by Robert Henderson
Alex Salmond is a chancer in the mould of Paterson and Law
William Paterson was the main mover of the Darien disaster which bankrupted Scotland in the 1690s through a mixture of ignorance, general incompetence and embezzlement; John Law was the Scot who ruined the currency and economy of Louis XV’s France through the use of paper money backed by land. The men had something in common with Salmond: they were both hideously reckless. This disastrous trait was evident in spades during the first of the debates between Salmond and Alastair Darling on 5 August 2014.
Overall the event was a truly depressing affair, being little more than a shouting match. Salmond spent most of the time with a fixed condescending smile glued to his face while Darling, thinking he had to be seen as assertive, frequently sounded and looked peevish as he adopted a behaviour horrendously at odds with his reticent and mild personality.
The discussion was horribly narrow, being concerned almost entirely with the material advantages and disadvantages of independence and even there much was either omitted or barely touched upon, for example, the large numbers of businessmen warning of a likely decamping from Scotland to England of many organisations if there is a YES vote or the loss of UK government contracts if Scotland becomes a foreign country. Other issues which had economic implications but a much wider significance, most notably immigration, remained unmolested by the debate. To a significant degree the debate was limited in scope by the disproportionate amount of time taken up by Salmond’s refusal to give a straight answer to the question of what currency Scotland would use if the vote was for independence . More of that later.
Completely lacking was any mention of the consequences of a YES vote for the rest of the UK in general and for England in particular. The debate was conducted entirely on the basis of what was to the advantage of Scotland. The fact that the programme was only available on terrestrial television in Scotland on STV or streaming through the STV Player (which crashed because it was unable to handle the demand) made some unkind souls see this as ironically symbolising both the exclusion of the rest of the UK from the debate and the many warnings from various quarters that Scotland would be a shambles if it goes alone.
Darling had the better of the debate simply because Salmond was so inept . Making cheap gibes about Westminster and repeatedly telling the same old evasive lies on any topic which caused him problems did not go down well even with the sizeable studio audience . The polling after the programme confirmed it. The YouGov poll taken after the debate showed those who have decided which way to vote will vote 61% No and 39% YES. With the undecided included there were 55% supporting a No vote and 35% backing independence, with 9% undecided.
Salmond was particularly weak on the question of the currency. He started from the objectively false claim that the Pound belongs to Scotland as much as it does to England. Darling counter-argued that the Pound belonged to the entire UK.
Legally speaking they were both wrong. The Pound Sterling is the English currency which Scotland was allowed to share when they signed the Act of Union in 1707, viz.
XVI That, from and after the Union, the coin shall be of the same standard and value throughout the United Kingdom as now in England, and a Mint shall be continued in Scotland under the same rules as the Mint in England; and the present officers of the Mint continued, subject to such regulations and alterations as Her Majesty, her heirs or successors, or the Parliament of Great Britain, shall think fit.
The Scottish pound became defunct at the same time. If Scotland repudiate the Act of Union of 1707, they lose the right to use the Pound Sterling in the sense that they no longer have a political right to share the Pound on an equal basis with the rest of the UK.
Scotland could of course simply use the currency, but they would have no say over its the management, no printing or coining rights, and the Bank of England would not act as lender of the last resort to Scottish financial institutions. Scotland would also have the problem of buying enough Sterling on the open currency market. To do that she would have to sell goods and services abroad to provide the wherewithal to buy Sterling.
During the time set aside for the Salmond and Darling to question one another, Darling asked Salmond repeatedly what was his Plan B for the now that all three main Westminster Parties had stated categorically that there would be no currency union between England and Scotland if there was a Yes vote in the referendum. Salmond simply kept on repeating that if there was a Yes vote Westminster would cave in and accept a currency union. This so angered many of the studio audience that Salmond was roundly booed as time and again he evaded the question of what would happen if there was no currency union.
Salmond has stuck to the same line on the currency since the debate saying in an interview that “There is literally nothing anyone can do to stop an independent Scotland using sterling, which is an internationally tradeable currency.…the No campaign’s tactic of saying no to a currency union makes absolutely no economic sense. But it also makes no political sense, and is a tactic that is a deeply dangerous one for them.”
This is classic head-in-the-sand Salmon. His position is built upon two ideas: (1) that anything he demands for Scotland must happen simply because he has demanded it and (2) that any attempt by the English to point out dangers or look to their own interests is illegitimate and bullying. At one point Salmond made the incredible claim that if Westminster did not grant Scotland whatever they demanded Westminster would be denying the democratic will of Scotland. This piece of Lilliputian arrogance was sharply knocked down by Darling, who pointed out that all a YES vote would do would be to empower Salmond to negotiate terms with the rest of the UK.
At another point Salmond claimed that if there was no currency union , Scotland would not take a proportionate share of the UK national debt. Incredibly Darling did not challenge him on this issue, most probably because he would have had to say that if they did not take their share, Westminster would have to veto Scottish independence which is, legally speaking, ultimately dependent on the UK government agreeing terms.
No opinion poll over in the independence campaign has shown the YES camp ahead. The odds are heavily on the referendum will producing a NO result. If the ballot produces a seriously bad result along the lines of the YouGov poll cited above, Salmond and the SNP could be in a very difficult position because it would put another vote on independence out of the question for a long time, perhaps a generation. There would it is true be new powers given to the Scottish Parliament, but the ones likely to be on offer are likely to be things such as Scottish control over income tax rates and the collection of the tax by the Scottish government. Such developments would mean the Scottish government having to take the blame for tax rises or public service cuts if taxes are not raised. That would make the Scottish government and Parliament much more prone to unpopularity than they are now. If that happens, those living in Scotland would probably become less and less enamoured of the idea of independence because they would have had a taste of what both sides of government – taxing and spending – were under a Scottish government.
Even if there is a NO vote with a small majority, much of the difficulty which would occur with a heavy defeat for the YES side would still exist, for it would still be improbable that another vote on independence . would be held for at least ten years. During that time those is Scotland would have plenty of time to become disenchanted with their government having to make the type of hard decisions on taxing and spending which are the common political currency of a fully fledged state. Indeed, things might even be more awkward if the referendum is close rather than heavily against independence. That is because the closer the vote the more powers Westminster are likely to grant Scotland. The more powers given to Scotland, the greater the opportunity for those in Scotland to blame the Holyrood government rather than Westminster.
There is also the unresolved question of England’s place in a devolved UK. In the event of a NO vote and the granting of greater powers to Scotland (and Wales and Northern Ireland) there will be pressure for the number of Scottish MPs to be reduced, for an English Parliament or English votes on English laws. This will eventually produce circumstances which reduce or even completely exclude Scots from English domestic affairs.
Both the increased powers for Scotland and the reduced participation of Scottish MPs at Westminster will make it more and more difficult for the Scottish devolved government to blame Westminster for so much of the decision making will occur in Scotland. In addition, if the Commons becomes increasingly an English chamber through English votes for English laws or a completely English chamber if it is used as the English Parliament, that will produce English politicians who will not be able to neglect English interests as they are now more or less completely neglected.
What does Salmon really want? He certainly does not want true independence because he wishes to have a currency union with the rest of the UK, to keep the Queen as head of state and to join the EU, which would be a much harder and intrusive taskmaster than ever England would. I suspect that he does not want a YES vote but rather narrowly won NO vote. That would allow him to get the most potent form of DEVOMAX.
What will be the consequences if, against all the polling evidence, there is a YES vote? Salmond will rapidly find himself in the mire. His fantasy world is one in which there a currency union, England acts as lender of the last resort if Scottish financial institutions fail, Scotland is allowed to join the EU on the terms they now enjoy as part of the UK, England continues to push huge amounts of money by way of defence contracts and research grants to Scotland and the revenues from North Sea oil and gas continue to flow like ambrosia from heaven.
There is not one of the elements in Salmond’s fantasy world which will be realised. Even our Westminster politicians would not agree to a currency union which would involved England underwriting the Scottish financial system. The EU will be less than delighted at the prospect of one of the major EU members losing part of its territory to an independence movement because of the precedent it set for places such as Catalonia and those parts of Italy which favour the Northern League. It is likely that Scotland would have to apply for membership like any other applicant. This process would be both time consuming, perhaps several years, and Scotland would have to sign up to the requirements which any new EU applicant has to agree to, including membership of the Euro. There is also the possibility that the remainder of the UK could veto Scotland’s application to join the EU.
As for contracts for defence work and research grants, Westminster would have every reason to keep those within the UK. At best, Scotland would have to compete for the contracts and research grants as just another EU member. At worst, the rest of the UK might vote to either leave the UK or remain after obtain concessions which allowed preference to be shown to business and research institutions within England, Wales and Northern Ireland. Either way Scotland could easily find itself excluded.
That leaves the oil and gas dream. Production of the oil and gas in Scottish waters and the tax collected has been steadily declining, viz.:
Significant production decline and increasing costs have led to total revenues from UK oil and gas production dropping by 44% in 2012-13 and by 24% in 2013-14. In the last two years Corporation Tax revenues have declined by 60% from £8.8 billion in 2011-12 to £3.6 billion in 2013-14 and Petroleum Revenue Tax by 45% from £2.0 billion to £1.1 billion in 2013-14. [These figures
are for the
entirety of UK
oil and gas
some of which
is in English
The decline is likely to continue, perhaps even speed up, as shale oil and gas deposits are increasingly being exploited. Nor should the possibility of other energy advances such as cheaper and safer nuclear power be ignored.
But those are only part of the problem for Scotland If the vote is YES. There are many public sector jobs in Scotland which deal with English matters, for example, the administration of much of the English benefits system. All those jobs would leave Scotland. Many Scottish businesses, especially those in the financial sector are likely to move at least their head offices to England. There would have to be border controls to stop immigrants using Scotland as a backdoor to England. More generally, the Scottish economy is dangerously dependent on public sector jobs. These jobs would almost certainly have to be severely culled. The Scottish economy is also very narrow with drink, food, financial services and the oil industry making up much of the private enterprise part of it.
The danger for England would be a Scotland which got itself into a terrible economic mess and Westminster politicians bailing the country out with English taxpayers’ money . However, because the politics of the rest of the UK would of necessity become ever more centred on English interests, that would become a very difficult thing for the Westminster government to do.
Salmond’s attempt to lead Scotland to independence on a wing and a prayer is horribly reminiscent of Paterson and Law’s behaviour 300 years ago, with the idea riding way ahead of reality.