The Financing of Independence Part 2

Kloot posted a very interesting and detailed comment today here and once I’d reached the 250th word in response, I decided to post my answer as a separate blog.
If you’re still awake by the end, I hope both you or he doesn’t mind me taking the liberty!!

I and (apart from a few other than some of the more rabid hang’em and flog’em right-wing) the vasrt majority of UK unionists don’t consider the Scots, any more than the Scousers, Geordies or cough, cough, N.Irish, as “scroungers”. If you believe in the Union as a family, then, as all the best families work and pull together, so should the Union. Pre-devolution there was very little of this talk of “spongers” (except Wilson with the loyalists, but that’s another story..), the cack-handed way assymetrical devolution has been handled and particularly the various budgets has ignited that kind of talk

”Very few blogs will argue the benefits of the Union, as they perceive”

Yes, you’re right and I’m as guilty as most in focussing more on the negatives of the present situation, rather than pushing why we still believe in the Union….we are surrendering that ground to the selfishly politically motivated faux-unionists like Brown and now, unbelieveably, Hain.

Are there benefits to the Union? Most certainly economically, culturally and socially. Are there downsides to Scotland and Wales (and England) taking the independence road, again most certainly, but it’s easier to stress these and we must not get always bogged down with the negatives.

“Could it be that the conditions that existed in the 1700's and 1800's which were used as arguments in favour of Union just do not exist any more.”

You’re right they don’t, but all over the world countries, states and federations were set up for reasons which are no longer valid nor relevant in the modern world, they still survive and prosper. Those of us that are conviction unionists have to clarify and argue exactly the Union still makes sense from a logical as well as an emotional point of view. These two did a reasonable job, although maybe a bit too N.Iron-centric:).

”For me, looking in, I see Scottish independence offering them something that devolution currently does not offer.. fiscal control. The ability to compete in the EU and on the world stage for inward investment by setting favourable economic policy.”

For that to potentially work (I believe) in an independent scenario, incredibly hard financial sacrifices would need to be made. The SNP are less than honest (hence my original post) in setting out clearly what those sacrifices would be.

“This cannot be achieved within the UK as it stands.”

Under the present devolved system it becomes more difficult than it would be by reverting to a new improved system based at Westminster. The distance is growing between Westminster and the Scottish parliament, the Scottish people are not gaining from this increasing gap.

“A federal UK could possibly address this problem. “

Not at all sure.
Would Scotland become a more attractive investment prospect ?
Would it solve its over-reliance on the public-sector?
I don’t think so.
Both of these things need to happen, but for them to have any chance of happening, then substantial finance will be needed to make the transition less painful. IMO that would be a better economic strategy for the SNP to follow, curbing the free university places and other dodgy social programmes and concentrating on setting up an enterprise-friendly culture with tax incentives etc.

”The Scottish economy should not need to be subsidised by the UK economy.”

Why not? As I said before, if you accept we’re a family, then there is no shame whatsoever in the richer members sorting out those less well-off.

“It should be self sustaining surely. Why would the Scottish, or indeed the Welch or NI economies want to be seen as dependants.”

Huge tracts of Europe are not self-sustaining (look at much of East Germany or Southern Italy for example) but they survive, again, because of this national family principle.

”That said, I wonder if scottish nationalism has fully thought through the consequences of exiting from the UK. Divorces tend to be painful. Yes, they might have the oil, but oil alone will not sustain their economy. It will not provide the jobs or attract the investment.”

They quite clearly haven’t thought it through, or, at least, they’re not prepared to put the figures on the table which proves they’ve thought it through. Oil is a depreciating asset, what would be the selling points of Scotland that would persuade an investor to come there instead of say for example, Slovakia, or em Sunderland?

”Social cohesion is likely to be greatly affected as well. As in Ireland, there will be sizeable minorities who will not be in favour of independence.”

In Scotland it’s a less than sizeable minority that want independence (20 something per cent in the latest opinion poll)!
Would Salmond win a referendum on independence tomorrow if it was called?
No, but what are the reasons why not? These are what unionists need to focus on.

”The SNP tend to look at the Irish economy as a model. Thats fine, but they would be wrong to assume that Irish economic success just happened along and occurred overnight. The steps required to produce the conditions that allowed the celtic tiger to flourish started in the 60s and required massive cuts in the public sector. Spending was massively cut. Cutbacks were the order of the day. Hospitals closing, benefits cut. Capitalism accepted as being the future.”

And that was something which happen over the period of nearly a decade….how far are the Scots prepared to make the same sacrifices in a more than probable shorter time-span?
Let’s put the figures on the table and let the electorate make the choice, let’s call Salmond’s bluff and have the independence referendum asap.

”Somehow though I think that Scottish nationalism could still achieve its goals within the UK but only in a federalist model which gives them more control of their economy and offers them a position on the world stage.”

Actually this kind of ties in with my Gladstone post from Saturday.
The parliament promised to Ireland under the Home Rule Bill of 1894 would have essentially made the UK a federal state. If it had been passed it’s unlikely we would have seen the rise of Sinn Fein and the violence of the Irish War of Independence. Notwithstanding Ulster, would Ireland twenty, thirty years still have been a part of the British nation?
I really don’t think so, once tax-raising and spending powers were given, then there would have been a steady, non-violent drift away from the central federal state.

If devolution proceeds further the way Salmond (and Paisley!!) wants it then we are moving inexorably towards a federal state. Salmond is, without a question, the most astute (we’d say “fly” up here!) politician operating in the UK today. He knows he can’t win independence through a referendum, but he knows he can win enough support to garner a steady drip...drip of powers away from Westminster, until we all wake up one morning, and as I said on Slugger, we’ll realise the Union’s dead and buried, but we’re not quite sure why or how it happened.

And that's it, thanks to Kloot and here endeth the sermon!!