06-09-2014, 07:56 PM
In a bind over ties
James Chessell
1558 words
6 Sep 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Independence As the long-awaited Scottish plebiscite nears, economic arguments loom large, writes James Chessell in Edinburgh.
Alan Russell coaches tennis in the Scottish town of Dunfermline, about 24 kilometres from Edinburgh, training the next generation of aspiring Andy Murrays. The 59-year-old considers himself Scottish "primarily" but also British. Even so he won't be voting "yes" when more than 3.3 million Scots are expected to have their say on whether they should remain part of the United Kingdom.
The September 18 referendum poses all sorts of questions about national identity at a time when the internet, cheap airfares and, in the case of Europe, freedom of movement are meant to be eroding the importance of borders. Polls have consistently suggested that most Scots will vote to stay in their 307-year old union with the UK, but a late surge to the independence campaign has rattled shares in companies like Royal Bank of Scotland as well as the British pound.
Russell, whose plan to vote against secession puts him for now in the majority, sees no contradiction in being part of two national communities.
He was proud, not just when Murray won gold at the London Olympics in 2012, but for the contribution of Scottish athletes to Team GB's overall medal haul. Russell will always support the Scottish rugby team. But if the British & Irish Lions are touring Australia, he will line up "very enthusiastically" with fans from all corners of the UK and Ireland.
"I would consider the Welsh and Irish and English as being kindred and cousins and close," he says. "We often draw parallels between our relationship with England and that of New Zealand with Australia, but I think it is inherently different. I just can't see how in an age of globalisation, consolidation and sharing that it can make sense to fragment and splinter and duplicate."Economic forces crucial
Russell is not alone in nominating economic forces as a deciding factor. The independence debate has been emotional and bad-tempered at times. There is some truth to what Scottish commentator Deborah Orr describes as the "knee-jerk, sentimental, victim-mentality, hate-the-English-colonisers patriotism that some Scots display".
But polls and surveys have repeatedly shown that regardless of their views on Scotland's place in world – even if they support independence – voters will make their choice based on more pragmatic reasons.
"National identity is of course correlated to 'yes' and 'no' voting a little bit," says Jan Eichhorn from the University of Edinburgh's School of Social and Political Science. "But what is much more important to people is the question of what will happen to Scotland's economy after the referendum."
It is for this reasons the Better Together campaign has built its case on the issue of macroeconomic risk. Led by the former Labour chancellor Alistair Darling, and backed by the three main British political parties, the pro-union supporters warn a vote for independence means weakening Scotland's banks, losing the pound and eroding the public service. They insist with some justification the Scottish population is on average older and less healthy and gets more public spending than the rest of the UK.
And then there are the dangers of dwindling income from North Sea oil. While an independent Scotland would get a great share of the oil reserves due to its geography – a key selling point for the Yes campaign – there is one drawback: production has fallen steadily since 1999. Santos chief executive David Knox is one of many Australian business figures with ties to Scotland who is worried about an economy relying too heavily on just one industry.
Knox grew up and studied in Edinburgh and considers himself Scottish, British and Australian. His first job was with Shell working on the Brent Bravo platform in the North Sea more than 30 years ago.
Business leaders are not fond of uncertainty and Knox's personal view is no different. "I really struggle to see the benefits of independence," he says.
"Often it's talked about in terms of oil but you have to remember, if we look forward, Scotland's oil production is going to halve over the next 10 years.
"I think there is a compelling case that it is better off as part of a much larger country, stronger financial system, better wealth flows, better income flows. That will result in far more jobs."
For his part, Scottish First Minister Alex Salmond argues an independent Scotland would be more prosperous – "the 14th wealthiest nation among the developed countries in the OECD" he claims. For Scotland to get its proper slice of the economic pie, he argues there must be a clean break from the uncaring politics of Westminster.Resentment a focus
Salmond has largely skirted technical questions about issues such the currency union and focused instead on resentment over the impact of conservative policymaking stretching back to Margaret Thatcher on Scotland's industry and social democratic values. "Yes Scotland" may be positive name for a campaign but it might as well be "No London". As Salmond claimed in April: "The attraction of capital and talent to London is now one of the defining features of the UK economy."
The arguments made by Salmond, a former bank economist, are just as pragmatic. An independent Scotland will still celebrate the Queen's Birthday, just at it did for a century before the parliamentary union of 1707, but the economic levers will be pulled in Edinburgh.
Would an independent Scotland manage its economy any better than London? Until this week it seemed the answer was academic. An endless series of polls suggested the No campaign enjoyed a solid lead. Bookmakers were predicting the chances of Scotland breaking away from the UK were less than 20 per cent.
This changed, however, on Tuesday, when a YouGov survey put the Better Together lead at just 6 percentage points (not including undecided voters), down from 22 points less than a month ago and 14 points in mid-August. With two weeks to go, the race was on again.
The pound fell as investors bought protection against a sharp drop in sterling in the event of Scotland seceding. All three UK parties say they would not agree to a shared currency. Salmond claims, not convincingly, they would change their tune if his side gets up. Meanwhile, shares in companies with operations on both sides of the border such as Royal Bank of Scotland were sold off. Prime Minister David Cameron was asked if he would resign if Scotland walked away from Britain. He said no, but admitted it "would break my heart if Scotland were to leave the UK". Threat to Cameron
A No vote may also break his government at next year's general election. There is just one Tory MP in Scotland (Nationalists like to point out there are twice as many pandas in the Edinburgh zoo) and Scottish conservative leader Ruth Davidson has even talked down Cameron's chances of winning the next UK general election given his unpopularity north of the border. Even a Yes vote will cause problems, given Scottish MPs will still be elected next year because the formal breakup is not due until 2016 at the earliest. There is speculation Cameron may face calls to postpone the election, an unprecedented decision in peacetime Britain.
The first genuine market reaction to the prospect of Scottish independence is a reminder of the broader implications of the referendum. The sun may have set on the British empire but it still has a strong voice in international affairs due to its permanent membership of the UN Security Council, the G7 and the G20. Losing 5.3 million Scots from a union of 63.1 million people will not put these positions in danger but will curb UK influence.
The ramifications extend beyond the UK. EU bureaucrats have been watching with growing unease, knowing a Yes vote will give the movements for Catalan and Flemish independence movements in Spain and Belgium renewed vigour. With anti-European sentiment running high, it is easy for these groups to generate political momentum.
Michael Bryce was, until recently, the patron of the Scottish Australian Heritage Council. The husband of former governor -general Quentin Bryce was born in Australia but retains attachment to Scotland through his family heritage. "I go to Scottish dinners and we sing Scottish songs and we wear kilts. It stirs my blood. I think this decision is for people who are born in Scotland or live in Scotland and not for romantic people like me who are looking at it from far away."
Nevertheless, Bryce says he would probably vote No if he was eligible because of the uncertainty of the alternative. He quotes the ad hoc anthem , F lower of Scotland – "those days are passed now/and in the past they must remain" – as evidence the battles with England are the stuff of history.
But minutes later he can't help himself. "I know a lot people would like to give the English a kick up the bum. I know a lot of people in Scotland feel that way. They were not encouraged to have their own culture as part of the union for a long time".
Fairfax Media Management Pty Limited
James Chessell
1558 words
6 Sep 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Independence As the long-awaited Scottish plebiscite nears, economic arguments loom large, writes James Chessell in Edinburgh.
Alan Russell coaches tennis in the Scottish town of Dunfermline, about 24 kilometres from Edinburgh, training the next generation of aspiring Andy Murrays. The 59-year-old considers himself Scottish "primarily" but also British. Even so he won't be voting "yes" when more than 3.3 million Scots are expected to have their say on whether they should remain part of the United Kingdom.
The September 18 referendum poses all sorts of questions about national identity at a time when the internet, cheap airfares and, in the case of Europe, freedom of movement are meant to be eroding the importance of borders. Polls have consistently suggested that most Scots will vote to stay in their 307-year old union with the UK, but a late surge to the independence campaign has rattled shares in companies like Royal Bank of Scotland as well as the British pound.
Russell, whose plan to vote against secession puts him for now in the majority, sees no contradiction in being part of two national communities.
He was proud, not just when Murray won gold at the London Olympics in 2012, but for the contribution of Scottish athletes to Team GB's overall medal haul. Russell will always support the Scottish rugby team. But if the British & Irish Lions are touring Australia, he will line up "very enthusiastically" with fans from all corners of the UK and Ireland.
"I would consider the Welsh and Irish and English as being kindred and cousins and close," he says. "We often draw parallels between our relationship with England and that of New Zealand with Australia, but I think it is inherently different. I just can't see how in an age of globalisation, consolidation and sharing that it can make sense to fragment and splinter and duplicate."Economic forces crucial
Russell is not alone in nominating economic forces as a deciding factor. The independence debate has been emotional and bad-tempered at times. There is some truth to what Scottish commentator Deborah Orr describes as the "knee-jerk, sentimental, victim-mentality, hate-the-English-colonisers patriotism that some Scots display".
But polls and surveys have repeatedly shown that regardless of their views on Scotland's place in world – even if they support independence – voters will make their choice based on more pragmatic reasons.
"National identity is of course correlated to 'yes' and 'no' voting a little bit," says Jan Eichhorn from the University of Edinburgh's School of Social and Political Science. "But what is much more important to people is the question of what will happen to Scotland's economy after the referendum."
It is for this reasons the Better Together campaign has built its case on the issue of macroeconomic risk. Led by the former Labour chancellor Alistair Darling, and backed by the three main British political parties, the pro-union supporters warn a vote for independence means weakening Scotland's banks, losing the pound and eroding the public service. They insist with some justification the Scottish population is on average older and less healthy and gets more public spending than the rest of the UK.
And then there are the dangers of dwindling income from North Sea oil. While an independent Scotland would get a great share of the oil reserves due to its geography – a key selling point for the Yes campaign – there is one drawback: production has fallen steadily since 1999. Santos chief executive David Knox is one of many Australian business figures with ties to Scotland who is worried about an economy relying too heavily on just one industry.
Knox grew up and studied in Edinburgh and considers himself Scottish, British and Australian. His first job was with Shell working on the Brent Bravo platform in the North Sea more than 30 years ago.
Business leaders are not fond of uncertainty and Knox's personal view is no different. "I really struggle to see the benefits of independence," he says.
"Often it's talked about in terms of oil but you have to remember, if we look forward, Scotland's oil production is going to halve over the next 10 years.
"I think there is a compelling case that it is better off as part of a much larger country, stronger financial system, better wealth flows, better income flows. That will result in far more jobs."
For his part, Scottish First Minister Alex Salmond argues an independent Scotland would be more prosperous – "the 14th wealthiest nation among the developed countries in the OECD" he claims. For Scotland to get its proper slice of the economic pie, he argues there must be a clean break from the uncaring politics of Westminster.Resentment a focus
Salmond has largely skirted technical questions about issues such the currency union and focused instead on resentment over the impact of conservative policymaking stretching back to Margaret Thatcher on Scotland's industry and social democratic values. "Yes Scotland" may be positive name for a campaign but it might as well be "No London". As Salmond claimed in April: "The attraction of capital and talent to London is now one of the defining features of the UK economy."
The arguments made by Salmond, a former bank economist, are just as pragmatic. An independent Scotland will still celebrate the Queen's Birthday, just at it did for a century before the parliamentary union of 1707, but the economic levers will be pulled in Edinburgh.
Would an independent Scotland manage its economy any better than London? Until this week it seemed the answer was academic. An endless series of polls suggested the No campaign enjoyed a solid lead. Bookmakers were predicting the chances of Scotland breaking away from the UK were less than 20 per cent.
This changed, however, on Tuesday, when a YouGov survey put the Better Together lead at just 6 percentage points (not including undecided voters), down from 22 points less than a month ago and 14 points in mid-August. With two weeks to go, the race was on again.
The pound fell as investors bought protection against a sharp drop in sterling in the event of Scotland seceding. All three UK parties say they would not agree to a shared currency. Salmond claims, not convincingly, they would change their tune if his side gets up. Meanwhile, shares in companies with operations on both sides of the border such as Royal Bank of Scotland were sold off. Prime Minister David Cameron was asked if he would resign if Scotland walked away from Britain. He said no, but admitted it "would break my heart if Scotland were to leave the UK". Threat to Cameron
A No vote may also break his government at next year's general election. There is just one Tory MP in Scotland (Nationalists like to point out there are twice as many pandas in the Edinburgh zoo) and Scottish conservative leader Ruth Davidson has even talked down Cameron's chances of winning the next UK general election given his unpopularity north of the border. Even a Yes vote will cause problems, given Scottish MPs will still be elected next year because the formal breakup is not due until 2016 at the earliest. There is speculation Cameron may face calls to postpone the election, an unprecedented decision in peacetime Britain.
The first genuine market reaction to the prospect of Scottish independence is a reminder of the broader implications of the referendum. The sun may have set on the British empire but it still has a strong voice in international affairs due to its permanent membership of the UN Security Council, the G7 and the G20. Losing 5.3 million Scots from a union of 63.1 million people will not put these positions in danger but will curb UK influence.
The ramifications extend beyond the UK. EU bureaucrats have been watching with growing unease, knowing a Yes vote will give the movements for Catalan and Flemish independence movements in Spain and Belgium renewed vigour. With anti-European sentiment running high, it is easy for these groups to generate political momentum.
Michael Bryce was, until recently, the patron of the Scottish Australian Heritage Council. The husband of former governor -general Quentin Bryce was born in Australia but retains attachment to Scotland through his family heritage. "I go to Scottish dinners and we sing Scottish songs and we wear kilts. It stirs my blood. I think this decision is for people who are born in Scotland or live in Scotland and not for romantic people like me who are looking at it from far away."
Nevertheless, Bryce says he would probably vote No if he was eligible because of the uncertainty of the alternative. He quotes the ad hoc anthem , F lower of Scotland – "those days are passed now/and in the past they must remain" – as evidence the battles with England are the stuff of history.
But minutes later he can't help himself. "I know a lot people would like to give the English a kick up the bum. I know a lot of people in Scotland feel that way. They were not encouraged to have their own culture as part of the union for a long time".
Fairfax Media Management Pty Limited