Monday 31 August 2020

Only reality will change minds now


In the last few months many of us have either been paid for doing nothing (furlough) or been paid for working at home. It has created a sense of unreality. If Rishi Sunak can conjure up huge sums of money just by waving his wand, why couldn’t Kate Forbes do the same in an independent Scotland? If there is a magic money tree called borrowing why do any of us go to work at all. Why not just borrow ever larger sums so that we can all live the life of luxury while doing no work at all. Unlike most European countries Britain is still psychologically in lockdown. We are still scared, and we prefer to think that nasty reality can be kept away by nice people like Nicola Sturgeon saying we don’t need to go back to the office. It is for this reason too that we shrug our shoulders at nasty economic figures that the Scottish Government publishes and blame someone else.

I have frequently said that I don’t think it is effective to argue that Scotland is too poor to become independent. I don’t even think that it is effective to argue that Scotland is better off financially in the UK, because this amounts to saying we would be poorer if independent. Such negative arguments rarely convince anyone. But what argument could convince Scottish voters?

I strongly suspect that Scottish Labour, Lib Dems and Conservatives are not going to work together with Alliance for Unity. They will not stand down even in the seats they cannot possibly win. Alliance for Unity will make a difference, but it may not be enough. At present the SNP are likely to have an overall majority at the next Scottish Parliament election. We don’t know what the winter will bring, but that is my honest assessment.

If the SNP campaign on a second referendum manifesto, the British Government would have the choice of saying No or saying Yes. I would prefer that it said No, but it’s not up to me. What if it said Yes?

I don’t believe during any independence campaign that Scottish voters would be any more realistic than they are at present in a Scottish Parliament campaign or in a General Election. This is our problem we need to bring realism back into Scottish politics. Whenever anyone talks about economics, they might as well be talking of zillions and squillions, no one pays any attention. What would make them pay attention?

The process of Scotland becoming independent needs to have a reality check built into it, whereby Scottish voters would have to experience the reality while they still had the chance to vote to stay in the UK.

There are different ways of doing this, but perhaps the best is to say that if the SNP ever won a vote for Scotland to leave the UK, then during the transition period Scotland would be treated by the British Government as if it were already independent and that Scotland could only proceed to full independence at the end of divorce negotiations on condition that independence won a confirmatory referendum.

It may be that a £15 billion, 8.5% deficit is no big deal. It may be that lots of countries have deficits so why shouldn’t Scotland. It may even be that such a deficit show that the United Kingdom is not working and that fiscal transfers from the British Government do us harm. I doubt somewhat that the SNP argue that if Scotland had a £15 billion surplus and transferred huge sums every year to England that this was grounds for staying in the UK, but this just goes to show that under the present circumstances the SNP can argue anything they like and be believed by a section of the Scottish population.

After a vote for Scottish independence the British Government would begin the divorce negotiations with the Scottish Government, but it obviously would have no obligation to continue fiscal transfers to Scotland. The Scottish Government would be given the power to borrow on international markets, raise taxes and begin the process of either using the pound unilaterally or setting up its own currency. During the period of negotiations everyone would assume that Scotland really was going to be become independent after all the Scottish voters would have just voted for it. In so far as it were possible the Scottish Government would be responsible for everything. What would be the result of this?

It would not be possible to implement independence. Both sides would try to negotiate seriously, but as soon as it became clear to the markets that the Scottish economy could not survive the shock of attempting to run a £15 billion deficit, they would be forced to revert to the status quo. To attempt to cut spending and raise taxes sufficiently would simply crash the Scottish economy. It would lead not merely to capital flight it would lead to people flight too. When people in Glasgow found that the Scottish Government could not afford to pay their benefits, they would move over the border to somewhere that could.

Scottish middle class remainer liberals who lent their vote to the SNP as revenge on Boris Johnson for dragging them out of their beloved EU, would rapidly find that they couldn’t sell their houses for the price they paid for them and possibly not at all.

It isn’t at all that Scotland is too poor to be independent. We are far wealthier than lots of independent countries. But the process of disentangling Britain would be far worse than Greece trying to leave the Euro. The mere attempt would do such damage to the Scottish and possibly the British economy that both sides of the negotiations would give up as soon as reality hit.

This then should be the stance of the British Government. It should say “No” that issue has been decided decisively, but if enough “Pro UK” journalists (Massie, Farquharson etc) and Scottish opposition politicians put enough pressure on it to agree to SNP demands, then the Scottish people should be given a second referendum only on condition that they try independence with all its consequences before being given a final say in a confirmatory referendum.

Arguments have become ineffective in Scotland. Let the SNP take full responsibility for its independence without the possibility of blaming England. Only reality will change minds now.