I’ve always been a big fan of Scotland. I had the privilege of working in Asia for some years with United Distillers (now Diageo), and I became “Mr. Johnnie Walker” in Korea. I’ve also had them pleasure of meeting Alex Salmond a couple of times — he once helped me with a speech for a Burns Night Supper (my birthday falls on Burns Night, as it happens). So I’ll be honest: I value the Union so instinctively that I don’t feel any need to present detailed arguments for it.
I absolutely disagree with Salmond on just about every political issue — especially Scottish Independence and socialism — but I still admire the man. He’s a showman, and I love a showman.
He’s also just in the process of launching his campaign for independence as I write, and I thought it might be instructive to contrast the campaign for Scottish independence with the campaign for British independence — in which I’ve been engaged all my political life, and which seems more achievable now than ever before.
Salmond seems to think that he can fund an independent Scotland on North Sea revenues. But North Sea production is in decline, and in the event of Scottish independence, the ownership of the oil and gas would be disputed. Not a very reliable start.
Many commentators have pointed out that had Scotland been independent three years ago, it would have been unable to bail out RBS, and Scotland could well have ended up like Iceland (or still worse — if they were in the €uro — like Greece).
Many of the English resent the Barnett Formula, under which the UK Treasury makes regular subventions to Scotland, funding their free university education, free prescriptions, elderly care and so on. I don’t resent it, because I recognise that a currency union (and Sterling is a currency union of England, Scotland, Wales and Northern Ireland) absolutely requires on-going fiscal transfers from richer areas to poorer areas. This is a fact which Angela Merkel is learning the hard way. The €uro could only survive with politically unacceptable permanent fiscal transfers from Germany to ClubMed.
But it is difficult to see how an independent Scotland, without the Barnett Formula, could possibly sustain its almost Soviet level of public spending as an independent country.
So Scotland receives huge and undeniable financial benefits from its union with England. The UK, on the other hand, suffers huge financial costs from its membership of the EU. The direct budget contributions are around £16 billion, but the total costs, including regulatory costs, are credibly estimated at over £100 billion — a terrible drag on jobs, growth and prosperity in Britain. The case for British independence from the EU is well-made. The case for Scottish independence is not (at least, not in Edinburgh — though the English might make a case).
Salmond seems to believe that after separation, both Scotland and rump-UK would continue as two new countries within the EU. (He also assumes that Scotland would keep the Pound — but will the English want to play Germany to Scotland’s Greece?). This is not at all clear. Constitutional lawyers argue that both Scotland and rump-UK would effectively be new countries, and would have to re-apply for EU membership. At the very least there would have to be elaborate negotiations over budgets and so on. And we in England would need a referendum. This is perhaps the one point that could persuade me to support Salmond’s position. We should get the referendum on the EU which successive politicians have denied us.
The funniest yet the saddest thing is that Salmond still talks of “An independent Scotland within the EU”. That is about as credible as Hague’s “In Europe not run by Europe”. Time to wake up and smell the coffee, Alex. Better still, have a glass of Scotch.