For last few days I have been responding to comments by various pro Independent Scotland bloggers so I thought I would try and pro-active post.
When I was in business and we had a problem to resolve, I kept on telling my staff, I don’t care what happened in the past or who did what to whom and when, all I need to know is what is today’s problem that you wish me to solve for the future. Lessons can be learnt of course, procedures changed, revised training and etc, so we can go forward. As someone said “History doesn’t repeat itself but it does rhyme!”
But the key point is “we cannot change the past, we must live in the here and now so that we can change our future!”
The central issue is the Economy and Finance where the SNP have singularly failed to offer and vision of the future. Such that they are continually being told, vote NO!. Not out of spite or some conspiracy engineered by London but because no credible financial plan has been presented. I am quite certain that the various international figures and industries that seem so antagonistic to iS would have taken a different attitude if they had seen how they could run a business successfully and make a decent profit for their shareholders.
On Sept 19th nothing will change.
But companies like BAE systems, Babcock and other will cease to invest in Scotland and put future investments in other parts of the UK so there will be a gradual decline in the overall manufacturing capability of Scotland. Finance will relocate to London, with limited effect on short-term employment but the same long-term problem, gradual reduction in staff numbers, tax take, and investment.
So by 2020 you will begin to see a difference.
UNLESS iS develops an economic policy that is sufficiently attractive for long term investments.
Between Sept 19th 2014 and sometime in 2016 when Scotland has to have a General Election, the major terms of independence will have to be agreed by both parties and been voted on and approved by the Commons, House of Lords and signed off by The Queen.
In that period, Scotland will still be part of the UK and will use the UKL and its various financial services companies will come under the protection of the various authorities based in London.
By “Independence day” iS will have to decided on its currency. Using the pound outside a currency union would be catatonically stupid so iS will need its own currency iSL, set up a central bank that issues that currency and have enough reserves to support it. That is a basic pre-requisite for membership of the EU (other things being equal of course). You do not have any reserves at present but you can borrow from London or I suppose elsewhere. The Interest on that loan will be higher than now but much higher, and maybe unaffordable, if iS effectively defaults on its share of the UK debt.
At present the iS industrial base is neither large enough nor sufficiently broad based to produce the necessary long term fiscal prosperity, so iS has to construct a fiscal policy that will make it attractive to business investors so that iS can slowly create a stronger and bigger industrial base, which will take time, upwards of 10 years to be significant and maybe 20 years before it can deliver a large contribution to the iS economy.
Any predatory fiscal policy adopted by iS will of course be reciprocated by rUK, which can more easily afford such a fiscal war. Independence does not mean you have any freedom to do what you like only to wave your own flag.
The consequence of all of this is that the social policies as promoted by the SNP will be simply unaffordable and the Scottish people will see a considerable reduction in budgets for the NHS, Housing, education, social services and etc.
My wife worked in Greece where large numbers of the population were employed by the state, very low productivity, endless red tape, though not with particularly high incomes, but the jobs were secure for life, great benefits such that any change to their short term life style was heavily resisted.
If that sounds familiar to Scotland that is because it is!! And therein lies the structural problem, just as in France, which we all know about, and pretty much the same in Italy, Spain, Portugal etc.
Please don’t tell me about Ireland which suffered from a “housing boom” but which has taken the hit financially and is recovering, whilst once again its brightest and best leave for the UK or elsewhere.
And the UK survived by dint of massive spending cuts, a very successful finance industry and it sheer size and economic credibility.
I see no evidence at all that the SNP has the intellectual competence to address these issues and to necessary leadership skills to admit to the Scottish electorate that they have been “sold a pup” but lets us go forward anyway!
Sweden and Germany have gone thru the pain of readjusting their economies, seen a reduction in life style but are now doing very well economically, so it can be done.
Now, iS can be successful and be a “Denmark”, no question about that, but are the Scots willing to take on the short term fiscal pain (20 years or so) for that to be achieved or are they so addicted to “their state subsidised life style” – as is the rest of the UK – that iS ends up like Greece?
The choice is that of the Scot and they will live with the consequences but as I have said, so will we all but we don’t get a vote.
Now I really am going to stop rabbiting on about Scotland.
Thanks for all your patience, tolerance and information.
Peter S