Tommy Cooper Square

Scotland outside the UK would succeed: ‘Just like that!’

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ONE OF THE much-loved comedians of the second half of the twentieth century was Tommy Cooper, the wizard whose magic tricks almost always ended in failure and much hilarity. He would explain what he was going to achieve, exclaiming it would happen “just like that!”. It rarely did. I was reminded of this recently when I saw Scottish separatists proclaiming Scotland’s strengths and assets – usually to an exaggerated extent. With our talent and resources, goes SNP propaganda, how can we fail? Freed from the oppressive (and exploitative) occupation of our country by the UK (we are told), we would be bound to succeed outside the UK because of what we already are, ‘just like that’!

This is somewhat reminiscent of the stance of the SNP in 2014, under their then leader, Alex Salmond. It’s well known Salmond enjoys a flutter, and his gambling instincts extend to the political arena. Such was his capacity for brushing aside difficult questions that his motto in 2014 seemed to be ‘it’ll be all right on the night’. One example of this was when Philip Hammond, as Defence Secretary, was visiting Clyde shipbuilders in 2014 and was asked by a member of the workforce whether the Royal Navy would continue to build warships in Clyde yards if Scotland left the UK. His unequivocal answer was ‘No, they would not’. Salmond immediately rushed to the TV studios to give an undertaking that was not in his gift: ‘I guarantee that the Royal Navy will build warships in an independent Scotland’. It was a characteristic piece of Salmond chutzpah – not to say dishonesty.

It is true that the SNP produced in 2013 a massive tome as a prospectus for the 2014 referendum, but it was all based on aspiration and, as the saying has more recently had it, ‘hope over fear’. There was nothing concrete that gave a realistic programme for how a separate Scotland would work. Some SNP people have now, if not disowned the White Paper, at least suggested its prescriptions were somewhat optimistic and not entirely workable. I believe Nicola Sturgeon is among them. At any rate, she was sufficiently unimpressed by it a couple of years later that she charged Andrew Wilson, a former SNP MSP and sidekick of Fred Goodwin (of Royal Bank of Scotland notoriety), with devising a new secession prospectus.

This emerged as the Growth Commission Report, being published at least a year late because Ms Sturgeon’s special advisers needed that time to scour it for potential difficulties and to sanitise it for perusal by the SNP membership. The end result, published in 2018, still dodged some difficult questions (like a separate Scotland’s relationship with the EU), but presented a programme that hinted (not much more than hints) that there would be a need for considerable austerity if Scotland left the UK. It was presented to an SNP conference in 2018, where it was received with polite interest in some quarters and something little short of a raspberry in others. The currency issue – which had caused the ‘yes’ side so much grief in 2014 – remained an untangled web.

More recently, Mr Wilson has abandoned his formerly cautious approach and gone into full SNP denial mode, asserting in the Spectator in November 2020 that ‘staying in the Union is riskier than independence’. Yet he also warned that leaving the UK “will take a huge effort. It will be hard work”. That isn’t the message that the SNP leadership promotes in its propaganda, nor is it one that its members want to hear – or whose implications they are capable of understanding. The message remains that leaving the UK would relieve Scotland of an incubus that restricts its potential and brings it no benefit, and so the creation of a separate and prosperous Scotland would happen ‘just like that!’.

Wilson’s prescriptions continue to be based on sterlingisation, the informal use of sterling by a separate Scotland, which would forfeit, through leaving the UK, the current basis of its financial arrangements – a functioning central bank, control of its own monetary policy and a lender of last resort. This would also preclude membership of the EU, for which control of a country’s monetary policy is a requirement, and it would present a suite of financial problems with which the SNP is not equipped to contend. But they are faced with a seemingly immutable problem: the SNP leadership knows that Scots wish to retain the pound. A leaked video shows an SNP Minister, Ivan McKee, MSP, telling SNP activists:

Polling shows that people in Scotland prefer to keep sterling after independence. Right? That’s the reality of where we are. So the conversation on the doorstep becomes a conversation of ‘What about the currency?’ – ‘We’re going to keep the pound.’ – ‘Are you allowed to do that?’ – ‘Yes.’ End of conversation. It’s not a conversation about ‘What will the exchange rate be? What will the deficit be? Will prices be different here than they are down south? My mortgage is in pounds, my pension is in pounds, what does that mean for me?’

A significant proportion of the SNP membership, however, wants to move immediately to a new currency. This has been elaborated in terms of Modern Monetary Theory by Tim Rideout, who has become something of a guru for the new currency tendency in the SNP, and who has been elected to its governing body. Both courses, using the pound informally as ‘sterlingisation’ and inventing a new currency, are fraught with problems, as was explained admirably by Sam Taylor in his article ‘Choose your poison: The SNP’s currency headache’ on the These Islands website. Others, including John Ferry, are of the same mind. However much separatists twist and turn, the currency issue remains perhaps the biggest thorn in the SNP’s side.

With the Growth Commission Report effectively kicked into the long grass, the SNP once again has no economic or financial plan. In truth, it has never had one. The fact is that the SNP’s rise from the 1970s has always been based on oil wealth. Oil wealth was a substitute for an economic and financial policy. Who needed any kind of policy when we would be rolling in riches from the North Sea? The SNP was lucky in that the revenue from oil was still buoyant in 2014 at the time of the referendum. But very shortly after that the price of oil collapsed, and with it the revenues on which a separate Scotland would have depended. In what would have been the first year of an ‘independent’ Scotland, not only was there not an oil revenue surplus, but oil extraction cost the Treasury £24 million. And yes, ‘depend’ is the correct term. SNP politicians had tried to suggest that oil was simply a bonus, over and above Scotland’s other sources of revenue. But Andrew Wilson himself gave the game away in March 2017 when he stated that ‘oil revenues had been “baked into the numbers” supporting the nationalist case’ in the 2013 White Paper, contradicting claims by SNP leaders before and after the 2014 referendum that North Sea income would simply be a ‘bonus’ to an independent Scotland.

This week’s GERS (Government Expenditure and Revenue) figures, that are produced by the Scottish government’s own statisticians, show that Scotland’s deficit is now 22.4 per cent, almost three times as much as last year’s 8.6 per cent. This is, of course, occasioned by the extraordinary expenditure necessitated by the Covid crisis, but it makes a mockery of Ms Sturgeon’s aim of staging a successful referendum in the first half of the current Holyrood term. The GERS is, of course, reviled by separatists, who go into full denial mode when confronted with it. As a corrective, here is what the Fraser of Allander said about GERS in 2019:

Each year, the level of misinformation and bad analysis around [GERS] is pretty shocking…. We can’t think of any other government statistical publication – and a National Statistics publication at that – that is subject to such criticism and attack. The… organisations producing official statistics should be defending their integrity, actively preventing their misuse and promoting correct interpretation. Much more could be done by government to defend these statistics and proactively clear up misunderstandings.

I repeat, the Scottish government’s own statisticians produce the GERS figures.

     

The Scottish government’s ruling party, the SNP subjects GERS to ‘criticism and attack’ , in its propaganda. The SNP government does nothing to ‘defend these statistics and proactively clear up’ what Fraser of Allander kindly calls ‘misunderstandings’ but is in fact deliberate fake news designed to undermine the GERS. The Scottish finance secretary’s contribution to that today was: ‘I think the arguments for independence are strengthened through the pandemic…. Having the highest deficit in Europe does not seem to be an obstacle to the UK government being independent. And the same argument would apply to us’.

It is positively terrifying (almost as terrifying as the prospect of Green MSPs in government) that the person in charge of Scotland’s finances can be as deluded as to say that. Her position is she cannot ‘grow the economy and [manage] its finances in a prudent and a sustainable manner’ as long as Westminster retains some of the ‘levers’. Ah yes, the levers, those mystical enablers of responsible financial conduct. We hear a lot about them as the Holy Grail that would enable a separate Scotland to prosper and conduct its financial affairs in a successful manner. Forget that Professor James Mitchell tells us the Scottish administration has the powers it needs to make a difference to governance in Scotland. Just remember that wicked Westminster still holds some levers.

Chief among these is borrowing powers. If only Westminster would allow Scotland full borrowing powers, we could enjoy a great leap forward – ‘just like that!’ But the question to be asked is: who would lend to Scotland, and at what rate? Well, obviously (to the SNP) Scotland would borrow at a rate similar to the very favourable rates already enjoyed by the UK. Really? A new country with no track record, an unprecedentedly massive deficit and probably a junk credit rating would borrow at the same rate as the UK?

Who would stand surety for the loans incurred? Who would be the lender of last resort? The SNP adopts a cake and eat it strategy, wanting full powers but also the might of the UK Treasury and Bank of England behind it and its borrowing. This attempt at sleight of hand is not successful. We already know that the SNP is like the snotty teenager who flounces out of the home but brings his laundry home to mum and expects to use the family car when it suits him. Like him, the SNP will have to face up to the fact that leaving home has dire consequences. You can be cut off from the comforts and facilities that you took for granted – ‘just like that!’

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Photo of Tommy Cooper courtesy of BBC News.

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