Scotland must solve its own business case if ‘Yes’ is to win an #IndyRef2

I admit there were a few occasions when I thought I’d stuck my neck out a little too far after I’d solemnly declared the Scottish #IndyRef to be over in February. It wasn’t of course and, as I also predicted at the time, it has brought in a lot of new business to the SNP, and neatly decapitated Scottish Labour into the bargain.

The paradox of the currency question is that it had two immediate but contrary effects when it crystalised back then.

Most obvious was an immediate boost in the polls which which Yes was able to build and was primarily cultural: ie, no old Etonian twat is going to tell us we can or cannot have our own money. And yet, it also killed the debate amongst those to whom it actually mattered.

The best account of this weakness from a Yes campaign perspective, is this piece on Medium from Gordon Guthrie:

Yes’s policy on the currency was simply not credible — you might believe that a currency union was the right policy — but it wasn’t a credible policy when the 3 major Westminster parties said they wouldn’t back it — and it won’t be credible next time.

In order to have a winning story on the currency next time (and there will be a next time) work has to start about 3 years before to develop, establish and socialise the currency plans so that they are seen to be bulletproof.

This leads to a couple of problems for the SNP:

  • the Euro — or rather not the Euro
  • the banks

It is fairly clear that the Euro doesn’t have its troubles to seek. Clarity on continuity of membership of the European Union — in particularly with regard to the Eurozone would be helpful. But given that a number of European states have their own independence movements that clarity is likely to elude us — but we need to have a more active and longer-term approach to flush out our opponents and achieve as much solid ground as we can.

He goes on to explore the deep cultural weaknesses on the No side, not least the pleading from some not to call another referendum. He rules out a quick re-run saying it would be lost by a much higher margin, but is confident that Scotland will return to this point again.

In fact the banking crisis all but ‘scrios-ed’ Scotland’s credible case for sustainable independence.

Going forward, the volatility of the oil market adds greater concern. Geopolitical risk is shifting substantially and there are fewer guarantees now than there ever have been in the past that we are ever going to move sweetly back to the status quo ante.

Sorting out and defining a sustainable business case for Scotland is a daunting task, and one that any re-invigorated Scottish Labour opposition would do well to try to steer and own themselves.

There’s no alternative but to roll up the sleeves and get working. The gradualist approach has worked sublimely well for the SNP thus far, and there’s no reason at all to suggest that that it won’t push further towards something like independence.

But the blocks are substantial, both internally and externally. Ireland is reeling from what was arguably its greatest existential shock since independence, and one not delivered by London, but Frankfurt and the governing council of the ECB.

Vested interests at home too are likely to provide substantial resistance to necessary change. Defeated Yes campaigners might do well to understand the struggle for independence as an arduous never ending journey, rather than a simple analogue destination.

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  • Chris Cook

    There are pervasive myths which cloud the reality of the modern (ie last 100 years) monetary system, and until the financial crash even approaching the subject was essentially financial pornography which no decent publication would go near.

    I wrote this article on an economics blog prior to the referendum on the subject of Scottish money.

    http://www.pieria.co.uk/articles/credit_scotland

    Also in early 2013 I had a major piece published in the Herald dealing with fiscal matters and the Myth of the National Debt.

    https://blogs.ucl.ac.uk/resilience/2013/03/11/the-myth-of-debt/

    In my view, the death of the global financial system may be dated to the collapse of Lehman Brothers and we are currently in a transition to a networked – and dis-intermediated – financial system with (positive) consequences which are little understood, I think.

  • Barneyt

    The Scottish independence debate and referendum has also had an affect south of the border….a resurgent Englishness…or at least noises in that direction. If the compromise offered by Westminster takes hold and they secure the English only vote, more Scottish devolved powers etc…. it will surely serve to create more distance between the union members, somehow negate the purpose of the original No campaign. Am I wrong in sensing a mood of…”don’t leave us…ha! we won…now you can partially feck aff!”

    Offering fiscal devolution surely recognises a need for independence on many levels…and that is somewhat inconsistent with creatingmaintaining a union.

  • barnshee

    “now you can partially feck aff!”

    Ensure that it won`t cost England- anything in the form of jocks arriving en mass as refugees when the arse falls out of an Independent Scotland and England will be delighted with “now you can WHOLLY feck off”

    What England wants to avoid is a rerun of the “Irish ” experience where 10`s of thousand arrive after “independence” and camp on the British welfare state.

  • PaulT

    The price of Oil fell 30% between June and the end of October, which covers the main campaigning period when price of oil and the economy was discussed in detail, the ref vote (45% Yes), and a opinion poll (52%) in early November 6 weeks after the ref vote. I think the starting point for Yes was originally circa 30%

    I think the desire for an independent Scotland is now a majority ‘Yes’

    This lowers the bar on how to make it economically viable, for example an early opinion poll which showed a Yes majority was conditional on annual incomes increased by GBP500. The most recent poll in Nov was a majority Yes without an improvement in annual income, hence the trend shows that future polls would still give a majority Yes even in the event of a drop in income.

    There’s an election happening in Scotland in which the ‘Yes’ parties are expecting to make gains but it’s not the time and place to discuss an independent Scotland’s future economy, although I imagine the pro-UK parties will probably get a grilling on exactly what they will get as a result of Devo Max.

  • Kevin Breslin

    Maybe Scotland could have its own currency based on 0.4535kg of the famous silver alloy often associated with a place within the geographic center of the land?

    They could call it a Pound Sterling!

  • Scots Anorak

    I must say that I find a good deal of what’s posted on Slugger about Scots independence pretty ill-informed, far too ready to regurgitate the view of the London papers or project the very different Irish experience onto Scotland. Only the other week there was agreement here among Irish Unionists and Nationalists that Scots nationalism required grievance, something that ended some time ago when we noticed a) that we had a parliament and b) that it was miles better than Westminster — which would be a good candidate for turning into a museum, a casino or a nursing home if it weren’t all three already. Both sides in the recent referendum accepted that Yes had fought the more positive campaign, which certainly doesn’t sound like the politics of grievance to me.

    “Defeated Yes campaigners might do well to understand the struggle for independence as an arduous never ending journey, rather than a simple analogue destination.”

    This may come as an epiphany to some, but those that follow Scots politics know that the debate between gradualists and fundies in the SNP has been a hallmark of nationalist politics for many years (try googling Jim Sillars if you don’t believe me).

    On that topic, there may be no need for the SNP to persuade with any economic case for independence if — and it is a big “if” — something much closer to Home Rule, more or less ending cross-border transfers, is offered by a hung Westminster Parliament. If that were achieved, anything short of absolute disaster would strengthen support for the logical next step of independence. That would be the result even if Scotland did slightly *less* well, since there would be ways to save or raise money available under independence not available under devo max, most obviously by cutting Trident and no longer spending taxpayers’ billions on endless wars against Muslims. Hell, we might even get our own flag on our drivers’ licences too.

    As for currency union, depending on the polls in the run-up to the next referendum, I’d be inclined to say that the Scots should now rule it out themselves. It was always of more importance to garnering support for independence than it was economically, and rUK would simply have to learn the lesson, as its balance of payments and currency took a nosedive, that it should be careful what it wishes for.

  • Scots Anorak

    Sorry to interrupt the hate-fest, but weren’t the Irish arriving in Great Britain in large numbers before the advent of both the welfare state (1945) and independence (1922)?

  • barnshee

    ER no the big influx(es?) were post 1920

    http://muse.jhu.edu/books/9780299212933

  • leoinlisbon

    Gordon Guthrie’s analysis is among the best to come from the YES side.
    His contention, that the biggest single group amongst voters (33%) was those who might support independence but who were unconvinced by the economics, strikes me as plausible.
    The question becomes whether there is likely to be a more convincing vision of Scotland’s economic future ‘next time.’
    The answer may well be ‘NO.’
    An aging population, declining North Sea oil revenues and a smaller financial services sector mean that it will be as difficult in any future referendum to convince the voters to take the chance on going it alone as it was in 2014.

  • kensei

    Non harm to you but this is a well dressed variation on too poor too wee too stupid. The Republic might be reeling, but was it ever in existential peril (that means cease to exist as an independent nation, just to you know, be clear). No it was not. It might very well have left the Euro was a lot of pain, but it’d have still been very much independent. Probably more so than now.

    I thought that all sides had admitted that Scotland would be a perfectly viable state. The question was whether it’d be better off (and that was over a fairly narrow range) and whether it would cope with shocks. Those questions are tractable, but never fully answerable – any if currency union, Panama option, Euro or independent currency’s will “work”. Ireland has had them all. They all have risks and tradeoffs and those pertain to the second question. But there is no magic answer. The electorate either understands that and the fact there is also opportunity cost in the status quo and feel it is worth the risk, or they don’t. You can improve the data and mood music on your preferred option, but none if them are safe from attack or FUD. That’s not a failure of those pushing change – it’s how the world works.

    And if your argument solely rests on the current economy being poor then wait. All business cycles turn. As long as you are in power, the environment will be more conductive to your argument.

  • Scots Anorak

    No one would contend that everything was rosy in the early days of Saorstát Éireann, but to suggest that Irish immigration to England should only be viewed in the context of its failures is highly tendentious. The most salient factor historically was probably the discriminatory English trade tariffs that kept Ireland poor and agrarian.

    Nor did mass immigration start at that time. The Irish-born population of England and Wales in 1861 was 600,000 — largely because of bad colonial government by the British, who a) in their eagerness to produce cash crops for export left most people dependent on a single staple and b) neglected to feed them adequately when it failed. The figures for Irish-born residents of Scotland will also have been substantial (indeed, proportionally much higher).

    Even at times when Irish immigration to Great Britain was relatively low, it remained high to other places, notably the United States.

    I might also have mentioned that immigration from Northern Ireland since Partition has been substantial too and so clearly cannot be ascribed to any ill effect of independence. Indeed, some of it at least was indirectly caused by the Union — in the form of policies deliberately aimed at encouraging the “disloyal” section of the community to emigrate.

    In any case, increased Irish immigration to Great Britain after 1922 cannot have resulted from the attractions of a welfare state that did not exist at the time. Neither would that be the case today, when British welfare payments are much lower than their Irish equivalents — so low, in fact, that the Council of Europe has described them as illegal.

    Quite apart from the fact that, unlike Ireland in 1922, Scotland today is an advanced industrial economy without a particularly high birth rate, I cannot imagine that an independent Scotland would ever treat its unemployed worse than the UK does at present, and the notion of masses of unemployed Scots moving to England solely to access benefits is therefore unlikely.

  • barnshee

    “the most salient factor historically was probably the discriminatory English trade tariffs that kept Ireland poor and agrarian.”

    Er the ROI produce was given “commonwealth preference” status and had all the associated benefitshttp://en.wikipedia.org/wiki/Imperial_Preference

    “— largely because of bad colonial government by the British, who a) in their eagerness to produce cash crops for export left most people dependent on a single staple and b) neglected to feed them adequately when it failed.”

    Who grew the crops ? who carried them? who exported them ?who shipped them ? What group or organisation encouraged reckless procreation and subsequent exposure to crop failure?