Wednesday, 19 June 2013

Better Together

I am a British Unionist. Come 2014, I will vote for Scotland to stay part of Britain. I will do this for reasons of history, culture and patriotism. These to me are far more important than economic or political reasons, yet there are also many economic and political reasons to stay together. If I was summarising, I think they fall in to three main categories.

1) Economics

Scotland is economically better off as part of the United Kingdom. Scotland contributes £56.9 billion to the UK Treasury yet receives more than £64.5 billion in spending in return, according to the GERS Report. The National Lottery has delivered £2.3 billion to good causes in Scotland. Why would we seek to lose this windfall of cash?

Though reduced, the UK’s credit rating is among the best in the world, and Scots save billions on mortgages due to this. A 1% rise in the interest rate adds £1,000 onto each household mortgage, and the three leading credit rating agencies – Standard & Poor’s, Moody’s and Fitch – indicated to the Financial Times that an independent Scotland would not automatically inherit the UK’s rating. Scotland could expect to receive an investment grade rating, but some notches below what it is now.

The Scottish Government’s own Fiscal Commission Working Group said; “The Scottish economy benefits from being part of an integrated market with the rest of the UK.” 67.2% of Scottish exports went to England, Wales, and Northern Ireland (rUK) in 2010. That’s around £45 billion per year, or 40% of Scotland’s Gross Domestic Product. Likewise, 66% of Scottish imports come from rUK. Why disrupt this single market with different taxation and regulatory regimes and damage the most prosperous single market in the world?

Whilst it is true trade would continue in a post-separation scenario, it is a simple economic fact it would not be as prosperous at present. There would be higher compliance costs, for example, enhanced regulatory uncertainty, and the need for possible currency hedging (basically when a company manages the risk of exchange rates) should Scotland have a different currency. Moreover, should the economies diverge; it means businesses would lose some of their current customer base.

Businesses across the United Kingdom do not have to worry about this and can trade freely. The CBI has stated that they believe independence would be bad for business, opposing independence for reasons of uncertainty, and finally concluding that they are “not convinced of the business and economic case” for independence. 1 in 5 workers in Scotland are employed by English, Welsh and Northern Irish firms. Why subject their jobs to uncertainty?

Additionally, polls show businesses think independence would be a bad move for them. 72% thought independence would have a negative effect on business compared to just 13% that believed there would be a benefit. 56% said separation would worsen their company’s prospects compared to only one in ten who thought it would improve their business outlook.

Organisations such as the Institute of Directors and the CBI speak up for businesses across the United Kingdom on a national and international level for a competitive policy landscape. It means the economic opportunities are far greater.

As part of the United Kingdom Scotland is part of a much broader and more dynamic tax base, pooling our resources together, spreading the risks we face, allowing is to direct the resources to where they are needed the most. This reduces the dependence on diminishing and volatile assets such as oil. Revenue from North Sea oil and gas reached a high of £12.9 billion, but reached a low of only £1 billion, a difference of £11.9 billion, or more than the entire Scottish NHS budget. While oil accounts for 10 - 20% of Scottish GDP (depending on prices) it accounts for 1 - 2% of UK GDP. The Economist explains it well in this YouTube video and this one.

For those who cite the potential of our whisky industry, regrettably, even the proposed £1 tax on each bottle of whisky produced in Scotland (which itself could have the effect of crippling the industry and running whisky on the international market place) would raise would raise only £1 billion for Holyrood's coffers, in a nation where the welfare bill alone is over £20 billion.

Whereas the SNP’s currency plans are causing a lot of uncertainty and confusion, I have confidence in our current system, where we have a central bank that works with and for Scotland.

2) Politics

Scotland is politically better off as part of the United Kingdom. If we want to advance international cooperation and engage with emerging markets: the United Kingdom has a top table seat on international bodies such as the G7, G8, G20, as well as the same number of votes as Germany at the European Council. A separate Scotland would not.

If we want to strengthen our collective security: the United Kingdom has a permanent seat on the UN Security Council. A separate Scotland would not.

If we want to tackle disease and poverty, the United Kingdom has a permanent seat on the Board of the World Bank as the fourth largest shareholder. A separate Scotland would not.

If we want to improve financial regulation, the United Kingdom has a permanent seat on the Board of the International Monetary Fund as the fourth largest shareholder. A separate Scotland would not.

Together we’ve got global clout by standing as one in the world. Again, the influence Scotland has in the international community and the opportunities this brings are far greater as part of the United Kingdom.

3) Society

Scotland is socially better off as part of the United Kingdom. We can be both Scottish and British. We can fly the Saltire and the Union Flag.

We can be proud of our shared history, saving Europe from tyranny twice and ending the slave trade for starters. Not many nations can claim such a record. Let's not toss it all away.

31,000 workers in Scotland have jobs with the UK Government. 800,000 Scots live and work in England and Wales without the need for visas, papers or passports. The pensions of 1 million Scots are guaranteed by the UK welfare system. Why throw it all away?

We have worked and lived together over the past 300 years to secure a better future for our children and grandchildren. Together we continue to help shape the world. Together we can be proud of our shared institutions: the Bank of England; the Competition Commission; the FSA; the current VOSA setup within the Transport Industry; the elite UK Russell group, which the top Scottish universities are members of – encouraging cross-university research and as a result and driving up research standards; the Intellectual Property Office; HMRC; the British embassies, which help Scots worldwide; the Department for International Development; the BBC; the NHS; the welfare state; the Armed Forces; the Monarchy; the Royal Mail; the DVLA; the Met Office; the list goes on.

Our universities benefit enormously from being part of the United Kingdom: Scotland’s population as a share of the UK’s is 8%, but Scottish universities received 15% of income from the UK Research Councils, the Royal Society, and the British Academy in 2010-11. They additionally received 13% of grant funding from the UK Research Councils.

Scots are currently supported and protected by over 270 embassies worldwide in an incomparable diplomatic network that is on hand to help in cases of anything ranging from a lost passport to civil unrest. The diplomatic skill of the Foreign and Commonwealth Office is unmatched and is respected the world over.

Together, we maintain incomparable Armed Forces that protect us at home and abroad. On July 15th 2006, news came through that the British aircraft carrier HMS Illustrious and an accompanying task force were being readied to steam to Lebanon’s coast and secure it with force if necessary, in support of the British Government’s plan to evacuate British nationals from Lebanon-Israel conflict. Many hundreds of British nationals with no other hope of escaping the war-torn Lebanon were evacuated by British forces. Norway, in contrast, chartered five buses to evacuate approximately 150 Norwegian citizens to Syria, which today would have its own difficulties.

Scotland is the country it is today because it is part of the United Kingdom. Devolution allows Scotland to focus on issues that really matter, such as education and health, while the UK can focus on a macro level for Scotland and enhance our opportunities, improve our security, and bring Scottish ideas to the top table in the world.

Together, we get the best of both worlds.

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