Scottish referendum

[Hazir]

Some time next month the Scots will have a vote on whether or not they want to stay in the UK. It's not an issue that I care too much about (and I don't see the Scots voting for independence next month either). But what really surprises me is the total lack of understanding for the realities of the world today the SNP leadership has. Virtually every time the issue of post-independence relationship with the EU comes up they will say things to the effect that Scotland will get the same treatment as the UK has negotiated, be it immigration, currency and pretty much every other EU-related issue.

It's virtually unthinkable that the EU will cut Scotland any special deals. For starters Scotland will be the asking party. Then we see a EU that is so little inclined to do special deals with anybody that it is even willing to risk losing the UK itself as a member. Towards third states (Switzerland) the pressure to conform is drastically increased. And then finally we have the matter of EU memberstates (more particularly Spain) could be against any special treatment in order to make independence look like a sacrifice of sovereignty rather than the gaining of it.

As usual the Scottish referendum shows that you can't trust politicians to inform the people. They'll tell the most outrageous lies to make their point. (No, I don't find that especially surprising, but the blatant lies, that is what gets at me).

[Timbuk2]

total lack of understanding for the realities of the world today the SNP leadership has

Sums up this entire independence fiasco. My Scottish partner and I find Salmond's lies hilarious.

Anyone looking at the underlying detail of Salmond's claims can see how paper thin they really are.

[RandBlade]

I agree with Hazir and Tim. I want Scotland to vote yes and think it would be better for both England and Scotland if the politically backwards and immature Scots went away and were forced to grow up. But it's not going to happen and the lies and half truths of Salmond are hilarious.

The worst and most obvious of all being currency. A few years ago the SNP had the logically sound explanation that they were going to join the euro upon leaving the UK. This meets EU obligations that new members adopt the euro and puts Scotland in a currency union rather than creating their own currency. Now that the euro is so unpopular though their alternative is a Sterlingzone currency union will be forced on rUK and Scotland. No, just no. Sterling is not a currency union and never has been. If we wanted a currency union then we wouldn't form one with the flighty Scots, we'd join the euro.

The SNP have completely dug themselves into a hole on the issue of currency and I think that will prove terminal to their campaign. I hope I'm wrong.

[Aimless]

May they have much luck in this experiment

How much does Scotland depend on EU, economically, atm? In what ways? What alternatives would they have to pursue if they gained independence?

Btw, are there any plans for a Scottish oil fund similar to the Norwegian one?

[Loki]

Seriously? Entirely. It's a little territory on the outskirts of Europe. Who else is it going to trade with without paying an overwhelming cost?

[Aimless]

To be fair, a third of its current exports excluding oil etc go to the US. Re. the EU, is there any reason to believe the EU would not let the Scots have access to the single market at all, ever? Sounds like such an exclusion would be harmful for the EU

[Loki]

You don't develop a modern economy by relying on the sale of oil/gas.

They'd have access, but not under the same terms as members, which is a pretty big disadvantage. Not saying that the EU would do it, but why would screwing little Scotland be harmful for the EU?

[Aimless]

You build a modern economy with what you have, by leveraging your actual resources and using them wisely in order to develop other resources in the future. To rely exclusively on oil and gas for all time would be foolish or just impossible. To use those resources in the development of a new healthy economy and society would be another thing entirely. I don't think the hydrocarbon assets are as amazing for Scotland as they are for Norway, but they don't exactly seem negligible.

Re. the EU, I don't mean to say it'd be a major hassle for the EU but I don't see how excluding Scotland could be a net benefit to the EU as a whole, even if it might be seemingly beneficial to individual members. Isn't it good to have more trade partners rather than fewer?

[Loki]

How's that different to the Scottish economy today? Are they holding back until they achieve independence?

The net benefit is small, while some countries might gain a lot (domestically) from hurting Scotland, so...

[RandBlade]

The EU is a non sequitur to this debate. Scotland is voting on independence from the UK (which itself is debating withdrawing from the EU, an argument used by yes to say vote yes to stay in the EU). There has been virtually no involvement from the EU whatsoever in the debate. Various EU bodies have explicitly said they are not getting involved in the debate as it is a matter for Scotland and the UK not them. Yes and No are arguing over the merits of continuing in the UK not the EU.

If Scotland votes yes they're not going to get such an easy ride over EU membership as the SNP are claiming (especially regarding many UK exemptions) but it's not a case that yes will mean Scotland leaving the EU altogether (since the plan is that Scotland will get its house in order regarding membership and other key issues before Independence Day). There has been no argument from the EU that a yes means leaving for good, if anything I suspect many in the EU wouldn't mind a divided and diminished UK lol.

[Hazir]

You build a modern economy with what you have, by leveraging your actual resources and using them wisely in order to develop other resources in the future. To rely exclusively on oil and gas for all time would be foolish or just impossible. To use those resources in the development of a new healthy economy and society would be another thing entirely. I don't think the hydrocarbon assets are as amazing for Scotland as they are for Norway, but they don't exactly seem negligible.

Re. the EU, I don't mean to say it'd be a major hassle for the EU but I don't see how excluding Scotland could be a net benefit to the EU as a whole, even if it might be seemingly beneficial to individual members. Isn't it good to have more trade partners rather than fewer?

The EU probably would easily accept Scottish membership. That however does not mean that Scotland can get membership on its own terms. Scotland would be a small country with no leverage whatsoever to get special deals. Especially considering that the EU at large is fed up with the whole 'special deals' thing.

[Aimless]

How important are those special deals to the appeal of Scottish independence, in the eyes of Scottish voters? Ie. would they vote to stay in the UK if they didn't get those special deals but were nevertheless allowed into the EU?

[RandBlade]

The EU probably would easily accept Scottish membership. That however does not mean that Scotland can get membership on its own terms. Scotland would be a small country with no leverage whatsoever to get special deals. Especially considering that the EU at large is fed up with the whole 'special deals' thing.

Agreed completely.

How important are those special deals to the appeal of Scottish independence, in the eyes of Scottish voters? Ie. would they vote to stay in the UK if they didn't get those special deals but were nevertheless allowed into the EU?

Not at all important.

The vote is happening in less than a month and the EU is simply not participating in the debate. Negotiations over these special deals (if they occur) will only occur after a yes vote. Voters can't change how they vote if they don't get x or do get y as they'll have already voted.

If you follow the debates that are occuring (and there's a televised BBC debate coming up between Alastair Darling leader of "Better Together" and Alex Salmond) then you can see what is important and debated.

[Aimless]

So, basically, Scotland can expect to gain independence from the UK, become a member of the EU, get terms that would be more or less acceptable to the Scottish public (eg. future membership in the currency union, etc). I'm not sure I'm seeing the major negatives here. They'll retain access to the EU market (with a short break) and the UK market. They'll have greater control over their own resources. They'll reduce the risk of being dragged out of the EU with the UK if the UK decides to be silly. What's the downside?

[RandBlade]

So, basically, Scotland can expect to gain independence from the UK, become a member of the EU, get terms that would be more or less acceptable to the Scottish public (eg. future membership in the currency union, etc). I'm not sure I'm seeing the major negatives here. They'll retain access to the EU market (with a short break) and the UK market. They'll have greater control over their own resources. They'll reduce the risk of being dragged out of the EU with the UK if the UK decides to be silly. What's the downside?

The downside are the downsides of leaving the UK, that is what is debated. Is Scotland stronger or weaker as part of the UK?

Scotland gains more per capita expenditure from the UK and in taxes (excluding the North Sea) contributes significantly less, so is subsidised by the rest of the UK. The SNP argue that the taxes on North Sea means that Scotland subsidises the UK, the government rejects that. The government says that North Sea oil reserves are limited and running out so not a basis for long-term planning, the SNP rejects that.

What currency will an independent Scotland use? The SNP says it will use pound sterling as part of a formal multinational single currency zone, the UK government and all parties unanimously say that is out of the question and if Scotland leaves the UK it leaves sterling.

Who backs up Scottish banks? Scotland have three major banks, which as a percentage of GDP are massive to the rest of the Scottish economy. RBS in particular virtually went bust during the credit crisis and had to be bailed out by the UK government and the Bank of England. The SNP have said that as part of a formal currency union the Bank of England will back up Scottish banks - a position rejected by all UK parties and the Bank of England. Even in the Eurozone Italian banks in crisis are not formally backed up by the ECB in the way the SNP are unilaterally saying their banks will be by the BOE. Think of the crises that have happened in Iceland and Ireland over their banks.

What will happen to jobs and investment? SNP have argued they'll cut taxes and gain more investment (while simultaneously commiting to lots of socialist expenditure on these lower taxes, go figure). Some big companies have said they may leave Scotland and invest in the UK if Scotland goes independent. Its hard to know as very few companies have actually taken sides (don't want to piss off half your potential consumers).

And so on and so forth. The arguments are about Scotlands relationship to the UK, not to the EU.

[Hazir]

That's not entirely true; the debate is done in such a way that whenever the EU comes into the picture the SNP depicts the new relationship with the EU as being exactly the same as the relationship between the UK and EU.

Of course the EU stays out of the debate; as long as there is no independent Scotland there is no reason for an EU position on anything concerning an independent Scotland. From Brussels the whole matter is an internal affair in one member state.

On the currency; it's a bit odd that appearantly avoiding being part of one monetary union, which became controversial because the idea of monetary union is unwanted in the UK, according to the SNP only can be done by joining a monetary union with an unwilling partner.

[RandBlade]

That's not entirely true; the debate is done in such a way that whenever the EU comes into the picture the SNP depicts the new relationship with the EU as being exactly the same as the relationship between the UK and EU.

Of course the EU stays out of the debate; as long as there is no independent Scotland there is no reason for an EU position on anything concerning an independent Scotland. From Brussels the whole matter is an internal affair in one member state.

Agreed this is an internal UK issue. You're right (and I never said otherwise) that the SNP depicts the relationship with the EU being the same as the status quo, but to be fair to the SNP though nobody is saying otherwise. The EU have said that an independent Scotland would need to become a member and not be one automatically, but other than that not much more has been said. I do not think the rest of the UK would play silly buggers regarding EU-membership (our debate happening now is on UK-issues not Europe) and we've already said we'll respect Scotland's decision so would have no reason to object afterwards.

I don't think Scotland and Scots in general have any major issues with the rest of Europe, if anything Scots are probably more popular with many Europeans than the English are. The one nation that might play silly buggers is Spain - but even the Spanish government have said in advance its an internal UK matter only, presumably so that if there's a yes they can write that off as being a British thing that sets no precedent to Spain. So given that I doubt Spain would throw a spanner in the works either.

Once the Scots have democratically voted, I'm not sure who would then try and raise concerns that weren't raised in advance. I think a solution would be found, it might be less easy than the SNP are saying but nobody is saying they'll raise an objection yet so there's no evidence for that. If anything I suspect an agreement could (just could) be reached with pretty rapid speed as it'll be in the interests of all concerned to wrap it up as quickly as possible. Spain won't want it being in the news all the time as a European affair (not British/Scottish) giving it constant Europe-wide publicity, Scotland will want it dealt with urgently, the UK won't object, the EU would probably find it easier to agree that this is a special case so as not to get into a messy situation of setting precedents to future new member states and so on. It may not go that smoothly, but nobody has said they'll prevent it and under game theory I'm not seeing who benefits by being awkward about it.

In other words its not entirely true that for Brussels as long as there's no independent Scotland there's no reason for a position, that's like saying that for Westminster as long as there's no independent Scotland there's no reason for a position. The debate is about voting on an independent Scotland becoming a reality and that vote happens 4 weeks tomorrow, its not hypothetical anymore. Since Brussels is an affected party it would have every right to enter the debate if it wanted to. That its chosen not to is fair enough but after the vote has happened would be a weird time to join the debate. That both Brussels and Madrid have both entered the debate just enough to say its an internal UK matter leads to the conclusion that is their genuine opinion.

On the currency; it's a bit odd that appearantly avoiding being part of one monetary union, which became controversial because the idea of monetary union is unwanted in the UK, according to the SNP only can be done by joining a monetary union with an unwilling partner.

Again agreed completely. It is utterly absurd. Scotland can print its own currency, use sterling in the same way as Panama uses the US dollar, or join the euro. A sterling currency union is a figment of their imagination. What they're asking is basically like one member of a couple saying they want a divorce, but want to keep using a joint credit card.

[Hazir]

You are aware that the EU is more than 'Brussels'? Several countries may not be willing to agree with special treatment for Scotland, especially those countries that couldn't get a special deal only a couple of years ago themselves.

Which is also the reason why the EU has been unable to offer Switzerland any wriggle room after their mass immigration referendum.

[RandBlade]

Brussels was used as short-hand for the EU in the same way as Westminster was for the UK and Madrid for Spain. I don't literally think my own country is restricted to a small portion of London 5 hours drive away from me, or that Spain is restricted to just one city.

I'm not denying that some may in the future object to Scottish membership, in fact I have said that in every single post; what I am saying is that none have done so to date despite a very real and lively debate happening right now. The SNP are making a bunch of wild and unsubstantiated claims, some (like the Sterling Currency Union) have people saying "no that's not right we don't agree to that" but they're still making the claim; one early and now dropped claim related to the EU (that membership would continue automatically) but the EU did join the debate then and said that was not right - and the SNP shut up very quickly about that claim then. But it is worth noting that to date not a single individual, government or organisation that I know of has raised an objection to Scottish membership in the near future if there's a yes vote on the current terms. While many relevant actors (EG EU Commission officials, the Spanish government and others) have publicly said this is a UK matter not for them despite this insistence by the SNP.

If nobody raises an objection then Scotland will get membership on the same terms. It remains possible until a deal is signed that someone may in the future raise an objection, but the vote is happening less than a month from now and on this one issue it is not unreasonable for Scottish voters to look at what has been said and conclude that on this issue the SNP could be right. Nobody is saying they're not.

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Edit: TL;DR - Yes this could be a problem but the debate is happening right now and the vote is happening in just a few weeks and nobody is entering the debate to say it is a problem. Voters aren't clairvoyants and so this will affect votes accordingly. Other areas are being debated and will sway voters, this undebated issue not so much.

[Hazir]

Brussels was used as short-hand for the EU in the same way as Westminster was for the UK and Madrid for Spain. I don't literally think my own country is restricted to a small portion of London 5 hours drive away from me, or that Spain is restricted to just one city.

I'm not denying that some may in the future object to Scottish membership, in fact I have said that in every single post; what I am saying is that none have done so to date despite a very real and lively debate happening right now. The SNP are making a bunch of wild and unsubstantiated claims, some (like the Sterling Currency Union) have people saying "no that's not right we don't agree to that" but they're still making the claim; one early and now dropped claim related to the EU (that membership would continue automatically) but the EU did join the debate then and said that was not right - and the SNP shut up very quickly about that claim then. But it is worth noting that to date not a single individual, government or organisation that I know of has raised an objection to Scottish membership in the near future if there's a yes vote on the current terms. While many relevant actors (EG EU Commission officials, the Spanish government and others) have publicly said this is a UK matter not for them despite this insistence by the SNP.

If nobody raises an objection then Scotland will get membership on the same terms. It remains possible until a deal is signed that someone may in the future raise an objection, but the vote is happening less than a month from now and on this one issue it is not unreasonable for Scottish voters to look at what has been said and conclude that on this issue the SNP could be right. Nobody is saying they're not.

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Edit: TL;DR - Yes this could be a problem but the debate is happening right now and the vote is happening in just a few weeks and nobody is entering the debate to say it is a problem. Voters aren't clairvoyants and so this will affect votes accordingly. Other areas are being debated and will sway voters, this undebated issue not so much.

The point is not that membership is controversial, but that exceptions will be very much so.

Not just in 'Brussels' but also in the 28 parliaments that would have to ratify. In some of those the question will be 'what makes the Scots so special they deserve preferential treatment that we couldn't even have dreamt of asking?''

[RandBlade]

The point is not that membership is controversial, but that exceptions will be very much so.

Not just in 'Brussels' but also in the 28 parliaments that would have to ratify. In some of those the question will be 'what makes the Scots so special they deserve preferential treatment that we couldn't even have dreamt of asking?''

I understand. But it's irrelevant to the referendum that's happening in 4 weeks today.

If someone has an objection they could have spoken up by now. It is not unreasonable for the Scottish electorate (who by and large will pay far less attention to this than you and I) to see no controversy here and vote accordingly. The electorate will be swayed by the issues debated and this isn't getting debated.

PS the simple answer the SNP will rely on is that the Scots won't be asking for anything they don't already have as part of the UK which makes it simpler for the 28 to ratify.

[Hazir]

I understand. But it's irrelevant to the referendum that's happening in 4 weeks today.

If someone has an objection they could have spoken up by now. It is not unreasonable for the Scottish electorate (who by and large will pay far less attention to this than you and I) to see no controversy here and vote accordingly. The electorate will be swayed by the issues debated and this isn't getting debated.

PS the simple answer the SNP will rely on is that the Scots won't be asking for anything they don't already have as part of the UK which makes it simpler for the 28 to ratify.

I understand that, but it's a gross misrepresentation of the actual situation which doesn't place Scotland inside the EU negotiating continuation of membership, but outside the EU negotiating membership. There is no 'UK Acquis' to sign up to, there only is the EU Acquis to sign up to. The deals with the UK are the deals that are of the UK, not the UK and peoples who left the UK.

Expecting anything else is the same sort of nonsense you see in the Swiss referendum debate; they can decide for themselves whatever they want, they can not however decide for others what they should want.

[Timbuk2]

The Chairman of HSBC, a Scot, outlines the dangers quite nicely ...

Scottish independence: HSBC boss makes 'capital flight' claim

Uncertainty over an independent Scotland's currency could lead to "capital flight" from the country, the chairman of HSBC has claimed.

Writing in the Telegraph, Douglas Flint said supporters of independence were "advocating a giant step into economic uncertainty".

Mr Flint donated £25,000 to the Better Together campaign last year.

Yes Scotland argued that a currency union was in the interests of Scotland and the UK, and would be agreed.

Currency has been a major issue in the independence debate ahead of the 18 September referendum.

The Scottish government has proposed continuing to use sterling in a formal currency union with the rest of the UK if voters back independence.

But the UK government and the main Westminster parties have said they would rule out such a deal.

Alternatives could include "sterlingisation" - using sterling without the Bank of England as lender of last resort - joining the euro or setting up a separate Scottish currency.

Pro-Union campaigners have pressed First Minister Alex Salmond to set out a "Plan B" but he has refused to do so, insisting that the UK government would negotiate a currency union if there is a "Yes" vote.

Mr Flint, who is group chairman of HSBC Holdings and describes himself as an "exiled Scot", wrote: "It is hard to imagine Scotland without the anchor of financial stability that it derives from sterling currency union.

"That is why the pro-independence campaign would like to recreate a currency union in the event that Scotland separates from the rest of the UK.

"If there was a better alternative that improved the future prospects of Scotland it would surely have been promoted vigorously."

He added: "The alternatives to a currency union include a completely independent currency, passive acceptance of a monetary policy designed in London for the rest of the UK, or, assuming Scotland rejoins the European Union, eventual membership of the euro.

"In all these circumstances, the transition from the existing currency union would be complex and fraught with danger.

"At the extreme, uncertainty over Scotland's currency arrangements could prompt capital flight from the country, leaving its financial system in a parlous state."

HSBC is the second largest bank in the world but has a relatively small presence in Scotland, with 10 branches.

A spokesman for the pro-independence Yes Scotland campaign said: 'People in Scotland can be assured that we will be using the pound after a 'Yes' vote and there will be a currency union."

He added: "The rest of the UK exports nearly £60bn year to Scotland - we are the rUK's second biggest export market.

"A separate currency would entail transaction costs of around £500m a year to rUK businesses.

"It is therefore clearly in the interests of the rest of the UK to share a currency with an independent Scotland.

"Scotland's huge contribution to a sterling area's balance of payments is another reason why it will be in the interests of the rUK."

Commenting for Better Together, Labour MP Ian Murray said: "This is another hugely experienced expert who has underlined the currency chaos which has plagued Alex Salmond's campaign.

"When a voice such as Douglas Flint's warns of the risks of money leaving a separate Scotland to somewhere safer, you pay attention.

"With just days to go until up to a million Scots start voting by post, Alex Salmond is running out of time to name Plan B."

[Hazir]

What I don't understand is why the Scots, being so affraid of having their own currency and not being let into a currency Union with the UK should opt for sterlingization of their economy. It would make a lot more economical sense to go for informal use of the euro.

[RandBlade]

I understand that, but it's a gross misrepresentation of the actual situation which doesn't place Scotland inside the EU negotiating continuation of membership, but outside the EU negotiating membership. There is no 'UK Acquis' to sign up to, there only is the EU Acquis to sign up to. The deals with the UK are the deals that are of the UK, not the UK and peoples who left the UK.

Expecting anything else is the same sort of nonsense you see in the Swiss referendum debate; they can decide for themselves whatever they want, they can not however decide for others what they should want.

SNP misrepresenting? Never!

But they're so honest and straightforward with everything else

The Chairman of HSBC, a Scot, outlines the dangers quite nicely ...

Well said.

What I don't understand is why the Scots, being so affraid of having their own currency and not being let into a currency Union with the UK should opt for sterlingization of their economy. It would make a lot more economical sense to go for informal use of the euro.

Trying to have their cake and eat it too.

They're basically going for an argument of "things will get better, except that which you like which won't change and there are no risks at all". Leaving sterling is a change, you'd think there'd be a number of changes when you leave a centuries old political union but the SNP wants things to get better and not change simultaneously.

[Hazir]

Interesting; the gap between NO and YES is rapidly shrinking. Given the general security situation in Europe I think a YES result would be exactly what we don't need right now.

[RandBlade]

I honestly don't think it matters whether its yes or no for security. Is the Netherlands insecure for not being a part of Spain or France? Is Ukraine less secure due to Dutch independence? Its just not that relevant to the security situation in the East.

I still hope for a Yes and expect a No. There's just too big a gap to close and I expect swing could continue between now and the vote, Salmond is a smooth operator, but then for those still undecided on the day to break to No (people err to the status quo generally).

[Dreadnaught]

I hope for a no...but sort of hope for a yes so that we can have a more visible example of the failures of socialism. For some reason France isn't enough for some people.

[Timbuk2]

socialism

Better watch out there Dread, you're in danger of becoming a 'ZOMG LIBRULZ' Lewk type of cliché.

[Timbuk2]

One week to go - and the Yes - No gap is closing.