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Monday, 29 August 2011

Scots and the Union

I was recently in Scotland, where the SNP are in the ascendant.  They are in the happy position of playing off the Unionist parties locally against the UK government, in other words having their cake and eating it.  Ironically, the SNP can only maintain this politically advantageous position so long as they fail in their overall aim of breaking up the Union.  The unionist parties, meanwhile, seem to me to fail to develop a proper case for the union _ failing to go beyond a very basic argument that Scotland gets more from the UK tax pot than it puts in.  While true, this strikes me as a very limited case, and it seems to me that both sides of the border gets things together that they could not get apart.  I wish the unionist parties would be more active in promoting pro-unionist arguments such as:

1) The value of the currency:  As I see it, an independent Scotland would have three choices.  It could keep the pound, which would mean the Bank of England would continue setting interest rates as it does at the moment.  I think that is the best system as the UK seems a near optimal currency area, but it runs completely contrary to the whole logic of independence.  Scotland could also join the Euro, but that would mean that the ECB would set interest rates, which it seems to do in a way that suits the German economy, but not most of the rest of the Euro area, including Scotland.  Finally, it could launch a separate currency, but that would have all the disadvantages of a small currency based around a small economy.  Indeed the last two options would presumably set up trade barriers with England that don't exist at the moment.  As England is likely to be one of Scotland's main trading partners whatever the political arrangements, that would be bound to be to the disadvantage of bother countries.

2) The Sovereign Debt argument:  The UK is a fairly big economy and that gave a certain stability during the financial crisis.  Despite having such a big financial sector, the UK was able to guarantee its banks without incurring the kind of difficulties that have led to a sovereign debt crisis in Ireland.  I doubt whether an independent Scotland would have been able to do the same.

3) Defence:  The UK is able to maintain a strategic defence capability, again as a result of sheer size.  The increasing expense and sophistication of defence projects like the new aircraft carriers is making this harder and harder.  It seems unlikely that an independent Scotland could maintain, for instance, top of the range fighter aircraft _ leading to a steady structural disarmament and loss of capability.  This is distinct from the "Scottish jobs" argument at Rosyth or elsewhere that is so often wheeled out.  Of course, the SNP argument might be that they want to scale back defence spending and simply do things like UN peacekeeping, but if so they need to make that clear.  A diminished UK would also find it harder to maintain high level defence capabilities, which would have implications for both UK defence and NATO.

4) Bureaucracy:  Presumably an independent Scotland would have to duplicate the apparatus of a sovereign state.  For example, I take it would have to set up a string of embassies around the world.  Is that really going to add anything that we don't get from the existing Diplomatic service?

5) Culture:  I suspect that the SNP would make an argument that independence would help the Scots overcome any "cultural cringe" that they may have towards the English.  However, I haven't noticed such a cringe, unless its comes in the form of defensive truculence.  I think Scotland both historically and currently has been perfectly capable of developing and maintaining its culture within the union.  If anything, I would have thought a separate Scottish Broadcasting Corporation would be far less effective than the BBC. 

It seems to me that all these factors, suggest a benefit for both sides of the border in continuing the union.

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