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The changing calculus of Scottish Independence

Summary:
Much was made of the first poll in favour of Scottish independence.  The calculus is changing.  I would argue that for a variety of reasons, independence is now more attractive. Relative to 2014, the first benefit is removing Scotland from the influence of two polar opposite, but pernicious political offerings, from Labour and the Tories.  During the 2014 referendum, major parties in the UK all pretty much lived within the rules of acceptable discourse, and were led by groups with different, but relatively pragamatic visions for ther UK. This is no longer the case.  Both major parties are infested with varieties of racism;  Labour, antisemitism, and the Tories, Islamophobia.  Both parties are led by cabals of ideologues.  The Labour leadership is held by a faction of anti Western

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Much was made of the first poll in favour of Scottish independence.  The calculus is changing.  I would argue that for a variety of reasons, independence is now more attractive.

Relative to 2014, the first benefit is removing Scotland from the influence of two polar opposite, but pernicious political offerings, from Labour and the Tories.  During the 2014 referendum, major parties in the UK all pretty much lived within the rules of acceptable discourse, and were led by groups with different, but relatively pragamatic visions for ther UK.

This is no longer the case.  Both major parties are infested with varieties of racism;  Labour, antisemitism, and the Tories, Islamophobia.  Both parties are led by cabals of ideologues.  The Labour leadership is held by a faction of anti Western Marxists, held somewhat in check by an unhappy and beseiged more moderate Parliamentary Labour Party.   The Tories are run by national populists, shadowing the ever more extreme agenda of the far right, now in the form of the Brexit Party.   There is a sensible faction, but this is a much weaker rump than the sensible faction of Labour.

The second benefit follows from the first.  Both major UK parties economic offerings depart from sound economic policy.   Scottish independence potentially offers a respite from alternating Marxism and economic populism.

Further benefits require us taking the perspective of the former UK unit.   One relates to part of the calculus that has worsened since 2014.

At that time, leaving the UK would not have meant any significant change in trading relationships with the rest of the UK and Europe.  Now, on the plausible assumption that Scotland would be accepted as a member of the EU, Scotland would swap avoiding Brexit, and retaining continuity of membership of the EU single market, for breaking its single market with the UK.

However, conditional on leaving, and if Northern Ireland or, more remotely, even Wales were ultimately to leave, this would increase the economic pressure on the UK to stay within the customs and regulatory orbit of the EU.  [Because trade with those in the EU single market would form a larger percentage of Egland’s trade than it does with the current UK as a whole].  Of course a caveat to that is that if Northern Ireland leaves, then the current impasse over the backstop would be sorted, and the England/Wales rump UK, or England alone, would be politically free at least to pursue FTAs with the EU and other countries.

Continuing with the idea of taking the perspective of constituent parts of the UK as a whole, not just Scotland, it strikes me that if the Union were to be dismembered entirely, this would not, as before, be a tragic weakening of a potentially positive force in the global economy and polity.  By contrast, beset by the economic and political evils offered by either of the current major parties, the England or England/Wales rump would be defanged somewhat and able to wreak less harm.  The ideal outcome, taking on board the assumptions made thus far, would be for the separate and weakend parts all to be embedded within the EU.  Scotland leaving the UK would be the first step along that route.

There are other costs and benefits of independence, of course, but they are as they were before.  The issue of Scotland’s currency, post independence, and whether it could set up a credible independent central bank, and whether it would ultimately be coerced into joining the Euro.  Scottish public finances once the subsidy from the rest of the UK is withdrawn.  And questions about the health of politics north of the border given the current hegemony of the SNP.

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Tony Yates
Economist. Consulting, lecturing, a book. Ex Prof at Bham, Ex BoE staffer. Macro, policy, monetary econ, occasional nonsense.

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