflect from the path to a singular, undiluted aim.

In stark contrast, the “Unionist” cause didn’t even exist in any tangible sense until barely a few years ago. Yet, it has undergone a myriad of identity crises, contritions, compromises and transformations as it has wrestled with the dawning reality of a rampant Nationalism on the one hand, and the resultant political schisms in Scotland and the UK on the other.

What this means in terms of the issues and how both “tribes” engage is equally interesting. Nationalists quite predictably attempt to contradict or dismiss the likes of Kevin’s economic elucidations. However, when Nationalists attempt to counter the existential threat to their bleak core ideology presented by the likes of Kevin's “Circles” philosophy, any detractions sit less well with a vast majority who are not ideologically wedded to Nationalism. It is therefore perhaps Unionism’s ultimate strength (among its many difficulties), that in deeply cogitating and often just gut-understanding the “Circles”, “Layers”, “Treads”, “Empathies”, “Interconnectedness” and “Mutualities” that exist in our Unionist philosophies, we hold the trump card in how our corner of Europe will play out.

So what am I trying to say?

Well I think I’m saying that I hope the troubled, pragmatic re-birth of modern Scottish Unionism will stand it in the stead required to reclaim the humane instincts in us all… and for what it’s worth, I think it will.

The concept of Unionism, in whatever form it may take, is in effect, cohesive humanity and I am gladdened to know that it lies in the heart of the vast majority of us.

Peter said...

EricF: there's a risk a debate here might start to hijack a(n excellent) blog. So even if you return with a withering reply, I'll try to apply a self-denying ordinance & leave it at this second contribution.

I'm surprised by your Paragraph 2. I wonder which blog you have been reading. As far as I can see, this site is one of the prime demonstrations of exactly what I said. Have you missed what Kevin has conscientiously addressed: incl. detailed rebuttals of claims on behalf of the SNP?

Every nation may need its myths: but some are more heinous than others. Misleading myths include "Scots" v "Unionists", "Team Scotland" v "Team Westminster", etc etc. The whole *economic* debate around Scottish Independence has been obfuscated: Kevin has been one of those who has shone bright lights into exactly such areas.

You may not be surprised I reject your view that my mind is closed. With respect, I've reached conclusions on the basis of experience: & have found other minds far narrower. But what I have found "depressing" since around August 2014 is the single-minded forcing of the issue of Independence above all else, by many who should understand better, in a highly divisive fashion, virtually whatever the economic & social consequences may be. I am not including yourself in this: but deploring a common tendency.

I can see why you would draw a comparison with Norway. That long border between two now friendly N Atlantic nations, & the issue of historic independence (beneficial for the "freed" smaller nation: including (now) high standards both of living & welfare, though these are also currently under pressure): but also a famed Norwegian autarky based (often thought, simply) on North Sea Oil.

Well, no comparison is exact. But I believe yours is not only tendentious, but extremely... sanguine.

So we're talking economics again. Norway has a history of prudent costing, wise exploration & protective exploitation of its petroleum discoveries. The Scottish government has shown little sign of the first since 2007 (hence this blog), & the signs from the SNP's policies of close kinship with big business (see Alex Bell's assertion that the SNP leadership "talks left, acts right") are not rosy on the 2nd & 3rd scores either. I am unsure if you are advocating Scotland's withdrawal from the EU: but Norway enjoys a latitude in economic movement of the sort the Scottish government craves, that Scotland would be extremely unlikely to have if it stayed in the fold.

You should also be aware that Norway reaps high rewards also from its wide North Sea reach in fisheries, & from a long-standing domestic exploitation of its HEP resources, which Scotland would be pressed to begin to match: esp within the EU (would it send warships against Oslo? - jk); & unless it quickly grew more mountains, down the full length of its nationhood.

Perhaps, if K manages to clone himself, he could draw an extensive comparison betw Norge & an independent Alba. As it is, I think the general implications of his (true) accounting have been clear so far.

There is more to the comparison than the economics. You are comparing 2 nations speaking different languages, one with a long-standing union with another Scandinavian kingdom, but combined for almost a century as the spoils of Wars, with 2 other nations that - with due respect to Gaelic - have been & are much more closely intertwined & interwoven, & would need to be hauled apart as a result. Much State building, too.

Your raising the "99% Plebiscite"(99.95% in fact) is revealing. Are you saying anything like this is the settled will of the people who live in Scotland, or likely to be so? Or that it is the ardent desire of the current Scottish government, & up to half of those who live in the country? With respect for your wishes, I don't take the validity of your comparison here either.

bucksboy said...

"The basic point is that we need to understand the UK economy as completely as we do the Scottish economy if we are to make decisions on how we plan our future"

Great idea, but isn't it about nine months too late?

To what end is the suggestion put? To give the blog author the runaround? To cling to the possibility the naysayers are wrong?

An economist once said 'Spain without the sunshine' and this blog appears to lend support to that outlook using information in the public domain. No fancy tricks.

So why not just run with it I wonder. Admit the drawbacks as a probable reality and take them on the chin rather than denying they exist.Doing so just might earn the independence campaign heaps more respect, it would help kill off those who claim it to be less than honest. Isn't it prudent to err on the side of caution anyway regarding financial matters? After all what worse possible start could be imagined for iScotland than for its people to have thought they’d bought a financial thoroughbred but to discover they’d been sold a goose with clipped wings.

Think about the possibilities, why stop there, why not put the entire narrative through the same washing cycle. For example:

- Drop the evil Westminster pantomime.

- Stop kicking around of the poverty football charade (there are foodbanks also in the beloved Norway after all).

- Put an end to the complaint about never getting the government voted for (in a healthy democracy surely every individual is entitled to their fair share of this).


"For any country to effectively sub-contract its governance to another country"

Scotland does not sub-contract governance to another country. The Act of Union merged the two kingdoms into one. Each individual's vote weighs the same. If the machinary of government were run out of Scotland it would be the equivalent. The same deal, different geography.

Ed Macfarlane said...

Just for anyone who is interested, there was a very informative book written prior to the referendum that did actually compare a range of 'small' nations. Called appropriately 'Small Nations in a Big World' by Michael Keating and Malcom Harvey. It looked at a range of different small nations, including the Nordic, Baltic and also Ireland, and looked at the challenges, and choices they have made. I found it very informative, and it is also relevant to the ongoing consitutional and EU discussions.

EricF said...

I'll make this my last contribution, as I have a life to live. I've no intention of making a “withering reply”, Peter. Why would I? That's not to say I don't find your attitude to the opposing points of view depressing. My career has been in teaching History, and its a subject that gives a sobering perspective on the specific debates of different times. Things move on, often in unexpected ways. I always told my students that, unless you make a real effort to understand an opposing point of view, you can never argue effectively against it. That's why I call into this blog every so often. It's useful, not because it confirms my assumptions and prejudices, but rather because it challenges them.

I'll conclude with a few observations:

1) My initial interest is in the governance of my country, Scotland. This is not to the exclusion of all else, but I'm happy to accept the term “nationalist”. Those who value the self-government of their respective countries would, by the same criteria, be described as Norwegian nationalists, Danish nationalists, Dutch nationalists and so on. Those of you who view this belief as an attack on the union are British nationalists. Your nationalism is as strong as mine. I find it odd that this perfectly ordinary observation is met with so much denial.

2) Economics, or the “dismal science”, was originally a branch of philosophy. For every view, however authoritative, there is an opposing view. I'll see your Nobel-Prize winning Krugman and raise you a Nobel-Prize winning Stiglitz. (Is that, by the way, the same Nobel-Prize winning Krugman who recently launched such a blistering attack on the austerity policies of the Westminster government that Scotland, despite having voted overwhelmingly against them last month, will still be subject to?) Anyway – enjoy this blog. Reading the comments there are some here who endow it with an almost religious authority. It unquestionably provides a service for those who oppose independence and want statistical information to back their case. It does not, however, by any stretch of the imagination, provide the definitive case against independence.

3) Independence is a matter of governance, of democratic control. Communication with other countries – through culture, trade, movement of people or whatever does not stop. In many ways an independent nation's power to properly foster international relations can make it increase and prosper. Scotland and England are two countries with very similar cultures. This is not an argument for subsuming the governance of Scotland within a shared parliament where representatives of England have an overwhelming majority. That in fact makes no sense at all. I would suggest that the model of independent Canada, sharing a border with the USA, with whom it shares such a lot culturally, or Norway with Sweden, with whom it shares such a lot culturally, or Holland with Belgium, or Germany – I trust you get the picture. India and Pakistan, not so much.

4) Scotland has problems. All countries have problems. How should a country best deal with its problems? That's a political decision for the people of that country. Can problems be overcome? Manifestly yes, they can. What if the elected government has the focus, but lacks the powers required? Then, I would suggest, a country really does have problems.

Incidentally, the book Ed mentions can be found in Google Books. It's another decent addition to the debate.

Anyway cheers guys. Thanks for the responses. Remember – the present is the signpost to the future, not its creator.

kininvie said...

It's sometimes useful to take the longer historical perspective. In the years when Scotland was an independent nation - as often as not at war with its southern neighbour - it survived. It was not a wealthy country, but it survived. It did so largely by exporting manpower in the shape of soldiers or merchants (see the Scots settlements on the Vistula for example) and by remittances back home. It is worth remembering just how pervasive in Europe the Scots were - and how influential in European politics (and wars). Even under the union of the Crowns there was no concept of 'pooling and sharing' - and indeed it is often argued that it was the exclusion of Scotland from English colonial markets abroad that directly led to the Union.

No one can argue that Scotland did not benefit enormously from access to the British Empire after the Union, but it was the familiar model - export of manpower and expertise - that enabled it. To a large degree all this has been forgotten via the post-war consensus, but the idea that one or more parts of the Union should subsidise the others is actually very recent. It is, I'd say, a disabling model - since it presumes a kind of hierarchy in which the 'strong' subsidise the 'weak' - without questioning whether, with a different set of assumptions, the weak might happily thrive on their own terms.

Those of us who argue for independence don't all necessarily dispute the hard economic truths that this blog is famous for. What is in dispute is the assumption that those truths are fixed in stone and cannot be changed. Personally, I have no doubt that the first years of independence would be hard - but that Scotland would be capable of finding a model - maybe the old one, maybe something different - that would allow her to survive and prosper on her own - as she did for so many centuries. Why should we take the risk? - Well, there you have the key question on which the recent referendum turned - and no doubt any future one as well. But there is plenty of evidence from history that the risk is not as great as is portrayed.



Paul said...

EricF:

"Scotland is surrounded around the North Sea by countries of a broadly similar size who appear to manage their affairs very well. Could Scotland also manage its affairs very well if independent? If not, why not?"

I don't believe many Unionists have said an indy Scotland would not be able to manage it's affairs. My take is that it would take years, probably decades, for the quality of life to catch up with the economic shock of separation. That price may be worth paying, but the price should be known beforehand; Kevin's blog is all about revealing the probable financial pain.

I'm looking forward to hearing the SNP's justifications for staying in the EU that aren't also applicable to the UK.

David GREEN said...

I have recently returned to Europe after 36 years in New Zealand. New Zealand is a small sovereign nation. Its population is similar to that of Scotland. It has a relatively large land area for its population that is difficult to farm. It has a unicameral Parliament, its own currency and its own Reserve Bank. It punches above its weight internationally, and is widely regarded as a successful nation state. What not to admire or replicate? The message to Scotland is that it comes at a price. There are no free GP visits (they cost about £20 each); dental care is private. Universities charge substantial fees, and their funding allows them to be solid if unspectacular (top 200-400 internationally). I doubt whether a standalone Scotland can afford to fund its 4 ancient universities to the very high international standard they currently enjoy. But the real difference may lie in the attitude to public finance. The current New Zealand government is close to running a balance budget, and this is widely regarded as prudent. Government debt is about 24% of GDP. Scotland can only dream of these figures; its budget deficit is 8.5% and government debt is the same as the UK, about 90% of GDP. The effect of this fiscal lassitude on the currency of an independent Scotland would be dramatic. Scotland is already over-borrowed, and vigilantes would undoubtedly test any currency peg with the rUK pound. Retention of the pound peg would, of course, look even more anomalous if rUK left the EU, and Scotland voted to stay in. Indeed, it might be forced to adopt the Euro and budget deficits of 3% maximum. These would be wrenching adjustments for a country that has, sadly, become accustomed to living high on the free entitlement hog. And the much vaunted independence would simply be a tight bonding to to a larger political entity. As for those wonderful economic levers that the SNP is always talking about, if ever there was an example of groupspeak, of the twittering of the birds, these levers are it. They don't exist, of course, except as the normal economic tools known to every government world-wide, including New Zealand. So, enjoy independence. You will be much poorer, and it will largely be a chimaera, given your geographical position.

Anonymous said...

Thank you. I'd begun to worry I was the only Aberdonian who'd noticed this.

Anonymous said...

I see comments like this sometimes. Vague assertions are made about "London overspend" without stating what the marker for spend on London should be. Also, the financial sector - I wonder if the poster is aware of its importance to the Scottish economy? It's critical.

nick s said...

EricF - thanks for contributing, and sorry you won't be commenting any more.

Re the dismal science - you say that "for every view there is an opposing view". True of course. But while economists can argue about how things got to where they are or how they might be made different in the future - undoubtedly a matter of opinion - the useful service KH has done is to set out clearly the current fiscal position for Scotland and the implications for Independence.

These are not matters of opinion. They are matters of fact. And they have not been seriously disputed by anyone in the Nationalist camp. KH has demonstrated that on Holyrood's own figures Independent Scotland would be worse off for the forseeable future.

Taken as a whole the Nationalists sneer at this, they are evasive, they are dismissive and even - apparently - try to muzzle the messenger. As far as I can see only a tiny handful of souls like you have had the humility to come on here and ask for elucidation.

Which did make me wonder why you hadn't thought a bit more about the economic implications before you voted Yes.

What does all this tell us about the SNP and about Nationalist voters? It tells us that the SNP has lied, lied and lied again about what iScotland would be like. Either that or the leadership is just stupid, which I rather doubt. It tells us that a significant proportion of the Scottish electorate swallowed those lies whole rather than examine the implications for their own future prosperity. For Christ's sake, even I, an Englishman who loves Scotland, had worked out four years ago what the economic consequences of Independence would be. Why could so few of your countrymen?

I find your own response typical of many Nationalists when these inconvenient truths are pointed out. "Can problems be overcome?", you ask. "Manifestly yes, they can". But you don't explain how. Is that because you don't know? Or is your Nationalism now just a matter of faith? Something will turn up? Is that "manifestly" just a comforting adverb tacked on to buttress a statement you're not sure is true?

It doesn't look that manifest to me. It looks lost in a Skye mist.

If I were a Scot, uncertain about which way to turn, I would look at the economic facts, look at the way Nationalists have responded to them, look at the way the SNP leadership have lied, think about the impact on poorest Scots and say, "Gie us Federalism, wi' balancing transfers. But Indy? Not in a million years".

Anonymous said...

In fact the sooner we stop assuming identity (national) has to be inter-changeable with Statehood and econ prosperity the better. Britain needs rebalancing, economically, but the limits of the Nationalists is that they assume it must be on the basis of her national constituent parts (which belies the actual reason for independence. It is not primarily about economics and social good but notions of identity - that can have many other cultural and social outlets.) One of the smarter things the EU does is formulate directives on the basis of economic region rather than 'country'. So poor parts of Scotland are considered in light of poor post industrial parts of France etc. Wealthy parts like Aberdeen ditto Amsterdam or London.) Wealth and investment is then transferred accordingly in accordance with other units of power. It's called multi level governance.

Jonathan Deighton said...

I thoroughly enjoyed reading this latest blog piece Kevin, Excellent as usual.

I'm English, i'm British and i'm European. When we start grouping ourselves into them and us by placing a value on 'them' and 'us' it will invariably lead to a breakdown in the very fabric of society.

The UK as a country should be celebrated for bringing together it's quadripartite peoples (And the many more who choose to live here from around the world).

We should celebrate what binds us instead of looking to split and break away from each other. Scotland has a huge part to play in the future life of the UK, a part that is essential if we want to succeed in this volatile world of ours.

David GREEN said...

The SNP position on fiscal independence is slowly becoming clearer, if only because of the response of others. Yesterday, Osborne announced new cuts of about £3.5 billion in UK Government expenditure, resulting in £170 million cuts to Scotland. Even after Osborne's supposedly savage cuts, the UK will still be running a budget deficit greater than the cap mandated for the Eurozone (3%). To the predictable SNP response of complaint, Osborne's answer was "like it or lump it". As Osborne pointed out, Scotland, and the SNP, can always raise their own taxes to cover the shortfall if they want to carry on spending.

Welcome to the contradictions of the SNP world of high tax, high spend Government. No wonder Scottish Labour was wiped out at the last election. Although I fully accept its antediluvian attitudes and neglect cost it many Scottish votes, it did remain a party with some sense of fiscal responsibility. But with the Scottish electorate falling for the anti-austerity mantra of the SNP, which equates economic prudence with harsh and unnecessary dogmatism, Labour was done for. Osborne appears to have recognised (a) that unpleasant economic medicine is best taken early in the lifetime of a government, and (b) that it offers, as an additional political bonus, a stark choice for Scotland in its 2016 elections. Vote SNP, and you raise taxes and borrow, or vote for some more fiscally responsible and start removing the freebies. I don't expect Scotland to turn from the SNP immediately, but I would expect to see opposition emerging to a one-part state whose economic policy resembles more that of Greece than rUK. Incidentally, when are the SNP at Westminster going to start responding to the constant jibes about the £10 billion shortfall if they pursue FFA? They seem to want much greater austerity than Osborne.

Finally, great blogs, Kevin. Keep fighting gullibility and stupidity. Sadly, the battle has to be fought at every generation, as anyone who knows their Voltaire or Swift will testify.

bucksboy said...

"Those of you who view this belief as an attack on the union are British nationalists... Your nationalism is as strong as mine."

This stance is core SNP supporter rhetoric, straight from the crib sheet.

Nationalism has an image problem and tarring everyone with the same brush, it is thought, will take some of the thunder away from those that oppose it on these grounds.

It is mistaken for a person to believe the world divides along nationalists lines just because they adopt this mindset for themselves.

The UK is a present reality, many appreciate it provides a reasonable platform for delivering security, prosperity and opportunity for all those within, and any force that threatens this reason enough to oppose it.

You don't need to be a nationalist to support what this present reality offers, I am no nationalist, I don't own a flag or feel the need to wave one, but I enjoy and value the society we have in the UK as it stands and look forward to wider integration with populations further afield in future.

That's not an argument for no change, but moving in a direction that introduces greater division for those living across the UK and introduces more inequality is something I will not support, and at present this means nationalism.


"the same Nobel-Prize winning Krugman who recently launched such a blistering attack on the austerity policies of the Westminster government"

Government policies come and go.


"Scotland and England are two countries"

It's one country, many identities.


"Scotland has problems"

There are many living in Scotland who are doing very well, just as there are elsewhere in the UK, and similarly many who aspire to do better. Interested to learn what problems are endemic to Scotland.

bucksboy said...

"Those of you who view this belief as an attack on the union are British nationalists... Your nationalism is as strong as mine."

This stance is core SNP supporter rhetoric, straight from the crib sheet.

Nationalism has an image problem and tarring everyone with the same brush, it is thought, will take some of the thunder away from those that oppose it on these grounds.

It is mistaken for a person to believe the world divides along nationalists lines just because they adopt this mindset for themselves.

The UK is a present reality, many appreciate it provides a reasonable platform for delivering security, prosperity and opportunity for all those within, and any force that threatens this reason enough to oppose it.

You don't need to be a nationalist to support what this present reality offers, I am no nationalist, I don't own a flag or feel the need to wave one, but I enjoy and value the society we have in the UK as it stands and look forward to wider integration with populations further afield in future.

That's not an argument for no change, but moving in a direction that introduces greater division for those living across the UK and introduces more inequality is something I will not support, and at present this means nationalism.


"the same Nobel-Prize winning Krugman who recently launched such a blistering attack on the austerity policies of the Westminster government"

Government policies come and go.


"Scotland and England are two countries"

It's one country, many identities.


"Scotland has problems"

There are many living in Scotland who are doing very well, just as there are elsewhere in the UK, and similarly many who aspire to do better. Interested to learn what problems are endemic to Scotland.

Anonymous said...

Hi Kevin. I've been a regular reader of your blog for a while but never commented before. Please keep up the hard-nosed analysis and scrutiny of the SNP's economic policies. Given the weakened state of the political opposition here in Scotland, there are precious few others doing so just now.

As regards a comment further up, I'm not sure Joseph Stiglitz has proven himself to have a good grasp of Scottish public policy, as his remarks on Start The Week last month demonstrated. (In fact, I'm told he was challenged on this very point at a Edinburgh book festival event last summer.)

He said: “Nothing illustrates that more than the attitude towards, say, education and university education,” he informed us. “…we’re talking to access and mobility. What is the likelihood of someone from the bottom making it to the top? Education, we know, is a critical part to the access and mobility. If universities are very expensive then it’s very hard for people at the bottom making it to the top.”

Some equally hard-nosed analysis by former SG civil servant Lucy Hunter Blackburn has shown the SG's student support policy to be regressive, benefiting the middle classes at the cost of those from low income backgrounds. Ironically enough, it transpires that the English student support system is better at getting those from low income backgrounds into higher education. And yet you would never know it from the high-falutin' rhetoric.