PART 1: Erroneous claims on trade and business:
The proposed question for the 2014 referendum is ‘Should Scotland be an independent country?’ which presents a clear choice of a Yes vote for Scottish independence or a No vote for remaining in the UK. This series of blogs will aim to analyse the arguments that are made for remaining in the UK, and will compare them with what could be possible for an independent Scotland.
The campaign for the No vote is presented by the ‘Better Together’ movement, driven by the Conservative / Lib Dem UK government and the Labour party – with Alastair Darling leading the movement. The claim is that Scotland is economically, politically and socially stronger as a partner within the United Kingdom and this is defined by three core areas: Prosperity, Security and Interdependence as listed on the website (http://bettertogether.net/pages/the-ve-case). I intend to in a series of posts (this being ‘part 1’) to go through each of these points and I will also reference Alastair Darling’s recent speech at the John P Mackintosh lecture (full speech here: http://www.newsnetscotland.com/index.php/referendum/6217-better-together-alistair-darling-delivers-the-john-p-mackintosh-lecture ).
For part 1 I’ll focus on the claim that Alastair Darling made on trade & business.
Alastair Darling quote: “Scotland is far better represented abroad as part of the UK than we could ever hope to be as a separate state. The nationalists tell you that the UK embassies and consulates do not represent Scots.
Try telling that to Scots who find themselves in trouble in a far flung part of the world and can rely on the UK embassy to help them out. To the businesses seeking trade. They open doors for our people and businesses across the globe.
Farmers, fishermen and women, businesses big and small all reap the benefits of the UK’s global reach and global influence.
Losing this influence would be a massive loss. It would be impossible to replicate it on a smaller scale.”
I’ve worked in 27 countries around the world in all 6 inhabited continents, so I think it is fair to call myself a global businessman. I am operating in a medium size business level but in 11 years of travel I cannot claim a single case where association with Britain has differentiated our business, with the key factor exclusively dependent on the quality of product and service that we have to offer. I believe that Alastair Darling’s claim is shown to be invalid by the following 2 points:
- There are actual metrics for assessing the volume of global business that countries perform in the modern world. Interestingly, a major development in the modern globalised world is that businesses from small countries have equivalent access to the global market that was previously dominated by global superpowers (a net effect of this being reduced influence for the UK, as demonstrated by the deconstruction of the Empire). The list of countries with the most global trade per capita is dominated by relatively small nations with Germany being the only country in the top 20 with a population >15 million (http://en.wikipedia.org/wiki/List_of_countries_by_exports_per_capita). The UK actually appears at 36th on this list, 1 place behind Gabon – an African country with a population of 1.5million, making a mockery of the claim that the UK is somehow uniquely placed to enable global business. I call this conclusive evidence that it is possible for smaller countries to have global business influence and I do not believe there are any barriers that would prevent Scotland from very quickly joining this list.
- Outside of Europe the genuine perception is that Great Britain, or the UK in political terms, is England (a point which I believe to be exacerbated by the fact that the language ‘English’ is globally denoted by the Union Flag). The general perception is that Scotland is another European country that the rest of the world hears little about – much like the many other small European nations like Belgium, Denmark, Sweden, Norway etc – the assumption being that we just go about our business without any fuss or need for global headlines. Scotland truly lives in the shadows in this sense and therefore I think any claims that we significantly benefit from association to UK embassies are spurious; in reality we’re disadvantaged against other small nations without our own distinct representation around the world.
The point on trade is not made exclusively in global terms, it is claimed that the large volume of trade that we have with England negates the case for Scottish independence.
Alastair Darling quote: “We trade more with England than we do with all other countries in the world combined. We export £45bn worth of goods and services – 40% of our total output to the rest of the UK.
The UK is the world’s oldest and most successful single market. Europe has worked for over 50 years to create a market without borders for goods and services. Why on earth would we want to turn our biggest market into our biggest competitor?”
At a glance this sounds potentially significant but is it actually relevant in the debate on our government structure? There are simple examples that identify this as a red herring, with the most obvious being Canada. Canada competes with Norway on an annual basis to be crowned with the highest standard of living in the world – it is safe to say it is doing well for itself. And yet, much like Scotland it has a population ~10% the size of its neighbouring country – replacing our English example with the USA. In fact 73.7 % of Canada’s total export is to the USA (http://www.ic.gc.ca/eic/site/cis-sic.nsf/eng/h_00029.html), but with Canada this accounts for ~25% of their total output (an indication that they are a bit better at keeping the wealth in their own nation). Despite this there is no move or appetite for Canadians to send all of their taxes and high level policy decisions to the American government. Instead both countries worked to establish the North American Free Trade Agreement (NAFTA).
The point is actually made about the EU by Alastair Darling as well – it is significant that the Europe has been working for over 50 years to remove borders for trade. The EU made big inroads into this, and in many ways has superseded the political purpose of the UK which in turn makes the UK redundant. But in the modern world trade agreements can be set up in a variety of forms, an example of how the EU allows for a degree of freedom of its member states is shown by Sweden, Iceland, Denmark(all in the EU) having a trade agreement with their neighbour Norway, which is not in the EU. And just to look at the Norwegian example, a country of 5million people (same as Scotland) but with a much larger and more challenging land mass than Scotland – yet their trade balance with the UK shows what a strong position they are in (http://www.ssb.no/english/subjects/00/minifakta_en/en/main_16.html)
So why would we want to turn our biggest market into our biggest competitor? The fact is that ticking along in the shadows of our biggest competitor is impairing our economic growth, and our social development is suffering. Despite Scotland’s great wealth we are find ourselves in a position where our businesses are suffering and our public sector lives under the threat of indefinite austerity measures as Westminster attempts to ‘balance the books’. In the modern world a society has to be quick to react to the opportunities for economic growth – the taxes that are collected by the government have to be focused on areas that can create jobs and allow for a distribution of social justice for its people. A bit of competition is healthy; just now the lack of competition and dependency on our problems to be identified and fixed from a remote government is handicapping our growth and limiting our potential. Small countries are showing that they can lead the way in the modern global world – I believe that reducing the scope of the UK government and bringing government closer to the people will prove beneficial for all people on the British Isles.