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John Swinney

Scotland doesn’t need permission to use the Pound

There’s been a lot of hot air and printer’s ink spilled over the past few days over the contentious issues of Scotland’s future currency and its membership of the EU.

George Osborne Could block a formal union

George Osborne
Could block a formal union

Even the London media seemed to agree in part that the Chancellor, George Orborne, came to Edinburgh to “bully” the Scots. His message was unequivocal – if you leave the Union, you leave the Pound as well.

There was a similar message from the EU. Commission President, José Manuel Barroso, told the BBC’s Andrew Marr that it would be ‘extremely difficult’ for an independent Scotland to join the European club because it would need the unanimous approval of all existing members.

The Chancellor’s speech had been thoroughly trailed well in advance. He argued that there was no legal reason why Scots should keep the pound if they voted for independence. The trouble with this is that any decision on whether Scotland uses the Pound or not may not be his to take.

What he CAN do is block any move towards an official currency union. But he cannot stop any other country using the Pound as its currency without fundamentally changing the nature of the Pound itself.

The Pound could continue to be used in Scotland

The Pound could continue to be used in Scotland

Sterling is a reserve currency. It is the third most popular such currency in the World. It is also one of the most traded currencies globally. Both politicians and civil servants in London have stressed time and again their commitment to open markets and free trade. There’s no way they could stop Scots using the Pound without undermining this principle.

Even the Financial Times accepts that no-one in England can stop an independent Scotland from using the currency for transactions and savings. “The country would simply have an informal currency union like Panama or Hong Kong do with the US,” it explained, adding: “Scotland could circulate uncollateralised sterling. Alternatively, it could use Scottish pounds exchangeable at parity and backed by sterling reserves.” In other words, business largely as usual.

However, it’s worth asking if a formal currency union is actually worth the effort and perhaps the heartache. Just remember what the Governor of the Bank of England said a short time before – that such a union would require “some ceding of national sovereignty”.

The Bank of England could ignore Scotland's needs even in a currency union

The Bank of England could ignore Scotland’s needs even in a currency union

If there has to be a ‘Plan B’, could it not be such an informal union? It would mean that John Swinney or his successors would have the control over the financial levers that he so desires – or at least much more control than he’d be allowed under a formal agreement.

Even with a seat on the Bank of England’s top table, the Scots would have to accept the monetary and fiscal restrictions imposed on them which, as now, appear to depend more on conditions in the South East of England than any other part of the country.

And one of the real concerns about a formal union would quickly turn into reality if Holyrood pursued social democratic policies while Westminster (now permanently Tory perhaps?) followed a diametrically opposite path. As we saw when the old Czechoslovakia split in two, a currency union can’t work when two countries pursue very different political and economic solutions.

Could Scotland also use the Euro?

Could Scotland also use the Euro?

So an INFORMAL currency union could have benefits.

And might other options not be considered? What if Scotland were to move to a cashless society? What if Scotland were to adopt more than one currency – both the Pound and the Euro for instance? Might the country decide on the ‘Bitcoin’ as an alternative? With electronic trading, these solutions need not be so far-fatched!

Then there’s the on-going question of EU membership. This has been a bone of contention for months.

The Scottish Government has argued that both successor states after separation would be members. However, the Commission President clearly disagrees.

José Manuel Barroso 'Extremely difficult' for Scotland to join the EU

José Manuel Barroso
‘Extremely difficult’ for Scotland to join the EU

It is probable that José Manuel Barroso is worried by the growing number of secessionist movements around Europe, especially in Spain and Italy. He will be concerned that, with the EU already in a fragile state after the financial crisis, nothing else should undermine the Union as it currently exists.

But once again, shouldn’t Scotland be thinking laterally? Norway appears to be Alex Salmond’s favourite Scandinavian country. It is not a member of the EU – and although some Norwegian ministers have acknowledged some disadvantages, there are also advantages and the lack doesn’t seem to have done the country any harm.

One could argue that NOT being a member of the European club could have some positive results for at least some Scottish sectors.

Scotland's fishing industry suffered under the CFP

Scotland’s fishing industry suffered under the CFP

Fishing for instance has been hard done by as a result of the Common Fisheries Policy. One could imagine Scotland making common cause with Norway and Iceland to declare a controlled, more protected zone in the North East Atlantic and the North Sea.

Unlike England where there’s a strong movement to leave the EU, most Scots would prefer to remain within the club. But if that offer is not on the table, would it really matter? Trade is carried out between companies – not countries. That would continue unabated.

There may be advantages for business. The European Commission has long been blamed for imposing excessive regulation and red-tape and making corporate administration more costly. An independent Scotland outside the EU could choose more freely what it needed to adopt.

The First Minister will deliver his speech to ‘deconstruct’ George Osborne’s arguments shortly. He also expected to deal with the European issue, something ministers have already dismissed as ‘pretty preposterous’. But it may be worth throwing other ideas into the mix. After all, there are still over six months before Scotland goes to the polls – and an awful lot can happen in that time.

Scotland invented retail banking

The Bank of Scotland’s surveys have produced consistently positive economic news

The Bank of Scotland’s Purchasing Managers’ Index (PMI) has shown that growth in the Scottish economy gained momentum at the start of the year, picking up after easing back a little at the end of last year. Indeed, January saw the “most marked increase” in manufacturing and service sectors for three months.

Professor Donald Macrae 'Growth momentum into 2014'

Professor Donald Macrae
‘Growth momentum into 2014′

According to the bank’s chief economist, Professor Donald MacRae, the index was at its highest level for three months and back to the highs of last summer. “Output grew strongly in both manufacturing and service sectors,” he said, accompanied by rising employment and increasing levels of new business. The growth in new export orders after two months of decline is particularly welcome. Business confidence continues to increase ensuring the Scottish economy not only continues the recovery but enters 2014 with growth momentum.”

Scotland’s Finance Secretary, John Swinney, described it as a solid start to the year. “The continued progress in Scotland’s economic recovery,” he said, “is helping to create more jobs and opportunities, with Scotland outperforming the UK in terms of employment, unemployment and inactivity rates. We know challenges will still remain as the recovery progresses, and that’s why there will be no let-up in the Scottish government’s determination to secure economic growth through our investment programme in skills and capital projects.”

Scotland Office minister David Mundell insisted that it proved that the country continued to do well as part of the UK. “We are providing the conditions for Scottish businesses to grow and create jobs because we are part of a strong, secure and influential UK economy,” he said. There is no room for complacency however, and we must continue to do everything we can to support Scottish business up and down the country. That is why from April we are introducing our employment allowance which provides Scotland with a boost of £100m by cutting the National Insurance bill of every Scottish business.”

Housing Association properties in Glasgow

There’s been an outbreak of consensus, or at least solidarity. Folk in Scotland do not like the “bedroom tax”, what the Westminster government calls “the spare room subsidy”, and all parties, except the Tories, have united in parliament to put a £50m line in the budget to abolish it.

The Scottish Parliament unites against the 'bedroom tax'

The Scottish Parliament unites against
the ‘bedroom tax’

Along with the poll tax, the bedroom tax will go down in history as a serious political mistake, foisted on Scotland by a government in London that was addressing an imagined problem in the south-east of England. It meant that council tenants, and housing association tenants, were losing up to a quarter of their housing benefit, if they were deemed to have a spare room. Up to 77,000 of the poorest households in Scotland were affected, many of them sliding into rent arrears as a result – four times as many as the year before.

The SNP government was gathering its brows like gathering storm over the issue and demanding that London raise the cap on welfare spending to offset the tax. Labour and the Liberal Democrats realised this was doing their Better Together referendum campaign no good at all. The SNP finance secretary John Swinney saw an opportunity to do away with the tax altogether and unite Scotland against Westminster at the same time. So he accepted a Labour suggestion that local councils and housing associations would be reimbursed for any losses in rent due to the bedroom tax.

Same Sex Marriage Bill Passed by a substantial majority

Same Sex Marriage Bill
Passed by a substantial majority

It was a marriage of convenience for both parties rather than a marriage for love. That came earlier in the week when MSPs, by a majority of 105 to 18, approved of the Same Sex Marriage Bill. Scotland has followed England to become the 17th country in the world to recognise gay marriage. The main churches argued fiercely against it, right to the end, and are still fearful it will lead to them being forced by the equality laws to offer gay marriage ceremonies in their chapels, churches, temples and mosques.

But the parliamentary consensus did not last long. By Thurday’s question time, Labour’s Johann Lamont was reading out a list of company chief executives who said an independent Scotland would be a more difficult place to do business. They included the boss of BP and the leaders of the main supermarket chains. Alex Salmond replied that whatever their chief executives might say, there was no sign these major companies were about to cut their investment in Scotland.

Ruth Davidson Concerned about abolition of corroboration

Ruth Davidson
Concerned about abolition of corroboration

He was slightly more consensual over pleas from the Conservative leader Ruth Davidson and the Liberal Democrat leader Willie Rennie for a stay of execution over the abolition of corroboration in criminal prosecutions. Perhaps it was the fact that the parliament’s justice committee had also asked for a rethink. He offered a review by the former judge Lord Bonomy – but only of the additional measures that might be taken to safeguard against the miscarriage of justice, such as increasing the majority required for a guilty verdict from 8 out of 15 jurors to 10 or 12.

The government is still on a collision course with most of the legal profession over what I think is largely a semantic debate. Scotland might be one of the few countries in the world to require “corroboration” before a case can be taken to court, but most countries have some sort of “sufficient evidence” test before a prosecution is mounted.

Two disturbing reports have come out this week about the health service in Scotland. One, from a BBC investigation, found that up to £800m a year was being stolen from the NHS by various frauds carried out by staff and patients. They range from false prescriptions, to theft of equipment, to dentists charging for gold fillings when in fact they were using cheaper materials. Such frauds, identified by health boards over the last five years have risen by 42 per cent. Let’s hope that is a sign that more are being discovered.

Elderly care 'unsustainable'

Elderly care ‘unsustainable’

The other report came from Audit Scotland which warned that the care bill for elderly patients in hospitals and nursing homes was set to double to £8bn over the next 15 years. That’s “unsustainable” it said. Not enough was being done by local health boards and councils to treat elderly people in their own homes. It seems we need to follow through on our pioneering policy of free personal care.

Finally, I see that Scotland is over-represented in the GB team at the Winter Olympics in Sochi. We have 18 sports men and women there, a third of the British contingent. We are, after all, the land of ice and snow. Our best hope is in the game we invented, curling. Eve Muirhead may well lead the women’s team to a gold medal and the men, skippered by David Murdoch will only be a stone’s throw behind. Watch out too for Andrew Musgrave in the cross-country ski-ing. He recently beat the Norwegians at their own game. But, of course, we don’t go there to win but to simply compete.

The poetry of Robert Burns
Hand written manuscripts on display at the National Library of Scotland

It has come three years late but it’s welcome for a’ that. We have finally seen a significant fall in unemployment. It is down to 6.4 per cent, the lowest figure for five years and a big fall from the usual figure of over 7 per cent. (It’s still 7.1 per cent for the UK as a whole.) In particular there has been a very welcome fall in youth unemployment, though it is still nearly 20 per cent.

Unemployment is down

Unemployment is down

Does it mean the years of austerity are over? Certainly not. Firstly, it’s not clear if the figures can be trusted – they seem to have caught the experts by surprise. Secondly, the bald figures do not give us the breakdown for part-time or temporary work – and the Labour Party tell us that a third of jobs in Scotland are now part-time or temporary. Thirdly, real earnings are still falling behind inflation. And fourthly, the Chancellor seems intent on cutting more jobs from the public sector.

So I’m left feeling unsure about whether we are entering a period of sustainable economic growth or just stumbling towards another quagmire. Certainly the Scottish government has been complaining that the budget it’s been given is still in austerity mode. But when the finance secretary John Swinney outlined its £35 billion worth of spending to parliament this week he did manage to squeeze out a little more money for childcare (£59m) and free school meals (£55m) and £20m to help council tenants offset the so-called bedroom tax.

Alex Rowley MSP Victor in Cowdenbeath

Alex Rowley MSP
Victor in Cowdenbeath

This was enough to persuade the Labour Party and the Liberal Democrats to add their votes to the SNP majority and the budget was passed by 90 votes to 13. There was a further outbreak of collaboration when Labour’s finance spokesman Iain Gray revealed he was in “constructive” discussions with Mr Swinney about the best way to protect people from the “Tory bedroom-tax”. This is rainbow politics indeed.

While this was going on at Holyrood, across the water in Fife the parties were fighting each other in the Cowdenbeath by-election. It was no surprise that Alex Rowley held the seat for Labour – he is after all the leader of Fife council. On a low turnout, of 34 per cent, the other parties did as expected, the SNP coming second, the Conservatives third. But the Liberal Democrats suffered another disaster, coming in fifth, behind UKIP.

In the wider referendum campaign, we’ve had another of those curious opinion surveys showing that if people thought they would be £500 a year better off, then support for independence rose from its usual 30 per cent to over 50 per cent. And if they thought they would be £500 a year worst off support for independence sank to just 15 per cent. The Scottish Social Attitudes Survey also shows that voters are not much influenced by arguments over currencies or membership of the EU. Professor John Curtis says, in his analysis here in the Caledonian Mercury, that this is because opinion on these issues is equally divided among supporters of both the Yes and the No camps. It leads him to the conclusion that the economy is the crucial battle-ground.

Prof John Curtice Are modern Scots just a 'parcel of rogues'

Prof John Curtice
Are modern Scots just a
‘parcel of rogues’

I am reluctant to disagree with the world expert on these matters but here goes. I think the 1500 Scots who took part in the survey were not being serious. They were caught in bar-room mood. We are not such a parcel of rogues to be swayed by a £500 bribe, or by predictions over currencies or memberships. I think as we get closer to 18th September, people will vote with their heart not their head, and cultural and historical issues will determine the matter.

There was evidence of that Scottish heart last week when 3-year old Mikaeel Kular went missing from his home in Edinburgh. Hundreds of neighbours turned out to help the police search for him. And then, sadly, they turned out again to lay flowers and attend a church service to remember him. His body was found in woodlands in Fife and his mother Rosdeep Kular appeared in court on Monday charged with his murder.

We suffered another very different tragedy on the same day young Mikaeel was found. This time there were no crowds, only a mountain rescue team. Donald Tiso (50), of the famous Tiso family of adventurers, died while climbing with a friend on Ben Starav south of Glencoe. He was a director of the chain of 21 Tiso outdoor clothing and equipment stores and a keen photographer and supporter of the Scottish music scene. His father, who founded the firm in the 1960s, was also a keen mountaineer but died in a boating accident when he was just 57.

Burrell Collection Items can now be leant out

Burrell Collection
Items can now be leant out

MSPs had one final duty this week. They passed the Burrell Collection Lending and Borrowing Bill, a private piece of legislation which will allow Glasgow City Council to lend pieces from the Burrell art collection to galleries abroad. It breaks one of the conditions laid down by the shipping magnate Sir William Burrell when he left his huge collection of world paintings, tapestries, sculptures etc to the city when he died in 1958.

It’s a timely example of Robert Burns’ famous line: “Nae man can tether time nor tide.” Circumstances change. One generation cannot bind another.

To celebrate Burns Night – on Saturday – the National Library has put on public display one of its greatest treasurers, the Glenriddell Manuscript, copies of some 50 poems, all in Burns’ own hand, and 27 of his letters sent to his friend Captain Robert Riddell in the 1790s. They somehow found their way to a gentleman’s club in Liverpool which disgracefully put them up for sale in 1913. Luckily, a rich American John Gribbel from Philadelphia bought them and returned them to Scotland. Unlike Sir William Burrell he did not need a parliamentary vote to persuade him to do the right thing. The collection contains such classics as Holy Willie’s Prayer and the aforementioned Tam o’ Shanter.

Unfortunately it doesn’t contain his later song, “A Man’s a Man for a’ That” which is perhaps best suited to these times of austerity and with which I raise a glass to honest Rab on his birthday.

“Is there for honest Poverty
That hings his head, an a’ that:
The coward slave we pass him by,
We dare be poor for a’ that !
For a’ that and a’ that,
Our toils obscure an’ a’ that,
The rank is but the guinea’s stamp,
The Man’s the gowd for a’ that.”

Unemployment down to 6.4%

The latest official figures from the Office for National Statistics show that unemployment in Scotland has fallen to its lowest level for almost 5 years. This follows a sharp drop towards the end of last year and has brought the unemployment rate down to 6.4% – its lowest level in January for five years. The number of jobless now stands at 176,000, down by 25,000 on the previous quarter.

John Swinney MSP 'Positive news'

John Swinney MSP
‘Positive news’

Earlier this month, the Scottish government published estimates which concluded that the economy here had grown by 0.7% in the third quarter of last year. This was in addition to a number of other recent surveys which have also shown very positive signs about the state of the economy. For instance, the Scottish Chambers of Commerce published a survey which suggested that economic activity and growth were both at their highest levels for many years, suggesting that the worst of the recession may now have passed.

The figures have been broadly welcomed across the political spectrum. Scotland’s Finance Secretary, John Swinney, said that the figures “provide more positive news for the Scottish economy, with the number of people in employment in Scotland continuing to increase, following on from last week strong GDP results. Scotland has a higher employment rate and lower unemployment rate in England, Wales or Northern Ireland. Consistent increases in employment levels show that the policies of the Scottish government to create jobs and boost the economy are making progress.”

In the view of the Scottish Secretary, Alistair Carmichael, “it’s extremely encouraging to see unemployment in Scotland at its lowest level in nearly 5 years and employment increasing by 90,000 over the past year. The number of people in work in Scotland is close to the record highs seen before the recession and there has been a big fall in the number of people claiming Jobseeker’s Allowance.”

Iain Gray Need to 'look behind the headlines'

Iain Gray
Need to ‘look behind the headlines’

For Scottish Labour, the finance spokesman, Iain Gray, described the latest figures as welcome but added that the Scottish government needed to commit to further action. “We need to be confident that these additional jobs are sustainable,” he said, “and will lead to increased consumer spending. We need to look behind the headlines and make sure the opportunities that are available full-time are secure and give people the scope to plan for their future and put our economy back to pre-recession levels.”

Colin Borland, the Head of External Affairs at the Federation of Small Business, said that every business which had increased their headcount over the last quarter had their part to play in today’s statistics. “These figures match the FSB’s, which show that Scottish small firms plan growth and investment in 2014. It’s important to remember that the recovery is neither uniform or assured,” he added. “Communities across Scotland need small enterprises and all levels of government to collaborate to continue to drive growth and create jobs.”

The employment figures were also welcomed by Grahame Smith, General Secretary of the Scottish Trades Union Congress. He described the figures as “a great way to start the New Year. It also encouraging that both women and men experienced falls in unemployment over the last quarter and that long-term unemployment starts to fall across all age–groups.” But he went on to add that there were reasons to be cautious about the strength of the recovery, concluding that the figures, while welcome, “provide no cause for complacency.”

The number of women in work at a 21 year high

The latest employment figures have provided a little seasonal cheer. Between August and September, the number of people unemployed in Scotland fell by 7,000 to 196,000; meanwhile, the number in employment rose again to a new total of 2,546,000. That means that there are now 83,000 more people in work than the same period last year. Across the UK as whole, the jobless total also fell. It was down by 99,000 to 2.39 million bringing it down to its lowest level for four and a half years.

John Swinney MSP 'A positive sign'

John Swinney MSP
‘A positive sign’

Scotland’s Finance Secretary, John Swinney, described the figures as “another positive sign that employment in Scotland continues to increase and that Scotland’s economic recovery is ongoing. Scotland,” he stressed, “has a higher employment rate, lower unemployment rate and lower inactivity rate than England, Wales or Northern Ireland. Consistent growth in employment shows that the policies of the Scottish Government to create jobs and boost the economy are making progress.”

The Secretary of State for Scotland Alistair Carmichael added that every new job created in Scotland “represents someone getting back into work and is to be welcomed. Today’s figures reinforce how well Scotland is doing as part of the UK and they are good news for people and families across the country.”

The statistics were particularly good when it came to the number of women in employment. That has reached a 21-year high at 1,233,000 and was the highest figure since the series began in 1992. This was welcomed by Grahame Smith, General Secretary of the STUC. But he also sounded a cautionary note by saying that “no one should underestimate the very significant challenge that remains in returning both the employment and unemployment rates to pre-recession levels. It is also important to note that today’s statistics do not include any new information on the quality of jobs created or indeed the performance of real wages in Scotland which of course continue to decline at UK level”

Chancellor George Osborne

Growth double the forecast in March

In his Autumn Statement, the Chancellor, George Osborne, has said the country is growing faster than any other major economy thanks to his policies. Britain, he claimed, would be back in the black within five years but the job of recovery was “not yet done” and money was still tight. As expected, millions would have to wait longer before they got a state pension, all to “keep track with life expectancy” something that would save future taxpayers £500bn.

The Chancellor says the Scottish Government budget will increase

The Chancellor says the Scottish Government budget will increase

In his 50-minute speech, Mr Osborne stressed that he wanted a “responsible recovery” and warned of “more difficult decisions” to come on spending. He acknowledged that the effects of the economic crash on family budgets were still being felt, but he insisted that the hard work of the British people was paying off and “we will not squander their efforts.” He insisted that “the plan is working – it is a long-term plan for a grown-up country. The job is not yet done but Britain is moving again – let’s keep going.”

The Chancellor had good economic news – the economy is expected to grow 1.4% this year – double the 0.6% predicted at the Budget in March. The Office for Budget Responsibility now predicts 2.4% growth next year up from its previous estimate of 1.8%. The level of borrowing has fallen more than forecast and forecasts for employment have been revised up. However, Government Departments in Whitehall can expect to face a further series of cuts over the next three years – £1bn in total.

The planned 2p rise in fuel duty scrapped

The planned 2p rise in fuel duty scrapped

As expected, Mr Osborne announced that offshore wind farms would receive Government support instead of onshore ones and he also announced plans to invest £375bn in energy, transport, communications, and water projects. He also announced that next year’s planned rise of 2p a litre for fuel would be scrapped

For Scotland, the Chancellor said that the government’s budget here would increase by £308m over the next two years. Unlike departments South of the Border, those run by Holyrood would face cuts of less than 0.2%. However, the Scottish Finance Secretary, John Swinney, argued the increase failed to make up for earlier cuts and said that the Autumn Statement showed the “damaging economic consequences” of remaining within the UK.

FSB welcomed some of the measures

FSB welcomed some of the measures

The reaction of business was positive. Andy Willox, the Federation of Small Businesses’ (FSB) Scottish policy convenor, said that Scotland’s small businesses would welcome many of the measures outlined this morning by the Chancellor. “By refusing to increase fuel duty,” he said, “he has recognised the big impact the price at the pumps has on independent enterprise and the economies of remote communities. “By abolishing employers’ National Insurance Contributions for employees under the age of 21, the UK government will give both firms and young people’s job prospects a boost. To have the maximum impact in Scotland, we must see our education system producing more young people with the right skills for the modern workplace. We must also ensure that we tackle the other barriers to small businesses recruiting.”

By contrast, Grahame Smith, Scottish Trades Union Congress (STUC) General Secretary said there was “nothing today’s statement to help embed the recovery and create decent jobs. While recent growth is largely attributable to consumer spending, real wages continue to fall at rate unprecedented in modern times. Yet the Chancellor brazenly adopted a triumphalist tone just as the Office for Budget Responsibility (OBR) revised down its forecast for wages growth. He continues to ignore the glaring disconnect between growth and living standards.

Grahame Smith STUC Nothing to embed recovery and create jobs

Grahame Smith STUC
Nothing to embed recovery and create jobs

“Business investment,” he added, “is contributing very little to growth and remains well below pre-recession levels. Net trade made a negative contribution to growth over the last quarter. This is not the ‘rebalancing’ promised by the Chancellor in 2010. Additional departmental cuts were announced although the Institute for Fiscal Studies (IFS) and others have questioned whether it will even be possible to implement previously announced cuts.”

Philip Hogg, Chief Executive of industry body Homes for Scotland, acknowledged that the Chancellor had drawn attention “to the weakness of housing supply and measures being implemented to address supply-side constraints such as the issuing of £1bn in loans to unblock large house developments. Builders face the same difficulties throughout the UK so we look forward to learning whether this loan facility applies in Scotland or, if not, what consequential funding is to be received north of the border. With yesterday’s Scottish housing statistics showing continuing falls in output and demonstrating the fragility of any market recovery, we hope that councils will look to take every opportunity to support the delivery of new homes in their areas.”

And in his first thoughts on the Autumn Statement, Graeme Brown, Director of Shelter Scotland, warned that the Chancellor’s optimism about the recovery “won’t be shared by the families struggling to pay their rent or mortgage, or the 4,574 children who’ll face homelessness this Christmas in Scotland. Beyond Westminster, thousands of people will be wondering if today’s announcements mean that their family faces yet another cut to the money they have to live on.”

Should anything distract from the referendum campaign?

The Independence Debate is a hot topic – but not always in the way you’d expect!

It’s perhaps no surprise that the independence question has been on many people’s lips this week. What’s been more surprising has been the way that the White Paper has not necessarily been the main focus of attention. Instead, it has been a mixture of three issues – the seeming failure of the ‘No’ camp to understand how this campaign should be fought; the intervention of the Spanish Prime Minister; and the sad demise of Scotland’s ‘quality’ newspapers just when they’re needed most.

Alistair Darling Too cerebral to lead the 'No' campaign?

Alistair Darling
Too cerebral to lead the ‘No’ campaign?

Depending on which opinion poll you look at, the ‘No’ vote is currently ahead. But there’s a widespread view that the result of next year’s referendum will be extremely close. The reason for that has to do with the huge number of undecided voters at this stage. It would seem therefore that there’s all to play for. But when you listen to some of the regular academic commentators, they point to the last Scottish election when there was a similar number of ‘don’t knows’ in the days before the poll. Most went on to vote SNP.

Some of the many who are watching and waiting think the ‘No’ campaign is in danger of losing the argument because they’re too focused on fact – economic fact in particular. And part of the problem is that it’s led by a former Chancellor of the Exchequer. There’s no doubt that Alistair Darling is a highly intelligent, very articulate man. But his comments tend to concentrate on what he knows – the economic impact of separation.

But for many people, the final decision about where to put their cross on referendum day will be based on emotion rather than economics. It will depend on how you ‘feel’ – Scottish or British! The ‘Yes’ campaign understand this all too well. Their messages are designed to appeal to the heart rather than (or perhaps as well as) the head. It uses history, heritage and culture as defining features of what makes us ‘Scottish’.

The British Raj Much the same arguments were used there against claims for independence

The British Raj
Much the same arguments were used there against claims for independence

A British Asian business woman mentioned this recently with reference to the history of India. In the closing years of the Raj, the colonial government used the same economic arguments to try to persuade the people of the sub-continent about the folly of their desire for independence. So the supporters of freedom from the Empire changed tack and focused on the importance of Indian culture and heritage and why it made sense to go it alone. We all know who won THAT argument.

Until the proponents of the ‘No’ campaign here understand that their emphasis on the ‘facts’ and the risk to our economic future isn’t cutting much ice with the ‘don’t knows’, they’ll continue to lose the argument. If they want to win, they need to find an emotional reason to bind the union together and that’s a harder thing to pull off.

It’s almost certain that the Spanish Prime Minister, Mariano Rajoy, knew exactly what he was doing when he made his comments about an independent Scotland. However, his words were probably more aimed at a domestic audience than Holyrood. With nationalists in both Catalonia and the Basque country both contemplating leaving Spain, he certainly had THEM in mind when he made his claim that Scotland would NOT automatically be a member of the EU.

Mariano Rajoy Speaking about Scotland with Catalonia in mind?

Mariano Rajoy
Speaking about Scotland with Catalonia in mind?

“I would like that the consequences of that secession be presented with realism to Scots” he said after a summit in France. “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”.

That prompted discussion as well. Would Madrid veto an independent Scotland from joining the European Union (at least in the short term) in order to frighten off the nationalists at home? Would some of the other members think the same? Italy has its own separatist movement in the north of the country. There’s even a small nationalist community in Bavaria as reported here in recent weeks.

Speaking on BBC Scotland, the Finance Secretary, John Swinney, reiterated the Scottish Government’s position that Scotland was already part of the European Union by virtue of its membership as part of the UK. All it would take for Scotland to be accepted as an independent state would be an amendment to The Treaty on European Union, although this would have to be approved by all member states.

“We are members of the European Union,” he explained. “Once Scotland votes for independence – a Yes vote in September 2014 – we remain still within the European Union and the day of independence doesn’t happen until 2016. So we are doing this from within the European Union as part of our membership.”

Both The Scotsman and the Herald have been hit by falling circulation

Both The Scotsman and the Herald have been hit by falling circulation

Finally, there’s growing concern over what’s happening to Scotland’s ‘quality’ newspapers – the Herald and The Scotsman. Both have seen their circulation fall dramatically. People are reporting difficulty in finding copies of either title in major news agents in both Glasgow and Edinburgh. However, they’ll hold considerable sway over the political establishment which may not quite have realised how far these venerable newspapers have fallen.

It should be in everyone’s interests to have the widest possible public debate on Scotland’s future over the next 11 months. But for a paper like The Scotsman to respond by further cutting back – the Saturday magazine is likely to disappear in the New Year – that debate may well have to take place elsewhere.

Employment has risen for ten consecutive months

This morning saw yet more positive news about the Scottish economy, with a number of Scots in work continuing to rise. The latest official figures from the Office for National Statistics (ONS) show that employment in Scotland went up by 16,000 over the three months to September. By contrast, unemployment also rose but only by 1000, meaning that the Scottish jobless rate is 7.2%, a little below the UK average of 7.6%.

Alistair Carmichael MP Scottish Secretary

Alistair Carmichael MP
Scottish Secretary

In the view of Scottish Secretary, Alistair Carmichael, “Today’s Figures Show Encouraging News for Scotland. the number of Scots claiming Jobseeker’s Allowance has fallen by 21,400 over the past year and is now at its lowest level over four and a half years. That should be welcomed. The small increase in unemployment over the last three months, and the recent events at Grangemouth in the shipyards on the Clyde, are stark reminders there can be no letup in our efforts to stabilise the economy and secure jobs for the future.”

The Scottish Finance Secretary, John Swinney, added that this was the 10th monthly report in a row to show “continued improvement in employment rates as we support more people into work. This consistent growth in employment shows that the policies of the Scottish government to create jobs and boost the economy by making progress.” He at knowledge to however that youth unemployment remained a challenge – although the number of young people in employment was continuing to rise.

The news was also welcomed by the Federation of Small Business in Scotland Whose Scottish Policy Convener, Andy Willox, described improvement as “certainly encouraging. With business confidence continuing to rise,” he added, “and more firms looking to invest, this is another sign that a sustained recovery could be underway. But is scratch that but it is by no means guaranteed. We must a focused on creating the conditions which allow small businesses to do what they do best – spot opportunities, serve their communities, create revenues and create jobs.”

John Swinney MSP Finance Secretary

John Swinney MSP
Finance Secretary

There’s growing evidence of confidence returning to the High Street. The latest figures show that Scotland’s retail outlets recorded an increase in volume and value of sales for the third quarter in a row. The growth may not have been as strong here as in the rest of the UK – but the Retail Sales Index for Scotland showed the volume of sales increased by 1.1% between July and September – 2% higher than the same period in the previous year. The equivalent figure for other parts of the country show sales rising by 1.6% and are now 2.7% higher than 12 months ago.

Scottish Finance Secretary, John Swinney, said the figures showed “significant” economic progress was being made in Scotland. “These figures follow on from recent GDP and labour market statistics,” he added, “which show employment in Scotland is at its highest level since the summer of 2008 and a continued growth in the economy and new figures also showing a growth in the number of new businesses.

“These positive figures highlight the significant economic progress being made in Scotland. This continued growth in Scotland’s economy is helping to create more jobs and opportunities for the people of Scotland. By continuing to invest in businesses we can help build sustainable economic growth for Scotland and highlight the country’s position as a place of international trade and investment.”

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