Sunday , July 14 2024

Are Scottish civil servants scared to tell Sturgeon the truth?

The SNP’s latest document “A stronger economy with independence” masquerades as some sort of objective analysis put together by impartial observers. We know however that those civil servants who were paid to write it depend for their jobs on coming up with the right answers. Telling Sturgeon that we would be better off staying in the UK would be like Thomas More telling Henry the Eighth that he couldn’t have a divorce. Off with his head.

We start with how wonderful Scotland is in every respect and then move on to how awful the UK is every other respect. What’s odd about this is that the other parts of the UK subsidise Scotland and have done so for some time. If Scotland is so wonderful and the other parts of the UK are so awful, how can it be that they pay us by means of the Barnett formula more than they receive themselves?

At this point my Scottish nationalist friends tell me that we pay taxes and in fact we subsidise the English. But the SNP document admits that Scotland runs a deficit and would do when beginning independence. So how can we be subsidising anyone else? Of course, the UK also runs a deficit, but the UK finances this through borrowing. The UK may overall be making a loss, but part of the reason for this is that it subsidises Scotland.

The SNP does not borrow (though it could), does not make a profit and instead spends more than it raises in taxes in Scotland. If Scottish nationalists disagree with this, they ought to apply to Sturgeon to give up the Barnett formula and refuse all money from the Treasury from now on. If they did this, I promise that I would vote for independence.

I will skip briefly over the bits about currency except to reiterate that I don’t fancy using sterling unofficially without a lender of last resort. I don’t see how our banking sector could survive. I also don’t fancy everything I own being converted into Scottish pounds. Nor do I believe that an independent Scotland in the EU could long stay out of the Euro, not least because it would be its best currency option.

The SNP wants to have a New Scotland Fund after independence. The idea I think is to emulate Norway’s wealth fund. But while this might have worked if Scotland had become independent in the 1970s, it is hard to see how it is going to work now. Scotland is running a deficit. Even the SNP admits this. Well, any money it puts into the New Scotland Fund is going to have to come from cuts elsewhere in the budget or from borrowing. But cutting spending is called austerity and that is something Tories do, while borrowing to create a New Scotland Fund is like me borrowing from the bank only to put the money in the mattress. I can call my mattress a New Scotland Fund if I like, but I still will have to pay it back to the bank. It’s not my wealth. It’s the bank’s. It’s not a wealth fund. It’s a debt fund.

The SNP thinks that it will boost trade by joining the EU. But after nearly 40 years of UK membership of the EU Scotland traded vastly more with the other parts of the UK than with the EU. Why would this suddenly change if Scotland joined the EU?

The problem the SNP has with EU membership is that it puts us in the wrong trading bloc. Scottish trade with the EU might increase if we joined, but at the cost of our trade with the former UK. But given that we trade vastly more within the UK than with the EU, our overall trade position is going to be worsened.

The SNP as usual has an exceedingly optimistic view of EU membership and Scotland’s relationship with the former UK. Trade with the former UK it thinks will be seamless, even though we know that trade between the EU and the UK has been difficult at times with bureaucracy, form filling and delays even between Britain and Northern Ireland (which is de facto in the EU’s Single Market). But none of this would apply to Scotland. Markies may not be able to sell sausages in Belfast, but no one would dare make a Scot fill in a form because we wear blue woad.

The SNP thinks that Scotland’s membership of the EU would be like Ireland’s. Scotland would both be part of the Common Travel Area and be given free movement across the EU. Scotland would be part of Schengen, but would be given an opt out from the border control aspects. So, there would be no need to show passports between England and Scotland and we would have exactly the same access to health care and benefits in the former UK as we do at present.

It may be that the SNP’s wish list is fulfilled, but it is worth pointing out that none of these things would be up to the SNP. The Common Travel Area was set up in the 1920s because of Irish independence and to avoid border controls between the Irish Free State and Northern Ireland. It exists now because of thirty years of terrorism and the hope that an open border helps us keep the peace.

The former UK Government might respond to Scottish independence in the same way. It might offer Scots reciprocal rights. But it would be under no obligation to do so. No other member of Schengen gets to have an open border between the EU and the non-EU. But again, Scotland is special.

One of the key aspects of SNP policy is that it wants to have much more liberal immigration policies in order to address depopulation in Scotland. But the Common Travel Area depends on its members having a similar immigration policy to the UK. The SNP wants to have open borders with the EU so that anyone from the EU can arrive in Scotland. This means rather than getting in a dinghy on the French coast it would be cheaper just to fly to Edinburgh and get the bus to London. What is to stop this if there are no passport controls? It’s not at all clear why a former UK Government would agree to this.

The SNP’s whole economic argument depends on it not being allocated a population share of the UK’s national debt. Instead, it offers an annual solidarity payment. The reason for this is that UK debt as a percentage of GDP is approximately 96.6%. It is difficult enough for the UK to maintain this level of debt as the recent crisis showed, but it would be completely untenable for a newly independent country to begin life with debt approaching 100% of GDP.

The solidarity payment offered by the SNP has of course not been negotiated let alone agreed. If Scotland were to avoid accepting its population share of national debt, then the former UK’s debt would increase as a percentage of GDP owing to the loss of Scotland. The former UK’s credit rating might also be downgraded as the break up of the UK might be seen as making lending to the former UK riskier.

The SNP wish list then amounts to saying we will not accept our share of the money you spent on Covid furlough, nor on capping our energy prices, nor indeed on decades of Barnett and everything else we have received, we will instead pay you a token solidarity payment and in response you will give us everything we want including open borders, seamless trade and you will continue to pay us benefits and healthcare so that if we happen to get drunk in the fountains on Trafalgar square and  trip up and hit our heads you will look after us for free. Really?

I have absolutely no idea what would happen if Scotland were to vote for independence. No one has tried to break up a first world country, like the UK, France, Japan or Germany. I think it would damage the former UK more than it guesses, but it would damage Scotland still more.

No one has tried to start a new country when approximately 50% are opposed to it being set up. How would the Pro UK 50% behave? Would we all just happily get on with being new Scots? I’d stay. My work is here, but I’m not sure how much I’d want to help. We just don’t know what would happen, because no country has become independent with such a small percentage wanting it to do so. Every other country I know of gained independence after an overwhelming majority wanted it. But in Scotland we need just 50% and one vote.

How much of the Scottish economy is intertwined with the other parts of the UK? We don’t know until we put an international border and see if it makes a difference.

The SNP thinks that it will get the best possible deal both from the former UK and the EU, but it fails to take into account that just as the EU chose to drive a hard bargain with the UK over Brexit, so the former UK might choose to drive a hard bargain with Scotland.

The SNP presents the best-case scenario as inevitable even before it has begun negotiations. It is arguing that we would have exactly the same rights in the former UK as we do now, there would be open borders and no disadvantages despite us using the pound without permission and refusing to accept our share of mutually incurred debt. It really is as if the Scottish civil service is scared to tell Sturgeon the truth. Off with their heads.

This article was first published here.

About Effie Deans

Effie Deans is a pro UK blogger. She spent many years living in Russia and the Soviet Union, but came home to Scotland so as to enjoy living in a multi-party democracy! When not occupied with Scottish politics she writes fiction and thinks about theology, philosophy and Russian literature.

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