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Archive for November, 2013

The Scottish Government has released its “blueprint for independence” – the long awaited White Paper. But despite producing a document that is 670 pages and 170,000 words long, Alex Salmond and co have failed to provide satisfactory answers to many questions of detail about their proposed breakaway from the UK.

There is very little that’s new in the text – and certainly not the full set of answers we have long been promised. And throughout it uses assertion where negotiation will be required and assumes better than best case scenarios while simply ignoring any other possibilities. The paper emphasises the emotional case while ignoring the economic and financial risks inherent in independence.

Much of the massive document is simply the type of rhetoric that we have been hearing from the SNP for years: it’s our oil, everything bad is London’s fault, trust us and it will all be ok in the end and so on. And a large chunk of the text, controversially launched at a media event before being presented to the Scottish Parliament, is in fact an SNP election manifesto. It seeks to set out a claim to be Scotland’s first government after independence, rather than providing full detail of the major constitutional change that would be required first.

Great play is made throughout the White Paper of links to the rest of the UK. Clearly the policy of trying to minimise fears of the potential effects of independence continues. But let’s be certain about what is being proposed here: Scotland would leave the UK. This is not enhanced devolution, it is separation. So claims that an independent Scotland could work more closely with the other countries of the UK simply make no sense at all. How can independent countries possibly be closer than those that are already parts of the same country, together through a political union?

Bold statements like, for example, the assumption that the new Scotland would somehow continue to benefit from the UK’s Research Councils, which currently fund scientific projects vital to our universities, simply have no basis in fact. And why would UK bodies like the DVLA and the various transport regulators continue to provide services to Scottish motorists and travellers after independence, as is proposed?

It’s very simple: you cannot leave the UK and at the same time continue to benefit from it.

A whole series of assertions lies at the heart of this White Paper’s case for independence. The independent Scotland would “continue to be“ a member of the European Union, we are told. Now this makes no sense either as Scotland is not currently a member of the EU; rather it is a part of an EU member state. So the claim that nothing would change and that the new Scotland would not be required to meet any new conditions to join the EU doesn’t stand up to scrutiny. Indeed in areas like farming and fishing it is even stated that additional resources will somehow come from Europe!

Similarly we are told that the new Scotland would “remain” part of the Common Travel Area of the UK – not seek to join, not negotiate to become a part, but be there by right. Clearly no one else has any say here, the independent Scotland can do whatever it wants and everyone else has to go along with it. And joining the CTA would imply agreeing a common immigration policy with the rest of the UK too.

And we are told that “On independence the National Lottery will continue to operate in Scotland.” The assertion here seems to be that Scotland can leave the UK but somehow still be a part of a contract between the UK government and lottery operator Camelot. No negotiations, no change. It will just happen.

The proposal for this theoretical independent Scotland to form a currency union – “the Sterling Zone” – with the remainder of the UK was always going to be a controversial part of the plan. Again, the Nationalist approach appears to be to try to reduce fear of change by stating that the new country would still use the familiar pound.

But there are even those on the Yes side who believe that the SNP is wrong to propose the use of sterling, preferring instead the creation of a new Scottish currency. Colin Fox, a Yes campaign Board Member, has described his own campaign’s plan as “untenable” and stated that “the idea of a sterling zone renders ridiculous the idea that you have an independent country.” And you can see his point – why would a new country start out with another country playing a key role in its economy, including setting its interest rates and having a say in its tax and spend policies?

Nicola Sturgeon, the Depute First Minister claimed on Radio 4 that an independent Scotland would have “fiscal independence in a currency union”, a contradictory position that makes no sense at all. At the heart of a currency union is the shared agreement of fiscal policy.

And it is always important to remember that forming a partnership requires the consent of both parties. A Yes vote would not somehow mean that the Scottish Government could dictate terms to the UK Government, as Alex Salmond and co would apparently have us believe.

If there is no agreement to a Sterling Zone could an independent Scotland simply decide to use the pound anyway? It is clear from the White Paper that there is no other alternative, no back up plan at all. And in theory yes it could – but even the SNP’s own advisory Fiscal Commission has ruled this out as a serious option.

And the SNP has today suggested that should agreement not be reached, Scotland could refuse to take on any debt responsibilities after independence. That’s a great start for a new country: default on your financial obligations immediately. What would the international financial markets would make of that? What sort of credit rating would the new country have? Certainly not the top level rating that the White Paper asserts, typically with absolutely no justification whatsoever, that the new country would have. And how much would interest rates on any government borrowing rise as a result?

Great play is made in the White Paper of increasing childcare provision after independence. This is on first sight an odd policy to have at the heart of an independence debate. Could it perhaps have something to do with repeated polls showing that women are less likely to support independence than men? And if expanding childcare is such a priority, why has the Scottish Government not done it already? It has the power to do so.

According to Nicola Sturgeon it is because more childcare would lead to newly working women paying tax to the UK government. What a bizarre answer! Never mind the needs of women, or indeed of the economy. Independence, as always with Nationalists, is the primary concern. And Sturgeon later repeated her stance in the Scottish Parliament, arguing that more jobs and therefore increased tax revenues could be achieved by expanding childcare, but that the Scottish Government chose not do so unless all of the tax income came to Scotland.

On foreign affairs, it is proposed that an independent Scotland would set up a network of 70 to 90 overseas embassies. The UK is currently represented in 100 or so countries around the world, so there would be a slight loss here. And there would apparently be “little initial cost” in setting this up, and it would be cheaper to run than Scotland’s share of the existing provision too, which makes little sense unless the range of services offered to citizens when abroad is very much reduced.

Much play is being made of the “650 Questions” section of the White Paper – although these range from straight cut and pastes out of other parts of the document to the ridiculous, like “What impact will independence have on the time zone that applies in Scotland?” and “What will the official name of the country be after independence?” (None and Scotland respectively, of course.) Frankly this section adds nothing at all to the paper.

There also appears to be no real change proposed to the political infrastructure of the country to govern independently. The same parliament with the same number of MSPs is assumed to be able to deliver on all of the new policy areas that an independent Scotland would require. To produce all of the legislation, form committees and scrutinise all of the new departments and represent constituents in all of the new policy areas. This implies either that they would be very busy or that they have an awful lot of spare time at the moment. And there is no proposal for a second house or revising chamber, meaning that there would be no checks and balances on a majority government.

Now we know that many new government departments and agencies would be required to deliver all of the functions that are currently UK responsibilities under the current devolution system. But there seems to be no indication given in the White Paper of the cost of establishing these, the one off expenditure required to set up the new services. This is a glaring oversight.

There is also no recognition of the relatively increased costs it would take to run smaller versions of UK departments and agencies when economies of scale are lost. A function catering for 9% of the population does not simply have 9% of the revenue costs. And in the case of tax collection, it is even asserted, again with no proof at all, that £250 million per annum could actually be saved by establishing Revenue Scotland.

A document designed as a blueprint for a new country should surely be able to answer basic questions on issues like the cost of establishing the independent government, shouldn’t it? So either the work to calculate the costs hasn’t been carried out, or the Scottish Government simply doesn’t want to show us the figures.

This White Paper was eagerly awaited by people on both sides of the debate – and by many undecided voters. But the document contains little that is new and nothing that could possibly persuade those not already on the Yes side. The hat is bare and there are no rabbits to be pulled out. Indeed much of what is proposed here could be delivered by the Scottish Parliament right now, or with the agreement of some extra powers.

The publication of the White Paper has long been seen by Yes supporters as a game changer. The moment when they would take charge of the referendum campaign by demonstrating that they had considered all of the issues and come up with well researched and justified answers.

Instead, the Scottish Government’s weighty tome is filled with airy rhetoric, baseless assumptions and political promises – and it simply fails to meet expectations.

 

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On Tuesday 26 November the Scottish Government will publish the document it describes as its “blueprint for independence” – a White Paper that will play a crucial part in the debate leading up to next year’s independence referendum.

So what can we expect the White Paper to contain?

Well according to Alex Salmond in a speech at the SNP Party Conference this year where he first revealed the date of its publication, it will have two functions. Firstly it will set out a vision for an independent Scotland and secondly it will detail a process to establish the newly independent state in 2016 in the event of a majority Yes vote in 2014.

Now the vision side of things will be, as always, largely politics and spin. We can all probably guess what will be in it: an idyllic image of a country where the sun always shines with smiling, tartan clad children running happily through grassy fields while everyone has above average income and money raised from oil piles up for use by future generations. Or something similar.

But the process side will be far more interesting. Because the Scottish Government will have to answer many of the difficult questions that it has either avoided so far or answered with glib promises that everything will be all right in time. The White Paper should in effect contain a clear project plan for independence. One that is, like all good plans should be, rooted in reality, backed up by facts and containing full details of timescales, budgets and resource requirements.

So what are the key questions that the White Paper should be looking to address?

We know that many policy areas are already devolved to the Scottish Parliament, and so when it comes to issues such as the National Health Service or schools, for example, there would probably be little change required by independence. Scotland has hospitals and schools, doctors, nurses and teachers, and they would simply continue to do their jobs.

But there are many other areas, known as reserved matters, where the UK government currently has responsibility across the whole of the UK. Clearly when thinking about a newly independent country the Scottish Government should look at all of these services and decide how they would be provided in the future. This would involve setting out the requirements in each area, negotiating with the Westminster government to decide which assets would come to the independent Scotland and which would remain with the rest of the UK and then looking to plug any gaps that remain. It would also be important to establish any transitional arrangements that might be required depending on the time required to set up each element of a new state.

The first area to consider is the infrastructure of the state itself. Scotland currently has a parliament and a government of course. But there would be a requirement for many new functions and services. These would include: a tax collection service, a benefits and pensions department, a Foreign Office and consulates or embassies throughout the world, a defence department, armed forces, a department for immigration and border control, a broadcasting service, and ways to replace a plethora of UK wide agencies and quangos that perform regulatory or other functions in dozens of areas from regulation of financial markets to provision of driving licenses.

In each of these areas it is clear that there would be initial costs associated with their establishment and setting up. How much will these set up costs be? What is the timescale to secure the necessary buildings, equipment and staff to allow them to operate? How will legislation be passed to set out their functions, powers and duties? And what processes will be put into place to monitor their performance?

And what would the political structure of the new country be? Would the parliament be of the same size, or be increased given the much greater level of responsibility it would have? Would we have a unicameral system or would there be a second chamber created, and if so how would it be elected? Would we have the same number of local authorities with the same functions as they currently have or would there be changes needed?

There are many other questions to be answered too.

Would the new Scotland be a member of the European Union? This issue has been debated long and hard – and to no definitive conclusion. It appears likely that the new country would be welcomed into the EU – but on what terms? What level of contributions would be expected from it? What requirements would it have to agree to secure entry?

There are many other international organisations where the UK is currently has membership. It can probably be assumed that an independent Scotland would seek to join some or all of these. So are there any requirements for entry that would have to be met?

What currency would the new country use? The prevalent thinking within the Yes camp currently seems to favour continued use of the pound, although there are those who would prefer the creation of a new currency instead. On the assumption that the White Paper will favour use of the pound, then there are issues to be resolved. What influence would the new Scotland have with the Bank of England? Nicola Sturgeon’s bold assertion during a television debate that the independent Scotland would have a place on its Monetary Policy Committee by right was soon shown up as nothing more than a baseless assertion. How would some sort of “sterling zone” be created and what effects would it have on the Scottish economy? What would the risks be for the taxpayer and for business? Who would set interest rates?

What would the defence force of an independent Scotland look like? What functions would it have and what ships, planes and other equipment would it require? What are the costs and timescales of establishing, equipping and staffing it?

And similar questions of functionality, practicality and cost now require to be answered in every area that the new county would be taking on. Timescales, costs and risks should be set out in each area.

Setting up a newly independent country would not be an easy task. This is in effect a demerger project, taking one part of a larger state and separating it out. So clearly there would be additional costs, both in its establishment and in its long term running costs due to the loss of economies of scale. Every time two bodies are merged into one there are cost savings. The reverse is also true.

The White Paper is eagerly awaited by many people on both sides of the debate. There are many weighty issues that have not yet been fully addressed by the Scottish Government. Will this be the time when the answers are revealed?

We will find out in just thirteen days.

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