Thursday, 8 March 2018

Spectator: "The Case For Independence Has Never Been Greater"...

Spectator: "The Case For Independence Has Never Been Greater"...: "It seems beyond human comprehension how those separate and distinct interests can be supported by one Parliament. The Scots deserve no...

"The Case For Independence Has Never Been Greater" - So Go Demand It.

"It seems beyond human comprehension how those separate and distinct interests can be supported by one Parliament. The Scots deserve no pity if they voluntarily surrender their united and separate interests to the mercy of a Parliament where the English shall have so vast a majority... and the 16 Scots Members may dance around to all eternity in the trap of their own making". Fletcher of Saltoun was referring to the Treaty of Union of 1707 of course and he was even more scathing of his countrymen after the Treaty was signed, when, on being asked if he intended to desert his country, he replied, "It is fit only for the slaves who sold it". Scottish Nationalists have aye agreed with Fletcher's take on the Treaty of Union and almost 450,000 of us believe it can be applied with equal force, to the Treaty of Rome and Scotland's membership of the EU. That division of opinion in the ranks of the SNP, which also spilled over to the broader National Movement, played its part in the loss of 21 seats by the SNP, in the General Election of June 8th 2017. The other major issue that caused division was the rise of Jeremy Corbyn in the last fortnight of the campaign and the decision of recent converts from Labour to the SNP, to revert to the Labour Party, in the belief that was the way to achieve socialism or, at least a more equitable society in the UK. Independence was not a priority, nor had it ever been; it was simply seen as the best vehicle to change UK society, until Corbyn that is.

The split which led to the loss of 21 seats and almost 500,000 votes by the SNP on June 8th, was some years in the making, the genesis emerging in the aftermath of the General Election of 1979, when the party lost nine of its eleven seats.   And it must be remembered that the party had only 6 Westminster Parliamentary seats until the General Election of 2015, when it won 56 of 59  of Scotland's Westminster seats and 1,454,436 or 50% of the popular vote. A number of factors came into play to explain the jump from 6 of 59 Westminster seats and 491,386 or 19.9% of the popular vote in the General Election of 2010. The most important factor of course, was the Independence Referendum of September 2014, which was lost but which energised politics in Scotland to a far greater extent than any other test of popular opinion, in Scotland's modern political history. No one, least of all the leadership of the SNP, expected the party to record such an astounding victory in 2015 and Nicola Sturgeon, in order to calm the expectations of some of the more enthusiastic SNP members in the days just before the poll, reminded supporters that anything over 11 seats would be a record for the SNP. Under the Old SNP, such a result would have been taken as a mandate to negotiate Independence but under the New Gradualist SNP, it meant, well, nothing very much. Unfortunately, it took only a few weeks for it to become obvious that the leadership had little idea how to make the best use of their total domination of Scottish politics. Instead of driving the cause of independence to new heights, Ms Sturgeon and her chief office bearers have done much to reduce its popularity. The pathetic campaign in the election of 2017, was only partly to blame for the election losses; much greater responsibility must lie with the nature of the SNP, the type of party it has become.

Political commentators tend to talk of the battles inside the SNP in the 1980s as a battle between the "Fundamentalists" and the "Gradualists", a battle which was won by the latter. Traditional Nationalists, by which I mean those who think as I do (fundamentalists or "fundies" was a derogatory name for that group) never saw the argument for independence in terms of economics - we were Nationalists long before oil was discovered - and certainly never saw it as an argument about class. We saw independence as the restoration of sovereignty, dignity, self-confidence, self-respect and an appreciation of our history, culture and languages; in short those things which independent countries see as normal and take for granted. We knew we had to rebuild the nation of Scotland, which meant appealing to the people of Scotland across classes, political allegiances and religious divides. Independence per se, had to be sold as more important than any "ism", after which Scots would build the kind of society they wanted the country to be. Gradualists on the other hand, argued Devolution would offer the opportunity of giving experience of government, however limited, and would allow Scots generally to judge the SNP on performance. They tended to assume they would always be better in government, local or national, than any of the Unionist parties. Despite an examination of SNP policy prior to 1979, showing the party to be more radical and conscious of social issues than Labour in Scotland, those who came to dominate the SNP under Alex Salmond, insisted the party must adopt a more left-wing policy platform. In time, the rhetoric was more evident than the reality.

The resignation of Angus Robertson as Deputy to Nicola Sturgeon, has opened up the opportunity to debate politics inside the SNP, something which has not been done since Alex Salmond became Leader in September 1990. The National of February 14th 2018, carried a piece by Alex Salmond, in which he said, "I always liked internal elections as they are good for debating issues. Deputy Leadership elections in the SNP have been quite significant and in living memory the really significant one that I can remember was myself against Jim Fairlie in 1987 which was basically the classic face-off between the fundamentalists and the gradualists. It was an epic contest which was resolved in favour of  gradualism and myself". Perhaps significantly, Alec did not mention the even  more epic contest which took place four years earlier over the question of the SNP's participation in the Scottish Convention. As Deputy Leader I had led two earlier SNP delegations to preliminary meetings of the Convention, in which it was established that none of the other participants - Unionist parties, TUs, Churches et al - recognised the sovereignty of the Scottish people.I had asked at the first meeting, and it was agreed, that the question of Scottish sovereignty should be on the agenda for the next meeting. It wasn't but I insisted on a roll-call vote, on the grounds that it would be difficult to determine what the Convention could achieve until it was decided who should be making the final decisions- the Scottish people or Westminster. Every single delegate from every institution present, except those from the SNP, opted for Westminster sovereignty.

The SNP Leader Gordon Wilson was a keen supporter of the Convention and had organised a resolution at the 1983 Annual Conference, to the effect that the SNP would play a full part in any Convention that was set up. I moved the direct negative and the resolution fell by a substantial majority. Gordon organised the same resolution for the next Annual Conference in 1984 at Inverness, but this time Jim Sillars carried the flag for the Convention and I again moved the direct negative, warning Delegates that the likely outcome, if they voted to support the Convention, would be to allow Scots to do no more than to talk about how little self-government Westminster would grant us. Jim and I debated the issue in front of hundreds of Delegates and the resolution to support the Convention was passed by only 7 votes, a clear indication of how divided the party was. There was no such division by January 1989 when the delegation of Gordon Wilson, Jim Sillars and Margaret Ewing advised the party to leave the Convention, when, as I had warned it would do, it refused to offer independence as an option. In effect, it demanded the SNP drop independence completely. At the National Council a few weeks later, the vote to leave was passed by 198 votes to 48. The two who had led the clarion call to support the Convention in 1984, Gordon Wilson and Jim Sillars, led the call to ditch it in 1989 and the SNP had wasted five years.

Alex Salmond is right in one respect, 1987 was a highly significant year for the Gradualists because their strategy lost the SNP Dundee East and Western Isles and turned what might have been a significant advance for the SNP into an utter shambles. Enter stage "Left", the idea of the "hung parliament" Salmond's brainchild and highlighted by him in his, "if Westminster is to hang, let it be by a Scottish rope" a catchy, if totally meaningless piece of political pap. A pact between SNP and Plaid Cymru, agreed to support Labour "in the event of a hung Parliament at Westminster", an idea touted for well over a year leading to the General Election of 1987. Margaret Thatcher had been painted as such a "hate figure" that keeping another Unionist party in power at Westminster and anti-Thatcherism, became the sole political aim for the SNP at that time. Some will have seen shades of the same "strategy" in 2017, when the SNP did their best to convince Scots the election "was NOT about independence". In the regular weekly column I wrote for the Scots Independent, I warned against the "hung parliament" scenario as far back as June 1986, when I wrote, "If the SNP continue to hype a hung Parliament, we will be making a present of that vote (anti-Tory vote) to the North British Labour and Unionist Party". That was only one of several warnings given about the lack of political nous over the next year and more in sadness than triumph, I wrote after the 1987 election, "Dundee East and Western Isles were sacrificed on the altar of anti-Thatcherism".

Was the "hung parliament" strategy in any way realistic, from the SNP's stand point? The UK Parliamentary figures tell their own story. In 1983 the General Election saw the Tories returned with a majority of 144 with each party polling as follows (Scot figs in brackets):- Tories 397 (21) Lab 209(41) Lib/Dems 23 (8) SNP 2. The bald figures alone show what a monumental task it would have been to create a "hung parliament" scenario but this was the period when Thatcher was in her pomp and Labour in England, offered no realistic opposition. The whole "hung parliament" idea showed an almost total lack of political awareness, given the strength of Labour in Scotland at that time. The polling figures for 1987 are as follows:- Tories 376 (-21) Lab (229 (+20) Lib/Dems (22 (-1) SNP 3 (+1) giving Tories a majority of 102. The Scottish figures show more clearly what a disaster for the SNP, the "hung parliament" strategy was, the voting figures being as follows:- Tories 10 (-11) Lab 50 (+9) Lib/Dems 9 (+1) SNP 3(+1). Labour's total gain of 20 seats in the UK, included 9 in Scotland, including two from the SNP. The party line became, "the election was a success as we increased our number of MPs by 50%" We had gone from having 2 MPs to 3 and it was in the atmosphere that this "success" had created, that Alec Salmond and I contested for the Deputy Leadership in September.

It is reasonable to assume that had the Salmond/Gradualist analysis been correct, the SNP would have enjoyed far more electoral success than it had prior to 1979, allowing for the internal strife that bedevilled the party throughout the 1980s and which ensured the party paid the electoral penalty. In October 1974 the SNP won 11 seats of 71 and 839,617 or 30.4% of the popular vote in the second General Election of that year.  The party fought four General Elections under the leadership of Alex Salmond; 1992 where it won 3 of 72 Westminster seats and 629,564 or 21.5% of the popular vote; 1997 winning 6 of 72 seats and 621,550 or 22.1% of the vote. Under John Swinney's leadership 5 of 72 seats and 464,314 or 20.1% of the vote were won in 2001. During Alex Salmond's second ten year leadership term, the party won 6 of 59 seats and 412,267 or 17.7% of the vote in 2005; while in his final attempt the party won 6 of 59 seats and 491,386 or 19.9% of the vote in 2010. Thus, on the electoral platform favoured by the Gradualists, under the leadership of Alex Salmond, widely acclaimed as the foremost politician of his generation and highly successful on a personal level, in two General Elections the party polled 400,000 or 10%, less than it polled in October 1974 and in the other two it polled over 200,000 and 8% less than it had in 1974: and in the one election it fought under John Swinney it won 6 seats and 200,000 votes or 10% less. Over a period of 35 years, 1979-2014, the SNP was embroiled in internal disputes for a decade, then totally dominated by the self-styled Gradualist, left wing and where party discipline was ruthlessly imposed, success at the polls amounted to no better than 50% of the successes of 1974. More to the point, throughout that period independence rarely dominated SNP campaigns and on one occasion occupied 10th place in a list of the SNP's top ten priorities.

Much greater success has been achieved in Scottish Parliamentary elections, where a form of proportional representation has ensured the SNP has won the share of Parliamentary seats commensurate with the number of votes won. Without proportional representation, the party would have had only 7 of the 73 constituency seats in the Scottish Parliament as that was the number of constituencies won. but its share of the vote entitled it to another 28 of the remaining 56 seats, giving it a total of 35 out of 129. In 2003 under the leadership of John Swinney the number of  constituencies won was still only 9 but topped up by another 18 to give a total of 27 out of 129, a reduction of 8 seats from 2003. The breakthrough came in 2007, with Alex Salmond back at the helm, the party won 21 of 73 constituency seats, with another 26 added under the top up, giving a total of 47 out of 129 making the SNP the largest party, forming a minority government. For the first time, in 2011 the party won a majority of the constituency seats - 53 of 73 - topped up to a total of 69 out of 129 and a majority government. But did being a majority government bring the prospect of independence any closer? The answer to that question must be a resounding "Yes". But has bringing the prospect of independence closer, made the SNP any more sure-footed, any more in command of the political situation in Scotland? The answer to that question, must be an equally resounding "No".

The atmosphere created by the campaign for the Independence Referendum has never been experienced in Scotland, either before the vote or since. It would perhaps be stretching it to suggest the vote could have been won, had it not been for the debacle of the SNP's insistence on a Currency Union with the rUK, but there is absolutely no doubt that the currency issue, more than any other single issue, lost the vote for the Yes side. Again, this was Alex Salmond's baby and the Yes side allowed itself to be bullied by the SNP, into supporting the CU as opposed to the argument supporting a Scottish currency. I have pushed the idea of a Scottish currency since the 1970's and the most galling part of the defeat for Yes, is to hear so many prominent members of the SNP, now claim they also supported the idea but remained loyal to the SNP's policy. It was put to me at the time, that the Scottish people had to be "persuaded and cajoled" to vote for Independence and, to push the idea of a Scottish currency would "frighten too many who would not want to take the chance". Who were the real fearties, the Gradualists in the SNP, or the Scottish people whose mettle the SNP refused to challenge? The other major issue which has divided the National Movement, is the SNP's total and absolute commitment to membership of the EU. I have written extensively on the EU in this series of Blogs and don't intend to rehearse the arguments here but the SNP refused to listen to how strongly many Independence supporters felt about membership of the EU. They treated those of us who voted Yes/Leave, with total disdain and contempt, paying the penalty at the poll in 2017.

The SNP is facing some of the same issues today, that split the party in the 1980's viz. the means by which Independence can be won, membership of the EU and the place the party should occupy on the political spectrum. Many of the self-styled left among the new recruits from the Labour Party, have no attachment to the cause of Independence and will return to the Labour fold if they feel there is any hope for Labour to form a government in Westminster - or when the SNP decide to run with another "hung parliament" scenario. It doesn't really help when the SNP Leader, along with some of the leading lights in the party, can't wait to decry Nationalism, claiming they support Independence because they reject the "Thatcherite neo-liberal, capitalist policies of the present Tory government" while endorsing the same neo-liberal, capitalist policies of the EU. Over one million Scots voted to leave the EU, we don't take kindly to being dismissed as racists. If the SNP continues to conflate Independence and membership of the EU, they will kill Independence. The Tories won 13 seats and 758,000 votes at the general election in 2017 for a reason. They cannot, indeed should not, simply be dismissed as "scum" without there being consequences. We cannot rebuild a Nation by treating people as if they are of no consequence.

The title of this piece is a straight quote from Alex Salmond - although I added the wee bit at the end. I hope it is not just another soundbite.

Monday, 10 October 2016


The confusion in the ranks of the National Movement over what constitutes "Independence", is such that the SNP and many of its supporters are in danger of killing the whole idea of returning independence and sovereignty to the Scottish people, the aim for which the party was created. When I read the headline in the Sunday Herald of 18th September; - First Minister: "Independence transcends Brexit, oil and the economy", I almost cheered, as it was the first time I had read any statement by Nicola Sturgeon which suggested she was a Nationalist. Oh, there have been any number of mentions of independence; the word trips off her tongue just as easily as any other word (s) in the SNP mantra. But what does she mean by it? In fact, what does the National Movement mean by "Independence", or is it just a word many proclaim without giving too much thought to what they mean by it? When I listen to the enthusiasm with which the SNP and its supporters embrace the EU, hear how many times the party's leaders, spokespeople and leading activists can contradict themselves in a single discussion or statement, I seriously wonder.

This is not the first time I have raised the issue and asked the question. In a previous Blog on 14 October 2014, entitled, "What do YES voters mean by Independence? Is it worth a candle"? I raised it in the aftermath of the Independence Referendum of September 18th, during which the debate over the currency an "independent" Scotland should use proved to be a turning point and is now widely accepted as the real Achilles heel of the YES argument. Unfortunately, there are still those, among the SNP leadership as well as ordinary voters, who still do not appreciate the nature of a currency union and what it would mean for "independence". But before looking at the conditions the UN requires to recognise an "independent" nation state, together with an academic, unbiased assessment of "independence" in the EU, It would be useful to look at a few examples of the confusion that exists in the ranks of those who claim to pursue Scottish independence.

In April 2013, under the auspices of Options for Scotland, I produced an article advocating a Scottish currency as the best option for an independent Scotland. The SNP were pushing the idea of a full blown Currency Union with the rUK, keeping the £ sterling and using the Bank of England as the Lender of Last Resort. My criticisms of the SNP policy were based on the lack of control Scotland would have over monetary policy and therefore, over the Scottish economy. A number of leading members of the YES Campaign, including Dennis Canavan the Chairman, publicly supported my arguments. Dennis was interviewed on TV and argued at some length, how important it would be for an independent Scotland to have control of its own currency and, therefore the economy. The interview went well until Dennis decided to elaborate, by stating the importance of having our own currency meant we would have the freedom to join the euro at a later date. Did he really understand the nature of a currency union?

Mr Canavan is not the only leading campaigner for independence who has trouble with the euro. On Thursday 13th, the first day of the SNP Annual Conference, the party will announce who will be the new Depute Leader of the party. Hustings have been held up and down the country for the past four weeks, as the four candidates have done their best to speak to as many party members as possible - out of the total of 120,000. Each is standing on a different platform, which they hope will impress the membership enough to see them elected. For the first time ever, all four candidates - Angus Robertson MP, current SNP leader in the House of Commons, Tommy Shepherd MP, Alyn Smith MEP and Councillor Chris McEleny - were interviewed together on TV, by Bernard Ponsonby. There was a remarkable degree of agreement on a variety of issues, with no major disagreements on anything, including the best currency option for an independent Scotland. All were agreed that independence had to come but membership of the EU was vital for Scotland, despite the UK, as a whole, having voted to come out. On the currency issue, all were agreed it had posed major difficulties in the Independence Referendum and all were agreed to say nothing more, not a squeak, not a cheep. Pushed by Bernard Ponsonby on the euro, all were agreed it was an option the party had to consider. None was prepared to say if he had a personal preference, not even to dismiss the idea of the euro. Thus, while they all agreed currency was the "big issue" at the last Referendum, that allowing the Scottish economy to be controlled by the Westminster Treasury and the Bank  of England was a "big turn-off" for Scots who wanted independence, they were all prepared to see monetary policy and the Scottish economy controlled by the European Central Bank, the £ sterling replaced by the euro, as an "option", while still claiming it was independence.

Peter A Bell, writing as Berthan Pete, is one of the SNP's most active supporters, writing and blogging at length on every issue. On 10th August 2014, one of his critics, responding to one of Pete's posts, said the SNP was guilty of "dishonesty" attempting to pass off "fiscal autonomy" as independence. Mr Bell responded as follows, "By what authority do you seek to impose a rigid definition of independence? Where is it written that your absolute notion of independence is the only valid one?" He continued, "In an interconnected world, a much more reasonable and realistic definition of independence would be the capacity to freely negotiate the terms on which a nation engages with the rest of the world. Under such a pragmatic definition, a freely negotiated currency union would not impinge on "true" independence at all." As soon as it is accepted that we can each define our own version of independence, the concept is rendered meaningless. Bell's definition totally ignores the fact that membership of the EU, which he strongly supports, expressly forbids member states to negotiate any kind of trade deal with any country which is not a member. It also ignores that once the "freely negotiated" currency union is established, all "freedom" to manage currency and the economy is ended, along with "true" independence.

The following is perhaps an even better example of his utter confusion on the EU and independence. In The National of Saturday, October 1st 2016, he wrote, "How long will we tolerate the British state continuing to withhold from the Scottish Parliament the powers that any other parliament would possess as a matter of right? How do Unionists justify this? How do they explain their preference for having immigration policy controlled by Westminster? If Scotland was independent, would they be urging us to take authority over immigration away from the parliament that the people of Scotland elect and hand it to a parliament in another country elected by the people of that country? Why should we remain in a union that no rational person would ever vote to join?" Why indeed? Has Mr Bell overlooked, forgotten, failed to understand the conditions of membership of the Single Market in his and the SNP's beloved European Union? Has he overlooked, forgotten, misunderstood or just failed to understand, Free Movement of Labour in the EU? If he thinks Scottish control of immigration is so important, why is he so fervent in his support for the EU where members have no control over their borders and must permit free movement of people from other EU member states? Perhaps he is not a rational person?

One of the reasons I raise the issue again is the SNP annual conference meets on Thursday 13th and the First Minister is under pressure to a) hold a second independence referendum b) postpone holding a second independence referendum (kick it into the long, long grass c) at least say when she is likely to consider holding a second independence referendum. Party leaders are said to be split with some like Tommy Shepherd MP urging postponement and ex-Minister Alex Neil advocating grasping the new powers offered as it would be "neo independence". There are others who fear Nicola Sturgeon's natural caution will cause her to miss the boat and fail to capitalise on the alleged "mood" in Scotland that favours independence, particularly in light of the decision of the people of England and Wales to vote to leave the EU and the perceived xenophobic tone of Tory Ministers at their recent conference. Sturgeon's problems however, are not confined to deciding when to call for a second independence referendum; her biggest problem is there is no settled notion of what the SNP's version of independence would mean. Her first major mistake was to tie holding a second independence referendum to the result of the EU referendum stating that IF Scotland voted to stay in the EU while the rest of the UK voted to leave, a second independence referendum would be inevitable. Why should there be an "IF" to holding a second independence referendum? Why tie the "IF" to membership of the EU, which now means Scots are not being given a choice of independence, but rather a choice between two unions, in neither of which would Scotland be independent.

Despite the warnings that have been given about the dangers of tying independence to EU membership, the SNP is to debate independence at its conference this month - tied to membership of the EU. The wording of the resolution is, "If no viable solution to safeguard our membership as part of the UK exists, Scotland should prepare for a second independence referendum and seek to remain in Europe as an independent country." Of course the party means the EU and not Europe and is obviously quite prepared to ignore the one million, eighteen thousand, three hundred and twenty two (1,018,322) Scots who voted to Leave the EU. How many will be prepared to stand logic on its head, as the SNP is doing, and vote Yes, is anyone's guess but the party is making the wrong choice again and, if it pursues this course will run the risk of dividing the National Movement and kill the vote for independence.

When Mhairi Black MP made her maiden speech in Westminster she said, "the demand for independence in Scotland has nothing to do with Nationalism, it is based on a rejection of the neo-liberal, Thatcherite policies of this Tory government." She condemns the current Tory government, stating its mask has slipped "to reveal the xenophobic, often racist, nationalist, ugly face beneath." Like many others in the SNP, Ms Black goes out of her way to eschew Nationalism and in her regular column in The National on Saturday October 8th, she said, "I have never identified with the word "nationalist"..and what irritates me most is I am automatically labelled as such because I am in the SNP. I believe in independence for purely practical reasons...I want Scotland to have total control and power over its own policies, government and direction of travel" Although she absolves the SNP of displaying any of the nastier traits the self-styled Left tend to equate with Nationalism, as a political scientist she should know that Nationalism is not a synonym for racism, chauvinism, imperialism or xenophobia but her confusion does not stop there, she is also an ardent supporter of the EU where the one thing Scotland will not have is "total control and power over its own policies" and her socialism will be sacrificed on the altar of "neo-liberal", international capitalism.

Ms Black is not the only prominent member of the SNP who puts the pursuit of class politics before the pursuit of the re-establishment of the Scottish nation state and one wonders if the kind of society which she hopes to see in Scotland could be established in the UK, would she still favour Scottish independence? Listening to the rhetoric, it would seem to be unlikely and there are a great many of the newer members of the SNP fall into the same category. The mystery is why they are prepared to write off the entire population of the rest of the UK as beyond redemption but are falling over themselves to embrace the people of the EU as fellow travellers, when the entire history of the  member states of the EU shows a far greater tendency to embrace right wing politics, than has ever been shown by the people of England, Wales and Northern Ireland. One also wonders what would happen if there was any possibility of a pact with Corbyn's Labour Party. Unless the SNP can show why independence is in Scotland's best interests, including the 400,000 Scots who tend to vote Tory, how many of the current advocates of independence will still be there if Labour can work some kind of miracle and become an attractive prospect again?

It is said that if a politician can't ride two horses at the same time, they shouldn't be in the circus. At the moment the SNP is a circus, with its members running in more than two opposite directions. Nicola Sturgeon has her work cut out.

Sunday, 17 July 2016

Who Will Speak For The 1,018,322 Scots Who Voted "Leave"?

Few would disagree that the EU Referendum debate was a disgrace, littered with exaggeration, scare-mongering, distortion and lies but despite countless pleas from those who, in the main, were mere bystanders, that participants from both sides should treat the electorate with more respect, the distortions continue. Enraged that the majority of the UK electorate who voted, voted to leave the EU, leading players on the Remain side still blame Brexit for every fall in share prices, figures for consumer consumption and predictions of economic mayhem 20 years from now. George Osborne, before his removal as Chancellor, had concluded in light of Brexit, he could no longer stick to his promise that he would have wiped out UK's deficit by 2020. His statement had nothing, of course, to do with the fact that he was unlikely to hit that target in any case. Mark Carney, Governor of the Bank of England, stated he would reduce interest rates, in anticipation of the economic slump he predicted would happen if the UK voted to leave the EU. Having set up the markets to expect a cut of 0.25% in interest rates on Thursday 14th July, the MPC voted by 8 to 1 to leave the rate at 0.5%.  Sterling has already fallen by approximately 10% against the $ and a cut in interest rates would drop it further, so it has been postponed meantime. Next month is being flagged up as the next opportunity to effect the cut, unless Carney changes his mind again. Someone who was confidently predicting the economic consequences of Brexit for years ahead, has failed to read the markets twice in four weeks.

The blame game will continue, the scare-mongering will continue and the demonstrations to have the decision to leave overturned, will continue, accompanied by surveys showing an increasing number of people who voted Leave, who, it is alleged, have now changed their minds. It is the customary reaction of the europhiles and euro-fanatics when a referendum goes against them, as happened in Eire and Denmark, and we can be sure there will be plenty of EU funds made available to keep the campaign going. Allied to that, will be the constant repetition of the charge that those who voted Leave were "misled", "lied to" or "didn't know what they were voting for". It seems the Remainers, particularly those in Scotland, have learned nothing, absolutely nothing, about the reasons many people in Scotland voted Leave. If they did learn anything of the reasons people voted to Leave, they have chosen to ignore them while continuing to paint a completely false and quite insulting picture of the kind of campaign which the Leave side conducted in Scotland.

The National (Sat: July 2) carried a letter from a Spaniard, currently living in Dundee, while expressing her deep despair at the UK result opined, "the result was a victory for ignorance and xenophobia".."the result was misled by populism and misinformation"...the referendum..."rather than an exercise in popular sovereignty" has been.."a symptom of the British people's endemic ignorance...and in many cases of a deep underlying hate for the foreign". Obviously not a fan of irony, she continued,..."I have been insulted countless times these past few months by a considerable proportion of the population of Great Britain".  Alyn Smith, SNP MEP, in his heart-rending, lachrymose appeal to the EU Parliament, to allow Scotland to remain as a member, implored it "not to let Scotland down, as Scotland did not let the EU down". He wanted to tell the EU that, "UKIP does not speak for us". By his own estimation he gave the "speech of his life" pointing out he wanted "his country to be internationalist, cooperative, ecological, fair, European", as if being outside the EU prevented us from being any of those. Of course there was no mention of the more than one million of us who voted to Leave, nor that there might, just might, be reasons other than racism - like sovereignty for instance - that accounted for that sizeable vote. That would probably have been too much to expect, given the SNP sees no need for substantial change to the structure of the EU, believing that other than the odd unspecified tweak here and there, the structure is just fine.

The "little England", "isolationist", "xenophobic" sneers still run like a thread through the complaints of the Remainers, at the result of the vote but I have to admit, some of the hysteria actually makes me laugh. On one televised Remain march in opposition to the referendum result, there were some placards which proclaimed, "Internationalism-I am a Scots European" (like African American). There is a Common External Tariff around the 28 member states of the EU, which discriminates against the countries of the rest of the world and members are denied the freedom to negotiate trade deals on their own behalf, with countries outwith the EU. The Common Agricultural Policy has long been condemned for discriminating against countries of the developing world, denying them access to the EU and despite recent reforms many of the criticisms persist. Terminology like "Scots European" implies a EU state, which is supra-nationalism not internationalism. The Sunday Herald (Sun: July 3) had a Leader which was truly cringe-worthy in its attempt to proclaim Scotland's historical European credentials. "Scots are citizens of the European Union" it thundered (is there any other trading union bestows "citizenship" on its members?) is a "democratic abomination "..."Scots forced out of Europe" (not the EU). "Scots..been outward-looking European nation since 16th century" - the Auld Alliance actually dates from 1295. And, if any other proof was needed, "braw" comes from Swedish, "kirk" from Dutch and "ken" from German. Help ma boab, wha wid ae thocht? This surely ranks with George Bush's, "The problem with the French is they don't have a word for entrepreneur" No mention of the English language, much of which has its roots in Latin and which has borrowed extensively from French, but that might have suggested that "Little England" was also a "European nation" - God forbid.

The title of this piece is a serious question and when I tweeted, "If the 2IndyRef includes the SNP devotion to the EU, it will split the Nationalist movement"- I meant it. It received the usual replies from the usual suspects, most of whom completely missed the point. Of the 1,018,322 who voted Leave or 38% of the total vote, an estimated 440,000 were regular SNP supporters. It is not only grossly insulting to suggest that number of Scots electors voted to leave the EU on the grounds of "ignorance and xenophobia", it is sheer bloody stupidity, a level of stupidity we see unfortunately on social media daily. Immigration was not an issue in Scotland, nor in much of the rest of the UK I suspect, unless people want to claim the bulk of the UK population is racist. I wrote my first piece against Scotland seeking membership of the Common Market for the Scots Independent in 1968. Why? - because I had read the Treaty of Rome which laid out the aims very clearly - "ever closer political union". I actually understood what that meant and in the intervening years, during which I have corresponded with academics who shared my views on the Common Market/EEC/EU/Euro, from Eire, Austria, Norway, Greece, France and several other countries, I have seen nothing in the development of the EU to lessen my opposition. I left the SNP, after 35 years membership, in December 1990 because I disagreed fundamentally with its uncritical commitment to the EU, and I could no longer give the party the loyalty it required from a senior member. The EU has developed in exactly the way I predicted it would. There is nothing very special about that, hundreds of other SNP members made the same predictions, as did tens of thousands of people throughout the member states. The only people I know, who believe a country can be a member of the EU and retain its independence, are members of the SNP.

Several commentators, myself included, have suggested the size of the Remain vote in Scotland had much to do with Yes supporters' loyalty to the SNP, notwithstanding the 440,000 who voted Leave. There has never been the level of devotion to the EU in Scotland, as has been suggested by the SNP leadership and, if the SNP continues to trumpet its devotion to a political union, which will shortly be just as incorporating as the UK, it will lose the 2IndyRef so many Yes supporters so desperately want. It has consistently ignored making any kind of political argument for Scots joining the EU (If Sovereignty is in the DNA of the SNP, Why surrender it to the eg. what are the political advantages for Scotland in allowing EU law to supersede Scots law, given the defence of the separate Scottish legal system that has been mounted since 1707? The arguments in favour of Remain, as presented by the SNP, have been mainly economic (Economics of The and the economic case just does not stack up eg. Scots' exports to rUK are worth four times the value of Scots' exports to the EU. The UK has serious economic problems and an imbalance in the economy, with London domination of the rest of the country now at an unhealthy and totally unsustainable level. That said however, unemployment in the UK at 5%, is half of the average level of 10.2% in the EU, where just over 22 million people are unemployed. The average figure however hides the most serious levels of Spain 21% and Greece - 24%, while 60% of Italy's 11.3% unemployed have been without work for over one year, a fate shared by 70% of Greek unemployed.

Joseph Stiglitz, the Nobel Prize winning economist, has said, "the euro is at the root of many of Europe's problems" and "the currency was flawed at birth". He has also said the EU is in danger of falling apart. Now that the UK has decided to leave, the EU has to make one of two choices, it can INTEGRATE further or, it can DISINTEGRATE. Having travelled so far down the road of political integration, the dominant EU elite will do all it can to complete the integration, thus achieving the original aim of a country called Europe. The arguments about introducing fiscal integration in the eurozone have raged for years and many see that integration as the only way to deal with the damage already caused to the economies of Southern Europe. Until the European Central Bank can control the spending and budgets of the weaker members of the eurozone, those members will be a continuous source of difficulty. The determination of the ECB and Germany to prevent the Italian government from releasing the pressure on Italian banks, which would involve breaking EU rules on government subsidy, suggest the pressure to integrate is already underway. Only days ago, the German defence minister said that now that the UK had gone, Germany and France could move ahead with plans for greater military cooperation. With the political and economic integration that has already taken place, together with the recent evidence of pressure to further integrate, the SNP argument that Scotland in the EU would be there as an equal, sovereign and independent state, is just so much nonsense.

Whenever a 2IndyRef is held Scots will be faced with a choice of two political unions, in neither of which will Scotland be independent. The SNP will continue with its campaign for continued membership of the EU, on the false premise that Scotland will be independent and an equal partner. Unfortunately, a great many life-long, traditional Scottish Nationalists, myself included, will be forced to choose the present Union with the rUK, for the following reasons.
1) Opposition to the EU has always been based on the loss of sovereignty. The current situation, the austerity and mass unemployment forced on the countries of Southern Europe, confirms that loss more than at any previous period.
2) To choose the EU will divide the National Movement, with those Yes supporters whose devotion to the EU is unlikely to change, ranged against Traditional nationalists who see the EU as another incorporating political union.
3) No Westminster government could play the Project Fear card a second time, and hope to have the same effect. With the majority of the people of England and Wales having voted to leave the EU, any argument in opposition to Scotland leaving the UK must be weakened.
4) The National Movement will be completely united. I don't know a single Nationalist who would choose to stay in the UK on a permanent basis, whereas many Yes supporters and the leadership of the SNP have already chosen the EU.
5) For the reasons listed above I believe it will be easier to break away from the rUK, at a later date.

In the title of this piece I asked, "  Who Will Speak For The 1,018,322 Scots Who Voted Leave"? To date the answer has been "No one". Hopefully that will change.

Tuesday, 31 May 2016

Economics of EU

"Hold Your Nose And Vote Remain" Aye Right

Having almost totally ignored the politics of the EU, particularly the question of sovereignty, the Referendum campaign has been dominated by the so-called economics of what will happen if we stay in the EU or leave the EU. Unfortunately, the distortions and downright lies have left most people more confused than ever. I spent fourteen years teaching economics and then more than thirty years in the financial services industry. I don't believe economics has earned the title of "the dismal science" nor do I believe that if we laid all the economists in the world end to end, they still wouldn't come to a conclusion, but unfortunately it can lend itself to being misused and distorted by those who seek personal advantage by doing so. Before looking in detail at the Scottish economy and its interaction with the EU, it is as well to highlight certain claims which are made daily and which are presented as self-evident truths which are not to be questioned.

1. Economic forecasting
The most important thing to remember about economic forecast models is that forecasts are based on assumptions and, that given certain circumstances, some of which may be totally unrealistic, there will be a series of outcomes. It is not an exact science because if the assumptions are changed, the outcomes will also change. Indeed, models can produce required outcomes providing the proper assumptions are made. Change the assumptions and the outcomes will also change. No economics lecturer worth his/her salt, would ever begin a lecture without the classic, "assume ceteris paribus" or "all other things remaining equal". In other words, when the Treasury made the prediction that by 2030, every family in the UK would be £4,300 per annum worse off, if we left the EU, what they did not explain, was that this depended on their assumptions AND that whatever shocks may visit the economy during that period, the authorities would effect no change in policy. Of course that is totally unrealistic, as is the claim that forecasts of economic outcomes in fourteen years from now can possibly be accurate. Even more ludicrous was Alistair Darling's prediction that for those children born between 2012 and 2014, there would be a loss of £145,820 over their lifetime (75 years perhaps?) if we left the EU. When Chancellor he could not forecast interest rates six months ahead.

We could perhaps be more sympathetic to those who are prepared to swallow this piffle, if the Treasury, the CBI, the IMF, the Office for Budget Responsibility and the Institute for Fiscal Studies all had exemplary records for accurate economic forecasting - but they don't. A little over a month ago the Office for Budget Responsibility forecast a 2015-2016 budget deficit of £72.4 bn. Less than four WEEKS later the actual figure was £74 bn - a £1.6 bn under-estimate over less than four weeks. In 1989 the Treasury "Red Book" predicted that three years later 1992-1993, the government would have a small surplus. In the event, it carried the largest peacetime deficit on record. All of the above august bodies and the SNP, clamoured for the UK to join the Exchange Rate Mechanism, which Margaret Thatcher finally did in October 1990. At the SNP's annual conference the year before, the SNP debated a resolution calling on the Tory government to join the ERM. I was totally opposed because I knew it was the first step towards a single currency but, knowing that asking Conference to reject the motion would fail, I successfully moved an amendment to the effect that the SNP would oppose any move towards a single currency. Within two years, the strain of keeping the UK in the ERM caused major problems, including raising interest rates to 15% on 15th September 1992. Despite appeals from the above named organisations to remain in, accompanied by dire warnings of the consequences if the UK left the ERM, Chancellor Norman Lamont was forced to take the UK out of the ERM the next day, 16th September 1992.

Instead of the catastrophe predicted, the FTSE jumped 130 points the next day and by a total of 8% in the first two days after leaving the ERM which survived only another eighteen months before collapsing completely. The next decade or more was one of almost uninterrupted economic growth for the UK. As a IFA, I managed a great deal of clients' money, much of it invested in equities. For some months before the crash of 2008, I began to feel rather twitchy about the markets. Suddenly the money for mortgages began to be less available, there was a slowing down of what had been an unsustainable rise in house prices, certain funds began to look a bit wobbly. I spoke to a number of clients about taking them out of equities, which we did, thereby saving them a great deal of money when the markets crashed.  None of the organisations above saw the crash coming, or if they did, they did nothing about it, no warnings were given, no attempts made to soften the blow. Given their track record - and the few incidents outlined only scratches the surface of their failures - why should we listen to them now, as they regale us with their forecasts of tragedy if we leave the EU?

2. EU Funding Of Scottish Projects
Get into a discussion with any Scottish Nationalist or SNP supporter about how much Scotland is subsidised by the English taxpayer and how impossible it would be for Scotland to afford to be independent and maintain its current standard of living, and you will have a fight on your hands. To traditional Nationalists, the economics are irrelevant but even the economic Nationalists will argue till the kye come hame, that Scotland has the potential to be a prosperous country, well able to provide a decent society, with or without oil. Their reaction to the charge that Scotland cannot afford to be independent, is open derision and frequently, hostility. For some strange reason, when it comes to membership of the EU, the SNP and its supporters adopt the same position as Unionists did in the Referendum on Scottish Independence. Whereas it was argued that Scotland could break up a Union that had lasted for over 300 years, with little or no problem anent trade, currency and so on; leaving the EU - after membership of just over 40 years - will cause absolute mayhem. According to the SNP, over 336,000 Scottish jobs depend on trade with the EU. While it is not specifically stated, the suggestion is there, that to leave the EU would mean the loss of both trade AND the jobs. When that very same argument was made by Unionists during the Scottish referendum, the SNP and independence supporters quite rightly dismissed it as utter tripe.

The Spice Report of 15th October 2015, entitled "The Impact of EU Membership on Scotland", notes that the Scottish Government claims over 336,000 Scots jobs are directly linked to trade with the EU. Several times over recent weeks, as the referendum campaign has gathered momentum, Scottish Government representatives and other Remain campaigners, have stated quite bluntly that in the event of the UK - as a whole - voting to leave the EU, those jobs would be in danger of being lost. Whether or not that would be likely will be looked at below, but the first thing to note is that the Spice Report differs quite radically, in its estimates of Scots jobs linked to EU trade, from the estimates made by the SNP and Remain, of the number of Scots jobs which are linked to trade with the EU. Spice calculates that the number of Scots jobs which can be directly linked to trade with the EU, is 81,000, a figure which almost doubles to 150,000 when the multiplier effect is taken into consideration and jobs indirectly linked, are also included. That is fewer than half the total of the Scottish Government's calculations and the very least that needs to be done, is a comparison of the methodology employed by both parties .

As well as the implied threat of lost jobs if Scotland left the EU, there is the threat of lost funding We are all familiar with the signs which now appear all over Scotland, "Funded by the EU", which suggests that not only are Scots subsidised by England, which the SNP and independence supporters vehemently deny, we are also subsidised by the EU, which the SNP and independence supporters see as something for which Scots should be grateful. While the SNP can produce figures for Scottish contributions to the UK Treasury, in order to boost their case for independence, they are strangely reluctant to discuss or state Scotland's contribution to the EU. They have a great deal to say about what funds are provided by the EU in terms of research at Scottish universities, or how much Scottish farmers depend on EU funds for their annual subsidies, without ever mentioning Scotland's contribution to the EU. In the SNP's EU Website the party claims that Scotland's Net contribution to the EU is £8 per head per annum, but the value of investment from EU companies is worth £1,225 per head. In The National of May 27th 2016, the CEO of Business for Scotland claims that for every £1 Scotland contributes to the EU, we get £20 back. Neither the SNP nor the CEO explain how they arrived at those figures but it is suspiciously similar to the way The Treasury managed to conclude every person in the UK would be £4,300 worse off by 2030 if we left the EU and that calculation was greeted with derision right across the board. Even in its heyday in its relationship with the EU, Eire managed to get only £6 for every £1 spent. The Spice Report shows that between 2007 and 2013, Scotland made a NET contribution to the EU of £1.6 billion. In other words, just to avoid confusion, Scotland paid £1.6 billion more to the EU than we got back.

The claims which have been made by the Remain campaign, on the economic consequences of Brexit have now become so ludicrous, that the bulk of their claims are now simply dismissed by an electorate totally scunnered by the entire charade. The SNP insists they want nothing to do with the Tory-led campaign to Remain, preferring to make what they have deemed to be "the positive, progressive case" for staying in the EU. Unfortunately, there has been little or no evidence of it as we have yet to hear from the SNP, any political case, let alone a positive political case for surrendering sovereignty to a political union which all agree is centralist, undemocratic and corrupt. Despite claiming the EU badly needs reform, the SNP's ambitions for reform are so minimal they could be introduced without Treaty change, which the SNP sees as neither "advisable nor desirable". The SNP website also claims "just under half -42%- of Scotland's trade was with the EU in 2014, which amounted to £11.6 billion in cash terms". It must be the first time that 42% of something has been described as "just under half" of the whole. It should also be noted that only 42% of Scottish trade was conducted with the EU in 2014 worth £11.6 billion, whereas Fig 3 shows that 46% of trade worth £12.9 billion was conducted in 2013. The downward trend of Scottish trade with the EU is therefore continuing and, if the current problems in the Eurozone in particular and the EU generally, are not successfully addressed, that downward trend will continue, whether or not we stay in. Only ten of the EU members accounted for over 90% of the EU's trade with Scotland in 2014 and eight of those ten, are in the Eurozone (see Fig3).

We are reminded daily that the EU is a market of over 500 million people, but over 90% of Scotland's trade with the EU is conducted with approximately half of that number and the economic conditions which exist in the countries which make up the other half, don't offer much hope of any increase in trade any time soon. In fact, those who intend to vote Remain because they fear taking a "leap in the dark" by voting Leave, will find that staying in constitutes an even bigger leap in the dark because the EU has no idea of how it will repair the damage which has been done by the austerity policies forced on the Eurozone members.

Unemployment in the EU.
For trade to take place between countries, there has to be a long term balance between trading partners, each of which has to be able to bring something to the table. In the long term a balance has to be struck so that one trading partner is not constantly disadvantaged. In a large trading block like the EU, most members will have a surplus with some members and a deficit with others but in the EU, 24 of the 27 other member states have a trading surplus with the UK, with a similar pattern with Scotland. Thus, trading advantage is very much with the other member states, which is another reason they cannot afford to stop trading if we leave. As trading in services has advanced very little in the EU, 94% of Scotland's insurance products are sold in the rest of the UK, therefore the threats of what might happen to Scotland's financial sector are largely unfounded.

It is always possible to change trading patterns if a country suffers from a long-term trading imbalance or disadvantage and the balance of payments includes trade in "invisibles" ie services such as financial products. A trade imbalance can therefore be countered by trade in invisibles, which has been the situation in the UK for generations. However, when trade in services is restricted as it is in the EU, new trading partners have to be found, which is exactly what has been happening in Scotland as well as the UK as a whole. Fig 3 shows how the long term trend has been for trade with the EU to diminish over time and while Scotland shows an increase in trade with the EU between 2012 and 2013, the figure for 2014 shows trade with the EU had fallen to 42%. Remain tell us that as we have access to a market of over 500 million, it has to be in our interest to stay but it has already been shown the reality is that only 10 countries, with just under half of that 500 million, take 90% of Scotland's trade. For that to change the economies of the EU members will have to improve.

At the end of 2015 unemployment in the 28 members of the EU was 9.1%, the lowest level since July 2009, while in the Eurozone it was 10.5%, the lowest level since October 2011. Unemployment in the UK in the same period was 5.1% and 5% in the USA. This means that in the EU28, there were 22.16 million people unemployed, 16.935 million of them in the Eurozone (eurostat Jan 2016). Unfortunately, the average figures disguise the real nature of unemployment in the EU, with 14 states with levels over 8.3%, with seven of those with rates from 9% - 12.5% and Croatia - 15.1%, Spain - 21.4% and Greece 24%. Over 60% of Italy's 11.3% unemployed, have been without work for over one year while 70% of Greece's unemployed have shared the same fate. We hear a great deal of the opportunities the EU offers to Scotland's youth (under 25) but it has been noted above, the relatively small number of Scottish students studying in the EU. Unemployment levels for the under 25 age group in the EU, suggest that opportunities for Scotland's young people will also be limited. Youth unemployment in EU28 averaged 20% or 4.6 million, of which 3.2 million or 22.5% were in the Eurozone. Averages again hide the worst cases of Italy - 38%, Croatia - 45%, Spain - 47.5% and Greece - 49.5%.

When it can be shown that perhaps the EU is not quite the land of milk and honey that the propaganda suggests, Remain, the SNP and their supporters take refuge in the claim we need the EU to protect us from the dastardly Tories, who it seems, are set to govern in the UK for all eternity. The claim is that if it were not for the EU, workers' and women's rights would be abolished by the Tories, as an act of revenge and to please their neo-liberal financial backers and, of course, if it were not for the EU, those rights would not have existed in the first place. Not surprisingly, they have little or nothing to say about the way workers' and women's rights were trampled over in Greece, Eire, Spain and Portugal or the riots which have taken place in France, Belgium and other member states to stop their governments abolishing some of those rights. All we hear from the self-styled, alleged "Left" is, "Hold your nose and vote Remain".

Conscious that this is beginning to run on a bit, I will examine the possible consequences of coming out of the EU, with possible alternatives for when we are out, in the next instalment. However, just for the record:- Right to Holiday Pay was introduced in the UK under the Holiday Pay Act of 1938. UK workers have a right to 5.6 weeks holiday, in the EU it is 4 weeks. Maternity Leave:- UK law provides for 52 weeks, the second highest in the EU, where the minimum is 14 weeks. Maternity Pay:- the EU does not give pregnant women any minimum pay level during maternity leave. UK provides 90% of pay for 6 weeks and £140 pw for the next 33 weeks. Equal Pay:- UK introduced equal pay in 1970, before we joined the EU. Discrimination:- UK introduced race discrimination 1965, sex discrimination 1975, before the EU. Wages:- EU has no minimum wage law and only 18 members out of 28 have a minimum wage. UK has one of the highest minimum wages in the world.