“It’s the economy stupid”

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A significant problem with the independence debate is that at heart, independence is only worthwhile (ignoring loyalty, history and heritage), if the numbers add up. The central tenets of separation are;

Self determination (myopic, local, parochial)
Fairness (their version, are we different from the rest in UK)?
Equality (their version, why would iScot be fairer)?
Being different and better (their unsubstantiated view)
Reversal of austerity measures (so called “bedroom tax” -which we can void at will- spending and benefits protection)
Protecting state services, NHS etc. (see above and devolved)
Ownership of assets (oil) (selfishness)?

Add in a large degree of left wing politics (ignoring the elements of anti Westminster and the English ) and that is essentially the separatists agenda.

To be successful iScot has to be economically viable in the long run. Separatists are fond of pointing to other smaller “successful” nations as evidence that we can do it and that Scotland is a rich country. Like Norway? http://www.ukscot.co.uk/ukscot_referendum_blog/ perhaps that aspiration should be revisited.

Although Scotland has had tax varying powers for many years, it has never used them, that really perplexes me, why? Can’t find any reasons anywhere, yet that is what they claim independence will give them. Shout loudly, “We already have them”.

Did you know we have additional new agreed tax powers coming?

http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/news/news-calman.htm

Separatists claim “we are a rich country”, this is a mischievously incomplete sentence, which should read “we are a rich country as part of the rich and successful UK”

iScot is not an officially recognised nation state, that’s what the whole pro indy debate and referendum is trying to achieve. So “we” are not in existence yet and whether we will be “rich” post independence is very moot.

Post a Yes vote ScotGov (Salmond/Sturgeon/Swinney) will negotiate to settle the terms of independence. This will entail currency union – already refused some time ago and restated in no uncertain terms in February, all UK parties agree, no CU.

Debt will require agreement (refusal to accept debt is international economic suicide) and will be balanced against other assets and liabilities, such as oil and gas. We will be negotiating with cUK who will fight their corner ferociously as “we” (UK) are weaker apart, a simple fact. The cUK can of course, with a larger non oil dependent economy, recover much more quickly.

Trident, if it goes (some debate about that) who pays costs? All part of the negotiation.

So it is likely we will get a tough/hard/raw deal from a separatist perspective. This is so because they “have” to do a deal, they can’t walk away from the table, the timetable for independence has been set. The thoughts and consequences of reporting independence “can’t be done” after a Yes vote are unthinkable.

Add to the economic mix that our interest rates would undoubtably rise due to a reduced credit rating (high debt, high spending, single source skewed economy, employment mix, age profile, removal of EU rebate) and the economic model starts to groan.

You will note there are no GDP, growth figures or share of tax and spending comparisons quoted here, I could do that but it would bore many readers, you are all intelligent, look them up. There are a number of independent reports (although every report that does not match the separatist agenda is usually rubbished) detailing the potential post indy situation this is one of the latest from NIESR independent, established since 1938 http://niesr.ac.uk/sites/default/files/publications/dp426.pdf

I’ll let the economists among us argue the fine detail and forecasts and financial modelling, I would rather focus on common sense. But here is one analysis of the oil position (ignoring recent drop in output and lowered forecasts) https://fullfact.org/factchecks/will_an_independent_scotland_be_better_off-28889

The white Paper (here is a summary http://news.bbc.co.uk/1/shared/bsp/hi/pdfs/26_11_13_scottishindependence.pdf) needs a thorough analysis as it is so biased and thin on costs it beggars belief, each week that goes by it loses credibility. As a document to base an economy on it is frankly pathetic. However, at 670 pages, the normal non-numbers trained voters have no real chance of comprehending the whole document. It’s an independence visual aid, it looks pretty held up in the air with a smile.

Here is the crux, here is why “it’s the economy stupid” should be ringing bells and sounding alarms;

Increased spending promises like triple pension lock, childcare, bedroom tax repeal, protection for minimum wage, tax allowances, tax credits, free this that and the other, embassies, broadcasting, privatisation of Scottish Royal Mail and so on.

Lower receipts like reduced oil revenues (http://www.oilandgasuk.co.uk/cmsfiles/modules/publications/pdfs/EC040.pdf) reduced corporation tax, reduced landing charges (APD), debt costs, EU rebate,EU trade tariff contribution, loss of UK green energy subsidies etc.

Never mind the P&L accounts, the balance sheet just does not add up!

Update 24/5/14 £3.25 Billion (via Scottish accountants) for indyref tax system? John Swinney does not know, Salmond thinks £250 million, it will be more than a billion and at least twice any real estimate.

http://www.scotsman.com/news/politics/top-stories/scottish-independence-tax-plans-could-cost-3-25bn-1-3416681

A well thought out fiscal analysis July 214

http://www.economicsuk.com/blog/002036.html#more

“It’s the economy stupid”

But don’t worry, if we vote for permanent economic separation we can always put taxes up and borrow more, gulp!

Ps if you think it’s not solely the economy, try this https://stevensayers.wordpress.com/2014/04/06/scotland-the-union-onwards-and-upwards/

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