Slugger O'Toole

Conversation, politics and stray insights

No chance of a Sinn Fein Scotland

Wed 21 November 2012, 10:30am

Jim Gallagher in his days as a civil servant one of the architects of developing Scottish devolution and still a leading authority on the Scottish Question discusses rival scenarios for Scotland’s future in the Scotsman, concentrating on the bottom line issue of control over tax and spend. Either way, whether the outcome is “devo more” as he calls it, or independence, he makes it clear that the English can’t be left out of the Scottish story. The detached reader might well conclude that things for Scotland might be better left where they are.

It seems unlikely that any scheme of markedly greater devolution – let’s call it devo-plus since no-one knows what devo-max is – could be implemented without some answer to .. English concerns. If Scotland were to have more tax powers, and so be more dependent on tax income arising here, it would have less call on shared UK taxes. If the principle is greater self-sufficiency, then there’s less equalisation according to need. If more taxes are decided in Holyrood, not Westminster, would England tolerate so much Scottish representation there?

By contrast, if Scotland votes for independence, the Barnett formula and the West Lothian question join the Schleswig-Holstein question in the history books. English views cease to be relevant. Or do they?

All the economic theory suggests the UK is pretty much an optimal currency area: goods and services, finance and labour move freely throughout the country with no legal barriers, and the economies of the different parts of the country move more or less in step. Independence would change that a bit, but it would probably still make sense for Scotland to share a currency with England. It will make sense for the rest of the UK only if, by doing so, they don’t import risks to the stability of their currency and financial system that they cannot manage. Hence you can expect an objective for their negotiators will be to ensure that monetary union, if it is to happen, gives the rest of the UK similar influence over Scottish fiscal policy to what the Treasury has today.

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Comments (5)

  1. Dewi (profile) says:

    “All the economic theory suggests the UK is pretty much an optimal currency area: goods and services, finance and labour move freely throughout the country with no legal barriers, and the economies of the different parts of the country move more or less in step”

    Really?
    http://www.landecon.cam.ac.uk/staff/publications/ptyler/CGERworkingpaperno1v5.pdf
    Worth reading the lot but here’s a quote:
    “…….In terms of GVA per capita, the South of the country began to pull further ahead of the North during the 1980s, achieving a cumulative output growth advantage of 6 percent over this period (Figure 3).2 But it was from the early-1990s onwards that the gap really widened. Between 1992 and 2007, the South’s cumulative growth advantage of the over the North increased to 20 percent…”

    What do you think?
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  2. Barnshee (profile) says:

    Suggest you read the item again

    “All the economic theory suggests the UK is pretty much an optimal currency area: goods and services, finance and labour move freely throughout the country with no legal barriers, and the economies of the different parts of the country move more or less in step. ”

    Note move in step

    “The South of the country began to pull further ahead of the North during the 1980″

    Note again

    “Finance and labour move freely throughout the country ”

    SE grows rest do not And you complaint is exactly what ?

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  3. Dewi (profile) says:

    these two statements are not compatible:

    “…..the economies of the different parts of the country move more or less in step”

    “Between 1992 and 2007, the South’s cumulative growth advantage of the over the North increased to 20 percent…”

    If your argument is that this does not matter because labour is mobile then that is a pretty different argument.

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  4. BarneyT (profile) says:

    An independent Scotland (We Ourselves) with their own currency, own tax rates….what would this mean? Diesel smuggling in Northumberland and Cumbria :-)

    Mind you the last time the English had to contend with unruly Bordersmen, they shipped the problem over here did they not.

    In terms of who has a say in Scottish independence? It depends how the Union was formed in the first place. If it was reciprocal, then it’s an England\Scotland issue. If there was any domination involved or misrepresentation, it is up to the once dominated entity to establish their own future without affecting the other.

    There is already a strong case for the English to demand less Scottish intrusion in West Minister matters, due to devolution, particularly when the issues affect Kent or any of the shires without any impact to Scotland.

    I have always seen devolution as a stepping stone to Scottish independence, just as I see it for Wales and N Ireland. Its not as if the current devolution offered to Wales and Scotland fits in with an existing English model or regionalist strategy…with devolved power of any sort. The devolution lines are drawn up account to existing boundaries demarcating areas of specific identity…..particularly in Scotland and Wales where you can be Welsh and British and Scottish and British…whereas in N Ireland you are Irish or British, and the British as despite Ali G’s suggestion are not on holidays. I deviate slightly.

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  5. Red Lion (profile) says:

    rather than all this piecemeal unequal developments in devolution in the UK (which in some ways i like all these constitutional quirks borne out of rich history), I think its time for some degree of harmonisation – the Uk government should announce a Royal Commision to examine the constitutional arrangements with some degree of federalism possibly on the cards,

    BarneyT, thats merely a legal defintion delivered courtesy of bumbling unionist politicians, We Northern Irish exist, so we do.

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