Devolution and the United Kingdom

Having had the result from referendum on 18th September, we know that Scotland has decided for know that it wants to remain as part of the United Kingdom for now.

Part of the commitments made was that greater powers would be devolved to Scotland. The government have said whatever powers are devolved should also be assigned to each nation within the union.  In addition a resolution of the “West Lothian Question” would be put in place. In essence Members of the Parliament (MPs) Westminster, would be allowed to vote on Legislation which applies to their particular part of the Union.  Would you believe that this has not always been the case? – politicians!

This would see to be fair redistribution of authority and powers and for all parts of the union to be treated fairly.

Labour Party

Whilst the Labour seems to be content to that Scotland has not abandoned the Union, after all 40 of the 59 Scottish MPs are Labour, they are not prepared to offer the same amount of devolution as the rest of the UK.

http://www.bbc.co.uk/news/uk-politics-29606220

Yet again the English are supposed to be roll over and be compliant saps for the Labour Party.  Why are the English not entitled to the same rights as the Scots/Welsh/Northern Irish?

Is this another case of Labour Party trying to ensure that the English are able to govern themselves.  Setting regional devolution is a not started as it would mean that we are unable to govern effectively and make England the way the English want it.  Or is it another case of the Labour Party wanting to retain power at all costs.  There is nothing wrong with MPs for a specific region being the only ones allowed to vote on Legislation that only affects them.  If Scotland wants to lower the rate of Income tax, that should be the rights of the MSPs, but it should be done on the understanding that no additional funds will be transferred from other parts of the UK to subsidise their operating model.

In essence we should turn the UK into a federated Kingdom, with some aspects reserved to the Central Government in Westminster, such as Defence, Foreign Policy and departments which have a national remit, such as Passports, driving licences etc..  Most other things should be delegated to the “National Assemblies”.  The difficulty will arise as to the redistribution of funds by the central government to the regions.

This is not a simple debate, but there needs to be a realignment of the political structure of the UK to take into account the aspirations of all the nations.  Otherwise we risk a demand for a new referendum and this time from the English.

 

European Nationalism

The referendum in Scotland has set off a train of expression throughout Europe of different regions who want to have a greater freedom, or in some cases to have expressed a desire to gain their independence from their current country.

A significant degree of frustration from “local” communities stems from “distant” politicians. The number of scandals, ranging from political contributions, sex scandals, tax evasion, bribery among other things.  Also as states have centralised, they have distanced themselves from the electorate. They continually promise much or and fail to deliver, whilst the perception is that they are “lining their pockets ” and looking after their own interests.

This has been compounded by the inability of the current political elite to deal with the financial crisis which began in 2008. Their seeming inability to deal with the consequences and fallout from the banking crisis and the financial situations that countries found themselves in has not helped to engender faith in politicians.  The complete lack of vision and inertia has meant that the electorate has lost faith in the political elite and the current political structures.

The danger that regional nationalism raises, is that the leaders of the Nationalist movements will repackage the same unfounded political promises in order to gain power, whilst leaving out the important details which would “distract” the electorate.

I am not advocating that sticking with the existing political structure and political elites is the only solution to the problems of the western world, but I am suggesting that before irrevocable decisions are made that the all the questions are asked and answers are analysed and debated.

To borrow a quote from the film Dave

It’s the definition of modern leadership.

You set out a bold goal and you don’t say how you’ll do it.
The other less endearing feature of the Scottish referendum debate and electioneering, was the vitriol and abuse that was heaped on any on anyone who even dared to suggest that the proposal on the table was the wrong choice.  Again as we are seeing in Catalonia, that the only “publicity and electioneering” that is taking place is that for the “pro-independence”.  Everyone who disagrees or questions the veracity of the argument.
Healthy political debate needs to be had, but the electorate needs to become more involved and not allow themselves to be hoodwinked by charismatic politicians.  We all need to understand that budgets and the country’s finances are the responsibility of all and that we should hold the political classes accountable.  In the UK, we have seen the Labour Party mess up the country’s finances that it will take us nearly a generation to get this under control again.  Yet again, the Labour Party is promising to spend more money on this, that and the other without telling us where the money is going to come from.
Debate
I would call all of Europe to hold a debate on how we want to be governed both on a national basis and also on a Pan-European Basis.
What do we want /expect our individual countries to provide in a huge number of areas.  I am going to suggest a number of areas for consideration, but would welcome comments / feedback and suggestions.
  • Social Services
  • Transportation (Roads / Rail / Air / Ferry)
  • Health
  • Defence
  • Currency
  • Banking
  • Education / Primary / Secondary / Tertiary
  • Business Services / Industry
  • Work
  • Pensions
  • Environment
  • Immigration
  • Decision Making
  • Utilities
  • Energy / Climate Change
  • Parliamentary Representation
  • European Integration and How we want the EU to work?
  • International treaties
  • International Organisations

The Decision is In

Finally the vote on Scottish Independence is in and the vote is in favour of remaining in the Union has achieved a majority.

Some of the communication and pronouncements that have been made by commentators is that the question of Scottish independence has been settled for a “political Generation” – that is to say a 15 year period.

Having seen the turmoil and planning chaos that this particular referendum has caused, do we really want to go through this rigmarole again?

It would seem that the Scottish nationalists are not willing to move on and govern in the name of the Scottish population, but would like to continue their pursuit of the independence dream. So we are faced with the prospect of another referendum in approximately 2030.

Next Referendum

This particular referendum has been the province of those who are currently resident in Scotland and reflects the views of those individuals. The rest of the United Kingdom was not allowed to express their view on the subject.  If the Scottish people at some stage in the future wish to have another referendum as to whether they wish to remain in the Union, then the other home nations should also be given the right to decide their own status within that Union.

Shetland / Orkney / Western Isles

During the discussions and electioneering for the Scottish Independence, the above parts of Scotland requested that a separate referendum to ascertain their own relations both with Scotland and also the United Kingdom as a whole.  Part of the devolution debate should include a discussion as to the future status of those territories.

Perhaps they could be turned in Crown Dependencies with their agreement and provisions being made for the “management” of their offshore “estates”.  It would be necessary to define their future relationship with both the UK as and Scotland in particular.

Referendum Campaigning

Whilst the rest of the UK has had to sit by and watch the campaigning during the Scottish Referendum and it can honestly be said that I have been appalled by the behaviour and antics of those involved in the Yes Campaign.  The vitriol and abuse that has been heaped on anyone who has dared speak out against Scottish independence is worthy of actions of President Putin and the media campaign against Ukraine or that of the Nazi Party.

Devolution Debate

Part of the debate has been that should Scotland vote against Independence, more powers would be devolved to Scotland.  The government has said that what powers are devolved to Scotland should also be devolved to the other home nations.  It has also been suggested that the “West Lothian Question” would be resolved FINALLY.  For those who are not familiar with the vernacular. This relates to a UK parliamentary questions relating to legislation passed in Westminster.  Currently if there is legislation in question relates to say Scotland only, then only Scottish MPs vote in the legislation.  However, the current situation relating to legislation concerning English specific legislation is that ALL MPs feel the right to vote on the legislation.  Part of the re-arrangement for constitutional situation should only allow MPs to vote only legislation which relates to their part of realm.

The Labour party, has done its usual backsliding and is now opposing the resolution of the West Lothian Question.  The reason for this, is that the majority of Scottish MPs in Westminster parliament are Labour Members.  Without those members voting on English Legislation the Labour Party would probably fail to pass any proposed legislation – so as usual only what is good for the Labour Party matters.  Have the “Westminster Elite” not learnt anything from the referendum vote.

Unintended Consequences

The whole debate or at least the perception of the debate south of the border, is that all that ails Scotland is as a result of the Westminster Parliament and more specifically the English.  And what does 2 years of listening to that invective do… Congratulations Mr Salmond you just managed to make the English very fed up, THEY are not stupid enough to believe that ever Scot buys into the invective but they do now believe that it’s time to stop being ashamed of being English, and that the English deserve exactly the same rights as….. the Scottish!  Funny that!

Given the likely pursuit of the SNP to gain independence from the United Kingdom at some time in the future, the Government in Westminster should in future ensure that critical defence infrastructure should not be built in Scotland, but in England so as to minimise the cost of moving defence equipment out of Scotland.

Historically the English have been somewhat apathetic or even ashamed to say they are English and put up with the jibs of the other nations, generally with good humour.  However, the diatribes, invectives and snide remarks by the YES camp, has resulted in the English begin to question their own position in the union and what should be the rights of the English.  It has also generated a significant amount of anti-Scottish feeling.  Alex Salmond and the YES campaign should be congratulated in poisoning the relations within the union.

Questions asked regarding Scottish Independence.

An interesting page on the BBC has highlighted a small number of questions regarding Scottish Independence.

http://www.bbc.co.uk/news/uk-scotland-scotland-politics-26620304

Pet Passports

As Scotland and Scottish residents would be a separate legal entity and travellers to the rest of the UK from Scotland would be expected to comply with OUR rules and regulations.

As a visitor to Scotland I would expect to have to comply to Scottish laws. Why should Scottish nationals / residents expect preferential treatment once they leave the UK.

The Open (Golf)

Honestly as a non-golfer, this is a question which is supreme indifference to me, but if Scotland were to “retain” the open post independence – what would be the point of

 

Royal Mail and other “public enterprises – privately owned”

The current Scottish government have said that post independence Scotland would “nationalise” the Royal Mail and possibly other “public” services. The precise details have to be costed or organised. But the basic fact that Scotland or indeed the Scottish government has not acknowledged is that the service offered by the “Scottish Royal Mail” would be more expensive to operate assuming that they offer a universal service to all localities.

The cost of postage in Scotland would have to reflect

  1. the reduced volume of business for Scottish Royal Mail
  2. Different currency and associated business costs
  3. Need to negotiate with other countries for access to the International Postal Union and cost of international mail
  4. Post to the rest of the UK would now constitute “international mail”
  5. Increased costs for business in Scotland and those sending to Scotland from the UK
  6. Would Scotland be allowed to carry on using the Postal code system devised by the Royal Mail, which presumably is Crown Copyright.

Would the Scottish government have the funds to invest in Royal Mail Scotland to ensure that they are able to compete on an international stage or would it impose a monopoly with the associated business challenges

MEPs

Following the European Elections on May 22nd 2014, Scotland will elect 6 MEPs. The question was asked what would happen to these individuals once Scotland goes independent.

The answer from the Scottish Government is that the MEPs would serve their full term until 2019. This is based upon a fundamentally flawed set of assumptions:

  • Scotland will be a member of the EU from the date of its independence.
  • Assuming Negotiations are successful would Scotland be happy to have a similar representation that of Cyprus which has a smaller population – I think not.

If Scotland were unsuccessful in joining the EU immediately upon its independence – all Scottish MEPs would by logical deduction would lose their seats as Scotland would not be an EU member state and therefore would not be entitled to representation in the European Parliament.

Another glaring example of the rosy world of the pro-independence movement.

Scottish Currency – Update

Yesterday during a debate at Leith Academy concerning the referendum on Scottish Independence, the current Scottish Finance Secretary John Swinney, confirmed that if Scotland does not get a currency union with the rest of the UK, Scotland will not take on any of their proportion of the National Debt.

http://www.bbc.co.uk/news/uk-scotland-scotland-politics-28943041

Essentially they are having Conniption fit.

Let me pose some questions for those interested in the debate on Scottish Independence.

  1. If Scotland does not take its share of the national debt – Scotland should be considered in default from day 1.  How will Scotland fund its government going forward?
  2. As Scotland is not taking their national debt – Scotland will have NO asset. No Roads, No Schools, No Railways, No Air Traffic Control etc.
  3. What reaction do they expect from the population in the rest of the UK to do if Scotland defaults?
  4. Joining the EU, when you are defaulting – I can’t see the rest wanting a defaulter joining!
  5. British Banks should be banned from trading with Scotland!
  6. Setting up their armed services when you can’t pay your debt!  Is Scotland going to be satellite state of Russia?
  7. Trade with Scotland by the rest of the UK represents only 10% of total trade. But Scotland’s trade with Rest of the UK is 70% of trade.  What happens to their business if severe import duty are imposed, in part to pay their proportion of the debt.
  8. What currency is Scotland going to use – we still do not have any form of plan B.  If I were running a business in Scotland it would make planning very difficult.

Some of the likely reactions will be:

  • No Dual Nationality
  • Complete split of the pensions – Scottish National Pensions to be frozen from day 1 of independence
  • Border controls
  • No right of employment
  • No payment of redundancy for government employees in Scotland by HMG Government – as a result of independence.
  • Scottish MPs being emasculated in Westminster Parliament
  • Scotland will be treated as a Foreign Country – There will be no prospects of an equivalent of the Government of Ireland Act of 1948

The other consideration for Scotland is what happens if the vote goes against independence.  I don’t think that Scotland can expect that things will stay exactly as they are.  I as a non-scot would expect that changes are made in the way the UK is run and the ability of Scottish MPs to vote on bill which do not impact on Scotland should be removed.

Based upon the pronouncements of the SNP during the debate I can see the following not happening / being in place once Scotland going independent:

  • Membership of EU
  • Membership of NATO
  • Being a member of the UN
  • Having its own currency
  • Having its own passports

Other impacts for Scottish Nationals

  • All embassies operating for the rest of UK government will not offer support to Scottish Passport holders
  • Pensions for Scottish Nationals will be frozen on Scottish Independence Day
  • Employment in the rest of the UK should now be subject to a Visa Requirements

In summary, how can Scotland honestly expect the other EU members to agree to Scotland’s membership when:

  • Has no central bank
  • Has no currency
  • is defaulting on its national debt
  • Scotland is acting like a spoilt child who not only wants the cake but also to eat, otherwise it will continually throw its toys out of the pram!.

The behaviour of the SNP is such they have never learnt the basic manners, and are so used to acting as the school yard bullies.  NOTE to Alec Salmond and co.  We are fed up of your bullying antics and time for Scotland to go totally independent.  When you go bust – you’re on your own.

 

Industry – Shipbuilding, Whisky etc.

How will the industries based in Scotland be affected by a positive vote for Scottish independence?

The immediate impact for those trading on either side of the border will be that they will now be trading “internationally” rather than nationally.  This will increase their transportation, taxation/finance and also legal costs.

Why is the obvious question, after all, has the YES campaign not said that nothing will change under an independent Scotland.

  • Transportation

When goods are transported in the UK, the costs are currently a permutation as to distance and value of the goods and a standard UK insurance policy.  But once Scotland goes independent, they will be transporting goods internationally and so the insurance premiums will change as will the associated transportation costs.

  • Custom / Excise

The customs and excise regime will change and the documentation for cross border transactions will get more complicated.  More forms will need to be completed.  A lot of goods which currently only pay excise to the HMRC, will in future will probably have to pay import duties as well as excise duty for importation to the rest of the UK. This is something that a new Scottish government will also likely implement, in order to develop some sort of strategy for balancing the books, post independence.

  • Financing / Insurance
    1. Increasing insurance costs for businesses north of the border. Why you might ask. The initial observation is that the transportation of goods to and from Scotland now has to potentially go through another country (England) and most insurance companies will see this as an additional, though low risk or if the transportation of these items is done by sea the increased risk due to seaborne transportation for a longer distance will definitely increase insurance premiums.
    2. Increased cost of doing business will inevitably be passed on the consumer, be it an individual or a businesses.
    3. Doing business with the rest of the UK will almost certainly involve some degree of exchange rate risk. The main political parties in Westminster have already advised that the possibility of a Currency Union in order to retain the pound is a non started.  So what currency is Scotland going to use.  The fact that the Yes campaign has no alternative plans smacks of poor planning.  As a consequence of the 1707 Acts of Union, the Pound Scots was replaced by the Pound Sterling at an exchange rate of 12/1 (Currency Conversion). Therefore the Pound Sterling does NOT belong to Scotland, no matter what assertions are made by the Scottish National Party and the YES Campaign.
  • Whisky Industry & Beer
    1. The Scottish beverages industry currently imports a significant amount of grain from England to support their production capability. (Scottish Grain Imports).  Scottish Independence will change the costs of grain imports.  So is Scotland going to provide all the grain for the scotch industry?
    2. Production costs – will the Scotch whisky industry get preferential treatment from the Scottish government in order to “contain” the cost of grain imports. It won’t benefit the sales of scotch in Scotland as they are proposing to have a minimum cost per unit of alcohol.
  • Possible additional charges for using English Roads
    This might seem a little strange, but there is likely to be a “call” for the transport industry to pay “surcharge” for transporting goods to Scotland. After all there will be little that can be perceived as benefitting the “English” economy, but merely adding to the wear and tear on the English road network.
  • Shipbuilding

The question which is being raised with regards to Scottish independence has been what will happen to the shipbuilding industry.  Scottish Nationalist are convinced that should they win the vote that the Government of the rest of the UK will continue to award defence contracts to Scotland.

From a procurement perspective that makes no sense.  If you are going to outsource to another country then parliament and the National Audit Office should insist that the best value is obtained.

From a practical and nationalist position why would any country but the management of their defence establishment in the hands of another country and especially when it comes to the building of warships. It would allow contracts to be delayed if the workers in that country do not agree with the actions of the UK government.

Politically it would be very difficult for any UK government to justify paying money to Scotland to build ships for us.  We could use the opportunity to revive shipbuilding in Portsmouth and the northeast and develop a good apprentice scheme for both areas.  Whilst indications have been given to the Scottish yards that new contracts will be coming their way for new patrol craft for the Royal Navy it is difficult to see how these can be awarded following Scotland going independent.

  1. Financial Services

As previously discussed the financial services industry in Scotland will have to establish a range of subsidiaries in other parts of the UK in preparation for the separation.  Investors in the rest of the UK will expect that their investments denominated in Pound Sterling will continue to be managed in Pound Sterling.  This will have an impact on employment in Scotland.

Additionally, should Scotland go independent, then the EU may require that the head offices and “registered” offices for Lloyds Banking Group and Royal Bank of Scotland may have to move to England.

Following a vote for independence, the Bank of England should inform the three Scottish Banks that they will no longer be allowed to issue notes in Pound Sterling as of 1 January 2016.

How much will this mean to the Scottish for their GDP and associated employment figures?  Additionally should the companies forced to make people redundant as a result of the vote, pay the redundancy?

How much will it cost in administration and paperwork for the assets to be located in the correct country and company? Who will manage the arbitration when there are disputes? How much do they affect the calculations as to the plans of the pro-independence vote? Should companies with client policies make the initial assumption that you want your policy based in the country you reside, but give you the option to “adjust it” to the other country?  How many contracts will have to be amended and the clients agreeing to the new terms? What happens if they don’t agree to the new terms?

Following on from the comments made by the chairman of HSBC, it is likely that given the ongoing, head in the sand attitude of the Yes campaign with regards to the currency that Scotland will be using, means that the likelihood of a substantial risk of currency flight from Scotland will increase.  There is minimal benefit for the rest of the UK to enter into a currency union with Scotland.  The continuing lack of clarity from the SNP and the YES campaign gives the impression that Scotland wants to give the appearance of being independent, but they also want the security blanket of having the Bank of England / Rest of the UK being in a situation of being forced to bail out Scotland in the event of something not going to plan.  So the obvious question for Alec Salmon and the Yes campaign – if going independent is so financially viable why does Scotland not want its own currency?

Conclusion

It would appear that the “business case” for going independent has been made upon:

  • assumptions that not based upon reality
  • Financial implications were not properly costed
  • impact on Scottish business were never discussed or considered
  • Choice of currency
  • Membership of International Organisations and the associated time-frames for membership.