Monday, 25 August 2014

5 Good Reasons To Vote No - Part 1

The Scottish independence debate is really warming up now as we draw close to the 18th September, when the people of Scotland will go to the polls. Alistair Darling and Alex Salmond will be trading blows again tonight in their second televised debate; the first one made for frustrating viewing as both politicians dodged questions and resorted to attacking one another's campaign tactics rather than discussing the core issues surrounding the referendum. Most notably, Darling repeatedly asked what the SNP's "Plan B" was for Scotland's currency if their plan for a customs union with the rump of the United Kingdom failed, and Salmond repeated sidestepped the question. Tonight's debate will no doubt be much of the same.

Personally, I remain firmly wedded to the Union. In case you hadn't noticed. But if you're still not confessed that the Union is best for Scotland, here's my 5 top ten reasons to vote "NO!" on the 18th, posted in two parts:

1. There aren't any definite plans on currency.

Scotland's First Minister, Alex Salmond, has repeatedly stated that the Scottish National Party's plan is to continue to use the pound sterling after seceding from the United Kingdom, stating that a currency union between the independent Scottish state and the UK would be desirable for all parties. However, Westminster has shown little enthusiasm for the idea of a currency union, and in February the Chancellor announced that the Coalition Government had formally ruled out the idea of an official currency union. In the last debate, the First Minister indicated that Scotland could continue to use the pound after independence whether or not the UK agreed, just as Panama uses the US dollar. This is entirely true- however, without a formal currency union, Scotland would find itself at the whims of the central British government's financial policy, and Scotland could not count on a safety net in the event of a future financial crisis. What's more, the pound sterling is backed by the Bank of England. The Scottish banknotes printed by Scottish banks are not in fact legal tender, but promissory notes that are backed by the Bank of England; since the Bank of England has no real reason to continue backing promissory notes printed by foreign banks in a foreign country, it is by no means clear whether Scotland would still be able to print its own currency upon independence. A further complication is that the SNP hope for Scotland to remain within the European Union post-independence, but EU officials, including European Commission  President Jose Manuel Barroso, have stated that Scotland will need to apply as a new country, meaning that Scotland will likely be expected to adopt the euro.

To make matters worse, the SNP have said that if they are refused a currency union with the rest of the UK, they will walk out on their £140 billion share of UK national debt. Apart from being childish, this is extremely dangerous financially- if the newly independent Scotland's first act as a sovereign country was to essentially default on its national debt, the impact on financial markets could be devastating. The SNP could rock Scotland's economy from Day 1.

2. Border controls would have to be introduced.

Currently, people are free to move between Scotland and the rest of the UK. The SNP have stated that this will remain the case post-independence; however, this is not guaranteed. A number of prominent pro-Union politicians have indicated that border controls between Scotland and the rest of the United Kingdom would have to be introduced; the principal concern is that Scotland plans to introduce a more lax immigration policy following independence, with Alex Salmond promising to increase net migration into Scotland by 10% in order to expand the workforce. Scotland's population is aging more quickly than the rest of the UK, meaning that the workforce needs to be expanded to pay for Scottish pensions.

Unfortunately, this is at odds with viewpoints on immigration in the rest of the country, where there is pressure for tighter border controls. This means that some politicians are worried immigrants will enter the rest of the UK through Scotland, necessitating border controls between England and Scotland. This could have a serious impact on Scotland's economy, since exports to the rest of the UK account for just over 50 per cent of total exports from Scotland, and imports from the rest of the UK account for around 64 per cent of Scotland's total imports. It would also be a major inconvenience for anyone like myself who is of both Scottish and English descent and regularly visits relatives on the other side of the border- and that's a sizable portion of the UK's population. What's more, if Scotland was required to go through the normal application process to the EU as Barroso suggested, it might be expected to join the Schengen Area, a common travel area established by an agreement in 1995 that enabled passport-free movement between 25 European countries, but not the UK and Ireland. This would almost certainly require border controls between Scotland and the rest of the British Isles.

To be continued.

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