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.

 

 

Self Determination

I note with amusement that whilst the Scottish National Party, currently running the Scottish Government, “reserves” the right to seek independence from the United Kingdom, it is not prepared to extend that right to distinct communities within the area currently defined as Scotland.

A petition has been made to the Scottish Parliament on 29th April 2014 from the councils of Orkney, Shetland and the Western Isles. Shetland, Orkney and Western Isles Petition

I note that the response from the committee reviewing the petition is very telling as to the viability of an Independent Scotland.

5 August 2014: The Committee agreed to close the petition under Rule 15.7 on the basis that that the Scottish Government has indicated that it does not support what the petition seeks and that there is insufficient time to arrange such referenda within the timescale called for in the petition.

Surely what the Scottish Government seeks is not the point of the petition. What is the Scottish government afraid of?  Could it be that the SNP has made its plans on the basis of resources and assets, which do not belong to them but to the communities above.  The Northern islands of Shetland and Orkney have more in common with the Norwegians. They are territories which were ANNEXED by Scotland and were not originally part of Scotland. Northern Isles History .

Is this an example of how Scotland will be governed in the future?  Could it be that the SNP is not interested in the aspirations of these areas because they do not represent these areas in the Scottish Parliament?

It would therefore seem that the referendum is more about what is good for the Scottish National Party (SNP), rather than the determining the rights and aspirations of the people of Scotland.   One rule for the SNP and another for anyone else.

Defence / Faslane / RAF – Armed Services

Part of the requirements for an independent Scotland will be the organisation of its Defence infrastructure.

Considerable parts of the current defence establishment will not be transferred to Scotland as they will have no need for those particular assets.

The Scottish Government has stated that they planning to develop their defence capability over a 10 year period. The obvious question that arises is who will be responsible for Scotland’s defence in the period before these plans are fully implemented? There will be a reluctance on the part of the rest of the UK to defend Scotland.

Over the first term of a Scottish Parliament, the current governments proposes that :

Naval forces would be built up to two squadrons with around 2,400 regular and at least 270 reserve personnel.

The army would incorporate an HQ function and an All-Arms brigade, with three infantry/marine units and supported by a number of specialist units and special forces.  This would entail around 4,700 regular and at least 1,110 reserve personnel.

Air forces will include an Air Force HQ function, establishment of Air Command and Control systems, a Quick Reaction Alert squadron, a tactical air transport squadron, flight training and establishment of airborne maritime patrol capability.  This would require 3,250 regular personnel and around 300 reserve personnel.

 

The Scottish National Party has proposed that under a Scottish Constitution – Scotland would be free of Nuclear weapons. As a direct result, it will be necessary for the Naval base at Faslane and the associated Coulport establishment would have to be relocated to facilities south of the border, whilst this would require an agreement to enable a timely transition of the bases, it will definitely result in the overall staffing reductions.

Whilst the SMP has proposed converting the Faslane Base as their version of Norwood, a lot of the technical trades would be redundant especially once the submarine fleet is relocated. Whilst some will be retrained, the question as to who will be liable for the necessary redundancy payments. Additionally as the SNP Plans would take some 10 years plus to come to fruition there are going to be a number of redundancies and unemployed personnel who would need to be supported.

The additional consideration would be as the based would be in the short term located in an Independent Scotland, the nationality of those employed by the base would have to be re-assessed, combined with full security screening being undertaken. Personally, I do not doubt the integrity of those who are currently employed to support the Royal Navy’s submarine fleet, but given the change of situation and therefore increased risk, precautions would have to be made. Issues, such as breach of security or “Official Secrets Act” would have to be dealt with. So who’s jurisdiction would in play.

  • What powers of investigation would be permitted for Royal Navy personnel
  • What jurisdiction would they be tried under?
  • What prisons would they serve their sentences?

 

Airforce

Whilst Scotland would have an expectation of “retaining” a number of RAF assets, those such as the F35B (Lightning 2), Typhoon and all the military transport capability cannot be transferred to Scotland – after all they would have no use for such asset and would not have the infrastructure to maintain it. So what fighter assets could be transferred, certainly some Tornado aircraft could be transferred and the Scottish Air Force would have experience to manage such aircraft, but would the proprietary avionics also be included – when did we agree to given research away?

Currently the air sea rescue is provided by a combination of HM Coastguard and service helicopters, though discussions are underway to “outsource” this capability. How would Scotland fund such a function? I do not see any mention of the SAR capability for Scotland in the Independence documentation?

 

Career Path

Personnel who decide to join the Scottish Armed forces would have to consider the limited opportunities which will present themselves here or whether they would prefer the greater opportunities that are currently available within the UK forces. Additionally personnel are given the opportunity to not only travel overseas, but also train overseas with allies. Those opportunities would be limited under an Independent Scottish government.

NATO Membership

The paper produced by the Scottish government identifies the aspiration for Scotland to join NATO. It is, however, difficult to reconcile the wishes of the Scottish government to remove all Nuclear weapons and systems from Scottish territory but still benefit from the protection of the armed forces of NATO members including those with nuclear weaponry. There is no guarantee that Scotland’s application for membership would be approved.

Too much of the proposals outlined by the current Scottish government is full of wishes, aspirations, and intent, but there is no obvious identification of a backup plan. It seems that the management style of the Scottish government is to identify “visions” but being very light on the details. Sounds very much like the plans for the currency of an independent Scotland.

Rest of UK expectations

There has been little discussion or indeed establishment of the expectations from those of us who remain in the United Kingdom.

Should Scotland vote for independence on 18th September 2014, then the expectations of the rest of the UK nationals should be taken in to account when it comes to the negotiations with Scotland.

  1. Westminster Parliament should pass a statute which removes the rights of any Scottish Member of Parliament (MP) to vote on legislation which does not affect Scotland (after all you are leaving so why should they be allowed to vote on our legislation).
  2. No Scottish MP will have a right to influence / participate in the negotiation for the transition to an independent Scotland.
  3. No Scottish MPs should be allowed to sit in cabinet apart as the Scottish Secretary.
  4. Scottish MPs should not be in a position to adversely affect the working of Westminster
  5. Review of Scottish MP participation of Parliamentary committees should be reviewed to ensure that their continuing participation is appropriate and necessary.
  6. Payment for the Scottish MPs when they leave Westminster should be refused – if payment is to be made then it is the responsibility of the Scottish Parliament and the Scottish People.

Assets

Whilst a number of assets should be transferred to Scotland, the precise details need to be negotiated between Westminster and Holyrood. However, a number of things should be made crystal clear.

  • All future ship building work for the Royal Navy will NOT be tendered to Scotland. It is in the interest of England and the rest of the UK to ensure that we have the capability of building and maintaining our own fleet.
  • Responsibility for the workers in the Scottish shipbuilding yards will be the sole responsibility of the Scottish parliament. Westminster will take no responsibility for the continuing employment or indeed any payment regarding the redundancy resulting from the loss of contracts.
  • Any assets which will be delivered post independence would be excluded from the negotiations.
  • Arrangements would have to be made for a transition period which would facilitate the continuing use of national services by both countries. However, the expectation will be that ALL functions undertaken by employees in Scotland on behalf of the Westminster Government would be moved to other parts of the UK at the earliest possible opportunity.

Nationality

Whilst Scotland has chosen to go down the path of independence, then the necessity will be for all those who wish to be Scottish to take Scottish Nationality will have to renounced British nationality as dual nationality will not be allowed. This is to ensure that Scotland is given the greatest possible opportunity to succeed and that those voting for independence don’t hedge their bets by hanging on to British Nationality. It will also simplify the allocation of resources and ensure that the pension funds and other resources are allocated on a fair basis. It will also ensure that everyone understands the responsibilities and implications of choosing the relevant nationality.

One of the things that will be impacted will be the employment rights of everyone on both sides of the border. The SNP is firmly of the opinion that the arrangements which were put in place following Irish independence will be similarly applicable for the Scots. This is a different world and the flexibility that was offered in 1920s may not be applicable in the 21st. Also given the probable situation that Scotland will be outside of the EU for a period of time, we to consider that employment regulations have to take into account EU legislation and requirements.

Whilst a great many institutions in England could and should be more efficient, the one thing which Scotland will have to deliver upon is its own procurement infrastructure and contracting.

This will inevitably affect the following but not exhaustive areas:

  • NHS
  • Defence Hardware
  • General government procurement