Heres a comment my tory friend placed..... give it plenty guys... Speaking as a Scot who lives in England, I have divided loyalties in this debate. But speaking as an economic commentator, I am amazed at the naivety and short sightedness of the Scottish National Party (SNP). Here’s 5 reasons why. 1 Currency confusion Not long ago (in 1999), SNP leader Alex Salmond described the pound as a ‘millstone around Scotland’s neck’ and derided the currency in 2009. Today he is desperate to keep it, realising that an independent currency would be so volatile and problematic that it would dissuade investors, reduce trade with the rest of the world and threaten to turn Scotland into an economic backwater. The European Union has effectively ruled out Scotland joining the euro (or even the EU) for many years, leaving Salmond exposed and blustering. 2 Delusions of oil grandeur The SNP’s main economic platform is that Scotland should own the revenue from North Sea oil and gas, making it a petro-dollar paradise equivalent to Norway. Although they have similar populations (5.05 million for Norway, 5.3 million for Scotland), the hydrocarbon revenues are massively different. Norway’s government gathered $40 billion in 2013 (according to the BBC) while the UK made $10.8 billion (according to the Financial Times), a fall of 40 per cent from 2012. Current predictions? Further falls, to £3.3 billion ($5.5 billion) in 2016/17, according to the Institute for Fiscal Studies. There’s no amount of careful stewardship that is going to magic $5.5 billion into $40 billion, when many of the North Sea rigs are at the end of their life and production levels are falling. 3 Financial mismanagement Scotland’s banks have become a byword for chaos and catastrophic losses, after the hubris of the 1990s turned into the near-collapse of the mid-2000s with massive rescue packages needed for Royal Bank of Scotland RBS -2.76% and Lloyds (both of them based in Edinburgh). The SNP announced in November 2013 that, under future independence arrangements, the Bank of England ‘would become a lender of the last resort’ following any future crises. This would mean taxpayers in the rest of the UK bailing out Scottish banks, despite them being in an ‘independent’ country. The evident nonsense of this position seems to be lost on the Scottish National Party. As one website remarked, Alex Salmond believes he still has the right to use gym equipment, despite giving up his membership. ‘I have been a member for many, many years, so why they think everything in the club is for the exclusive use of the remaining members is completely beyond me,’ the website imagined him wondering. 4 Loss of credibility The UK has sunk an awful long way since the height of empire in the 19th century, but it remains the world’s sixth-largest economy and the second-largest in Europe behind Germany. This confers all kinds of useful benefits, including low interest rates, a permanent seat at the UN Security Council, leadership in NATO, a major role at G20 conferences and in the WTO, among many others. For decades, even centuries, Scots have been at the heart of this economic presence, as Chancellors of the Exchequer (Gordon Brown, Alastair Darling under Labour, Norman Lamont under the Tories) or as Prime Minister (Brown again, Tony Blair – even David Cameron has Scottish roots). They also helped to build and maintain the Empire. So instead of a seat at this high global table, Scotland seeks to become… what? The new Slovakia (population 5.4 million, average income $24,000)? It’s an instructive parallel. Slovakia became independent of the Czech Republic in 1993 because the Czechs wanted rid of their poorer partner under the forced communist marriage of Czechoslovakia. The SNP, by contrast, is under the illusion that Scotland would emerge a wealthier nation than it is today by ditching its richer partner. The logic is perverse.
Posted on: Sat, 22 Mar 2014 11:35:42 +0000
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