Portillo: Independence for Scotland a win-win

Michael Portillo writes in his Sunday Times column advocating independence for Scotland. He says that it would be a solution to the vexed issue of Scottish MPs swinging the balance on English matters they have nothing to do with, while giving the Scottish economy the kick up the backside it needs.

People often question whether Scotland will be independent one day. In the past, with London eager to keep hold of Scottish oil, there has been a lot of myths meddled about the issue as a result. Now, as Portillo says, with the peak of oil production being reached (there is still a trillion dollars down there for Scotland to take advantage of though), and the Tories needing a route back into power, cutting off Scottish MPs would be to the pleasure of all. For any deal to happen, both sides must gain, and we are now in a situation of win-win.

There has been a very perceptible shift in the Scottish media's coverage of next year's Holyrood elections (indeed the Sunday Herald do a feature today on the possibility of SNP leader Alex Salmond being the next First Minister). There have been press speculation of who the SNP may go into coalition with and the terms that an agreement may be reached by. This is the first time in my lifetime that I can remember Scottish Labour being talked out of power in this way. As the Herald piece points out, they have won every election in Scotland since the 1950s. This is why this paper talk about new coalitions is so significant.

Comments

[Abu Abdur Rahman]

Yes when I read Portillo this morning, my first thought was wondering whether my favourite Scottish blogger would be writing about it - good to see that you have. My feeling was that you would find him somewhat more palatable that Niall Ferguson's "Scotland should be liquidated" hypothesis a few months ago.

I thought Portillo actually made a lot of sense - Scottish independence is probably the only thing that can revive the local economy and make it a proper first-world country again, though of course they do have the significant problems of an ageing population, a lethargic private sector and a bloated, anti-enterprise public sector to deal with - none are insurmountable with the right political will though.

Yes, independence would be tough to begin with; public expenditure would have to be drastically reduced as Scottish tax revenues are clearly insufficient to sustain it at current levels. But IMHO Scotland has, over its history, created more economists, businessmen, inventors, scientists and men of learning per person than any other society - if the likes of Latvia, Estonia and Belarus can be independent, no reason why you guys cannot and make a great success of it too!

The oil stuff is a red herring though, isn't it? It was not as if English ministers drilled oilwells and started offloading barrels of the black stuff! The oil revenues went to private companies, many of whom were Scottish and some were global, since of course they took the risks.

By the way, did you read Magnus Linklater in The Times a few days ago - he wasn't too complimentary about the Scottish Raj, or of the prevalent pro-T&T fervour there!

[Osama]

The Chancellor over the years has raked in billions from oil revenues. Just in the last budget, the current one further taxed the oil companies.

It's estimated he's raking in £6-8bn a year from the North Sea.

Norway, another small independent nation has saved up its oil revenues and has a fund now worth £100bn. Just the growth on this is raking in £10bn a year, which will last for perpetuity, even when the oil runs out. Scotland's national resources have by contrast been frittered away by successive Westminster governments.

[Abu Abdur Rahman]

Thank you for the clarifications. A couple of quick questions:

Just in the last budget, the current one further taxed the oil companies.

Sure, but was he not taxing the oil majors and supermajors here, not the small North Sea Independents? And if so, its less of a Scottish issue, as the oil majors have the overwhelming majority of their operations outside the UK. Even the next tier UK/Eire companies, eg Clyde, Tullow, Premier, Burren etc are primarily built on some very profitable overseas assets, in places like India, Pakistan, Turkmenistan, etc.

It's estimated he's raking in £6-8bn a year from the North Sea.

Estimated by who - the SNP or the SWP? Or reasonable, intelligent economists who know what they are doing? It may well be the latter, so a source would be very helpful! :-)

If this number is correctly calculated, I presume it relates to the taxes on the North Sea fields only and excludes the vast majority of overseas oil operations of UK Cos?

And if so - how does it compare with the net subsidy Scotland continues to receive, where English taxpayers continue to subsidise them - tax revenues per head are lower in Scotland than say London, whilst public spending is much higher. Is that net subsidy more or less than the alleged 8bn North Sea oil revenue? I don't know the answer, but maybe there is some independent report out there.

[Abu Abdur Rahman]

I just re-read my comment above and it seems that it could come across as unduly confrontational - apologies. That was completely unintentional; I am aiming to clarify the facts and figures, no more, and certainly did not intend to be rude :-)

[Osama]

No need for apologies, I can take the abuse bro ;)

More info on the Chancellor's recent swipe at the oil companies at my now defunct seperate Scottish politics blog - http://www.osamasaeed.org/scottishpolitics/2005/12/once_again_scot.html

Treasury stats - the people that take the tax - say that the total is £6bn. It is indeed ringfenced corporation tax from North Sea oil revenues. Doesn't matter where the company is based, they're taxed on their North Sea activities.

The deficit is a prickly business depending on whose stats you use. The govt's GERS figures show a 5bn deficit. The SNP dispute that analysis and using different analysis of tax it can be argued that Scotland contributes a surplus. Even if you don't accept this, the oil revenues plug the gap.

The SNP also say that Scotland has contributed a surplus of over £24bn over the last 20 years. Certainly, I have never been able to understand why the Westminster govt claim they're subsidising Scotland - if it's costing money surely they should be glad to be shot of us. There has to be something in it for them and there has been.

[Abu Abdur Rahman]

Thank you for the info - I would not trust the SNP or the SWP etc, for both their economic illiteracy and their intellectual dishonesty. However, the Treasury figures you quote seem very definitive - sure, some of the North Sea oil revenue is probably from Liverpool Bay and surrounding areas which contribute a fair bit of late, but overall if the tax revenues are 5bn and the net subsidy is 5bn, the bottom line is still nil - which is not what the Westminster politicians would tell you (there's a surprise, MPs being dishonest!).

So really, there is no reason, fiscally at least, why Scotland cannot be independent.

The SNP also say that Scotland has contributed a surplus of over £24bn over the last 20 years. Certainly, I have never been able to understand why the Westminster govt claim they're subsidising Scotland - if it's costing money surely they should be glad to be shot of us.

True. Over the past few years the Westminster politicians have been so keen on the Union because Labour needs Scottish votes to stay in power - and to win crucial divisions in the Commons. Without them, this administration would have been out a while ago, and hence Labour would always fight Scottish independence tooth and nail - unlike the new Tories, who are not very conservative and probably not unionist either!

[Abu Abdur Rahman]

The Scottish affairs committee at Westminster seems to have come up with a similar report:
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2006/06/20/nscot20.xml

"The committee appeared to accept that a reduction of the power of Scottish MPs was the only way to go, noting four possible solutions: dissolution of the United Kingdom; English devolution; fewer Scottish MPs; only English votes on English laws. It did not express a preference."

I think that's a good summary of the options available...

[Osama]

Can't understand why you're linking the SNP and SWP together, but I can say that the former only use officially available statistics when it comes to economic matters.

Regarding the Scottish Affairs Committee recommendations:

1. There doens't seem to be an appetite for English devolution. Regional assemblies have been rejected. And setting up a new building with new MEPs (Memebrs of English Parliament) would be seen as a bridge too far in beurocracy building. It would also leave Westmisnter as nothing more than a foreign affairs talking shop.

An English Parliament would have to be weighed up with due consideration to what the point of it is. Why keep the Union? Is it not easier for Scotland just to break off?

2. Reducing Scottish MPs would not solve the problem of Scottish MP's votes potentially swinging votes having nothing to do with them.

3. English only votes may work. But Labour aren't going to accept that in this Parliament or the next given their reliance on them. There's also the issue of what exactly affects Scotland e.g. reduced education spending in England on the face of it is an English issue, but through the Barnett Formula has a knock-on effect on the Scottish budget. Seems simpler just to make a clean break.

[Ted]

1. The English have never been asked if they want devolution. They have been asked if they want their country balkanized which, unsurprisingly, they don't.

2. It wouldn't completely solve the anomaly but it would reduce their influence on English and Welsh legislature. Of course, if MP's were decent, honourable human beings we wouldn't need to bring in legislation for Scottish MP's not to vote on matters that are nothing to do with them. But that's another matter.

3. English only votes are not the same thing as an English Parliament. They are a next best solution.

I do not see what is so difficult about setting up an English Parliament and leaving Westminster for UK-wide legislature and foreign affairs. An independent Scotland has never been voted for at the ballot box so there is no mandate for it.

The alternative, of course, was to have no devolution at all - which would be preferable all round - but now that Labour have created the anomaly they're going to have to do something about it. Doing nothing is not an option.

[Osama]

New figures - Scotland contributes a net surplus to the UK of £853 for every man woman and child every year -
http://www.snp.org/snpnews/2005/snp_press_release.2006-07-03.0518632934