On the 26th November Alex Salmond and the SNP revealed their ‘Scotland’s Future’ White Paper. Within hours critics were picking up on the lack of fact, misinformation, and the all agreed that the document amounted to nothing but a wish list with no real backing or evidence behind it to make it reality.
Just yesterday the Spanish Prime Minister corrected Alex Salmond on his claim in the White Paper that an Independent Scotland could simply continue on as a member of the European Union, saying:
I would like that the consequences of that secession be presented with realism to Scots. Citizens have the right to be well informed and particularly when it’s about taking decisions like this one.
I respect all the decisions taken by the British, but I know for sure that a region that would separate from a member state of the European Union would remain outside the European Union and that should be known by the Scots and the rest of the European citizens
To become the 29th member of the EU, Scotland would need to win agreement of all current 28 members. And the Spanish may be less than keen to set the precedent of giving a breakaway state an easy ride in its membership talks. Scotland is NOT an integral part of the EU other than as part of the UK membership. As an independent country it would not be a signatory to the Treaty of Rome or the Maastricht Treaty and thus would not retain EU membership but would definitely need to apply for entry in exactly the same way as any other nation. It only takes one veto for a country applying to the EU to be barred from entry. So essentially this means categorically and Independent Scotland would not be allowed EU membership.
Somehow i think Alex Salmond knew this was the case but decided to brush it under the carpet instead of face the reality of the situation. The White Paper lasted all but one day before being entirely undermined by not only lack of costings, but also the Spanish PM’s comments and the reality that Scotland may not be allowed the Pound Sterling as a currency either.
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This is what the experts said about the White Paper:
Stuart Adam, Senior Research Economist at the Institute for Fiscal Studies, said:
“The White Paper… is more specific about tax cuts than about tax rises. The obvious drawback of tax cuts is the cost. Since an independent Scotland would face an even bigger long-term fiscal challenge than the UK as a whole, an independent Scotland might find itself looking for ways to increase, rather than reduce, taxes.”
Professor David Bell, University of Stirling, said:
“Yet even with the concerted efforts of the Scottish Government to produce a comprehensive prospectus, there are still issues that need further detail.”
“The key issue that the White Paper does not cover is why the rest of the UK should agree to this [debt] arrangement. Clearly we have a very weighty document, but there is still some way to go before all of the issues are resolved. With some, it is not clear that they can be sorted out prior to independence.”
Peter McGregor, University of Strathclyde:
“There is considerable uncertainty over the economic impact of such radical constitutional change… retention of the pound is something that would have to be negotiated with the rest of the UK (rUK)… Even if successfully negotiated, a “one size fits all” monetary policy would prevail.”
Tony Mackay, Mackay Consultants, said:
“The SNP propose setting up an Oil Fund to use the oil revenues for future generations, along the lines of a similar fund in Norway. That would have been a very sensible proposal in the 1970s but I believe is unrealistic now, for two main reasons: the declining oil revenues; and the SNP’s commitments to a high level of public spending. There would be therefore be little or no money left to invest in an oil fund.”
Dr Angus Armstrong, Director of Macroeconomic Research at the National Institute of Economic and Social Research, said:
“Even if a currency union is agreed by 2016, it may not be Scotland’s choice in the years thereafter. If citizens on either side of the border have no guarantee that the Sterling union will continue to be the preferred option in future, then the arrangement is fragile because of this possibility of future changes of heart. To unconditionally commit to a currency union in perpetuity requires political union. Indeed the Euro has survived precisely because there is a high degree of political commitment. Scottish independence is a political move in the opposite direction.”
Jo Armstrong, Centre for Public Policy for Regions, said:
“it has a feeling of a manifesto about it … it doesn’t give us an understanding of the costs associated with [independence] … It would be in Scotland’s interests potentially to have [the sterling] but probably not as it would want to use its own fiscal levers. [Being] fixed to a currency over which it has no control doesn’t make a lot of economic sense. Politically I can see why you wouldn’t want to create uncertainty in the minds of individuals about what currency we’re going to be using. I think it’s much much less in England’s interest. … I think the balance of payments, benefits for England have been much overblown.”
“There’s two debt issues: one is the amount of debt we take on at the point of becoming independent. But as of day one, we are running a fiscal deficit. We spend more than we are raising in revenue, so we need to borrow. So we need to find a way that will make the markets comfortable with us issuing our own bonds, paying our own interest charges. There absolutely nothing in [the White Paper] about that and it’s almost a day one issue”
Peter McGregor, Head of Economics, Strathclyde University said:
“The pound is something that would have to be negotiated with rUK, the concentration of Scotland’s trade flows adds to the challenge of stimulating Scottish exports and, finally, the plans for lower corporation tax, with the intention of stimulating economic activity through enhanced competitiveness, assumes the absence of retaliation from rUK”
Dr Nicola McEwen, ESRC Fellow at the University of Edinburgh, said:
“The Scottish government may legitimately claim to be in a position to determine what is in Scotland’s best interests, but it can’t define the interests of the rest of the UK. The UK government, for its part, has given heavy hints that formally sharing a currency and other such arrangements may not be in their interests, with the Secretary of State and others demanding a ‘plan B’ from the Scottish government in case such offers of partnership and co-operation are refused.”
Grahame Smith, General Secretary of the STUC said:
“The White Paper does raise questions about how an independent Scottish Government might develop a sustainable approach to taxation in order to fund important and legitimate additional social investments. It is also disappointing that new arguments weren’t forthcoming to rebut genuine concerns around a formal currency union with rUK.”
Pat Donnelly, Community Union’s executive member for Scotland, said:
“Community disappointed by plan for independent Scotland… I’m really concerned that if Scotland were to leave the UK, we will witness a race to the bottom between Scottish workers and our friends in England, Wales and Northern Ireland – competing, not on skills but on low wages and poor conditions.”
“Most worryingly, this white paper says nothing new about workers’ rights and I know our members will be particularly concerned about the lack of a commitment to abolish zero-hours contracts.”
Mick Whelan, ASLEF’s General Secretary, said:
“This white paper is a thick document full of false promises”
John Cridland, CBI Director-General, said:
“The CBI believes that the nations of the UK are stronger together and that Scotland’s business and economic interests will be best served by remaining as part of the UK.”
Ian McKay, Scottish Chairman of the Institute of Directors:
“While the White Paper maintains there will be no increase in the basic rate of tax, this will inevitable mean rises in other taxes to fund initiatives like increases in childcare provision, and it is not immediately clear how these services will be funded.”
Jim Milne CBE, Chairman and Managing Director, Balmoral Group Holdings Ltd. said:
“As part of the UK we are optimally placed to maximise the potential of the North Sea for years to come. Not only is it imperative for the wider economy to be able to manage the revenues derived from the North Sea, but economies of scale mean that tax breaks and decommissioning relief worth billions are attracting new investment into the province. Our industry is achieving this as part of the UK. I don’t believe such a level of influence would be possible if Scotland was independent.
“Our business depends on exporting leading-edge products to the global oil and gas industry. Having the strength and security of such an influential country as the UK is vitally important when I travel overseas and speak to international business people about our company. Why would we want to give that position of influence up? We are not losing our ‘Scottishness’ by being part of the UK but indeed are benefiting from it.”
Margaret McPherson, chair of Intelligent Office UK said:
“I have worked in business all across the world, and I know how important it is being part of a large and successful economy. Business people I talk to in places like New York can’t understand why we would want to cut ourselves off from the successful single UK market. I don’t understand it either.
“I started my business in Scotland and now have clients in 35 locations across the UK with over 80% of our revenues being generated in England. Being part of the one country meant it was easier for me to develop my business without huge barriers like a different currency and a different regulatory regime. I don’t want new businesses to miss out on the opportunities I had to grow my company in a market of over 60 million people rather than just 5 million.”
Peter Page, a leading business figure for 25 years, said:
“Scotland has some of the best and most successful businesses in the world, yet independence puts this at risk.
“There is too much uncertainty. How can I plan and manage an international business from Scotland when it isn’t even clear what currency we will be using in a few years time or if Scotland will be a member of the EU and on what terms?
“What we have today works well. The single UK market gives Scottish businesses a domestic market of over 60 million people and a platform for the international stage. Why would we want to put up a barrier to that market? There are simply too many risks involved with independence.”
David Wood, Institute of Chartered Accountants of Scotland, said:
“ICAS asked questions about how EU rules would affect defined benefit schemes operating across the UK, which would become cross-border in the case of a ‘Yes’ vote. EU rules mean these schemes would face enormous, immediate funding requirements. Today’s paper doesn’t shine any further light on what these would be. Instead, it says negotiations on transitional arrangements should begin immediately. It appears unlikely that the UK government would agree to this”
Martin Potter, leader of the IFoA’s Scottish Board:
“There is a great deal to digest in today’s wide ranging White Paper by the Scottish Government. The IFoA identified a number of challenges that Scotland and the rest of the UK will face should Scotland become independent (in our October paper: Commentary on the key challenges facing an independent Scotland within financial services http://tinyurl.com/ozmjfzg). Whilst today’s paper offers further clarity on the Scottish Government’s proposals for an independent nation state, questions remain around how this will be achieved.
“In particular we would welcome further detail on the proposed regulatory frameworks for financial services. Today’s paper sets out the Scottish Government’s intentions regarding membership of the EU and retention of Sterling. It also outlines the creation of certain Scottish regulatory bodies yet proposes a pan UK regulatory framework in other areas. Understanding the benefits and drawbacks of a patchwork regulatory system is vitally important for the financial services sector and consumers. The IFoA will seek further detail from all bodies to better understand the risks and benefits such changes would present.”
WELFARE & CHILD CARE
Graeme Cooke and Guy Lodge of the Institute for Public Policy Research, said:
“The Scottish government’s long awaited white paper is a piece of fantasy economics. More spending and lower taxes: everybody wins. Alex Salmond’s argument today is that Scottish voters can have it all. All gain and no pain … Other than a (contentious) assertion that the tax base north of the border is stronger than in the rest of the UK, it is unclear how any of this can be paid for.”
“One of the headline grabbing aspects of today’s announcement is on childcare, where the Scottish government rightly advances an argument for following a Nordic path of extending provision for parents with young children. The first obvious point to note in response is that childcare is already a devolved issue, so there is no need for independence for such important progress to be made. The trickier problem for the SNP is, again, how the extra provision would be paid for.”
“What the white paper fails to mention is that Scotland stands a much better chance of meeting the future costs of welfare if it remains part of the UK social union. By coming together the nations of the UK are able to pool financial resources and share risks across a large and resilient political community.”
“Independence, however, would permanently break the UK’s social union weakening the ability of Scotland to cope with the fiscal and demographic pressures welfare states the world over face.”
David Phillips, The Institute for Fiscal Studies, said:
“IFS research suggests that even if oil revenues rebound strongly during the first few years of independence, an independent Scotland would need to raise taxes or cut spending by more than the UK in the longer term. Increasing benefit spending would make this task harder and it would not be surprising if the government of an independent Scotland felt the need to cut rather than increase the generosity of at least some benefits to help balance its books.”
David Comerford, University of Stirling Management School said:
“This enhanced childcare policy can be criticised as something that can be implemented under the current devolved settlement.”
Bryan Buchan, Chief Executive of Scottish Engineering, said:
“The first obvious concern to the engineering manufacturing sector is the apparent haste with which the first independent parliament would ditch Trident with the consequent loss of employment. At current levels this would involve at least 1,600 jobs at Faslane and Coulport. Add to that the large number of secondary jobs within the supporting supply chain and you will create a massive group of highly skilled jobseekers. I would also like to know how the promise of boosting high value jobs through increased manufacturing activity is to be delivered. The manufacturing engineering industry as it exists in Scotland today has demonstrated excellent stewardship to come through a prolonged and deep recession. What is the accelerator that politicians in an independent Scotland think they can activate to improve on this?”
Mariano Rajoy, Prime Minister of Spain, said:
“It is clear to me that a region which asks for independence from a state within the European Union, will be left outside the EU. It is good thing that the citizens, the Scottish people know this, along with other Europeans.”
Myrto Tsakatika, Senior Lecturer in European politics, University of Glasgow, said:
“Why would the positions of other member states for which Scottish independence sets a dangerous precedent or indeed of the UK itself be as accommodating in these negotiations as the White Paper reckons?”
Stephen Tierney, ESRC Fellow at the University of Edinburgh, said:
“The process of achieving membership has been a thorny one for the Scottish Government and it is revisited in the White Paper. It seems to be conceded by the Scottish Government that Scotland would need to apply for new membership”
Andrew Neal, Principal Convenor of the ESRC seminar series ‘Security in Scotland, with or without constitutional change’, said:
“The white paper recognises that a new security service may not be completely in place by independence day, and so calls for continuing UK assistance. Questions remain over how this assistance would eventually be drawn down and how the UK security agencies providing the assistance would be held accountable in an independent Scotland.”
Bruce Beveridge, President of the Law Society of Scotland, said:
“Given the different positions being taken by the UK and Scottish governments, it is difficult to understand the most likely currency arrangements if the Scottish people were to vote for independence next year. It is hard to have a proper debate against a background of uncertainty on such an important issue as this. The Scottish government should be setting out its contingency plans if its preference on currency cannot be achieved. Equally, the UK government needs to be clearer on why it could or would not support such a shared currency arrangement.”