Sunday, February 23, 2014

The Debating Society

A new meme appears to be bubbling up from the ranks of Better Together. It's to the effect that, whatever the outcome of the referendum, Scotland is going to be left "divided", usually "bitterly" divided, after it. The implication (though sometimes it is spelled out) is that a division is being created, where none previously existed, as a result only of the fact that the referendum is going to take place and that the electorate is going to be given the opportunity to vote.

There are various proper responses to this. In the first place, it is a deeply, deeply undemocratic position to take. To champion democracy is to accept that in any society there exist different opinions, conflicting opinions, and that this fact is not just to be tolerated but positively welcomed. Or are we to aspire to the unanimity of a cult? In the second place, it is a deeply, deeply conservative position. If we disallow debate, or render it illegitimate or even just disreputable, then we completely disarm those who might make any challenge to the status quo. Is the status quo, whatever it is, to be put beyond any challenge and are those who might dare challenge it to be castigated and othered for creating unnecessary "division"? In the third place, it is emblematic of the delusionary group-think that characterises so much of what Better Together says and does. The referendum debate has most emphatically not created "division". There always has been a "division" between those who do, and do not, want Scotland to be an independent country. Supporters of the union may deny that. They may, I suppose, genuinely not have noticed it. That doesn't change the fact. Those wanting independence have managed to live for decades (arguably, centuries) with a management of that division that comes down in favour of their opponents. What has changed is simply that, to its disbelieving fury, the class that thinks it has done very well out of the union is at long last being forced to justify its continuance, to argue its case, and it is slowly dawning on it that it might not be as easy as it thought to persuade the rest of us to go along with it. In the fourth place, those who claim that the conduct of the debate has somehow divided the country in a way that brings shame on it, or the disrespect of a worldwide audience, are simply and demonstrably wrong. The debate taking place in Scotland is universally peaceful and astonishingly well-informed, cordial and erudite by any international or historical comparison and the fact that someone is rude to someone else on Twitter changes that fact not one jot. Anyone who genuinely thinks it does just doesn't know Twitter nor appreciate how both the tone and content of any debate is distorted if it has to take place by means of exchanging 140 character bursts.

And that point shades into this last one. Most irritatingly for those on my side of the fence, insofar as the campaign does become rancorous or off-puttingly aggressive, who do you think benefits? Who would benefit if this idea takes hold, if we all come to believe that those who insist on having the debate are obsessives who don't care about the unnecessary bitter division they are creating? Which side in fact identified, long ago and (at semi-official level at least) explicitly, that if the tone of the debate can be lowered, or just thought to be low, then so much the better? See the picture above for the answer to that question. The sonorous warnings about "division" are in fact an unspeakably cynical attempt to close down the debate itself, simply because it's feared that it might be lost. The hope is, in essence, to prevail not by winning a debate but by making it too embarrassing for your opponents to turn up and take part.

Well. It won't work. I am sure that I am not alone in having watched and listened to friends, colleagues, acquaintances, over the last two or three months in particular, start to engage in the debate not in sorrow or with angry reluctance but with enthusiasm, interest and a real appreciation of what a privilege we are being given and what an obligation there is on us to think about things properly and get the answer right. No-one I know is embarrassed or annoyed at finding himself or herself part of the generations that get to carry that task out. On the contrary. Quite, quite on the contrary.

Saturday, February 22, 2014

So if it was "No"...

1.Will Scotland still be in the EU in 2020 if there's a No vote?
2.What will the UK's national debt, both absolutely and relative to GDP, be in 2016?
3.How many UK army, naval and air force personnel will be based in Scotland in 2020?
4. How much will Scottish taxpayers have to pay for the replacement
of the Trident nuclear weapons system?
5. If the Barnett formula is scrapped, by how much would Scotland’s budget be cut after a No vote?
6. If the Barnett formula is retained, by how much would Scotland’s budget be cut after a No vote?
7. What will UK personal tax rates be in 2016 and beyond, and how will Westminster improve the tax system, including collection?
8. Will the rate of VAT be increased, cut, or stay the same in 2016 and beyond?
9. What will be the level of Air Passenger Duty (APD) in 2016 and beyond?
10. Why has APD not been devolved to the Scottish Parliament, as recommended by the Calman Commission on devolved powers?
11. Will all current universal and pensioner benefits remain or will some be means tested?
12. In the event of a No vote, will you guarantee funding for a long
term expansion of childcare in Scotland to match the best provision in Europe?
13. What will be the state retirement age for people in Scotland who are starting work this year, in the event of a No vote?
14. Will the bedroom tax be abolished in the event of a No vote?
15. Can you guarantee that no other public services (like the Royal Mail) will be privatised?
16.How much money per year will taxpayers in Scotland contribute to funding the House of Lords?
17. What will the UK's credit rating be in each of the years 2016 to 2020?
18. If the UK government fails to renegotiate the UK’s EU membership terms, will it recommend withdrawal?
19. Will Scotland get any direct representation in Europe to negotiate for our fishing and farming industries after a No vote?
20. If Scotland had been independent during the most recent EU farming talks we would have qualified for an extra €1 billion of funding. How will that shortfall be made up?
21. Scotland currently receives the lowest farm payments of any country in the EU. Will this continue?

Thursday, February 13, 2014

Default setting

Imagine you're in business with a partner. The company took out a business loan some time ago but the bank never asked for any personal guarantees from either of you. The company's doing ok but you've been a bit unhappy for a while. You disagree about the direction you want to take things in. You eventually decide to strike out on your own.

Your partner says he wants to carry on the company as before. Same name and set up, just without you. You invested some capital years ago and you've contributed a lot of time, skill and energy too. You have a bit of negotiation with your partner about who's contributed what and how best, for you both, to divide up the company's assets. The deal you agree involves the company making you a payment in settlement of your interest in it. The company will remain liable for all its debts and, equally, after the payment is made to you, you'll have no claim on its assets. It's largely to be a clean break but you both agree that a good way of structuring things, as part of the swings and roundabouts, would be for you to pay something each month to the company to help it pay off the business loan. The company makes its payment to you, you leave and set up your own firm. As you promised, you set up a standing order for the monthly payments.

Imagine the same, but less amicable. You've ploughed money into the company and worked for it for years. However, your partner says that if you want to leave you can. It's just that you'll have to say goodbye to all your money and the company's assets. He's not happy about your plans. Not happy at all, after all he's done for you. If you want to leave, fine, but don't imagine he'll pay you a penny. The assets are the company's and if you want to leave then great. You'll just have to take the consequences. He's not bullying you, he's at pains to stress, before you start. It's realpolitik.

This all seems wholly unfair to you. You're frankly a bit taken aback. You thought you'd been perfectly reasonable and had offered a fair and practical way to manage the parting, one that would be best for both of you. However, you see there's nothing you can do. You can't force your partner to be reasonable. So, you reluctantly agree but say that if that's the deal then you won't be paying anything to him to help him meet the company's obligations to the bank.

In what possible sense does this involve you "defaulting" on any debt?

Wednesday, February 12, 2014

On the money

True when he said it and still true. Scotland is the rest of the UK's second largest export market. Exports from the rest of the UK to Scotland are greater than those to Brazil, South Africa, Russia, India, China and Japan put together with £60,000,000,000 worth of goods and services being sold to us each year. If there was no currency union, the businesses earning that money from us would face additional transaction costs estimated at £500,000,000, threatening tens of thousands of jobs in the rest of the UK. Are we really to believe that any UK politician would ignore the justified howls as English companies closed and cut back because of a spiteful, pointless refusal to pursue a currency solution that is in fact in the best interests of both countries? Without our exports, the UK's balance of payments will plummet (oil receipts halve the UK's balance of payments deficit). If we have our own currency, the UK would have as a neighbour a major trading partner which could devalue overnight, rendering its exports to the UK instantly more competitive than domestic products. In whose interests is that?

It's of course not at all surprising that the UK parties will say, now, as part of the campaign, that they would not agree to a currency union but if there's a yes vote, they'll simply do something different. Even if you think we can't know that to be true, it's surely a reasonable possibility to explore. Jeremy Paxman and the rest are usually pretty quick to express at least some doubt when a politician claims something. Will the BBC press Osborne and Balls on the credibility of the claim (assuming they end up making it): what will they tell their constituents when the factories start to close? In what way is it in the interests of those consitutents to harm the economic well-being of their second biggest export market? It's patent bluff.

But, just in case, here's a fallback. Scottish pound, pegged 1:1 to sterling seems the most minimally disruptive solution and would in fact leave us with all the sovereignty that Better Together were so worried about "ceding". And, if this is how the negotiations go, no need to agree to contribute anything to service the UK's debt. Not agreeing to pay to the UK something to help it meet the cost of its borrowing is not the same as defaulting on a debt to a third party. And that is most particularly true if the decision not to pay is made in response to the kind of spiteful, unreasonable bullying that is threatened and as part of the swings and roundabouts of overall negotiation.

And with no debt interest and no Trident to pay for, Scotland becomes one of the only two or three countries in the developed world with no deficit. If you don't have a deficit, the need to borrow anything at all is pretty much diminished.

Sunday, February 9, 2014

A "geographical share": a fair assumption?

It ought to be a cause of surprise and, frankly, derision that so many comments and reports about the economics of Scottish independence include a qualifier along the lines of "assuming a geographical share of North Sea oil". The phrase, or something similar, often features somewhere in the graphs and tables:

The implication is that some other method of allocation might be appropriate or fair or forced upon us. The further implication is that that might be a share by "population".

The reason this remains implication and is never spelled out is that it would be so ridiculous a suggestion. The notion of a "population share" arises only as a budgeting tool in the context of the existing UK where it shows, say, what contribution is made to the UK's economy, on a GDP per person basis, by North Sea receipts. No-one has (to my knowledge) ever seriously asserted that the physical entity "Scotland" should be divided up on a population basis. If it were, the border would be around Inverness, I believe. The proposition would be simply preposterously ridiculous.  

And yet. It keeps cropping up: "assuming". Sort of like "taking for granted without thinking about it". OK. Game on. Let's think about it.

Friday, February 7, 2014

Love, bombing again

So. That's that then. And how did Mr. Cameron's exhortation to hug a sweaty go down with the Great British public? They were told to make their voices heard. Did they respond?

On that metric, the speech must be judged a runaway success. The web, the news programmes, Twitter, all the instantly viewable media were awash with voices responding to the cry to smother us with love, to tell us that of course it's entirely up to us and our view will be respected whatever it is but that we'd really, really be missed. So, was that the message of the tumult: don't leave us, please, because we love you?

On that metric, the exercise must be judged as, charitably, a catastrophically disastrous failure. The rest of the UK responded just precisely as surely should have been predicted. I don't blame them. A people is told, year after year, decade after decade, that a section of them are, at best, subsidised and, at worst, spongers. Knowing and ungrateful spongers at that. That people is then told that the spongers are threatening to leave and that they should tell the spongers not to leave because they love the spongers and that they and the spongers are actually better off together. And, of course, keep subsidising the spongers so they don't leave. How do you think that people would react? How would you react? Well, that's how they reacted.

You say "Goodbye" and I say "Goodbye"

Best photobomb of the campaign, thus far.

Wednesday, February 5, 2014

Financial Times reports the facts

The Financial Times is not a supporter of Scottish independence. Yet it fell recently to that publication to carry out a fair, relatively impartial assessment of some of the facts underlying the independence debate (and see also here). You won't read any of this in the Scotsman:
  • "... the leading players on both sides accept that Scotland has all the ingredients to be a viable nation state";
  • "If its geographic share of UK oil and gas output is taken into account [and by the by, why one earth would it not?], Scotland’s GDP per head is bigger than that of France" ;
  • "Oil, whisky and a broad range of manufactured goods mean an independent Scotland would be one of the world’s top 35 exporters."
  • "An independent Scotland could also expect to start with healthier state finances than the rest of the UK. ";
  • "Scotland’s fiscal health will also be challenged by the relatively rapid ageing of its population and the long-term decline of oil output [yet]...greater sway over its own economy could be a real advantage for Scotland. "

Love, bombing

The Sun's done a poll.

Em. Isn't "54% of the rest of the UK want us to stay" just a different way of saying "46% of the rest of the UK don't want us to stay"? Aren't each of those figures fairly described as "about half"? So, "About half of the rest of the country don't want Scotland to remain in the UK".

Tuesday, February 4, 2014

Man says "Great Britain is great"

Mr. Dudley of BP personally opposes Scottish independence because "Great Britain is great". He makes himself available for interview by the BBC and claims (without any challenge at all by the interviewer) to be "concerned" that it would create "uncertainties" for the company.

If Alex Massie and the Spectator, neither well-known for pro-independence sympathies, can immediately see this claim for the "silly" "poppycock" that it is then wtf is this story (not reported by any other station's broadcast news at all this evening) doing as the second item on the BBC national news, the lead item on Reporting Scotland and plastered all over the BBC website?