Questions, Questions!

Before I vote ‘Yes’ in 2014, there are several questions to which I’d like the answers.  I hasten to add, however, that these aren’t questions about the international status of an independent Scotland, or the policies of its government; rather they are about what would happen if Scotland remains within the Union.

There is an asymmetry in the way that some commentators are approaching the debate on independence: if a spokesman for the ‘Yes’ campaign can’t give precise details of the fares on Lothian Buses in 2025 in an independent Scotland,  some journalists assert that this ‘weakens the case for independence’. But at the same time, they never question what the future may hold if Scotland remains in the Union.  In fact, voting ‘no’ and staying with the Union carries just as much uncertainty as voting ‘yes’ to independence.

So next time we have a TV debate on independence, here are some of the questions that should be put to the ‘No’ campaign:

  • Will the Westminster Government after the 2015 be another coalition, and if so, involving which parties; a majority Labour Government; a majority Conservative Government; or none of the above? (Mid-term polls are no guide to election results. Nobody will know the answer to this with any certainty in autumn 2014.)
  • What will be the UK rates of income tax, and at what thresholds will those rates kick in, in 2016 or 2017? (This depends a bit on who wins the election. But regardless of what pro-Union parties might say in advance, few people think that any politician’s pre-election promise is any more credible than, say, ‘no, your bum doesn’t look big in that’ or ‘I didn’t use advance season ticket sales to fund my takeover of the club’.)
  • What will be the headline UK Corporation Tax rate in 2018? Will there be a lower rate for smaller firms, and if so, how will HMRC define ‘smaller firms’? (Same comment as applies to income tax.)
  • What defence or foreign policy needs will the UK’s defence capability be designed to address? And in which countries will UK defence forces be engaged on active service in 2018, and on what basis? (Nobody predicted the Second Gulf War, Afghanistan, or NATO involvement in Libya, though when British troops were deployed to Helmand, the then Foreign Secretary, John Reid, suggested that they might not have to fire a single shot.)
  • What rating will credit rating agencies give the UK in 2018, a) if Scotland becomes independent, depriving the rest of the UK of the collateral assets represented by its oil and gas reserves; or b) if Scotland remains in the Union? (This is another question where the crystal ball is needed though other things being equal, an independent Scotland might expect a higher rating than the UK as a whole.)

Clearly, these questions can’t be answered at all; or can only be answered with a best guess, based on assumptions that will inevitably need to be changed as circumstances change.  That’s just the same as with the questions that are regularly put to those advocating independence.  So let’s have a debate in which arguments on both sides are treated with an equal degree of scrutiny.

But the real point is that the referendum isn’t about the detailed policies that will be followed by a future government of Scotland. It’s about whether that government is elected by those who live in Scotland, and has the powers to deliver Scottish solutions to Scottish problems; or whether we remain governed from London, by a parliament in which Scottish MPs are a tiny minority.

And there aren’t really any more questions to which I need answers before I vote ‘Yes’ in 2014. I’ve been considering the issues for years already, and have already arrived at a firm conclusion.

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Lessons from Lothian: Bullying in the Workplace

NHS Lothian is rife with a culture where bullying of staff is the norm, according to a recent report. Most right-thinking people would deplore such a management style. But is it always the case that bullying in the workplace is inappropriate?

To some, that question may seem shocking. But we should ask it to help understand how such a culture can take hold in an organisation. Because although there are some corporate sociopaths out there, in order for bullying to become so widespread, there will be others who would be horrified to think of themselves as bullies, but who must nonetheless acquiesce in a bullying culture.

Some of them will simply be too scared to speak out. But there will be others who put a premium on getting the job done, and though they might not actively condone bullying, see it as a necessary evil in a tough world. Others may think that what some would perceive as bullying is just how over-sensitive souls see the sort of robust, decisive management style that is necessary for the efficient running of businesses or public services.  

It is certainly true that successful management in any organisation sometimes requires tough, even ruthless decisions – including, sometimes, the requirement to sack people. However, there is a world of difference between having the ability to take tough decisions and thinking that bullying is the correct way to treat people.

It’s easy to see why a management style that relies on bullying would be ineffective in theory. People who are happy in their work, be they shelf stackers or hedge fund managers, perform better, other things being equal, than unhappy ones.

A culture that tolerates or encourages bullying also encourages people to conceal mistakes. They do so in the interests of self-preservation, and to avoid a rollicking.  That means problems in an organisation on don’t get addressed early. And you don’t need to be a management guru to realize that it’s better to fix a problem sooner, rather than later when it’s had time to fester, or to understand that the first thing you need to do to fix a problem is to admit that the problem exists.

A bullying culture also discourages staff in an organisation from using their initiative, or questioning the established way of doing things: why raise your head above the parapet if it’s likely to get knocked off? That leads to a ‘tick box’ mentality, poor customer service, and a lack of innovation. That’s not generally regarded as a recipe for success in any organisation.

That’s the theory, but what about the practice?

The ex-banker formerly known as Sir Fred is alleged to have indulged in ritual humiliation of staff, his daily meetings with his direct reports reputedly being referred to as the ‘daily beatings’. It’s hard to see his management style being held up as an exemplar of good practice, given what happened to RBS under his leadership,

It should be sufficient to say that bullying as a management technique is morally wrong, full stop. It shouldn’t be tolerated or excused, any more than racist or sexist abuse can be dismissed as ‘a bit of banter’. But just in case you don’t share that view, the practical argument against it is that it’s not merely ineffective, but actually counter-productive. It’s not the sign of a strong manager, but of an inadequate one.

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Defence Policy and Scotland’s Referendum

UK Government policy on defence has become increasingly muddled, to the extent that it makes the Charge of the Light Brigade look sensible. In contrast, in Scotland, the SNP is increasingly articulating policies which are both coherent and credible. To reinforce that credibility, the party should also now support NATO membership, which it could do without changing its non-nuclear stance.

The first priority for any country’s defence policy should be to protect its own domestic territory. That means defending its borders. Yet in recent years, both under the Coalition and under the previous Labour Government, UK defence policy has been neglecting this primary responsibility, its approach skewed by trying to cut expenditure while simultaneously engaging in expensive foreign deployments of dubious merit.  

The priority for the UK, as presently constituted, or for an independent Scotland in future, is maritime defence. Both Scotland and the UK have a very long coastline, and only very short land borders. The latter do not constitute a serious defence risk –unless you believe that the Irish Republic is likely to invade the North, or that an independent Scotland would be subject to English invasion.  We have a large number of island communities, as well as substantial, important offshore assets that also need protecting, in the shape of oil and gas and, increasingly, renewable energy installations.

Defending these coasts and offshore assets requires not just ships, but also a maritime reconnaissance capability, and it’s here that UK defence policy is a particular shambles. That results in part from the previous Labour Government’s decision to remove the Nimrod MR2 from service, and from the current Coalition Government’s decision to cancel its replacement, the Nimrod MRA4. That leaves a huge gap in the UK’s ability to carry out maritime reconnaissance, as well as its ability to conduct long range search and rescue. Other countries that have an interest in defending the same seas as the UK, including Iceland, Ireland, the Netherlands, Norway, Portugal, and Spain, have all managed to retain these capabilities, despite the current financial crisis. The sheer folly of this policy and the risks that it poses to the UK’s and to Scotland’s defence, were set out clearly in April, in a submission from Angus Robertson to the Commons Defence Select Committee. The full submission can be found at: http://www.publications.parliament.uk/pa/cm201012/cmselect/cmdfence/writev/1918/fms07.htm

One problem, of course, is that the UK is choosing to spend its defence budget on other things, including the war in Afghanistan, and on buying aircraft carriers that won’t actually carry any aircraft for a number of years. If anything epitomizes the current muddle in UK defence thinking, it is the latter: surely the whole point of an aircraft carrier is that it’s supposed to carry aircraft.

But if the UK is failing to provide for the proper defence of these islands, could an independent Scotland provide for its own defence needs?

Defending Scotland’s coast should not, in principle, be prohibitively expensive. We need only to look to Canada, the country with the world’s longest coastline, and so also needing a sizeable maritime capability. Canada spends around 1.5% of its GDP on defence, far less than the UK, which spends roughly 2.7%. The Canadian Navy doesn’t have any aircraft carriers – with or without aircraft. You don’t actually need these hugely expensive capital ships for home defence. Air cover for that purpose can be provided for by land-based aircraft. You only need aircraft carriers if you want to conduct operations overseas. Nor do you need carriers to protect the Olympic Games from potential terrorist attack, any more than you might decide that the best way to provide security for the Balquhidder Highland Games is to post a gunboat on Loch Earn.

But mention of Canada raises the issue that it is a member of NATO, and hence the question of whether an independent Scotland should be a member, too.

The SNP has had a long-standing opposition to NATO membership, but is reported to be reconsidering that position. That would not be universally popular within its ranks, or amongst others who are not members of the party but support independence. A major factor in their objections to membership is opposition to nuclear weapons at Faslane, and concern about participation in wars outside Europe, such as Afghanistan or Iraq.  

However, a number of NATO countries are non-nuclear. A few of them are nominally so, but still have nuclear weapons stationed on their territory. But 80% of NATO’s 28 member countries do not. Nor would there be any obligation on an independent Scotland to do so. Similarly, NATO membership would not oblige an independent Scotland to provide troops for operations outside Europe, unless it chose to do so: Belgium didn’t participate in first Gulf War, for example. NATO is primarily a defensive alliance.

NATO membership wouldn’t be absolutely essential to an independent Scotland. Ireland and Sweden are not members. But Denmark, Iceland and Norway are, and in protecting the waters round our coasts, NATO membership would allow Scotland better to coordinate our activities with those nations. It would make sense for Scotland to join.

 

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Wind Turbines: Why We Should Learn to Love Them

Three quarters of Scots support wind energy. The other quarter should learn to love wind turbines –or at least accept them.

I don’t think they are a panacea – it’s true that they don’t generate electricity when the wind isn’t blowing – and I’m all in favour of a mix of energy technologies. But fossil fuels are a finite resource and contribute to global warming; and, especially once the externality costs of climate change are properly factored into the equation, it’s clear that our long term future energy needs will increasingly be provided for by renewables. Don’t get me wrong, I don’t think every planning application for a wind farm should be accepted without question. But some of the reasons put forward by objectors are frankly absurd.  

One of these is that wind farms pose a risk to the health of those who live near them. But there isn’t a scintilla of credible evidence that turbines harm people. It’s true that a few people are ill and believe that wind turbines are the cause. But that’s common with any technology, and what folk believe to be the case isn’t always so. You see that with electrosensitivity – the condition where people attribute all manner of ailments to the presence of electrical equipment. Their symptoms are real enough. However, numerous studies have shown that they still experience those symptoms in the presence of dummy electrical equipment or gadgets that have been switched off.

Next, we hear the utterly bizarre argument that wind turbines will discourage tourism. This line of argument was recently described by Stephen Leckie, Chair of the Scottish Tourism Alliance, as ‘hysterical’. As his agenda is promoting tourism, not renewables, he probably knows what he’s talking about on this. And does anyone seriously imagine a potential tourist thinking “I’d love to visit Stirling, and take in the castle, the Wallace Monument, and the Bannockburn Visitor Centre, but I couldn’t possibly do that because you can see a wind turbine from the Abbey Craig”?

It’s true that wind farms do have a visual impact. Personally, I don’t mind the look of them, but then beauty is in the eye of the beholder. However, much of we think of as our ‘unspoilt landscape’ isn’t ‘natural’ at all, but is the result of centuries of human intervention since the days we stopped being hunter-gatherers. Dry stone walls don’t occur naturally. The RSPB nature reserve at Loch Gruinart, on Islay, is beautiful, but it’s a managed landscape and looks like it does because part of it is on land reclaimed from the sea for farming, some 200 years ago. The Glenfinnan Viaduct and the Forth Rail Bridge are man-made structures that enhance the views of which they are a part. And if we don’t address climate change, and the Greenland ice-cap melts, some of our lovely coastal scenery won’t look quite so pretty when it’s completely submerged.

If you want to live in a museum of pre-industrial life, or eschew entirely the use of electricity, object away, and I’ll both respect and defend your right to do so. But if you want to keep the lights on, don’t be quite so hysterical about wind farms and get a sense of perspective. Or maybe you’d prefer to have a nuclear power station, opencast coal mine, or some hydraulic fracturing – ‘fracking’ – in your neighbourhood?

And just for the record, I don’t work in the renewables sector.

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Miliband’s Tax Muddle

At his party’s Scottish Conference, on 2nd March, Ed Miliband weighed into the independence debate. But in doing so, he simply highlighted that Labour’s position on the devolution of fiscal powers is in a bit of a muddle.  

Miliband declared himself opposed to Scotland having control of Corporation Tax, a position seemingly endorsed by Johann Lamont, in her speech to the conference the following day. Yet at the same conference, Douglas Alexander said that Labour ‘must be open minded on how we can improve devolution’s powers, including fiscal powers’, while Alistair Darling has also suggested that he favours transferring control of taxes to Holyrood.

The Labour leader seems particularly hostile to the idea of Scotland having a lower rate of Corporation Tax than the rest of the UK. Yet a lower rate makes sense: there is a wealth of empirical evidence from around the world that shows low corporate tax rates boost tax revenues. It isn’t hard to understand why. For one thing, low corporate tax rates attract inward investment, and help ensure firms that might leave stay put. More importantly, low rates of corporation tax mean that firms have more retained capital to invest: that means more output, more jobs, and higher wages, all of which generates more tax revenue that can be spent on public services. Conversely, higher corporate tax rates mean firms have less money to invest, which leads to lower output, fewer jobs, and lower tax receipts.

So the case for transferring control of Corporation Tax to Holyrood is based on the fact that it would allow the Scottish Parliament to set the tax at a rate that would stimulate economic activity. So what’s the problem?

Well, Ed Miliband says he thinks that cutting Corporation Tax in Scotland would not be ‘progressive’. But Corporation Tax is paid by firms, not by individuals, and there’s nothing ‘progressive’ about a policy – i.e. higher corporate taxes – that chokes off economic growth, and reduces both employment and tax revenues, and thus leads to worse public services.

One possibility is that Ed Miliband simply lacks an understanding of basic economics, though I hasten to add that’s not what I believe. A more likely explanation is that he understands perfectly well that a lower Corporation Tax rate would boost investment and jobs in Scotland, but might do so at the expense of investment and jobs that might otherwise go elsewhere in the UK.

It’s hard to blame him for taking that view. He is, after all, MP for Doncaster North, in Yorkshire. He’s taking a perfectly reasonable intellectual position, and if I were a voter in Doncaster, I expect I’d want my MP to be fighting to keep investment there, rather than in, say, Dundee.

But the Dundonian voter is more likely to be interested in what’s best for Scotland, and may not be persuaded by a pitch of ‘pay higher taxes, and see jobs and investment go south’, which is the logical implication of Ed Miliband’s position.

Maybe Labour’s new devolution commission will sort out the muddle and clarify the party’s position on Corporation Tax. Unless, that is, the commission won’t look at the issue, Ed Miliband having ruled it off limits.

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Cameron’s Conundrum: Rocket Scientists Wanted

Following David Cameron’s speech in Edinburgh on 16th February, the billboard outside my local newsagent read: ‘Vote no, and get more powers’. 

That will clearly cut no ice with those who already support independence. But it doesn’t take a rocket scientist to work out that Cameron’s strategy is designed to appeal to that sizeable chunk of Scottish opinion that believes in far more powers for the Scottish Parliament, but hasn’t yet decided whether to go the whole hog and vote for outright independence. Nor do you have to a psephologist to realize that it is through the votes of this portion of the electorate that the referendum will be won or lost. But they are unlikely to be beguiled by the Prime Minister’s offer of greater powers. And in making the suggestion, he may well have weakened his case, rather than strengthening it.  

Indeed, if the letters page of The Scotsman – not normally regarded as a hotbed of Scottish nationalism – on the following days is anything to go by, the reaction of many Scots has been one of extreme cynicism. As a number of commentators were quick to point out, the then Tory leader Edward Heath promised a degree of devolution before the 1970 General Election, but failed to do anything once in power. And more recently, before the 1979 referendum, Alec Douglas-Home told Scots that they should vote against the devolution proposals proposed by the then Labour Government, because an incoming Tory administration would bring forward something better: Margaret Thatcher and John Major had eighteen years in which to fulfil that promise, but didn’t quite get round to it. Many Scots voters who aren’t SNP members thus see Tories of having ‘form’ for failing to deliver on their promises on this issue.

Now it may be the case that neither Heath nor Douglas-Home was being deliberately mendacious; and some folk are prepared to believe that David Cameron is an honourable guy, who is sincere in what he says. However, when they look at what he did say, supporters of ‘Devo-max’ may well have some further doubts.  The relevant bit of his speech[1] reads as follows:

“And let me say something else about devolution.  This does not have to be the end of the road.  When the referendum on independence is over, I am open to looking at how the devolved settlement can be improved further.  And yes, that does mean considering what further powers could be devolved.”

So he didn’t actually promise any further powers for Scotland, in the event of a ‘no’ vote. He simply said that he was ‘open to looking at’ and ‘considering’ further powers. Even if we accept that David Cameron is genuinely open-minded on this issue now, there would be nothing to stop him considering the question, and in all sincerity, concluding that no further powers should be transferred to Scotland. Or he might offer some sort of symbolic gesture –say, letting Holyrood decide what tartan should be worn by the Royal Regiment of Scotland –but give nothing substantive, like the power to set Corporation Tax.

However, even if he did decide that there should be a substantial transfer of power to Holyrood, would he actually be able to deliver it? Leaving aside the small matter of whether he would be in office (as the next UK General Election is now only three years away, which would give little or no time for the necessary legislation after the referendum, whenever it is held)  would he be able to deliver his own supporters? That isn’t at all clear: since his speech, a number of Scottish Tory grandees, such as Michael Forsyth and Malcolm Rifkind, have publically opposed greater transfer of powers, while Tory leader at Holyrood, Ruth Davidson, was elected on a platform of ‘The Scotland Bill and no further’. And since the Prime Minister said he did not want to dictate to Scots what they should do, that presumably includes Scots in his own party.

In summary, therefore, most supporters of ‘Devo-max’ are unlikely to be swayed by David Cameron’s promise of more powers: first, because a promise to ‘think about it’ doesn’t add up to much of a promise in the first place; and second, because Cameron is simply in no position to guarantee he could deliver anything to Scotland.  

This gives the Prime Minister a bit of a conundrum.  Leave the promise vague – as it is now – and it lacks any real credibility. But spell out what further powers he’s actually talking about, and if they don’t amount to much, that won’t persuade ‘Devo-max’ supporters to vote against independence. Or, if what’s on offer really does look substantial, that will alienate some in his own party, and his ability to deliver will be in further doubt.

Either way, It also begs the question: if it’s right for Holyrood to have these powers in the event of a ‘no’ vote, why isn’t it right to transfer these powers now? And if extra powers are to be on offer, why not include a question about them on the ballot paper, as many in civic Scotland are calling for. The tricky bit for the Prime Minister will be to come up with plausible and coherent answers to these questions that look based on principle, rather than – perish the thought – being simply a case of crude political calculation. Now that’s a conundrum that would test the ingenuity of the rocket scientists.

 [1] http://www.number10.gov.uk/news/transcript-pm-scotland-speech/

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Neither Surprising nor Conclusive

A significant development in the referendum debate since my last post has been the UK Government’s announcement that its legal advice is that only Westminster, not Holyrood, has the legal power to hold a referendum on independence. That’s hardly surprising, but nor is it conclusive.

It’s not surprising because when governments want to do something, they frequently get a legal opinion to help bolster their case. When Henry VIII of England wanted to divorce Catherine of Aragon in order to marry Anne Boleyn, he got his Lord Chancellor, Thomas Cromwell, to provide the legal arguments to justify his actions. Similarly, when Tony Blair wanted to invade Iraq, Lord Goldsmith duly obliged with an opinion showing that it could be justified under international law.

I make no comment about the validity of the arguments in any of these cases. Rather, I merely cite them to illustrate that governments’ in-house lawyers don’t simply sit there all the time providing disinterested advice with the wisdom of Solomon. Sometimes they also seem required to strain every sinew to provide a plausible legal rationale to back up what their political masters want to do, or have already determined to do.

Nor is Westminster’s legal opinion conclusive. One party to a dispute may have its legal opinion, but that’s not the end of the matter. Others can hold different opinions. That’s why we have judges and courts: to rule on who is right and who is wrong. And governments, like private individuals or corporate bodies, are subject to the rule of law, at least in democracies. Whether the UK Government chooses to have its opinion tested in the courts is a political decision, not a matter of law.

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