The Key Issues Around Scottish Independence Ebook

I N D E P E N D E N C E
T H E I S S U E S
PART ONE: INTERNATIONAL PAGES 2-8
PART TWO: FINANCIAL PAGES 10-16
PART THREE: WELFARE PAGES 18-24
PART FOUR: YOUNG PEOPLE PAGES 26-32
2 THE SCOTSMAN 3 THE SCOTSMAN 2 3 The Scotsman TUESDAY 5 AUGUST 2014 The Scotsman TUESDAY 5 AUGUST 2014
I N D E P E N D E N C E : T H E I S S U E S W W W . S C O T S M A N . C O M / S C O T T I S H - I N D E P E N D E N C E
Principles are clear but the
devils in the detail
Europe is not the decisive
issue that either side hopes
Desire for an independent Scotland to take its place on the global stage
must be matched by clarity on dealing with the technical challenges
W
HAT, the old Scots catechismasked, is the
chief end of man? We might comparably
ask what is the chief role of the state? But
rather than the glorication of God we
might respond that the states rst, unavoidable, duty is
to defend and otherwise protect its citizens. If a nation is
a community, defending that realmis the states primary
and most unavoidable responsibility. It helps dene who
and what we are. Defence, like its foreign policy sibling,
is a means by which we establish our place in the world.
The world is large and complex, however, and inde-
pendence is not what once it was. Ever since the party
embraced the European Union in the early 1990s, the
SNP has made a virtue of the interdependent nature of
the modern globalised world. There are some issues
climate change, for instance that are too big to be
addressed by individual nation states.
Moreover, arguing that an independent Scotland
would, of course, be a member of key international in-
stitutions offers a kind of reassurance designed to allay
fears that independence might leave Scotland alone and
somehow isolated. On the contrary, the Scottish Gov-
ernment insists, international institutions such as the
EU (and the United Nations) provide both a means for
expressing distinct Scottish interests and conferring the
kind of respect due to an equal member of the interna-
tional community. Most of all, however, membership
of high-prole institutions such as the EU, UN and Nato
reminds Scots that though we may be a small nation we
are not one of no consequence.
Here as elsewhere in the independence debate, how-
ever, the detail matters just as much as the principle of
the issue. Would membership of the EU really be as
seamless a process as the Scottish Government suggests?
Or would the precise terms of Scottish membership of
the EUbe a matter for complex debate and compromise?
Would Scotland have to make an at least notional com-
mitment to eventually joining the euro? How, precisely,
might a common travel area with the remainder of the
United Kingdomwork? Would Scotland inherit its share
of the UKs present EU rebate? Would, indeed, Scotland
be a net contributor to EU funds or a net beneciary?
Would Scotland really win a better deal for the countrys
shermen and farmers? Might Scottish membership
even be subject to being vetoed by other nation states
most pertinently Spain who have no wish to encour-
age separatist or independence movements in their own
countries?
If these are certainly technical matters they remain
ones too important to be dismissed as mere procedural
difculties that will, in the fullness of time, be satisfacto-
rily resolved. As yet no clarication on Scotlands likely
status has come from Brussels. European Union ofcials
and ofce-bearers have no wish to involve themselves in
what, for the time being, remains a domestic UK issue.
It is, as is so often the case, a matter of interpretation.
Unionists point to the difculties and complexities of
EU accession; nationalists insist there is no reason to
suppose the detailed terms of Scottish EU membership
cannot be resolved in a friendly, common sense fash-
ion. Scotland, they insist, is not in the same position as a
country such as Serbia that seeks to join the EU. Scotland
F
EW issues have received more attention in the
referendum campaign that what independence
would mean for Scotlands place in Europe. Both
sides have wanted to convince us that a vote for the
other side would imperil Scotlands EU membership. It
is an argument that rests on a shared assumption that
voters are sufciently concerned about remaining in the
EUthat the issue might sway which way they will vote.
But the assumption is a dubious one. While more
Scots want to stay in the EUthan get out, there is far from
widespread enthusiasmfor the European project.
The most recent ICM poll for this paper found that
while only a third said they would vote to get out if there
were a EU referendum tomorrow, less than half (46 per
cent) would vote to stay. One in ve voters did not know
what they would do. And as our graph shows, while
most people might prefer to stay in the EU, no less than
40 per cent would like to see the EUs powers reduced.
In those circumstances, appeals to vote either Yes or
No on the grounds that to do so would be the best way of
ensuring Scotlands continued EUmembership seemun-
likely to have much resonance. Indeed, when the outgo-
ing EU President Mr Barroso suggested in February that
it would be difcult for Scotland to retain her EU mem-
bership following a Yes vote, just 3 per cent of Yes vot-
ers told Survation that his remarks made it more likely
they would vote No. Equally, ICM have shown that just
4 per cent of No supporters say they would vote Yes if
they thought that the UK was heading for the European
exit. And in practice neither side has been particularly
successful in winning the Europhile vote. While 51 per
cent of Yes voters say they would vote to stay in the EU,
so do 50 per cent of No voters. The referendum debate
on the issue has raged to little or no discernible effect.
In contrast, Yes and No voters do hold somewhat dif-
ferent views about Britains nuclear weapons facility on
the Clyde. Nevertheless, there is far fromunanimity in ei-
ther camp. On balance Yes supporters are opposed to the
principle of Britain having nuclear weapons. According
to the Scottish Social Attitudes survey, just 29 per cent are
in favour while 58 per cent are opposed. In contrast No
supporters are more or less evenly divided on the issue.
While 43 per cent are in favour, 40 per cent are opposed.
But that means there is still many a voter who opposes
nuclear weapons yet is still inclined to vote No. Indeed in
the SSA survey, rather more opponents of nuclear weap-
ons (46 per cent) indicated they would vote No, than said
they would vote Yes (38 per cent).
So while, Scotland as a whole is on balance opposed
to nuclear weapons by 46 per cent to 37 per cent the
issue is not proving as big a vote winner for the Yes side
as it might hope.
Indeed, the debate about defence and foreign affairs
more generally is probably not the most fertile territory
for the Yes campaign.
Ask Scots who should run any aspect of their countrys
domestic affairs, and a majority will agree responsibility
should lie with the Scottish Parliament. But on defence
and foreign affairs, only 39 per cent nominate Holyrood,
while 53 per cent reckon Westminster should remain be
in charge.
Having responsibility for defence and foreign affairs is
what above all distinguishes an independent state from
a federal or devolved one. So this apparent reluctance to
contemplate a Scots Army or Foreign Ofce could prove
an important barrier to a Yes vote on 18 September.
lJohnCurtice is Professor of Politics, Strathclyde University
is already a member of the EU and already subject to EU
laws and treaties.
Such an interpretation raises the prospect of Scot-
land being of the EU but not quite in the EU during the
18 months in which the terms of its full membership
would be negotiated following a Yes vote. Scottish mem-
bership might be placed in a kind of suspended anima-
tion while the negotiations took place. That might not
resolve all risk or uncertainty; it might also be all that
can be safely speculated right now.
If that is necessarily hypothetical so is the Scottish
Governments claim that public opinion in England is
the greatest threat to Scottish membership of the EU. If
Scotland votes No and if David Cameron wins a second
term in ofce next May and if the UK Government re-
negotiates the terms of Britains membership and then
holds a referendum in which Britain votes to leave the
EU then Scotland, which might have voted to remain a
member, will be on the outside of Europe looking in and
not, as it might be after independence, a full partner in
the European project. Such a scenario is not impossible
(though it ignores the fact that more than a third of Scots
tell pollsters they favour leaving the EU) but it is also far
fromguaranteed.
If the EU is one thing, membership of Nato is another.
The SNP leadership has committed an independent Scot-
land to join the Atlantic alliance; the SNP membership
has, with some reservations, backed the leadership. The
SNP remains an anti-nuclear party but intends Scotland
to be a member of the western nuclear alliance.
There will be no nuclear submarines based in Scot-
land, however. On this the SNP insist there is no room
for compromise. Trident will have to leave the Clyde and
be based elsewhere. If this means sacricing other objec-
tives during the independence negotiations then so be
it. It is a price worth paying even if, viewed dispassion-
ately, removing nuclear submarines fromScottish waters
does little to advance the goal of international nuclear
disarmament.
Nonetheless, Scotland would most probably not be a
nuclear-free zone as New Zealand is denying Ameri-
can or British nuclear submarines access to Scottish wa-
ters. The Scottish Government has hinted instead that
it would operate a dont ask, dont tell policy on such
matters. Pragmatismhas trumped principle.
An independent Scotlands defence needs will be
met by a budget that rests somewhere between that of
the Republic of Irelands modest armed forces and Den-
marks larger, more sophisticated, military apparatus.
It would allow the country to contribute to UN peace-
keeping operations but unable to supply large numbers
of troops to Nato operations. No more illegal wars, na-
tionalists say; no more punching above our weight as
part of the United Kingdom, unionists reply.
Here again, however, the defence of the realm, like
membership of the EU, is as much a matter of signalling
the kind of Scotland Yes campaigners desire as it is a con-
clusive or convincing demonstration of the kind of Scot-
land that would actually arise from independence. The
principles may be known and largely agreed upon; the
detail is a different matter. Resolving those issues would
be the chief end of the states early years.
PART ONE
INTERNATIONAL: DEFENCE AND EUROPE
INTRODUCTION BY ALEX MASSIE
WHAT THE POLLS TELL US
BY JOHN CURTICE
HMSVanguard sits
in dock at Faslane.
Independence for
Scotland would
see Britians
nuclear submarines
stationed elsewhere
Picture: Getty Images
What should Britains long-term
EUpolicy be?
To stay but reduce
the EUs powers 40%
Leave things as
they are 25%
To leave 20%
Increase the EUs
powers 8%
Back a single
EU government 3%
Dont know 6%

Source: Scottish
Social Attitudes 2013
*Figures
are rounded
A change for the better
at home and abroad
Breaking away will cost us
money, jobs and security
An independent Scotland will be able to tailor its miliary structure to
its specic needs and play a constructive role in the international arena
The SNP has failed to produce any credible answers as to how our
nation will defend itself if it abandons the UK and its armed forces
H
OWwould an independent Scotland defend
itself and conduct foreign affairs? Sceptics as-
sert that Scotland would struggle to pay for
its defence, and would lose global clout by
leaving the UK. Is this so?
Could Scotland afford its defence?
The development of a newly independent Scotlands
defence infrastructure would be underpinned by Scot-
lands 8.4 per cent population share of UK defence assets.
In 2012-13, those assets were valued at 92.28 billion. In
the aftermath of a Yes vote, Scottish negotiators would
therefore approach discussions with Ministry of Defence
(MoD) ofcials looking to secure the transfer of military
equipment, infrastructure and where appropriate, cash
to the value of around 7.75bn.
This substantial sum would fund the initial develop-
ment of Scotlands defence infrastructure. It would also
underwrite commitments such as Scotlands contribu-
tion to the cost of removing Trident. Lastly, it would
fund the procurement of key equipment for Scottish de-
fence forces such as naval vessels and aircraft.
What would it cost annually to maintain an independ-
ent Scotlands defence? Currently, Scottish taxpayers
contribute more than 3bn per year to the UK defence
budget. This is more than nations such as Denmark and
Finland spend annually on defence. The Scottish Govern-
ment intends dedicating 2.5bn annually to national de-
fence, a gure similar to that of Denmark. It is reasonable
to assume that Scotland could develop a Danish-scale
military force structure for itself on this budget, one tai-
lored to Scotlands requirements.
Under the Scottish Governments plans, it seems that
defence would make lesser demands on Scottish taxpay-
ers than current UK arrangements. Furthermore, a Scot-
tish defence budget would not be drained by big-ticket
items such as nuclear weapons and 3bn aircraft carriers.
Lastly, we might consider the implications of having a
Scottish defence establishment based in Scotland and
staffed by salaried personnel who are overwhelmingly
resident (and spending) in Scotland.
What would a Scottish Defence Force look like and
what would it do?
The Scottish Governments plans for a Scottish defence
force have undoubtedly been inuenced by the Nordic
militaries. What is depicted is a modestly sized but capa-
ble military force, with emphasis placed upon maritime
and aerial capability. This makes sense given that Scot-
land is a maritime nation, with a sea area more than ve
times larger than its land area. Scottish troop numbers
would build towards a force of 20,000 over ten years,
comprising 15,000 regulars and 5,000 reservists.
What would Scottish military forces do? An inde-
pendent Scotland would be a member of the UN, the
EU and possibly Nato; this could mean any number of
possible commitments. However, the priority would be
defending domestic interests. Increased shipping trafc
through the Northern Sea Route requires a greater com-
mitment to the monitoring of Scotlands coastline and
T
HE referendumdebate has thrown up myriad
questions that the nationalists have been un-
able to provide coherent and convincing an-
swers to, and none more so than questions
about our defence.
From the challenges of globalisation, to the intelli-
gence needed to keep us safe and the economic impli-
cations of separating our defence forces, the nationalist
argument falls down on each and every aspect.
As part of the UK, Scots have a high level of security
in a dangerous world. Service personnel from Scotland,
England, Wales and Northern Ireland work together
in our armed forces to keep us safe at home and tackle
threats around the world.
Scots like the security that the UK armed forces pro-
vide. In the Scottish Social Attitudes survey from earlier
this year, only 27 per cent think that if Scotland becomes
independent she should have her own army, navy and
air force, while a massive 67 per cent believe that even
in the event of separation, Scotland should have a joint
armed forces with the rest of the UK. The truth is thats
not an option if we go it alone we dont get to stay
under the protective umbrella of the UK armed forces,
and I understand why that worries folk.
The UK has an international inuence that few states
can match. We are a permanent member of the UNSecu-
rity Council, a leading member of the EU and a founder
member of Nato as well as part of the G7, G8 and G20.
A separate Scotland simply would not be able to
match that level of international clout. It would not be
able to replicate the UKs extensive and long-standing
network of bilateral defence relationships. The UK
works together with countries around the world on
maximising defence capabilities, on training, on research
and development, and on the intelligence essential for
UK national security, not to mention on vital contracts
for the defence industry.
The UK has one of the largest defence budgets in the
world at 34 billion, and Scotland benets from every
single pound of money spent. In comparison, the nation-
alists propose to spend only 2.5bn on defence, intelli-
gence and cyber capabilities. That is roughly 7 per cent of
the combined UK budget, and less than countries such as
Denmark and Norway spend on defence alone. It is not
enough to provide the level of defence and security we
currently have as part of the UK.
Now take a look at the SNPs White Paper. There is
not a single costed procurement pledge in it. Instead
their plan is simple write a wish list of equipment
you want to take from the UK. Except the UKs defence
infrastructure cannot be easily disaggregated, and the UK
seas; the smuggling of goods, weapons and people is rife
across the British Isles, meriting greater attention than it
currently receives.
On these domestic duties alone, Scottish air, naval and
coastguard services would be busy. Looking beyond Scot-
lands environs, further opportunities would beckon. An
independent Scotland would be viewed by the UN as an
ideal candidate for contributing to international peace-
keeping missions. Involvement in such missions would
provide invaluable operational experience for Scottish
military forces; it would also demonstrate Scotlands cre-
dentials as a good citizen within the international com-
munity. Scotlands contribution need not reside solely
in peacekeeping. For example, a Scottish navy could
contribute to multinational anti-piracy operations in
international waters.
Would independence mean a loss of global clout?
Those speaking for the UK Government regularly warn
that an independent Scotland would miss the global
clout of the UK. Recent years have shown the weakness
of these assertions. The UK has in fact negligible capacity
to steer the course of international affairs. In those areas
where it can exert inuence for example in the EU it
may soon willingly surrender its clout.
In fact, whilst UK ofcials frequently refer to
global clout, most national governments do not speak
in this way. The more typical approach reects the be-
lief that a nations inuence ie being listened to and
being able to enact constructive change within the in-
ternational arena is most evident and least divisive
when it manifests itself through consensus-building and
multilateral action.
These approaches would dene an independent Scot-
lands international outreach. However, this does not
mean that Scotland would be denied the opportunity
to act unilaterally. For example, in 2013, Luxembourg
was the most generous international state donor of hu-
manitarian assistance; Sweden was the second. This type
of commitment may not demonstrate global clout
as some appear to dene it but it is just one example of
how Scotland could decide to prioritise its foreign af-
fairs agenda and take distinctive decisions which have
international impact.
Ultimately, it would not be loss which would dene
Scotlands experience of independence. Scotland and the
UK would necessarily continue to have a multifac-
eted and mutually self-interested relationship. Through
membership of the EU and Nato, Scotland would have a
voice in two of the worlds major regional transnational
institutions.
An independent Scotland would be a more modest
military actor than the UK but it would nonetheless have
the capacity to defend itself in an uncertain global en-
vironment. It could also, however modestly, work with
other nations in helping to shape that environment for
the better.
l Dr John MacDonald is Director of the independent
think-tank Scottish Global Forum
Government may want to keep its equipment. It may, in
the independence negotiations, decide on a nancial set-
tlement, once liabilities and assets have been taken into
account. What then? Does the newScottish Government
buy second hand and make do with equipment designed
and built for another air force, navy or army? Or does it
order new? If it does, Scotland will be facing, potentially,
an undefended decade. And what will the costs be? These
are the questions the nationalists had to have answers to
by now to be credible on defence, but they do not and
they are not.
UK defence sustains thousands of jobs in Scotland
fromthose who serve on the front line to those working
in industry.
Separation will not only have an impact on our na-
tional safety, but it will have a devastating effect on
Scottish defence jobs. Under the SNPs plans, the UK
Clyde naval base will close. It will be replaced by a Scot-
tish naval base, which will not employ anywhere near
the same number of people as are currently based there.
Dont take my word for it, look at the SNPs own plans or
ask the civilian employer at the base.
This is important too for our shipyard workers on the
Clyde and at Rosyth and in the many companies in the
supply chain to the yards. As part of the UK our ship-
yards get special preference when it comes to allocating
billions of pounds worth of contracts, like the magni-
cent Queen Elizabeth-class carriers. The UK simply does
not build complex warships in other countries. Thats
why John Dolan, GMB union convenor at the Clyde
yards, has described the SNPs defence plans as complete
fantasy which would lead to yard closures.
Whatever the constitutional settlement, Scottish poli-
ticians like me will argue for defence contracts and jobs,
but the building of complex warships is regarded by the
UK as a sovereign capability and we have a responsibil-
ity to deal in the truth, not assumption and assertion. If
we leave the UK, Scottish yards will not have access to the
contracts they currently bid for and get.
Many of us are saying No thanks because we believe
the UK gives us the best of both worlds through pool-
ing our resources and sharing the risks. Nowhere is that
better illustrated than in the defence of all of us on these
islands. By pooling our defence resources the four na-
tions of the UK are better protected than we would be by
breaking apart. I suggest we keep it that way and say No
thanks on 18 September.
l Gemma Doyle is Labour MP for West Dunbartonshire,
and Shadow Minister for Defence Personnel, Welfare and
Veterans
Military structure
n Norwegian-Danish inspired emphasis on maritime
and aerial capability, building to 20,000 troops over ten
years.
Affordability
n Infrastructure development and procurement of
military assets funded by multi-billion-pound inherited
share of UK defence assets;
n Annual running costs equivalent to Denmarks;
savings for Scotlands taxpayers
n Signicant proportion of annual Scottish defence
budget spent in Scotland
Activities
n Domestic: maritime and aerial patrol, shipping safety,
customs enforcement.
n International: UN, EU and possible Nato missions,
possible emphasis on peacekeeping.
n Independent Scotland would have a voice in major
international institutions and could prioritise its foreign
affairs agenda
n The UK has the fourth-largest defence budget in the
world
n Our armed forces are made up of 142,500 regulars and
nearly 35,000 trained volunteer reserves
n The UK has a seat at the top table in world affairs. We
are a permanent member of the UNs Security Council,
giving us unique inuence in the world
n The SNPs proposed cut in defence spending
would leave a separate Scotland with a smaller budget
than countries such as Denmark and Norway
n The defence sector in Scotland today employs around
12,000 people
n The UK does not build warships in foreign
countries
AT A GLANCE
AT A GLANCE
DEFENCE
THE CASE FOR YES
BY JOHN MACDONALD
DEFENCE
THE CASE FOR NO
BY GEMMA DOYLE
Soldiers fromthe
Royal Highland
Fusiliers , 2nd
Battalion The
Royal Regiment of
Scotland on parade
Picture: Phil Wilkinson
Baseless optimism is no
match for the facts
Ensuring a direct voice in
decisions that affect us all
The SNPs claims on the process and timescale for Scotland joining the
EU bear no resemblance to the reality of the situation
As a full member state of the EU we will have greater inuence and
control over the policies which impact upon our lives and prosperity
T
HE people of Scotland deserve facts before
going to the polls, not baseless claims or as-
sertions, where difcult questions are batted
away as scaremongering. So in regard to the
EU, let us look at the facts.
It is the position of the European Commission Presi-
dent Jean Claude Juncker, his predecessor Jose Manuel
Barroso and European Council President Herman Van
Rompuy that if Scotland votes to leave the UK this Sep-
tember, it votes to leave the EU. The Scottish Govern-
ment contends that a separate Scotland would become a
member state of the EU. I have no issue with that posi-
tion, but it fails to answer the key questions in the debate
how Scotland would join, how long it would take and
on what terms.
These are the key details of the debate, but they tend
to be brushed over by the Nationalists. Yet the longer
they refuse to answer these questions, the less credible
their position becomes. It is Article 49 of the Treaty on
European Union which oversees the entry of new states
to the EU. However, because the process has historically
been characterised by delay and fraught with political
wrangling, the Nationalists would have you believe it
uniquely does not apply to Scotland.
Instead, the Scottish Government has argued that
Article 48 should be used. This provision governs revi-
sion of the EU treaties. Scottish ministers hope and it is
simply hope that Scotland could become a member of
the EUfromwithin by amending the treaties.
This approach has already been criticised by experts
such as Jean Claude Piris, who said it would not be legal-
ly correct to use article 48. He is correct to say so. There
is clear inconsistency in seeking to use a generic rule to
admit a new member, when specic provisions exist for
it in article 49. Further, the Scottish Governments pre-
ferred option of using article 48 is fraught with difcul-
ties and procedural concerns.
Only a member state or institution of the EU can in-
voke the Article 48 treaty revision process. A separate
Scotland would not be able to. If this process were used
there would be nothing to stop member states adding
provisions and amendments which have nothing to do
with Scotland, risking signicant delay.
A separate Scotland simply would not have the time
for such delays. Making a rod for its own back, the Scot-
tish Government unilaterally proclaimed that, if there is
a Yes vote, Scotland would be a fully independent state
by March 2016, giving Scotland just 18 months to negoti-
ate exit fromthe UK and entry into the EU.
I nd this position to lack all credibility. It is, to put it
charitably, hopelessly optimistic to think that 300 years
of institutions and legislation could be picked apart in
18 months with the UK, never mind the hundreds of
T
HE independence referendum is the great-
est opportunity we have ever had to build a
more prosperous, fairer and better Scotland.
At its heart the case for independence rests on
the belief that it is better for all our futures if decisions
about Scotland are taken by the people who care most
about Scotland the people who live and work here.
We are one of the wealthiest countries in the world,
with a higher GDP per head than France, Japan and the
UK as a whole. But under Westminster for far too many
people it doesnt feel that way.
With independence well have control of the policies
we need to ensure our great wealth can be used to create
a more secure future.
The alternative is to leave decisions about Scotlands
economy, tax system, social security policy and European
future in the hands of Westminster governments often
governments that, like now, have been rejected by voters
here. No-one believes that David Camerons promise to
hold an in/out EU referendum by 2017 was made in the
best interests of Scotland. The Prime Minister took that
decision because of external pressure fromUkip south of
the Border and internal tensions within the Conservative
Party.
The consequence is that Scotland could be dragged
out of the EU against our will if a majority elsewhere in
the UK votes for withdrawal. Several Westminster Cabi-
net ministers are now on record as saying that if an EU
referendum was held today they would vote to leave.
David Cameron is playing a game of European roulette
with both Scotlands future and peoples jobs by starting
a process he can no longer control.
I believe an independent Scotland will take a very
different approach. We wont get everything right and
there will be challenges to face but we will have the
power to put into practice the values that most people
in Scotland share.
That means having an outward-looking international
focus where we look on the EU as an opportunity to co-
operate and achieve not a threat to be overcome.
Scotlands independence is something that runs with
the tide of history. When the UN was formed at the end
of the Second World War, there were fewer than 50 in-
dependent members today there are more than 190.
And of the ten countries which joined the European
Union in 2004, more than half became independent
since 1990 and seven are smaller or around the same size
as Scotland in population terms. All of those countries
have a seat at the top table of Europe so they can put the
case for their national interests and pursue policies they
believe will benet the whole of the EU. That is one of
the prizes that will come with independence.
treaties the Nationalists want to negotiate for entry into
international organisations such as the EU.
This timetable has been criticised by the experts. Ear-
lier this month, the Law Society of Scotland called for
the Scottish Government to set out its contingency plan
should it fail to negotiate entry into the EU in the pro-
posed timeframe. Its concerns were echoed by Sir David
Edward, a former judge of the European Court who said
he did not think it would be possible to negotiate accept-
able terms of entry for a separate Scotland by the Scottish
Governments self-imposed deadline.
It also must be noted that as it stands Scotland lacks
some of key structures normally expected of member
states joining the EU, such as a central bank and its own
independent competition authority.
It is clear that an independent Scotlands entry into
the EU would depend on the outcomes of negotiations
with the rest of the UK. The 18-month timetable for inde-
pendence therefore means securing successful negotia-
tions with the UK and then the EU, yet it has never been
explained howboth processes could occur concurrently.
With the legal arguments and experts against them
the Nationalists have been known to talk about the po-
litical dimension to entry. So again let us look at the facts.
There are several separatist movements across Eu-
rope, realpolitik would suggest that it is in the interest of
member states to showthat secession is not the straight-
forward, seamless process the SNP claimit would be.
Finally let us consider the extraordinary terms on
which the Scottish Government proposes that an inde-
pendent Scotland should join the EU. It wants to retain
the UKs budget rebate, the UKs opt-out from the euro
and the UKs opt-out fromthe Schengen free movement
area.
No recent accession state has joined on terms any-
thing like as generous as these. The SNPs wildly optimis-
tic position is completely reliant on a level of goodwill
fromthe EUwhich is unrealistic in the extreme.
Lets go back to the key questions on the EU at out-
lined at the start How, how long and on what terms?
On the how Scottish ministers are suggesting ignoring
an article used to admit newmember states in favour of a
process highly likely to attract delay. On howlong they
propose a timetable to negotiate exit from the UK and
into the EU which verges on nonsensical, and the terms
they are seeking have not been secured by any recently
admitted member state.
None of this has any credibility or stands up to scru-
tiny. To say otherwise is to do a disservice to the Scottish
electorate who deserve the facts.
lAdamTomkins is Professor of Public Lawat the Univer-
sity of Glasgow
Under Westminster, because we dont have that di-
rect voice, Scotland receives the lowest farmpayments in
the EU. Our shing industry has been damaged and our
rural communities have missed out on billions of euros
of funding. Had an independent Scotland negotiated a
deal similar to Irelands, we could have secured an extra
2.5 billion in rural development funding between 2014
and 2020.
In the event of a Yes vote on 18 September, as an exist-
ing part of the EU, we will move to become a full, equal
member state in our own right. People in Scotland will
still be EU citizens the difference will be that we will
be represented by our own government, not by remote
Westminster administrations for whom Scotland will
never be a priority. The negotiations to secure that in-
dependent status will take place during the period be-
tween a Yes vote and Scotland becoming independent in
March 2016 so at no time will Scotland be outside the
EU. A range of legal and academic experts support that
position. After all, we self-evidently meet membership
criteria because we are in the European Union.
Scotlands continued membership is a matter of com-
mon sense and in the interests of both ourselves and
the rest of Europe. Scotland is a lynchpin of the EU. We
have some of the EUs best universities, with close links
to other European institutions. We have 60 per cent of
the EUs oil reserves and 25 per cent of Europes offshore
wind and tidal potential.
As one of the wealthiest countries in the world we
will be a net nancial contributor and we are home to
160,000 people fromother EU nations. So our independ-
ent membership of the EU will be of great benet to Eu-
rope as well as to ourselves.
But aside fromthe major contribution we have made,
and will continue to make, to the EU, perhaps most
importantly we share and promote the EUs founding
values. The European ideal is based on freedom, democ-
racy, co-operation and the rule of law. In Scotland we are
engaged in a legal, democratic process to determine our
future. It is a process that exemplies the very values of
which Europe should be proud. There is no doubt that
the eyes of the EU and the wider world are on Scotland
as we decide the future of our country. Our prole has
never been higher.
With a Yes vote on 18 September we can take our
place as an equal member of that international commu-
nity. Lets grasp this opportunity of a lifetime to make
our contribution to the wider world and vote Yes.
l Fiona Hyslop is the Scottish Governments Cabinet
Secretary for Culture and External Affairs, and SNP MSP
for Linlithgow.
nIf Scotlandvotes toleave the UK, we vote toleave the EU.
nAs part of the UK we benet fromthe UKs opt-out
fromthe euro, and the UK rebate, which is worth 135
for every household in Scotland
nAs part of the UK we are one of the Big Three in
Europe France, Germany and the UK
nEvery country that has joined the EUsince the creation
of the euro has had to pledge to join the euro
nThe UK has an opt-out fromthe Schengen agreement
and we control our own borders
nScotlandis a valuedpart of the EU withnearly 60per
cent of the EUs oil reserves and25 per cent of its offshore
windpotential.
nAnindependent ScottishGovernment will, for the
rst time, be able topromote Scottisheconomic interests
directly andparticipate onequal terms.
nWithout a direct voice, Scotlandreceives the lowest farm
payments inthe EU.
nHadanindependent Scotlandnegotiateda deal similar
toIrelands, we couldhave securedanextra 2.5 billionin
rural development funding between2014and2020.
nDavidCamerons planfor anin/out referendummeans
that without independence Scotlandcouldbe forcedout of
the EUagainst our will.
AT A GLANCE
AT A GLANCE
EUROPE
THE CASE FOR NO
BY ADAM TOMKINS
EUROPE
THE CASE FOR YES
BY FIONA HYSLOP
Members of the
European Parliament
attend the inaugural
session, on 1July in
Strasbourg, eastern
France
Picture: Getty Images
8 THE SCOTSMAN 8 TUESDAY 5 AUGUST 2014 The Scotsman
Political solution to legal conundrum
With no precedents, Scottish applications to join the EU and Nato could hang on the interests of others
W
ILL Scotland have to apply
for Nato and EU member-
ship if there is a Yes vote?
The Yes campaign has ar-
gued that Scotland would more or less auto-
matically become a member of both bodies.
Better Together, on the other hand, has
argued the opposite; Scotland would have
to reapply to become a member of both in-
ternational organisations and it says it is
unlikely to be granted. It cites the outgoing
president of the European Commission Jose
Manuel Barroso in support of this view. Mr
Barosso believes that it would be extremely
difcult to get the approval for Scottish EU
membership.
But Yes Scotland may have trumped this
claim. In a surprising intervention Sir David
Edward who served on the European Court
of Justice from1992 to 2004 expressed the
view that Scotland would not have any dif-
culties joining the EU. Further, argues Yes
Scotland, Mr Barossos successor Jean-Claude
Juncker as reported in The Scotsman has
declared that he is sympathetic towards a
future Scottish membership of the EU.
Much of this debate depends on inter-
pretation of law and of the existing trea-
ties. The most crucial issue is if Scotland is
the successor state. The successor state is
the rump that is left behind once a country
has seceded. For example, when Norway se-
ceded fromSweden in 1905, Sweden was the
successor state, and bound by treaties and
obligations signed and agreed during the
period of union.
The successor state is responsible for
payment of debt and automatically retains
the membership of international organisa-
tions. The rest of the UK would retain the
seat on the UNSecurity Council.
The newstate will have to apply for mem-
bership of international organisations. Thus
South Sudan (the newest state in the world)
had to apply for membership of the Afri-
can Union and the United Nations when it
became independent in 2012. The applica-
tions were dealt with swiftly and the country
joined the respective organisations within
days of becoming independent.
But many issues are still outstanding. In-
ternational law is based on precedent; in the
absence of an international legislature the
law of nations is largely based on what has
happened before. The problem as regards
EU and Nato membership is that we are in
a new situation. No country has previously
left an EU or Nato membership country to
re-apply.
The question is ultimately a political one
and not a matter that can be determined by
studying the law books. This is also the view
of Sir David. The former judge at the Euro-
pean Court of Justice believes that: All that is
certain is that EU law would require all par-
ties to negotiate in good faith and in a spirit
of co-operation the result of such negotia-
tions are hardly, if at all, a matter of law.
But politics cannot be underestimated in
the EUor Nato.
Membership of the defence alliance may
prove the least difcult. At a time of increas-
ing tensions between Russia and the West,
Nato would have an interest in retaining
Scotland as a member. The neutral Scotland
would not be in the geopolitical interest of
Nato, let alone in the interest of the United
States. Certain issues, especially those per-
taining to nuclear weapons would be a
stumbling block. Still other countries with
clear anti-nuclear policies, such as above all
Denmark, have been able to remain mem-
bers of Nato without compromising on their
opposition to nuclear weapons.
EU membership is potentially more dif-
cult. Mr Juncker may be sympathetic
towards Scottish membership. And in law,
Scotland is far ahead of other applicant
countries such as Albania, Serbia and Tur-
key who all have questionable human rights
records. The problem for Scotland is that a
single country can block membership.
It has been speculated that Mr Barosso a
Portuguese politician with close ties to Spain
expressed the view of the Spanish govern-
ment. Spain fears that Catalonia will seek
to become independent. A referendum is
planned in the region in November but it is
still uncertain if it will go ahead. Spain is anx-
ious to prevent this referendum and would
not want Scotland to create a precedent.
While EU law may require that negotiations
are conducted in a spirit of co-operation,
there are several examples of countries
blocking decisions without providing other
reasons than national pride. For example,
Greece vetoed the recognition of Macedonia
until the country had changed its name to
The Former Yugoslav Republic of Macedo-
nia, and Cyprus has blocked membership of
Turkey. These decisions were not based on
co-operation but on national self interest.
There is in law nothing that can prevent
Spain (or one of her allies) from blocking
Scottish membership of the EU.
G Matt Qvortrup is a constitutional law-
yer and author of Referendums and Ethnic
Conict
INTERNATIONAL PERSPECTIVE
BY MATT QVORTRUP
OutgoingEUpresident Jose Manuel Barroso saidit wouldbe extremelydifcult for Scotland
to gain approval for EUmembership Picture: Getty Images
No. Yes.
Scotlands Independence Debate. For all the facts without fear or favour,
see Scotsman.com/scottish-independence.
There are two sides to every story.
T H E I S S U E S
PART TWO: FINANCIAL
Facts are proving tricky to
pin down in this debate
Yes camp still trailing in the
key battleground
Each side has produced figures to support its claims about Scotlands
future, but neither side can definitively say what is going to happen
I
F THERE is one thing everyone agrees upon in this
referendum campaign it is the need to establish
the facts. Facts are sacred. Facts are the compass by
which we navigate our way through the political
forest. You can rely on facts.
Except you cant. For there are very few facts, only a
multitude of interpretations. Your intuition, your judge-
ment is your only guide and, in the end, you are on your
own. Nowhere is this more abundantly the case than in
the claims and counter-claims made about Scotlands
economic prospects both nowand after independence.
Will you be better off after independence or will you
continue to receive a Union dividend by voting No?
The truth though neither campaign will let you in on
it is that no-one knows. Yes Scotland and Better Togeth-
er have promised you wildly different futures but their
campaign claims, ultimately, are exercises in best- and
worst-case guesswork. They are only two of the many
possible futures contingent upon a host of decisions that
would be made in response to circumstances that, for
now, can only remain a matter of conjecture.
This is not to say that everything either campaign has
done all that number-crunching, all those leaets plas-
tered with smart and shiny statistical infographics has
been useless, merely that expecting either to give you
the facts, let alone the truth is to expect more than
they can reasonably, even possibly, deliver. Indeed, a
sceptic might recall Mark Twains suggestion that in any
argument it is important to Get your facts rst, then you
can distort themas you please.
Everyone agrees on this at least we can be modestly
certain that Scotland is one of the wealthiest parts of
the United Kingdom. All ofcial statistics point to it trail-
ing only London and the south-east of England. There are
worse places fromwhich to begin a journey towards in-
dependence. The Scottish Government insists that, once
North Sea oil revenues are included, Scotland contrib-
utes more in UK revenues than she receives in UK pub-
lic spending. She has done so, St Andrews House claims,
for each of the last 33 years. Over the last ve years, Yes
Scotland argues, our public nances have been strong-
er than the UK by a total of 8.3 billion that is almost
1,600 for every person in Scotland. Be that as it may,
Better Together responds, Scotland benets frompublic
spending per person that is around 10 per cent higher
than the UK average and the long-term nancial ben-
et of staying in the UK is worth up to 1,400 a year to
each person in Scotland.
Who is right? That, like so much else, is a test of faith.
If your instincts lean Yes, you are more likely to believe
the Scottish Government; if not, the unionist argument
is likely to prove more seductive. And if you dont know
who to believe, there is no-one who can help you.
If thats unfortunate, so is the lack of clarity over
which currency an independent Scotland might use.
Are George Osborne and Ed Balls blufng when they
say Westminster could never endorse a formal currency
union that made the Bank of England last resort to the
banks of a foreign country? Or would common sense
I
T has become the best-known nding of the pletho-
ra of polls and surveys conducted in advance of the
referendum. According to the Scottish Social Atti-
tudes survey, no less than 65 per cent of Scots would be
in favour of independence if they thought that leaving
the UKwould result on average in everyone being 500 a
year better off, while only 21 per cent would be opposed.
Forget all the arguments about a shared British iden-
tity or 300 years of common history, Scots were appar-
ently prepared to give all that up if the price were right.
The politicians seemto have taken the lesson to heart.
Just a few weeks ago the Yes side was arguing that inde-
pendence would result in everyone on average being a
1,000 a year better off, while on the very same day the
No camp was suggesting that staying in the Union would
deliver a 1,400 a year dividend. Both sides seemto have
accepted that they need to appeal to our wallet.
On its own, however, the 500 nding can be re-
garded with scepticism. Voters are not necessarily good
judges of howthey would behave in a hypothetical situa-
tion. But lying alongside it is a crucial current reality no
other issue distinguishes Yes and No supporters more
than what they think the economic consequences of in-
dependence would be.
In the most recent ICM poll for this newspaper, for
example, no less than 86 per cent of those who said that
independence would be good for Scotlands economy
went on to say that they intended to vote Yes. Converse-
ly, as many as 85 per cent of those who believe that inde-
pendence would be bad for the nations economy stated
that they would vote No.
So whatever we make of their answers to a hypotheti-
cal 500 scenario, what voters think the economic conse-
quences of independence would be appears to be central
to the decisions they are actually making. Consequently
it looks as though that for both sides the key to winning
the referendumlies in persuading voters of the econom-
ic merits of their case.
Herein lies a problem for the Yes side they have so
far failed to convince most voters that independence
would be good for Scotlands economy. As the table
above shows, still no more than 35 per cent are of that
view no more than back in January. They are clearly
outnumbered by the 45 per cent who reckon independ-
ence would be bad for the economy, a gure that is
slightly higher nowthan at the beginning of the year.
But not all of the economic arguments have gone the
way the No side might have hoped. That is certainly true
of the dramatic announcement in February that no cur-
rent or future UK government would be willing to share
the pound as part of a monetary union with an inde-
pendent Scotland.
The No campaign anticipated that this claim would
see undecided voters ock to their side in horror.
Their expectations were dashed for two reasons.
First, voters were not presuming that a monetary
union would necessarily happen. According to a Pan-
elbase poll conducted just days before the currency an-
nouncement, only 41 per cent expected such a union to
be formed.
Second, the Yes side succeeded in persuading many
voters that the UK could not afford to deny Scotland the
pound and thus was blufng. YouGov recently reported
that no less than 42 per cent are still of that view.
Important though it may be, winning the economic
argument is not necessarily proving easy.
prevail once the referendums done and won? No-one
can be wholly certain, Imafraid.
We can say more condently, however, that so-called
sterlingisation an option Alex Salmond dubs quite at-
tractive is the most probable, if still elusive Plan B for
the Scottish Government. That would see Scotland con-
tinue to use the pound, albeit in an unofcial, informal
fashion. The country would have no central bank and
no lender of last resort. It is, however, an option the First
Ministers own scal commission deemed unattractive.
A formal currency union or, alternatively, sterlingisa-
tion, might not on the face of it affect the lives of ordi-
nary hard-working Scots. The pound in your pocket
would remain the pound in your pocket. But it would
most probably have an impact on the countrys nancial
services industry. Edinburgh, in particular, might have
cause to be anxious about sterlingisation. The upside,
froma nationalist perspective, is the possibility of reneg-
ing on past assumptions about sharing the UKs debt and
beginning independent life with no national debt.
If a formal currency union requires Westminsters
agreement (however galling that prospect may be) it also
raises the prospect of a sharply diminished denition of
independence. Interest rates would be set by the Bank of
England and London would probably insist upon strict
budgetary rules that would limit any Scottish Govern-
ments roomfor manoeuvre. Cynics might even dub this
independence within the UK.
In any case, it seems probable that London would cast
some shadow over an independent Scotland. For in-
stance, current SNP policy is to undercut whatever rate
of corporation tax is levied by Westminster. Effectively,
Westminster would set the Scottish rate of corporation
tax. As regards personal taxation, the Scottish Govern-
ment says it has no plans to increase the burden of tax
paid by individual Scots. No government can tie the
hands of its successors, however.
But some circles can be squared. That is, it is possible
for Scotland to be, relatively speaking, in a better scal
position than the UK as a whole and for it to be true, as
the Institute for Fiscal Studies suggests, that an independ-
ent Scotland, while economically viable, would need to
raise taxes or cut spending to balance its budget.
This game of numbers, however, lies at the heart of the
referendum campaign. The SNP is keenly aware of the
need to establish its economic credibility as a platform
from which the race to independence can be launched.
For their part, Unionists must straddle a line between
noting the advantages of Union and fostering the im-
pression that Scotland, somehow, is too poor or too
hopeless to survive independence. Not a banana repub-
lic, but a shortbread tin economy.
In the end, nancial statistics can only take you so
far. Numbers may seem more solid than words and the
thirst for concrete certainty is understandable, but this
is less an argument about the economy than one about
which set of numbers you are prepared to entrust with
your faith. Facts, even if you can nd them, may not be
able to help you.
PART TWO
FINANCIAL: ECONOMY AND CURRENCY
BY JOHN CURTICE
Changes to the
currency may not
affect Scots on a
daytoday basis, but
the nancial services
industry would
certainly be affected
Picture: AFP/Getty Images
Would independence be better or worse for Scotlands economy?
10
20
30
40
50
(%)
Sept Jan Feb Mar Apr May June July
No difference
Better
Worse
Source: ICM; Dont Knows not shown
This is the second in a four-part series of supplements examining in
detail the issues raised by Scotlands independence referendum.
Part three, on welfare matters, will be published with The Scotsman next Tuesday.
Join the debate at www.scotsman.com/scottish-independence
Making Scotlands money
work for all of us
Costs of walking away are
too great to bear
With full control of spending and taxation, Holyrood will be able to
tailor policies to our nations needs and ambitions
Separation from the Union means putting up barriers to our biggest
export market and a loss of security in difcult times
A
MID the spirited arguments over whether Scot-
land should be an independent country there is
agreement on one vital fact no-one seriously
doubts that Scotland is one of the wealthiest
countries in the world. Scotland is blessed with extraor-
dinary resources and we are rich in human talent.
The gures speak for themselves. Our GDP per head
is higher than France, Japan and the UK as a whole. Our
food and drink industry is worth 13 billion, our manu-
facturers export 15bn internationally and we are world-
class in cutting-edge industries such as life sciences and
renewable technology. Perhaps most signicantly Scot-
land has more universities, per head, in the worlds top
200, than any other country in the world. We have the
best-educated workforce in Europe. Even without a sin-
gle penny from the North Sea oil, Scotland generates
roughly the same amount of tax, per capita, as the UK.
But despite our great wealth for far too many Scots it
doesnt feel that way. On 18 September we have the op-
portunity of a lifetime to make the wealth of Scotland
work much better for all the people who live here. We
can vote Yes with condence knowing we will become
an independent country based on strong foundations.
The case for independence is grounded in the belief
that it will be better for all our futures if decisions about
Scotland are taken by the people who care most about
Scotland the people who live and work here. We wont
get every decision right and there will be difculties to
overcome. But no-one else will do a better job and no-
one else has a bigger stake in our success.
With the limited powers of devolution we have evi-
dence of the gains for people and businesses of taking
decisions in Scotland. Scotland has emerged from reces-
sion with employment at a record level, with more than
2.5 million people in work. Investment in our country
fromoverseas is at a 16-year high.
But our long-term economic growth has lagged be-
hind both that of the UK and other comparable coun-
tries. And in an increasingly competitive world it is now
urgent that we equip ourselves with the powers all other
countries take for granted to give their businesses an
edge.
Under Westminster more and more wealth is being
concentrated in London and the south-east of England
and the gap between rich and poor is rising. Most people
in Scotland will know of friends and relatives who have
had to leave Scotland for job opportunities. As part of
the EU and within the Common Travel Area of the Brit-
ish Isles those opportunities to work elsewhere will still
be there. After all London is a global city that welcomes
people fromacross the world.
But in an independent Scotland, for the rst time, we
will have an economic policy with full powers to put
Scotland rst. That means, working together with busi-
ness, unions and other partners we will have the means
M
Y opinion on separation is a matter of pub-
lic record. I am proud to be Scottish and
British. I will vote No with my heart and my
head. I think Scotland is better in the United
Kingdom, and that it would be an economic and social
catastrophe of epic proportions to disengage with the
rest of the United Kingdom.
The people of Scotland will make their decision as to
whether to break up the United Kingdombased on what
will be best for jobs, their mortgages, savings and the fu-
ture of their families.
As a businessman, I would always weigh up carefully
before making a big decision, kick the tyres so to speak.
The people of Scotland will be doing exactly that when
deciding whether or not to break up Britain.
The problemfor the Nationalists is that even the soft-
est of toe pokes from the Scottish public will see the
tyres of their economic argument deating.
I have absolutely no doubt that the best future for the
Scottish economy, Scottish business and Scottish jobs is a
No vote this September.
In the UK, Scotland is part of the third-largest econo-
my in Europe and the sixth-largest in the world.
The result of this is Scottish businesses whether it is
a family-run rm that has existed for generations, or a
start-up froman ambitious young entrepreneur with an
idea and a dream can sell their products or services to a
domestic market of 63 million across the UK rather than
just ve million in Scotland, barrier free and hassle free.
This means that Scotland sells more to the rest of
the UK, our friends and neighbours in England,
Northern Ireland and Wales, than we do to the rest of
the world.
No matter how many promises, assertions and fairy-
tales the SNP try to cook up, they simply cannot match
that. The UK domestic market is good for Scottish busi-
ness, its good for Scottish jobs, and its good for Scotland
and all of us who live here.
Separation would put that at risk. Scottish-based com-
panies whose customers are based in the rest of the UK
would seriously consider whether they should relocate
south of the Border.
Today, one in ve Scottish jobs is with a company
based elsewhere in the UK. Putting up barriers puts these
jobs at risk.
Every business tries to grow its customer base, and no
business would seriously see its domestic market shrink-
ing by 80 per cent as a good thing.
Our economy as a whole is stronger as part of the UK.
By pooling and sharing our resources across the entire
UK we have more money to spend on our public services
like schools and hospitals.
to build a more secure economy and greater job oppor-
tunities here. Future Scottish governments will be able
to develop policies to address imbalances, and full our
vision of Scotland as an innovative, high-wage and high-
productivity economy, that competes in international
markets and focuses on high-value goods and services.
To compete with the gravitational pull of London we
can design a tax system to provide incentive to rms to
expand their operations here and create more jobs. A
priority will be to ensure more headquarter functions so
that people in Scotland can climb the career ladder here
at home. We can cut Westminster taxes, such as Air Pas-
senger Duty which harmtrade and tourism.
Well also have the opportunity to make savings.
The current Scottish Government has set out plans to
make annual savings of around 600 million by taking
different decisions from Westminster on defence and
nuclear weapons as well as other policy areas and from
not spending money on Whitehall bureaucracy and the
House of Lords.
No-one is denying there wont be challenges. For
Scotland there is a need to increase the working popu-
lation, boost productivity and maintain the population
growth of recent years. The question is whether we can
best meet those challenges by taking on the powers of
independence or leave it to Westminster politicians for
whom Scotland will seldom be a priority. In fact, the
current UK Government has decided to make it harder
for talented students who want to make a contribution
to Scotland on graduation to stay here. And after years
of cuts the Westminster coalition a government led
by a party with just one MP in Scotland wants to make
25bn of further damaging cuts over the next three
years.
Whether we like it or not, those cuts will hit Scotland
if we stay within the Westminster system.
In the rst year of an independent Scotland, our bal-
ance sheet is forecast to broadly match the UKs and pub-
lic sector debt will be falling as a share of GDP. Thats why
I announced plans which would see the Scottish Govern-
ment provide 1.2bn in additional resources in 2017-18
and a further 2.4bn in 2018-19 to boost our economy.
This plan would be equal to supporting around 30,000
jobs, and would support the economy whilst ensuring
Scotlands decit continued to fall as a share of GDP.
Based on that foundation, we can choose to reject auster-
ity and create a newprosperity for Scotland.
Its a better Scottish alternative to the Westminster
cuts which are being imposed out of an ideological
drive to dismantle cherished public services. With in-
dependence, well be better off with Scotlands future in
Scotlands hands.

l John Swinney MSP is Cabinet Secretary for Finance, Em-
ployment andSustainable Growth
By contrast, the economy of a separate Scotland would
be hugely reliant on oil. Last year oil revenues dropped
by 4.4 billion, effectively the equivalent of the entire
Scottish schools budget.
It also means when things go wrong, we are part of
something bigger and can protect ourselves. During the
2008 banking crisis the entire UK underwrote the cost,
keeping money in cash machines and mortgages safe.
A separate Scotland would nd that impossible. The
size of banking assets in a separate Scotland would be
1254 per cent of Scottish GDP.
This of course, is in part due to the size and success of
our nancial services sector in Scotland. Edinburgh and
Glasgow are world-leading nancial cities. They are in
that position because of the winning combination of
Scottish talent taking advantage of the UK pound and
the UK domestic market.
Impartial experts, like the Institute of Fiscal Studies,
have been clear a separate Scotland would face tough
choices on tax and spending, with around 6bn in either
spending cuts or tax increases needed to get our nances
on a sustainable path.
So our economy thrives as part of the UK because our
integration. The UK is the oldest and most successful eco-
nomic union in the world, and the attempt to unravel it
by the Nationalists is exactly what poses a threat to our
economy.
It is nothing to do with Scottish invention, intelli-
gence, entrepreneurship or talent. We lead the world in
these things. It is the simple fact that, for men like Alex
Salmond who have spent a lifetime trying to break up
the UK, economic success is coming under the wrong
ag. It is throwing out the baby because he never liked
the bathwater.
We see this every time the First Minister passes com-
ment on Scottish unemployment gures. If they rise its
the fault of the Union, if they fall its in spite of it. The
doublethink would be amusing if it wasnt so tragic.
When you are blinded by an obsession for decades
you will say and do anything to convince yourself that
you are right, but the people of Scotland will always pick
fact over assertion.
And it is fact that, if we say No Thanks to separation,
we can keep the pound and retain the most successful
economic union in the world. We can safeguard Scottish
jobs and create more by having the best of both worlds,
our own Scottish Parliament, with more powers guaran-
teed, backed up by the strength, stability and security of
the UK.
l John Boyle OBE is an entrepreneur and former chairman
of Motherwell FC. He writes here inapersonal capacity
n Scotland would be a successful and prosperous coun-
try. Our GDP per head including a geographic share of
oil and gas output is greater than in countries such as
France, Japan and the UK itself.
n Scotland has paid more in tax receipts per person than
the rest of the UK in every year since 1980-81.
n Thats one of the reasons Scotlands nances have been
in a stronger position than the rest of the UK, with g-
ures showing that we were relatively better off by 1600
per person in the ve years up to 2012-13
n Using the powers of independence we could stop
Scotland being affected by the 25bn of cuts to public
spending planned by the UK Government and use our
new powers to increase revenues by 5bn by 2030 and
create thousands more jobs.
n Together, the UK provides a single domestic market 12
times the size of Scotlands alone.
n Expert evidence shows that international borders
reduce trade, even where free trade agreements are in
place. This is a result of differences in regulation, tax and
pensions, and the additional administrative burdens of
cross-border transactions.
n UK Trade and Investment has 169 ofces in more
than 100 countries, promoting Scottish exports and
Scotland as a destination for investment, education and
tourism.
n 600,000 Scottish jobs are created by companies based
in the rest of the UK or depend on exports there, sup-
ported by our single market.
AT A GLANCE
AT A GLANCE
ECONOMY
THE CASE FOR YES
BY JOHN SWINNEY
ECONOMY
THE CASE FOR NO
BY JOHN BOYLE
BPs ETAPoil
platformin the North
Sea. Scotlands
potential oil revenue
is a key issue in the
economic debate
Picture: Getty
Money matters, and the
sums just dont add up
Continuity is in best interest
of both countries
Both formal currency union and lesser sterlingisation options present
too many risks, uncertainties and additional costs to be viable
Despite the bluster of Westminster, businesses on both sides of the
Border will be better served by sharing the pound
W
ITHonly a fewweeks to go until the Scot-
tish referendum on independence, the
people of Scotland are still unclear as to
what currency they will be using for eve-
ryday transactions and in what currency their assets and
liabilities will be denominated if there is a Yes vote. Fur-
thermore, since the currency regime associated with the
choice of currency (that is, whether the currency oats
or is xed against other currencies) can have a profound
effect on a countrys ination, competitiveness, employ-
ment and output it is surely incumbent on the First Min-
ister of Scotland to tell the people of Scotland what his
Plan B is?
The Plan A of the Nationalists involves staying in a
sterling monetary union post-independence. An alterna-
tive take on this is to say that they prefer a rigidly xed
exchange rate between an implicit Scottish pound and
the pound sterling, with a one-to-one parity. The eco-
nomic rationale for continuing with such a xed rate
relationship is based on the so-called optimal currency
area criteria, which in turn essentially relies on the con-
vergence of economic indicators, such as productiv-
ity and GDP growth, across participants of the currency
union. Although such criteria would seem to be met at
the moment they will not be met post-independence
both for endogenous reasons, which are the inevitable
consequence of independence, and also because it is the
express objective of the Nationalists to make these indi-
cators change.
However, it is widely accepted by specialists in ex-
change rate economics that these kinds of effects have
profound and systematic effects on a countrys com-
petitiveness or its real exchange rate. Furthermore, if
an independent Scotland were to gain the geographic
share of North Sea oil it would become a net exporter
of hydrocarbons and the rest of the UK would become
a net importer. This would mean the two areas would
suffer asymmetric shocks and that is another funda-
mental source of divergence and driver of a countrys
competitiveness.
I am unaware of any effective proposal from the SNP
as to how these effects would be handled in a monetary
union in which the exchange rate is xed and therefore
cannot be used to handle underlying competitiveness
changes.
The economics of currencies therefore clearly indi-
cates that Plan A is not a viable option for an independ-
ent Scotland and any attempt to impose such will un-
ravel pretty quickly at great cost to all participants a
eurozone monetary union would suffer from similar
and additional issues.
Other lesser forms of sterlingisation have been touted
as alternatives to a formal sterling monetary union. For
example, the slogan it is as much our pound as theirs
has been used many times during the referendum de-
bate to justify adopting sterling anyway as the currency
of an independent Scotland. Or a currency board could
C
URRENCY and debt have featured heavily in
the independence debate and more often than
not as though they are difcult issues for the
Yes campaign when in many respects the op-
posite is true. There is no legal obligation on the govern-
ment of an independent Scotland to accept any liability
for UK Government debt. But the current Scottish Gov-
ernment has expressed its willingness to accept volun-
tarily an equitable share of it on the basis Scotlands peo-
ple also receive an equitable share of the assets to which
they have contributed. Howbig should that share be?
The nal outcome is negotiable, but I believe that Scot-
tish negotiators should take a hard line. The huge size of
the present debt is the result of mismanagement of the
public nances by successive UK governments.
By April 2015 public sector net debt is expected to be
some 1,355 billion. It is forecast to reach 1,548bn by
2019. This liability amounts to about 50,000 for every
family in the country.
The annual cost of servicing this debt exceeds 50bn.
This is the amount that the government has to nd every
year just to pay the interest, never mind the principal. It
is more than the entire annual defence budget.
If Scotland remains within the Union we will share of
this burden for decades to come. If we vote for independ-
ence there is no reason why the UK Government should
get a permanent subsidy fromus to help themclear up a
mess of its own making.
How did this huge increase in debt come about? The
politicians responsible are quick to shift the blame. They
say that in 2007 the British economy was hit by an ex-
ternal shock, a global nancial crisis.The nancial cri-
sis was not global; it was conned to Europe and the US.
Nor was it external. Unlike a meteorite strike, a nancial
crisis is wholly man-made. It was made by governments,
as well as by bankers in the City and on Wall Street. Bank
of England ofcials, nancial regulators, Treasury minis-
ters and civil servants and their political masters all share
some of the responsibility for having led the UK econo-
my into the nancial crisis of 2007-08, and then allowing
it to languish in recession for four more years.
In the run-up to the nancial crisis, monetary policy
was kept too loose for too long. The mortgage market
was barely regulated, while wholesale nancial markets
were not regulated at all. No legislative provision was
made for dealing with insolvent banks.
In2000the UKrananestimatedstructural budget sur-
plus equivalent to 2.4 per cent of GDP. By 2007 that had
turned into a structural decit of 5.2 per cent. This was the
result of unsustainable spending commitments, as well as
persistently over-optimistic forecasts by the Treasury. Be-
cause of the Treasurys pipe-dreamof no return to boom
and bust, it made no provision for the risk of a recession.
The UK was therefore poorly placed to deal with the con-
sequences of the recessionthat beganin2008.
Despite tax increases and cuts in planned spending,
debt has continued to grow under the present UK Gov-
ernment. Messrs Osborne and Alexander are going to
add an estimated 530bn to the national debt in the ve
years of this Parliament. This is more than Brown and
Darling added in 11 years.
be set up in which local Scots pounds, issued by a Scot-
tish monetary authority but backed at least 100 per cent
by sterling, would be freely converted on a one-to-one
basis with Bank of England notes.
However, these alternative forms of sterlingisation are
also effectively xed exchange rate regimes, with a parity
of one-to-one, and therefore suffer from all of the de-
ciencies of a formal sterling monetary zone, plus many
others such as having no lender of last resort function.
As Nobel laureate Paul Krugman and others have
noted, history is replete with the disastrous consequenc-
es of countries trying to defend xed exchange rates
with one-to-one parities when their underlying compet-
itiveness was changing.
For example, in 2001 Argentina began a default proc-
ess on the massive debt generated to defend its one-to-
one xed parity with the US dollar and that costly proc-
ess is still unravelling today, 13 years later. The initial
default pushed Argentina into a steep recession com-
bined with a 100 per cent ination rate. Since that period,
Argentina, once one of the wealthiest countries in the
world, has been locked out of international bond mar-
kets and recently suffered a second default on the pay-
ment of restructured debt fromthe initial default.
This therefore leaves an independent currency with
an independent central bank as the only tenable plan B
option for an independent Scotland. With very limited
foreign exchange reserves to start with, the currency
would need to oat on exchange markets. However,
oating exchange rates are highly volatile and uncertain,
imparting exchange risk and an extra layer of transac-
tion costs into international transactions. For a coun-
try at Scotlands high level of development, and with
the channels of nancial and economic linkages it has
with the rest of the UK, this is clearly not an attractive
prospect.
To attenuate such volatility, interest rates would need
to be set above Scotlands competitors rates, while an
austerity programme of expenditure cuts and tax rises
would be needed to generate a scal surplus in order
to generate sufcient foreign exchange reserves for the
longer-termmanagement of the currency.
Since a separate currency is clearly the only tenable
plan B, and since the negative consequences of such a
plan for a country with the sophisticated economic link-
ages Scotland has are likely to be generational in their
effects, the people of Scotland surely deserve a properly
worked through cost-benet analysis on the currency
issue.
Indeed, unless the benets of such a regime are clearly
shown to outweigh the costs, or in the absence of such
an analysis, the current sterling monetary and politi-
cal union is the only viable currency arrangement for
Scotland.
l Professor Ronald MacDonald holds the Adam Smith
Chair of Political Economy at the University of Glasgow
No politician or civil servant has accepted responsibil-
ity for these mistakes. Instead, ordinary people have been
punished. Under the Union, average real wages in Scot-
land have fallen in each of the past ve years. Thanks to
the mismanagement of the public nances by the British
political class, we have become poorer together.
Despite oil tax revenues from the Scottish waters of
the North Sea having contributed some 160bn to the
UK Exchequer since 1980, the economic policies of suc-
cessive UK governments have meant that every family in
Scotland has ended up with a debt of some 50,000. In
Norway, on the other hand, the Governments manage-
ment of that countrys oil tax revenues has resulted in
the accumulation of a national wealth fund worth some
450bn, or about 200,000 for each Norwegian family.
It is clear in my mind that following independence
there will be a sterling currency union with the rest of
the UK. A continuation of existing monetary arrange-
ments will be in the best interests of both countries. Scot-
land will be the second-largest export market for Eng-
land after the US, and English small and medium-sized
business exporters will not want to have thrust upon
themthe transactions costs and exchange rate risks asso-
ciated with a separate currency.
A formal currency union between two sovereign
countries usually requires consistent nancial regula-
tions together with agreed limits on government budget
decits. Having a binding budget agreement provides
cover for politicians who would otherwise be tempted
to abandon restraint in the hope of winning votes.
We should and will have these kind of prudent limits
whether or not we are in a currency union.
If the currency union proposed by the Scottish Govern-
ment is in the rest of the UKs interests, what is all the fuss
about? As the Nobel Prize winner Professor Christopher
Pissarides of the LSE observed, it is about trying to inu-
ence the outcome of the referendum. By pretending West-
minster wont agree, the No campaign hopes to create the
very currency uncertainty about which it complains.
In the most unlikely event that the rest of the UK re-
fused to enter into a formal currency union, it would be
quite possible for Scotland to carry on using the pound.
This was what Ireland chose to do when it left the UK in
1922, and continued doing so until 1979. In Irelands ex-
perience, as in so many other historical episodes, includ-
ing Scotlands from1716 to 1844, the absence of a central
bank proved no handicap. On the contrary, a major fac-
tor in the reckless behaviour of many US and UK banks
in the run-up to the 2007-08 nancial crisis was their
belief that they were too big to be allowed to fail. As a re-
sult, policy throughout the Western world has changed,
and bail-out by the taxpayer is being replaced by bail-
in by shareholders and creditors. I mention this only be-
cause it will be a factor in the negotiations, not because
I believe there will be any other outcome than the con-
tinuation of a currency union. Once the politics of the
referendumcampaign subside, the economic interests of
both parties with so much in common will prevail.
lProfessor David Simpson is a former economic adviser to
StandardLife and founder of the Fraser of Allander Institute.
n There is no certainty over currency if Scotland leaves
the UK.
n Currency unions dont work without political and eco-
nomic integration Nationalists are proposing the op-
posite. This is why the three UK party leaders have come
together to rule out such an arrangement.
n We are faced with three choices: using the pound
without agreement, as Panama uses the US Dollar, an un-
tested Scottish currency, or joining the euro.
n The pound is one of the worlds most trusted and se-
cure currencies.
n The Eurozone crisis has shown us how important it is
to have a strong and stable currency.
n The British pound is an asset built up as much by Scot-
land as the rest of the UK. The Bank of England is actually
the central bank of the UK, founded by a Scot.
n An independent Scotland is legally entitled to a eq-
uitable share of UK assets, especially if its to take on any
share of debt.
n Its in the interests of the rUK to maintain the cur-
rency union specically (including Scotlands 40bn
contribution to rUKs balance of trade, no transaction
costs for English exports north, an interdependent
nancial system).
n Economic common sense will prevail as political pos-
turing subsides. We have 18 months to negotiate the
exact terms of howsovereignty is pooled after a Yes vote.
Independence gives us the choice what to share in mu-
tual interest with others and when to plough our own
furrow.
AT A GLANCE
AT A GLANCE
CURRENCY
THE CASE FOR NO
BY PROFESSOR RONALD MACDONALD
CURRENCY
THE CASE FOR YES
BY PROFESSOR DAVID SIMPSON
The question of
whether Scotland
will keep the pound,
and in what form,
looms large over the
economic arguments
around independence
The unionist-dominated Scottish affairs committee likened a currency union to Monty
Pythons famous Norwegian Blue but Yes campaigners insist it is the best option Picture: Getty
Debate is alive with possibilities
Multiple solutions exist to the thorny question of sharing the pound, each with its own complexities
W
ILL Scotland be able to keep
the pound? As in all other
issues pertaining to the ref-
erendum, opinion is ercely
divided. Not surprisingly, the Scottish affairs
committee at Westminster dominated by
unionist MPs played on Monty Python and
declared in a report that currency union is
dead as a parrot. Ian Davidson, the Labour
chairman, recently said: The Scottish Gov-
ernment tries to give the impression that a
currency union is still a possibility. It is not.
This parrot is dead.
His opponents, of course, categorically
deny this. Maintaining that the possibility
of a currency union is still possible, Deputy
First Minister Nicola Sturgeon has empha-
sised that not sharing sterling would cost
businesses south of the border an extra
500 million in transaction costs.
The issue of the currency has been hard
fought and was for a while a strong point
for Better Together. But this changed after an
article published in the Guardian in March
this year. The newspapers chief political
correspondent, Nicholas Watt, wrote that
a government minister at the heart of the
pro-union campaign, admitted, of course
there would be a currency union.
That a currency union is possible was also
the message from Mark Carney, the Gover-
nor of the Bank of England. Though Dr Car-
ney was adamant that sharing the currency
was a challenge and would be difcult.
The two governments, he said, will have
to consider carefully what the necessary
foundations for a durable union are.
Currency unions are not as rare as many
have suggested. Before the euro was es-
tablished Belgium and Luxembourg were
part of a successful currency union. Earlier
in European history there have been simi-
lar arrangements between large and small
countries. Between 1873 and 1914 Denmark,
Sweden and Norway formed the so-called
Den skandinaviske mntunion. The union
broke down after the First World War broke
out. The Latin Currency Union, established
by France, Belgium, Italy and Switzerland in
1865 lasted until 1927.
But a fully edged currency union is not
the only option. There are roughly three
alternatives.
The rst option is that the Bank of Eng-
land becomes a supranational institution
with representatives from both independ-
ent countries. This is the option favoured
by the current Scottish Government. This
proposed arrangement is opposed by the
current British Government. London fears
that a Scottish government may be more s-
cally generous than a Conservative-Liberal
coalition would like.
This arrangement is what is referred to as
a currency union. To establish such a union
would require an international treaty. Some
lawyers take the view that this treaty would
lead to transfer of sovereignty to a newbody.
If that is the case, current legislation requires
that there is a referendumin England before
the treaty comes into force.
If it becomes impossible to establish a
supranational Bank of England, an inde-
pendent Scotland could do the same as El
Salvador and Ecuador do in relation to the
US dollar. Similar to the two Latin American
countries, Scotland could simply use English
banknotes. But that might not be palatable
for a newly independent Scotland. This ar-
rangement is the second option.
The third option is a so-called Hong Kong
Solution. The Hong Kong dollar is pegged to
the US dollar. In fact, this is very much the
situation today. Since The Banknote (Scot-
land) Act 1845, Scottish banks such as RBS,
Bank of Scotland and Clydesdale Bank have
had the right to issue notes on the condi-
tion that they hold an equivalent quantity of
English banknotes. Similarly, the Hong Kong
Monetary Authority has at any given time a
reserve of US dollars equal to the amount of
Hong Kong dollars in circulation.
In the event that an independent Scotland
does not reach an agreement with London,
the Hong Kong option would be a possible
solution, though one that would require a
high level of scal stability in Scotland. As
long as Scotland does not embark upon a
Greek spending spree, this option is a possi-
ble solution.
Some in Better Together suggested the
Mark Carney ruled out currency union. Yes
Scotland came to the directly opposite con-
clusion. So what did the Governor actually
favour? He did not say directly. Being a pub-
lic servant, and a Canadian, he was aware of
the political dangers. But given that he used
the words, necessary foundations for a du-
rable union, it seems that he believes the
best option is a supranational institution. In
other words a currency union.
But while Carney may be closer to the Scot-
tish Government position he stressed that
it would be very difcult to reach an agree-
ment. This prediction is likely to be accurate.
Conict
BY MATT QVORTRUP
No. Yes.
T H E I S S U E S
PART THREE: WELFARE
Money matters at the centre
of the battle for votes
Source of funding the main
difference between the sides
While their views on whats best for Scots personal nances differ
wildly, its clear both side of the debate agree on the issues importance
F
OR a small country, Scotland contains multi-
tudes. It is only a short distance by road fromthe
splendour of Glasgows west end or the genteel
luxury of its wealthy suburbs to impoverished
housing estates still scarred by the consequences of post-
industrial decline. The low road and the high road take
you to very different Scotlands that are dened as much
by their differences as by anything they have in com-
mon. Neither Scotland can be ignored in this referen-
dumcampaign; neither is large enough on its own to de-
liver victory to either campaign.
Despite this, it is generally agreed that votes cast in
the former industrial heartlands of Glasgow City, Ren-
frewshire and Lanarkshire will have a disproportionate
inuence upon the eventual outcome. Labour voters in
Castlemilk or Hamilton; Easterhouse or Gourock are con-
sidered the most important potential swing constitu-
ency upon which the result will hinge.
As a consequence, the campaign experience here is
very different to the one found in Morningside or Aber-
deen. It is less a struggle about identity or tax than one
about social protection and poverty. This is the cam-
paign that seeks to persuade voters who long ago aban-
doned faith in politics-as-usual to return to the polls and
cast their ballots for a different, better, future. A cam-
paign that, as Yes supporters would put it, still believes in
a place called Hope.
JimSillars, returning to high-prole politics after years
in the background, is adamant the referendum will be
won or lost in housing estates that were once rock-
solid Labour voting areas but that now, too often, have
become areas detached from political life. Schemes in
which grinding poverty produces a kind of despair, apa-
thy and hopelessness that wreaks enormous damage.
Unemployment, disability, poor health and low levels
of educational attainment have left too many commu-
nities behind. A rising tide has not lifted all boats. This,
Yes campaigners argue, is a Scotland that literally cannot
afford to vote No. What, in any case, do the poorest com-
munities in Scotland have to lose from independence?
Where is their so-called Union dividend?
Polling evidence suggests that income is the best
single predictor of support for the Union. In general,
though with exceptions, the wealthiest parts of Scotland
are also those most likely to endorse the constitutional
status quo. Which explains why the Yes campaign has
made inequality a centrepiece of its campaign to per-
suade Scots a different future, a different kind of soci-
ety, is not only achievable but fundamentally necessary.
Scotlands wealth means the country can afford to be
independent; poverty and inequality mean it must be
independent.
So the argument is twin-pronged. As SNP ministers
endlessly repeat, as measured by OECD gures, an inde-
pendent Scotland would be the 14th wealthiest country
on earth. In other words, this is a wealthy nation that
can afford to do better than it does at present. Alex Sal-
mond, in his rst debate with Alistair Darling, reiterated
his belief in an entrepreneurial Scotland that was also a
just society. Supported by campaign groups such as the
Common Weal movement and the Radical Independ-
ence Campaign, the battle for independence is, in large
part and by their own admission, less a matter of nation-
al liberation than a ght for social justice.
The SNPs vision for Scotland is, in many respects, a
hybrid beast: Anglo-Saxon capitalist vigour coupled with
Nordic social democracy and a generous welfare state. It
is an ambitious blend, if also one that contains a certain
number of contradictions. Can Nordic levels of social
O
NE of the key arguments in favour of inde-
pendence laid out in the Scottish Governments
White Paper is that an independent Scotland
would be a more equal society, an objective that would
be underpinned by a more generous welfare state and
would reect Scotlands more social democratic ethos.
The Yes campaign often cites the so-called bedroomtax
as an example of why London cannot be trusted to pro-
vide an adequate safety net for those in need.
In contrast, the No campaign argues that Scotlands
welfare state would be more safe and secure if it contin-
ues to be funded from the (larger) UK-wide pool of tax
revenues. It often suggests this is particularly true of the
one benet we all hope to enjoy, old age pensions.
What should we make of these claims?
People in Scotland do have a somewhat more gener-
ous attitude towards welfare than their counterparts in
England. According to the British and Scottish Social At-
titudes surveys, 61 per cent of people in Scotland think
that the government should spend more on benets for
people with disabilities, compared with 54 per cent of
people in England.
Yet this does not mean that Scotland has been im-
mune from the UK-wide trend towards a more censori-
ous attitude to some of the less popular aspects of the
welfare state. For example, whereas in 2001 just 26 per
cent of people in Scotland thought benets for the un-
employed were too high and discouraged people from
trying to nd work, now the gure has doubled to 52
per cent. As our graph shows, this trend has occurred in
almost perfect parallel with a similar change in England.
Moreover, those who propose to vote Yes in the refer-
endum are only a little more likely to adopt a generous
attitude towards welfare. While 68 per cent of Yes sup-
porters think more should be spent on people with dis-
abilities, so do 58 per cent of No voters. Although just 23
per cent of No supporters believe unemployment benet
is too low and causes hardship, the gure amongst those
intending to vote Yes is, at 32 per cent, only a little higher.
In short, attitudes towards how generous the welfare
state should be seemto play little role in most voters de-
cisions about which way to vote in the referendum.
Meanwhile, although Scots are inclined to be a little
more generous with welfare than are people in England,
it appears that they would still prefer to see the benets
paid to people in Scotland to be funded out of UK-wide
rather than Scottish-only taxation.
According to the 2013 Scottish Social Attitudes survey,
58 per cent of people in Scotland believe that the ben-
ets paid to people in Scotland should be funded out of
UK-wide taxation. Just 36 per cent believe they should be
funded by the Scottish tax payer alone. Meanwhile 61 per
cent believe pensions should be funded out of UK-wide
taxation while only 34 per cent believe they should be
paid for exclusively fromtaxes raised north of the border.
Moreover, opinions on this subject do seem to make
something of a difference to which way people are in-
clined to vote. Just 14 per cent of those who think that
pensions should be funded out of UK-wide taxes say
that they intend to vote Yes, compared with 58 per cent
of those who think pensions should be funded from
Scotlands resources. So there is some truth in the claims
made by both sides. Scotland is inclined to be a little
more generous on welfare, though perhaps not necessar-
ily as much as is sometimes suggested. But it is also not
sure it wants to take on all the burden of paying for it.
protection really be reconciled with or delivered by neo-
liberal, Anglo-Saxon levels of taxation? Can every circle
be squared so Scotland can be a low-tax, high-welfare
country?
Nevertheless, a large part of the case for independ-
ence has centred on the need to secure current levels
of welfare spending so as to protect Scotland from the
presumed ravages of UK Government policy. In this, as
in other areas of the debate, the Scottish Government as-
sumes the role of a kind of national protector or guard-
ian, defending the status quo fromthe predations of the
coalition Government in London. In this way independ-
ence is reimagined as a vote for continuity, not reform.
Nowhere has this been more abundantly obvious
than in the argument over the so-called bedroom tax.
SNP ministers and Yes campaigners have done their best
to suggest this unpopular measure should be viewed as
a kind of 21st century poll tax foisted upon the Scottish
people against their will. The bedroom tax now miti-
gated though not reversed by the Scottish Government
demonstrates devolutions shortcomings. A policy made
in London, foisted upon a reluctant, even hostile, Scot-
land. Perhaps so, though it remains the case that polling
suggests 50 per cent of Scots think unemployment ben-
ets too generous and more than 70 per cent express ap-
proval, at least in general terms, of welfare reform.
Be that as it may, according to the Yes campaign, as
many as 100,000 Scottish children risk being plunged
into (relative) poverty by the current Westminster Gov-
ernments welfare reforms. Meanwhile, the prevalence
of food banks the use of which has increased sharply
in recent years is a mark of shame that disgures a
wealthy country such as this. If this is a mark of the
Unions success, Mr Salmond asks, what horrors would
failure reveal?
Scotland, in this dystopian view, will become a less,
not more, equal country if the Union is retained. There
are moments, in this long campaign, when it is not clear
which campaign better deserves the sobriquet Project
Fear.
Nevertheless, uncertainty about the future provision
of matters such as pensions is an unavoidable part of the
independence debate. As Better Together insists this, like
uncertainty on the issue of an independent Scotlands
currency, is an unnecessary uncertainty and one intro-
duced by the SNP itself. Whatever one might think of
the constitutional argument in its abstract or theoretical
terms, pensions, like wages and the broader economic
outlook, is a question that voters are entitled to consider
in highly personal terms.
Which is why the Scottish Government has gone to
great lengths to reassure voters that whatever risks inde-
pendence might entail, the fate of your pension is secure.
Doubtless the technical details of establishing a newpen-
sions system would be complex but, rest assured, they
would be far fromimpossible. State pensions would con-
tinue to be paid as they are now, insist the nationalists;
nor would occupational pensions be threatened by the
transition to a new constitutional arrangement, despite
an onerous EU requirement that cross-border pension
funds need to be fully funded. The state pension, moreo-
ver, would be guaranteed by a triple lock rising by a
minimumof 2.5 per cent a year or in line with ination
or wages.
Here again, the dominant motif expressed by the Yes
campaign is that Scots have little to fear save fear itself.
A different Scotland is not simply something to be im-
agined, it lies just around the corner. That, at any rate, is
the promise in which Mr Salmond wishes you to believe.
PART THREE
WELFARE: PENSIONS AND POVERTY
BY JOHN CURTICE
Many believe that the
independence debate
will be won or lost in
the deprived housing
estates of the post
industrial central belt
Picture: Chris James
Is unemployment benefit too high?
30
40
50
60
(%)
1999 2000 2001 2002 2003 2006 2009 2010 2013
Scotland
England
Source: Scottish and British Social Attitudes surveys
This is the third in a four-part series of supplements examining in
detail the issues raised by Scotlands independence referendum.
Part four, on family matters, will be published with The Scotsman next Tuesday.
Join the debate at www.scotsman.com/scottish-independence
Scotland more than capable
of paying its own way
Walk away from our past and
risk throwing away our future
Dire warnings of the risk to pensions if we go it alone are nothing
more than baseless scare tactics
A Yes vote means leaving the security and certainty of a benets
system built up across the UK over more than a century
T
HE Yes campaign says that Scotland can afford
to pay for its own pensions. The No campaign
targets areas where people feel vulnerable.
No plays to human instinct and fear change
is risky even if it is for the better. Your pension is at
risk, they say. For those with little or no private pension
the UK state pension limited compared to other coun-
tries standards is a lifeline. Unsupported threats of risk
to their pensions are both cynical and cruel.
Claims of state pensions being at risk if we vote for
policy decisions to be made in Scotland rather than
England can be easily disproved. The threat can only be
based on the idea that Scotland needs nance from the
rest of the UK to sustain its current pensions. The No
claimboils down to Scotland being in the red and need-
ing subsidy fromelsewhere in order to maintain current
pension provision. The UKparty leaders have agreed that
Scotland has what it takes to be a successful independent
country. Yet, in the same breath they say pensions are at
risk if we vote Yes. It is doublespeak, designed to make
us fearful. Scotland either pays its way or it does not. So,
which is it? No cant have it both ways.
Paying National Insurance contributions (NICs) dur-
ing your working life entitles you, under current UK
rules, to a state pension, but the pension itself is not
funded by your own NICs. Rather, your pension is fund-
ed by the taxes paid by working people.
The question therefore is whether the tax and other
revenues of Scotland are sufcient to pay pensions, at
least at the rate they are at now, of those living in Scot-
land without compromising other spending budgets.
The gures support Scotlands ability to do so. Scotland
has paid more per person in taxes every year for the last
30 years than the rest of the UK. The Institute of Fiscal
Studies states that, ignoring North Sea oil and gas, Scot-
tish tax revenues per head are almost the same as the
UK average. Scotland is a net contributor to the UK and
government gures (GERS 2014) show Scotland spends
less of its total revenue on pensions compared with the
UK average. Expenditure on social protection, including
pensions, is a lower percentage of Scotlands output than
the UK average.
Politicians and governments on all sides will make
claims about pensions. But they have no case to say that
the level of state pension, currently set by Westminster,
is threatened by decisions about our revenues being
made in Edinburgh rather than London. Whatever party
you prefer to vote for and whatever claims they make
about your state pension after independence, the gures
show that Scotland can sustain, and if it wanted to, with-
out spending on nuclear weapons and such like, have the
potential to increase the pensions we already have.
Pensions already accrued under a UK government
are to be respected after a Yes vote. Steve Webb, the UK
coalition government pensions minister, conrmed
T
HE United Kingdomintroduced the rst state
pension 106 years ago. This was the beginning
of the modern welfare state. The Liberal Minis-
ter in charge was Welsh radical Lloyd George,
but the author of the state pension was the Labour party
or more precisely the rise of the Labour party.
The state pension was not given to working people
across these islands without a ght. It was won.
Won by the formation of the Labour party led by a
Scot, Keir Hardie, and committed to redistributing the
vast resources of the UK to the needs of the people.
Won by the votes of the people who put Labour MPs
in Parliament in 1906 and who promised to send more
Labour MPs there.
Won froma Liberal and Tory establishment who con-
ceded the principle of the state pension not because they
believed it right but because they believed it impossible
to resist.
It is the principle established in 1908 by Labour pres-
sure that this civilized nation has a responsibility to its
pensioners upon which all further pensions progress
has been built.
We built this pensions systemtogether across the UK
and we all continue to contribute together. Our parents,
grandparents and great-grandparents helped build a sys-
temwhere everybody fromWick to Walsall can be sure
of dignity in retirement.
Governments come and go but the sharing remains.
The people of the UK who built this systemdid so on the
basis that we share our resources so that those in need
get what they need. The result is that the UK spends far
more on the state pension and associated pensioner ben-
ets than in any other area of social security. We do so
because of successive Labour governments commitment
to sharing resources across these islands on the basis of
need. And yet progress is sustained not just by Labour
governments. Its sustained by the solidarity and strength
of the UK labour movement.
Just as the rise of Labour 114 years ago changed quickly
the rules of politics and led to the creation of the state
pension by non-Labour governments, so the continuing
centrality of Labour to UK politics as the ofcial opposi-
tion as well as in government, has protected the gains of
social progress.
No Tory government since the rise of Labour has
dared abolish the principle of redistributing resources
across this island on the basis of need. Politicians re-
spond above all else to pressure and the commitment of
the labour movement across all parts of these islands to
social solidarity via resource sharing and redistribution
has constrained all Conservative governments.
The UK pension systemis not perfect of course, nor is
that those who had accumulated rights to UK pensions
would be entitled to their pension after independence.
He made the analogy of a Scottish person who works
all their life and then retires to France they still have
an accumulated pension right in respect of the National
Insurance they paid when they were part of the United
Kingdom. He also stated that citizenship is irrelevant.
Scotlands projected ageing population has been
raised as a problem. It is a challenge for most European
countries and has been acknowledged by the Scottish
Government. An adequate response is one that does
something about this. We need targeted policy to keep
young workers in Scotland and to attract new young
workers to come here. We need the powers to do some-
thing about the issue rather than sitting back and trust-
ing Westminster, with its other priorities and pressures
in the south-east, as the situation gets worse. A fair and
sensible immigration policy, targeting talented young
workers, would help, as would economic policies de-
signed to encourage existing young workers to actually
stay in Scotland. We have net migration out of Scotland
in this group. We might well ask why. The status quo of-
fers no change to policy making in these areas. Full pow-
ers for the Scottish Parliament do.
Private pensions remain a contractual matter between
individuals and their chosen pension fund provider.
Long established contract law will always continue to
formthe basis of these agreements.
Regulation, as far as the current Scottish Government
proposals are concerned, will be aligned with UK regu-
lation and protection provisions maintained. In terms of
EU requirements for full funding of the few remaining
dened benet schemes, the EU has allowed funds to
work towards full funding via transitional agreements
and it is most likely that this would apply to new cross-
border funds. Kevin Le Grand, head of pensions policy
at Buck Consultants and past president of the Society of
Pensions Consultants has described the No campaign
argument on EU full funding as unhelpful scaremon-
gering which hides the real issues. He stated that it is
inconceivable that the EU would not allowtransitional
arrangements for schemes.
Being told that Scotland cannot, uniquely among
wealthy nations, sustain what is a relatively low level
of pension by any similar standards, is a somewhat odd
claim. Logic shows that Scotland already pays its way and
has better prospects of continuing to do so with targeted
decisions made here rather than elsewhere.
lRachel Holmes is a chartered accountant and has worked
for 17 years for major nancial institutions in Scotland,
London and Luxembourg. She has been a full time lecturer
since 2007 with the Institute of Chartered Accountants of
Scotland and, more recently, at university in Edinburgh. All
views are her own.
the systemin any nation. But the UK systemis built, it is
sustainable and it has a broad spread population to sup-
port it; a systembuilt through the generations and there
for the generations to come. Thats something worth cel-
ebrating, defending and promoting. Its the promise of
Labour solidarity, a promise that even the Nationalists
promise to honour insofar as they say there will remain a
pan-UK pensions system.
But they cant keep that promise. Its the same kind of
arrogant assertion which we have wearily grown used to
fromthe Nationalists, be it on currency or the EU.
The people of Scotland deserve the facts. And the fact
is, if we vote to leave the UK, we vote to leave the UKpen-
sions system.
The UK state pension would cease to exist in Scotland.
The security and certainty of the UKs pension promise
would disappear overnight for Scottish pensioners and
for the rest of us who have been paying into the system.
The only promise Scots would have about their pen-
sions would be from Alex Salmond. A man who has
failed to answer the big questions in this debate time and
again.
Scotland receives 200 million a year more for pen-
sions and pension credits than a standard UK distribu-
tion of payments by population. This redistribution
from the rest of the UK would disappear at exactly the
time when Scotlands ability to pay pensions begins to
come under increased pressure from the demographic
challenges of an ageing society.
Whats more, because of EU rules on pension schemes
operating in more than one country, Scottish pension
contributions for occupational schemes may have to rise,
or benets fall, or schemes close, as the Institute of Char-
tered Accountants of Scotland, has emphasised.
The case for keeping the UK pensions system is clear.
Its supported by Scots who can pool and share risk as
part of a more secure UK insurance policy against in-
dignity in old age. Its even supported by the SNP to the
extent that its White Paper asserts a pan-UK pensions
systemcan continue.
But remember for Alex Salmond this is not about pen-
sions. Its about politics.
He cares more about breaking the political union
across the UK its his lifes work than preserving the
common benets of the economic and social union.
We dont have to take that risk. We can vote No to
Alex Salmonds political obsession and instead have the
best of both worlds, our Scottish Parliament with more
powers guaranteed backed up by the strength, security
and stability of the UK.

lGregg McClymont MPis shadowpensions minister
n State pension rights protected and paid as now
n Social protection is more affordable here requiring
a smaller proportion of tax revenues than for the UK
n State pensions will grow by at least 2.5 per cent annu-
ally, and always keep up with rising living costs.
n We can cancel Westminster plans to move quickly to
a pension age of 67
n Well stop the abolition of savings credit for newpen-
sioners on lower incomes
n Private pensions protected and regulated as now
n Accrued public sector rights protected, and policy de-
cided through engagement and consultation with staff.
n The UKs social security system makes 258,000 pay-
ments in Scotland every day
n By continuing to pool and share resources
within the UK we can protect public services and
welfare
n Over the last decade, poverty in Scotland has
fallen signicantly for children, working age people and
pensioners.
n The Institute for Fiscal Studies has reported a separate
Scotland would have to make around 6 billion of cuts
to public spending or tax rises, over and above those
needed as part of the UK, in the years following inde-
pendence.
AT A GLANCE
AT A GLANCE
PENSIONS
THE CASE FOR YES
BY RACHEL HOLMES
PENSIONS
THE CASE FOR NO
BY GREGG McCLYMONT
Some of the rst
recipients of the
state pension in
1909, a century on,
the future of the
allowance is under
scrutiny Picture: Getty
We must stick together to
protect the most vulnerable
Power to end the cycle of
deprivation
Far from solving Scotlands social problems, breaking up the UK will
make it harder to ght for the rights of those in greatest need
With full control of economic and social policy we can create a fairer
nation where everyone can realise their potential
W
HILST the referendum is a signicant
event in Scotlands history, it has seen is-
sues like the ght against poverty pushed
to one side by hypocrisy, humbug and
hubris. Referendum watchers might nd this puzzling,
after all, nationalists talk about poverty at length as part
of their positive campaign. My problemis that they are
using the most vulnerable members of our society as po-
litical footballs to full their own ambitions. It is simply
isnt good enough, and does a disservice to political de-
bate in this country.
We have all seen the images on nationalist propagan-
da. The schoolgirl with the dirty legs, scuffed shoes and
ragged skirt, we are told that voting to break up the UK
will transform poverty in Scotland. Posters designed by
marketing people who clearly have no real experience of
dealing with poverty on a day-to-day basis and cynically
exploiting the cuts and welfare reforms of the Cameron-
Clegg coalition.
That is both insulting and offensive. I amno fan of the
current UK Government. I decry the Orwellian scape-
goating, their shaping of the poor into a cup into which
theyve poured the bitterness and blame for an economy
wrecked by a greed-driven nancial elite. But the refer-
endumis a bigger issue than any one politician, party or
current set of deplorable reforms.
Governments last for a few years, punitive policies
can be made good. Breaking Britain is forever. When
SNP nance secretary John Swinney was presented with
measures to effectively abolish the bedroomtax in Scot-
land using the powers already under his control, his re-
sponse wasnt to immediately help vulnerable people in
Scotland, but to make sure that Westminster wasnt let
off the hook.
Using the poor to further nationalist ambition what
an astonishing, hypocritical response. Or consider the
SNP Scottish minimum wage offer if we vote for inde-
pendence, despite the fact that the SNP voted against Liv-
ing Wage amendments proposed by Scottish Labour and
supported by the Greens in the Procurement ReformBill.
Nationalists who say only independence will trans-
form poverty are, sadly, blinded by their passion. The
reality is that major progressive reforms in the history
of the UK were not just handed to us. Together work-
ing across the UK we fought for the NHS and won. We
fought for the welfare state and won. We fought for pen-
sions and won. We fought for the minimum wage and
won. Women chained themselves to fences for the right
to vote and won. Progressive change doesnt just happen.
It has to be argued for, fought for, and won.
This is the battle immemorial, and changing the
constitution will not make this less so. In fact, the
progressive movement would be weakened by breaking
S
COTLAND is one of the richest countries in the
world, but for too many people in Scotland it
does not feel that way.
The fact is that the reduction in poverty seen
in recent years is nowbeing reversed by UK Government
social security cuts, with one in ve children in Scotland
nowliving in relative poverty. This is unacceptable.
The Scottish Government has focused on doing every-
thing we can to mitigate the harmful effects of Westmin-
ster social security cuts and we will continue to do so
but the impact is still being felt by the most vulnerable
in our society.
What is even more worrying is that 70 per cent of the
welfare cuts are still to come Scotland will see its so-
cial security budget reduced by more than 6 billion by
2015/16, of which more than 1bn relates to children.
There is no reason for children to be living in poverty
in our society. Our children deserve the best possible
start in life and we dont want to see any child in Scot-
land being born into or condemned to live a life of pov-
erty.
Last year, more than 200,000 children were living
in relative poverty across Scotland, with an increase in
30,000 in just the last year even before the main cuts
have taken effect. If we continue with Westminster poli-
cies it is certain that child poverty levels will continue to
increase.
The welfare reforms of the Westminster government
will have a signicant and detrimental impact on Scot-
land and do little to address the scourge of child poverty.
The UK is one of the most unequal countries in the
developed world. Living standards have been falling for
those on middle and low incomes, and the gap between
rich and poor is getting wider. Westminster welfare re-
forms, such as the reduction in in-work tax credits, are
reducing incomes for some of our poorest households.
Figures published last month show incomes are fall-
ing for families in Scotland. Our social contract policies
and our efforts to mitigate the impact of welfare cuts are
designed to help, but we need the powers to do more.
Westminsters bedroom tax affected thousands of
people in Scotland, so in 2013/14 we gave 20 million in
discretionary housing payments to mitigate its impact
on Scottish households. And this year we gave a further
35m to local authorities to top up discretionary hous-
ing payments to meet the estimated 50m needed to
fully mitigate the effects of the bedroomtax in 2014-15.
However, right now, all we can do is mitigate the im-
pact of Westminster policies.
The real and better solution is for the Scottish
Parliament, with the powers of independence, to have
up the UK. The working classes who formed the labour
Movement from Maryhill to Manchester, Leith to Lon-
don would nd themselves broken up, separated by a
border when previously we worked together to improve
all of our lives.
The nationalists tell us that Scotland could set an
example to the rest of the UK after separation. Alex
Salmond himself said we could be a progressive bea-
con, betraying an incredible amount of hubris that our
friends and family elsewhere in the UK need an exam-
ple set to them, when we have worked side by side with
themto achieve change for years.
But it wouldnt just be the poor and vulnerable in the
rest of the UK missing out, those in Scotland who have
the least would lose the most. Impartial groups such as
the Institute for Fiscal Studies have calculated that a sepa-
rate Scotland would face 6 billion worth of spending
cuts or tax rises. Alex Salmond isnt a fan of raising taxes.
He would rather push his regressive council tax freeze
which rips off the poor and offer nearly 400 million in
tax cuts to corporations such as Starbucks and Amazon.
So it would be public services on the chopping block. Of
course, we are not told what specically is at risk be it
our schools or our hospitals. Dont believe it could hap-
pen? Ask the colleges, those working class ladders out of
poverty who have lost 130,000 course places on the SNPs
watch. The White Paper had no serious strategy to tackle
poverty. The headline offer of childcare was a cynical
policy put forward because the SNP have a women prob-
lem, it nowlies in tatters, having been totally uncosted in
the rst place. Like the smaller primary class sizes prom-
ised in their last manifesto, we are still waiting.
The fact is, we are far better placed to ght pov-
erty as part of the UK than we are by breaking it
up. By pooling and sharing our resources across
63 million people rather than just ve million people
we can share risk and reward. We can fund our welfare
state, our pensions and our public services more effec-
tively. Scotland has the best of both worlds. Our power-
ful Scottish Parliament with more powers guaranteed by
the 2012 Scotland Act, with more taxation and welfare
powers to come, backed up by the strength, security and
stability of the United Kingdom. This means that in Scot-
land in the Scottish Parliament, we can tackle poverty
on a truly meaningful level by getting beyond a quick
headline. Ill be voting No and campaigning to keep the
UK together because poverty doesnt respect borders or
ags. To end it, we have to work together.
lAlison Dowling is a credit union worker and anti-poverty
campaigner who works with social housing tenants, local
authorities and the NHS to mitigate against the health and
economic impacts of nancial insecurity.
full control over welfare so that we can put in place poli-
cies that benet the people of Scotland.
In an independent Scotland we would have the pow-
ers to provide one of the most comprehensive child care
packages in Europe, which would allow more parents to
work.
We would also be able to set up a commission to con-
sider a new Scottish minimum wage which would at
least rise in line with ination and ensure that benets,
allowances and tax credits keep rising with the cost of
living.
The Poverty and Income Inequality in Scotland report
published in July demonstrates just how vital the full
powers of independence noware, to enable us to create a
different approach one that supports our most vulner-
able, encourages people into the workplace and provides
a fair days pay for a fair days work.
Our poorest households do not have the income
needed to gain the wealth and security that comes
from owning property or having pension wealth. Un-
less action is taken soon, this cycle of deprivation will
continue, with more children continuing to be born into
poverty.
Housing is a priority for us, we will do whats right for
Scotlands economy and housing market, and where it
is sensible and sustainable, we will help people get onto
the property ladder.
In the lifetime of this parliament we set a target to
build 30,000 affordable homes, at least 20,000 of which
would be for social rent. In three years weve built 19,903
affordable homes, including 14,294 for social rent.
However, the reality is that over the years the West-
minster system has failed to properly address the deep
social inequalities which exist in Scottish society, with
generation after generation feeling the impact.
Tackling and reversing this inequality requires key
economic and social policy levers being in the hands of
the Scottish Government.
Thats why we need the full economic levers available
to us to create a different approach one that supports
our most vulnerable, encourages people into the work-
place and works towards making Scotland a more equal
country to live and work.
We are taking a long-term approach to tackling pov-
erty and income inequality, to remove the barriers that
stand in the way of people being able to realise their full
potential.
Solving the problems of poverty and inequality wont
happen overnight, but with independence we will have
the powers we need to tackle them.
lNicolaSturgeonMSPis deputy rst minister of Scotland
n We share our state pension across a population of
63 million people in the UK, making it more affordable.
The costs of providing pensioner benets in Scotland is
projected to growat a larger rate than the rest of the UK
n Scotland has a faster-growing older population than
the UK, with the number of working age people growing
more slowly. To offset this, we would require additional
migration to Scotland of one million people by 2050.
n We currently spend 80 more than the UK per work-
ing age person a year on providing pensioner benets in
Scotland. Over the next 20 years, that gure is projected
to rise to 200.
n Westminster plans to cut the social security budget in
Scotland by more than 6 billion by 2015 1bn of this
relates to children.
n These cuts are reducing incomes for some of our poor-
est households and poverty is increasing.
n In 2012/13, 220,000 children in Scotland were classed
as living in relative poverty after housing costs thats
an extra 30,000 children compared with the previous
year.
n If we continue with Westminster policies then child
poverty levels will continue to increase.
n We need the full powers of independence for a system
that supports our most vulnerable, helps people nd
work and provides a fair pay.
AT A GLANCE
AT A GLANCE
POVERTY
THE CASE FOR NO
BY ALISON DOWLING
POVERTY
THE CASE FOR YES
BY NICOLA STURGEON
According to
the SNP, around
200,000children in
Scotland were living
in relative poverty
last year
The Yes campaign cites Scandinavia as a model of social welfare for an independent Scotland
but would Scots accept the higher taxes needed to pay for greater equality? Picture: Scott Griessel
Taxing issue of paying for equality
Looking to Scandinavia raises potentially hard questions about Scotlands commitment to a fairer society
T
ACKLING inequality has been a
major issue in the referendum
debate. But the effect of Scottish
independence on social justice is
divided.
Scotland is a wealthy country, but the
reality is that the Westminster system has
utterly failed to address the deep social in-
equalities which exist in Scottish society in-
deed under successive Westminster govern-
ments those inequalities have been allowed
to widen, says deputy rst minister Nicola
Sturgeon. She believes that independence
will reduce the gap between rich and poor.
Her view is countered by former Labour
Prime Minister Gordon Brown. In his book
My Scotland Our Britain Brown wrote: In-
equality could be higher than in England if
Scotland were to go independent.
Three is a lot of politics in these state-
ments, and a fair bit of positioning. Both
views are responses to polling data, which
suggests than many working-class voters are
receptive to the rhetoric of the SNP adminis-
tration. Attacking Yes Scotland fromthe left
at a time when an estimated two out of ve
Labour voters would vote for independence
makes political sense for Better Together.
Gordon Browns and Better Togethers
argument is that allocating money to free
university education (which benets the
middle-classes) means that less money will
be spend on those in real need. This is a
credible argument. However, the evidence
from the Scandinavian states, which many
in the Yes camp wish to copy, suggests that
it is possible to ensure both redistribution
and free tuition at the same time. In fact,
the provision for free tuition provides the
middle-classes with an incentive to sup-
port the welfare state, as Scottish academics
Michael Keating and Malcolm Harvey have
shown in the book Small Nations in a Big
World, which was published in the spring.
The Scandinavian countries have been
suggested as a model for what a Scotland
would be like after a Yes vote. The levels of
social welfare in the Scandinavian coun-
tries Denmark, Norway and Sweden are
certainly more generous than here. Swed-
ish pensioners get high state pension of just
over 25000 per year. The Danes get about
half of that, though this is compensated for
by supplementary pensions to which eve-
rybody has to contribute. In Britain, the g-
ure is a paltry 5500 a year. The net result is
that Danes and Swedes on average get a state
pension that is between four and ve times
that of an average Briton. It is difcult to put
a precise gure on the net gain but some es-
timates published by the Government sug-
gest that if the UKs distribution of income
resembled that of Denmark, 99 per cent of
UK households would gain 2,700 per year.
There is no doubt that the higher pen-
sions have reduced poverty among the eld-
erly in Scandinavia. But equality has come at
a price; higher taxes.
According to the accountancy rmKPMG
the average tax rate for Danes is 55 percent
and 57 percent in Sweden. Norway has a
lower tax-rate of 47 percent due to its policy
of saving the incomes of the North Sea oil.
Taxes would go up considerably so if
Scotland were to go down the path of the
Scandinavian welfare state after a Yes vote.
Unemployment in the Scandinavian
countries is comparatively low; 8 per cent for
both Denmark and Sweden. This is mainly
thanks to laws that effectively force unem-
ployed individuals to either accept work or
retraining. There are penalties for those who
refuse to do so. Many of the welfare-to-work
schemes currently proposed by Iain Duncan
Smith and the Conservative-Liberal govern-
ment at Westminster are inspired by legisla-
tion in Scandinavia. The Scandinavian wel-
fare states are not always social-democratic.
The Scandinavian welfare states do not
have a state-guaranteed minimum wage.
However, agreements between the unions
and the employers organisations mean that
those who are members of a trade union are
guaranteed an hourly wage.
Whether this systemwould work in Scot-
land is an open question. Roughly 70 per
cent of Danes and Swedes are members of a
trade union. The equivalent gure for Brit-
ain is approximately 25 percent. The strong
unions in Scandinavia are integrated into the
economic decision-making and have tradi-
tionally been able to negotiate substantial
improvements in wage and working condi-
tions. At the same time the unions have occa-
sionally accepted pay cuts during recessions.
Assertions, speculations and claims have
characterised the referendum campaign.
There is nothing new or unique about that
it is always the case in referendums. Equal-
ity and howto deal with it is a political issue.
Lower levels of inequality require higher lev-
els of taxation. Whether Scots are willing to
pay this price is a matter that can only be de-
cided once they elect an independent parlia-
ment after the referendum.
Conict
BY MATT QVORTRUP
No. Yes.
T H E I S S U E S
PART FOUR: YOUNG PEOPLE
An issue more focused on the
future than any other
Rhetoric doesnt tally with
what the voters think
As with any policy, attitudes towards education and childcare depend
on individual voters but trying to pigeon-hole them is foolish
J
UST for once, the cliched, lazy suggestion that wont
someone, somewhere, please, please think of the
children has some merit. What is this referendum
campaign if not an argument about the future?
A debate about the kind of country Scotland is, or
could be, and the type of society we wish to bequeath to
the next generations of Scottish children? Never mind
whats been and gone, think of the getting there. The past
is another country and so is the future.
Considered in that light, the Scottish Governments
decision to broaden the franchise and grant 16 and
17-year-old Scottish residents the right to vote in next
months referendumseems entirely reasonable. It is their
country too and they will have to live with the conse-
quences, for good or ill, of the referendums outcome.
They have a larger, more personal, stake in the outcome
than some of their elders.
And yet despite that, there are few signs that a new
generation of Scottish voters have been enthused by the
possibilities that come with independence. Polls suggest
that, as in other elections, pensioners are more likely to
vote than teenagers and also that, contrary to some ex-
pectations, the youngest tranche of voters take a harshly
sceptical viewof independence.
Politicians endlessly repeat the mantra education,
education, education but opinion polls consistently re-
veal that fewer than one in six voters consider education
one of the most important issues facing the country. In
truth, education only occasionally dominates the po-
litical agenda. It might go a long way towards deciding a
countrys future but voters are generally more concerned
with the present. Jobs, the economy and the NHS touch
everyone now; education does not.
Moreover, as a devolved matter and one, thanks to
Scotlands distinct exam and university systems, that is
obviously and widely known to be devolved it is less
than immediately apparent that education might be
transformed by independence. Most probably, voters are
liable and entitled to think, it would continue much as it
is now. Certainly there is nothing stopping the Scottish
Government from reforming Scottish education except,
perhaps, the will to do so.
One of the fewareas of education policy to have made
any great impact during the long referendum cam-
paign is university tuition fees. But even the question of
whether Scottish universities could continue to charge
fees, uniquely, to English, Welsh and Northern Irish
students after independence has only been a matter of
marginal, specialist, concern. The Scottish Government
is convinced it could continue to discriminate against
UK students even though most if not all independent
observers think it highly unlikely Scotland could charge
fees to students from one EU state (the UK) while not
charging students from other nations. This may explain
why many of Scotlands former university principals
have expressed their reservations about independence.
Much greater attention has been paid to childrens
early years. A pledge to devote signicantly greater re-
sources to childcare is one of the Scottish Governments
F
REE university tuition has become one of the icons
of devolution in Scotland. For its advocates it is a
perfect demonstration of the fact that the country
values equality of access to education in a way that Eng-
land, where university fees can now be as high as 9,000
a year, does not. Meanwhile, for those campaigning for
independence the policy exemplies why Scotland
should claim the freedom to implement its allegedly
more egalitarian ethos more widely.
Yet all is not what it seems from the rhetoric of the
political debate. When we look at what the public say we
discover that support for free tuition has always been a
minority cause in Scotland, and only marginally more
popular than in England. Meanwhile, peoples attitudes
towards the merits of free tuition appear to have little to
do with their willingness to vote for independence.
Our graph shows howattitudes towards free universi-
ty tuition have evolved on both sides of the Border since
the advent of devolution. The gures come from Nat-
Cens Scottish and British Social Attitudes surveys, which
have asked people on half a dozen occasions to choose
between three propositions: that no university students
should have to pay fees, that some should have to do so
according to their circumstances, and that every student
should have to pay. The graph shows the proportion
who say no students should have to pay.
Even when in 2000 Scotland was beginning to take its
rst steps along a different path fromEngland, eventual-
ly switching to the so-called graduate endowment rather
than up-front tuition fees, only 38 per cent of people in
Scotland said that no students should have to pay fees
while they were actually studying.
Although only 5 per cent reckoned that all students
should have to pay, no less than 56 per cent believed they
should pay something, depending ontheir circumstances.
These gures were only a little different fromthose in
England. There support for no tuition fees while study-
ing stood at 30 per cent in 2000, while no less than 61
per cent reckoned that the amount that students should
have to pay should depend on their circumstances.
Thereafter, support for the principle of free tuition
actually fell north of the Border to around 30 per cent,
again only a little different from the contemporaneous
position in England. Now, according to the most recent
reading, taken in 2013, it stands at little more than a quar-
ter (26 per cent) though this represents something of
a turnaround after dropping to just 20 per cent in 2010.
So, if anything, free tuition is even less popular now
than it was in the early years of devolution. Equally, even
though the policy position in the two countries has
never been more different, support for the principle is
still only seven points higher than in England.
Given that support for the principle of free tuition is
so low, emphasizing the issue would be unlikely to help
the Yes side win a majority in the referendum even if
those who back the principle were markedly more likely
to vote Yes. However, this proves not to be the case. Ac-
cording to the 2013 Scottish Social Attitudes survey,
support for free tuition is barely any higher amongst
those who say they will vote Yes (28 per cent) than it is
amongst those who are inclined to vote No (24 per cent).
We should not be surprised that politicians who have
promoted a distinctive Scottish policy should want to
argue that what they done is emblematic of the values of
the country they seek to serve. But their rhetoric is not
always a reliable guide to what voters actually think.
clearest examples of an independence dividend. It is de-
pressing to think that childcare is generally considered a
womens issue and that the proposals are transparently
an attempt to close the gender gap that has long been
one of the obstacles along the road to independence. (A
cynic might even think Nicola Sturgeons unofcial title
is Alex Salmonds Ambassador to Women.)
But depressing for a number of reasons. First, because
labelling a policy for women frequently and implicitly
consigns it to second-class status; secondly because doing
so contrives to insult women voters as capable only on
focusing on their own immediate, domestic, interests.
There are no comparable mens policies. And thirdly
depressing because childcare would, even in a less-than-
ideal world, be an issue for fathers as well as mothers.
Be that as it may, the Government argues that its
childcare plan is that rarest of beasts: a virtuous policy
in which all earn prizes and there are no losers. Increas-
ing childcare provision will encourage more women to
return to work, which will increase tax revenues that will
pay for the increased cost of state-sponsored childcare.
Moreover, only independence can achieve this since
without independence increases in Scottish tax revenues
would simply be kept by the UK Treasury. Scotland
would bear the costs but enjoy few of the rewards. This,
the SNP insists, is why it cannot increase spending on
childcare now. Or, rather, explains why it chooses not to
since, at present, increased spending on childcare must
come at the expense of reduced spending in another
area of the Scottish Governments responsibilities. A re-
minder that to govern is to choose a predicament that
cannot be eased by independence.
In any event, that might be the case under the existing
devolution settlement but, however much nationalists
doubt it, the present constitutional arrangements may
not survive a No vote either. Change is promised by all
the main Unionist parties even if they cannot yet agree
on the precise detail of those changes. At the very least,
however, it seems probable that the Scottish Parliament
might be granted control of income tax and benet
fromincreases in revenue stemming fromtax increases
or even cuts in the future. (National Insurance is likely,
however, to remain a reserved matter).
All of which serves as a reminder that policy cannot
be neatly pigeon-holed as a family issue or a womens
matter. Like the bones in the human body, everything
is connected. There are no free-standing policies and
slicing and dicing the electorate into segments that can
be pacied or persuaded by individual policy baubles is
a presumptuous enterprise that risks treating voters as
gullible simpletons.
And yet, despite that, thinking of the children helps
concentrate the mind. What kind of Scotland do we seek
and can that Scotland be delivered by independence or
not? The possibilities are as varied as the country itself
but, in the nal analysis, this future will be built by in-
dividual voters themselves just as much as it will rely on
any vision promised by any politician. You family, your
children, your country.
PART FOUR
YOUNG PEOPLE: EDUCATION AND CHILDCARE
BY JOHN CURTICE
Observers consider
it unlikely an
independent Scotland
could continue to
charge UKstudents
tuition fees and not
other EUstates
Picture: Neil Doig
Should no students pay fees?
25
20
30
35
40
(%)
2000 2001 2002 2006 2010 2013
Scotland
England
Source: Scottish and British Social Attitudes surveys
Investing in the future of our
children and our nation
United we can make a bigger
difference to the world
With independence we can continue our already proud tradition in
education and adapt to help create a fairer society
Walking away from the UK means abandoning a funding system and
infrastructure that has created a global leader in scientic research
P
URSUING freedom from Beveridges ve great
evils of squalor, ignorance, want, idleness, dis-
ease was at the core of the post-war consensus
across the UK. The welfare state was introduced
to ght these evils and, though not without its faults, the
progressive dismantling of the protection it presented is
nowa critical element in the independence debate.
Scottish control over education the specic counter
to Ignorance was protected by the Act of Union but
independence offers us the opportunity to uphold both
traditional values and to ensure that massive budget
cuts threatened by the Treasury in Westminster do not
undermine our capacity to invest in our children, young
people and lifelong learning. With the objective of rais-
ing achievement while preserving an egalitarian ideal,
what should a progressive education systemlook like?
First it should be supporting people and families in
education and learning throughout life. Following the
practice in the best-performing societies and econo-
mies, comprehensive and affordable childcare and nurs-
ery provision are essential in laying the basis for all to
progress and for wider equalities to be pursued. Scotland
will be a more successful and fullled nation only if all
are allowed to be all they can be, regardless of gender,
ethnicity, class, caring responsibility or disability, and in-
vestment in these early years are absolutely vital.
Based on his lifetime experience, Brian Boyd, Emeritus
professor of education at the University of Strathclyde,
has praised the progress made by the Scottish education
systemover the last century, while recognising its faults.
He has argued for a comprehensive system with the
highest expectations of all children, taught by the best
teachers with a mission to educate the whole child in a
system not dominated by formal exams. That contrasts
with the approach south of the Border and suggests a
reappraisal of the strengths, aims and players of our
schools and education and training. That does not imply
further changes at all levels but rather a period of allow-
ing the Curriculum for Excellence to develop, for Scot-
lands good industrial relations and high skill levels of its
teaching staff and university expertise to be applied, and
for facilities and other resources to be used to best effect.
Where there are issues to address, these must focus
on closing the gaps that exist in the aspirations and en-
vironments in some areas. That will require a real step
change in performance: learning frompast mistakes and
successes, learning from elsewhere. Wider and deeper
changes in the Scottish economy and society will be in-
tegral to, dependent on and generating these progressive
improvements: these are complementary policies and
strategies and need addressed holistically.
Underpinning structural improvements will be
the long-established partnership principles that un-
derpin much of what is good in Scotland and which is
recognised beyond this country, this contrasts with the
competition and conict that characterises the neo-
liberal approach. In this context, it is often the case that
I
HAVE dedicated my life to academia, working in
three Scottish universities over 40 years. It has been
rewarding and humbling to see the successful de-
velopment of Scottish universities over this period
and the way in which they punch above their weight,
both within the UK and internationally.
This owes much to the highly talented and commit-
ted academics in our universities. But it has been un-
derpinned by the UK research funding system widely
acknowledged as one of the best in the world, and the
large-scale research infrastructure which we have shared
with the rest of the UK. I wish to express in the strong-
est terms my passionate belief that the best and brightest
future for our world-leading education sector is as part
of the UK.
It is because of our excellence that we do very well.
But dont believe that this would simply continue if we
walk away from our partnership within the UK. In the
most recent year, Scottish universities won UK Research
Councils grants worth 257 million 13.1 per cent of all
awards to researchers in a nation with 8.4 per cent of the
UK population. The Research Councils have themselves
claried their position following misleading quotes at-
tributed to their chief executive by the Scottish Govern-
ment. Their position is clear that Should there be a vote
for independence the current system could not contin-
ue. Those of us who value Scotlands success see this as a
very big reason for staying.
A similar story holds true with the national charities
which deservedly hold a special place in our national
life. While perhaps the potential risks and uncertain-
ties around funding are less intuitively obvious, they re-
main very real. In medical research, Scotland receives 13
per cent of UK-wide charitable funding, around 143m
a year. This support has helped Scottish medical schools
lead UK comparisons. Our institutions hold particular
research strengths in areas such as cancer, heart disease
and mental health services. In life sciences and medicine,
three Scottish universities were ranked in the worlds top
100 alongside 12 other UK universities. We are all part
of this success. The sponsored runner in Newcastle who
raises funding for medical research done in Glasgowthat
helps someone in Swansea proves the strength of this
partnership and in no way short-changes Scotland.
Having celebrated our successes it is only prudent to
consider the risks inherent in an uncertain leap into the
dark. The warnings expressed by 14 of the worlds lead-
ing scientists who are based here in Scotland should hold
our attention. More recently, we had the most senior
gures in UK science speak out. When the Presidents of
the Royal Society, the British Academy, and the Academy
of Medical Sciences raise concerns we should listen.
the aspects of the Scottish educational infrastructure
and institutions that are appreciated around the world
are criticised or ignored at home. The OECD, UN, Euro-
pean Commission and others have singled out our lead-
ing role and superiority in many dimensions of fram-
ing and delivering education, while the problems and
weaknesses receive all the attention here. Building on the
strengths and addressing the issues should guide future
developments.
Akey objective in the ongoing evolution of the educa-
tion and training systemwill be in raising the status and
signicance of the vocational routes through later years
of secondary school and beyond. We already have a fur-
ther education and modern apprenticeship system that
works well but there are still questions over gender and
disability obstacles and some skill shortages.
Again, developments in post-school need to be under-
taken cognisant of and consistent with wider changes
in the economy. Promoting enterprise development
through the employment of innovative workforces is
standard in the Nordic countries, Netherlands and Ger-
many, and modern apprenticeship systems underpin
such successes along with more participative practices.
Building an economy that offers the prospects of
skilled jobs for all school-leavers in a secure and inclu-
sive national strategy has reduced inequalities, directly
addressed aspirational and social scepticism, and led to
long-term stable prosperity. An industrial strategy that
suits the educational and training demands of its citizens
has been the foundation of the better performance of
our nearest competitors for almost two centuries, and
vice versa, and an independent Scotland can pursue our
own paths in these areas with promise.
Finally, Scotland is a world-leader in higher education
in terms of having more top universities and outputs per
academic staff than anywhere else on the planet. As a sec-
tor it is an outstanding success in preserving Scotlands
distinctive culture, values and attainment. Free univer-
sity education, very high examand job market perform-
ances, and out-performing neighbours in winning grants
fromnational and international bodies can be enhanced
further under independence by protecting Scottish insti-
tutions fromthe deep cuts being introduced in England,
by diverting funds from such extravagances as Trident,
and by a more welcoming immigration policy for inter-
national students. Having such facilities in Scotland of-
fers students, families and returners the opportunity to
learn with the best and, with a restructured and vibrant
economy, the prospect of graduate-level employment
here rather than the exit road to a congested, unfullling
future.
At all levels, independence can change education
and training for all for the better, within the UK we are
constrained by inequality, an unbalanced economy and
uncertainty.
lMike Danson is professor of enterprise policy and director
of doctoral programmes SML at Heriot-Watt University
Sir Paul Nurse, a Nobel Prize-winning geneticist, has
made a very personal case for rejecting separation. His
career is testament to collaboration and opportunities
across the UK moving us a step closer to beating cancer.
The only conclusion possible is that the most eminent
experts are all lining up against the risks of leaving the
UK because it would diminish not just Scotland but the
whole UK.
Leading UK charities have also expressed concerns.
The Association of Medical Research Charities repre-
sents more than 120 leading charities including the
British Heart Foundation, Cancer Research UK and the
Wellcome Trust. The umbrella organisation has ques-
tioned the risks that this uncertainty is posing to medi-
cal research funding and clinical trials in particular. The
Wellcome Trust, a major source of funding for medical
research in particular, is clear that future support would
have to be reviewed because it does not fund research
outside the UK to the same extent.
Consideration of the Nationalists proposals pro-
vides no clarity, let alone comfort. Only ten of the 42
paragraphs devoted to universities and research in the
Nationalists White Paper describe post-independence
plans. Five deal with tuition fees and the wish to keep the
status quo by continuing to exclusively charge students
fromthe continuing UK. This is a awed proposal which
the European Union, EU legal experts, and the former
director of Universities Scotland have all said would
fall foul of EU law. This decision therefore is not just
about top-class science it is about the opportunities
open to every student in Scotland. They benet frombet-
ter universities and rewarding careers should they enter
the academy. The practical impact of separation would,
however be more immediate, forcing the introduc-
tion of tuition fees or a drastic fall in places for Scottish
students.
Leaving the UK means leaving a research system that
ranks second to the US in achievement and is the world
leader in delivery per pound because of intense compe-
tition in a big system that gets signicant support from
both the UK Government and UK charities. Neither
would survive independence unaffected; therefore for
science the outlook is bleak.
To settle for less than being a world-leader in research
is selling Scotland short. There is a better choice. I rm-
ly believe that a future within the UK promises greater
achievements than one apart. It is for these reasons that
with considered condence I will say no thanks to break-
ing our successful partnership on 18 September.

lEmeritus Professor SusanShawis former deputy andvice-
principal of the University of Strathclyde
n Budgets for schools, colleges and universities protect-
ed fromOsbornes cuts
n Savings from Trident and not paying for Westmin-
ster invested in a transformational expansion of free
childcare
n New powers to tackle inequalities and poverty the
most signicant cause of educational inequalities
n Free university tuition shows making our own
decisions works and will be protected with a Yes
vote
n Decisions over our schools, colleges and world-leading
universities are taken by the Scottish Parliament.
n Our world-class universities excel through big UK
research funding. UK Research Councils spend 13% of
their funds in Scotland, far more than our 8% population
share. A vote to leave the UK means walking away from
this support.
n If Scotland left the UK and joined the EU, charging stu-
dents fromthe rest of the UK tuition fees would become
illegal. This would not only create a budget shortfall, but
would either force the introduction of tuition fees or,
put places for Scottish students at risk.
AT A GLANCE AT A GLANCE
EDUCATION
THE CASE FOR YES
BY MIKE DANSON
EDUCATION
THE CASE FOR NO
BY SUSAN SHAW
The matter of what
is best for our
childrens education
is a key concern
for parents and
both sides of the
referedumdebate
Nationalists pipe dream is
ushed away by reality
The power to invest in a
better future
The SNPs childcare policy is a shambles. Innovation, not independence
is the way to improve and expand provision
Only with the full control to allocate Scotlands wealth as we chose can
we ensure a better deal for children and women
C
HILDCARE is easily the biggest expense for
working families and, therefore, no wonder
its at the forefront of the referendum debate,
which sees huge swathes of women in the
stubbornly undecided category.
To see an issue entirely devolved to the Scottish Parlia-
ment used as a battering ram to make the case for inde-
pendence is deeply cynical but I refuse to lose sight of the
ambition. Why? Because women in the labour and trade
union movement have been arguing for investment in
childcare for decades.
The referendum has put the issue front and centre. If
you believe, like I do, that high-quality, exible childcare
is key to tackling inequality, to raising attainment and
unlocking womens ability to access to work we have to
keep it there. Regardless of the result in September.
But that requires a serious debate about childcare,
what its purpose is, how its provided and, ultimately,
how were going to pay for it. Its a serious debate that,
despite its prominence, has been poorly served by the
referendum.
So with that said, let me be clear, the White Paper offer
on childcare is nothing but a pipe dream.
The goal is sound. I just wish the level of ambition had
been matched with groundwork and detail.
Lets start with the price tag. The SNP simply cant tell
us how much 30 hours of childcare a week for all one-
year-old to pre-school children would cost. SPICe can.
At least theyve had a go at doing the numbers. Thats
the Scottish Parliament Information Centre a group of
independent experts that works directly for the Parlia-
ment. They put the cost at 1.2 billion. But thats just rev-
enue costs. No one has a clue how many new nurseries
would need to be built, howmany refurbishments.
Surely if Government is going to embark on spending
a thousand, million pounds as Alex Salmond likes to
put it, you think they might have done some economic
modelling to prove it worthwhile?
Alex Salmond has repeatedly said this policy will
bring 100,000 women back in to the labour market but
hes done absolutely no work to evidence that his child-
care policy will be the policy to do it.
If he had, he would have identied fairly early on that
they werent enough women. Quite literally, there arent
enough women with kids under the age of ve looking
for work in order to full his objective.
Even if his policy was 100 per cent successful, hed still
be 35,000 women short.
This matters because the First Minster expects this
policy to pay for itself. He believes that the tax receipts
of 100,000 more women in work would pay for the addi-
tional outlay. But he has no idea of timescales and clearly
A
S 18 SEPTEMBERand Scotlands choice in the ref-
erendum approaches, more and more people
are waking up to the opportunity to transform
childcare with independence. The opportunity
to build a high-quality nursery systemthat supports par-
ents particularly women into work, is one the greatest
prizes to be grasped with a Yes vote.
It is an opportunity that can deliver a virtuous circle.
Increased employment delivering increased tax rev-
enues, which can be invested in even greater expansion
of free nursery places.
It is an opportunity that simply isnt on the table with
devolution. The virtuous circle is broken by the over-
whelming majority of tax revenues from increased em-
ployment going straight to George Osborne.
And, his plan isnt to invest in expanding childcare.
His plan is to cut a further 25 billion from public
spending.
What we have been able to do with devolution is ex-
pand nursery provision to 600 hours a year an increase
of almost 50 per cent on the level we inherited fromLa-
bour. And we have extended eligibility to two-year-olds
fromworkless households this year.
The move to 600 hours saves families 707 per child
per year.
Thats a record to be proud of, but we can do much
more with independence. We can transformchildcare.
Independence will give us the opportunity to invest
more in the supply of services, rather than subsidising
demand. This is the approach adopted in the most suc-
cessful countries. That ensures resources are spent most
effectively, and that childcare becomes more affordable.
It is subsidising demand that has partly contributed to
childcare in the UK being amongst the most expensive
in Europe.
And we can begin that investment by having access to
all of Scotlands wealth. As one of the top 20 wealthiest
nations in the world it isnt that we cant afford to pro-
vide more and better childcare, its that as part of the UK
the money that could begin that transformation is spent
on other priorities such as nuclear weapons. With inde-
pendence we can spend that money on our bairns not
on bombs.
In year one of independence, we will extend 600
hours of nursery care to half of all two-year-olds.
By the end of the rst independent parliament, we
will ensure that all three and four-year-olds and vulner-
able two-year-olds are entitled to 1,140 hours of childcare
a year. Thats almost double the current level and match-
es the time a child spends in primary school.
And, by the end of the second independent parlia-
ment we will extend this to all children from one to
school age.
This is a massive expansion that will allow thousands
of women to work. Free childcare for the whole primary
no sense of what women get paid. Again, because he
hasnt done his homework.
Theyd only get remotely close if every woman out of
work returned to work on a full-time salary of 26,000
a year. No consideration whatsoever that women with
young kids are more likely to end up in part-time, poorly
paid, often unsustainable jobs. Given the SNPs stubborn
commitment to slashing college places for women and
adult learners, its hard to see those patterns changing.
It is an utterly astonishing approach to public policy
making and I cant help but think its so cavalier, so non-
chalant because they just dont expect to have to deliver
it. Apipe dreamis all they need.
But even the dream is a disappointment because its
still relentlessly based on an entitlement to hours and
the reality is that families just dont think like that.
What happens in the summer holidays? What about
kids over the age of ve? What about that frenetic 90
minutes getting kids fed, dressed and out the doors and
yourself to work on time? What about those trouble-
some hours between the end of the nursery day and the
working day? What about trafc and last-minute jobs
and the realities of life?
The White Paper offer is an utter shambles. But Imnot
prepared to kick it to the side of the road and leave the
childcare agenda behind.
Thats why Labour is relentlessly focused on develop-
ing its alternative childcare policy based on the real-life
experiences of families across the land. With the ambi-
tion of giving families what they need when they need
it crucially, by asking themrst.
Were looking at creative solutions too, and there are
wonderful examples that dont receive a penny of Scot-
tish Government or council cash at the moment. Like
Families First in Dundee, a One Parent Families Scotland
project. It has worked with the local housing association
to turn a tenement building into a nursery. The housing
association charges a peppercorn rate knowing that if
more women are working, theyre less likely to fall into
rent arrears.
This model isnt based on the childcare being free.
Simply affordable. And for those awkward bits being
the start of a shift and the start of a school day the nurs-
ery offers a home-based service. Again, not for free but
for affordable rates.
The reality is that we can realise a dream of transfor-
mational childcare in Scotland but the constitution has
absolutely nothing to do with it. Its not about who has
power where but howits used.
l Kezia Dugdale MSP is shadow cabinet secretary for edu-
cation.
school day makes taking a job far more practical than the
current systemof free morning or afternoon sessions.
Anyone who currently faces the hard choice of howto
make a job pay in the face of childcare costs will under-
stand just howsignicant this change can be.
But delivering this level of childcare provision wont
happen overnight. It will require hard work and com-
mitment but it is the kind of national ambition that in-
dependence allows us to pursue.
That national ambition can deliver for Scotlands
women, but just as important, it can also deliver for Scot-
lands children.
We all know that the social and economic conse-
quences of child poverty can last a lifetime. A child
trapped in poverty at three is too often still trapped in
poverty at 30. That is one of the most damning indict-
ments of the current constitutional settlement.
But we know that study after study has shown that
high-quality early learning and childcare is one of the
most effective ways known to break the generational
cycle of poverty.
Taking a child froma disadvantaged background, pro-
viding themwith stimulation and learning, surrounding
themwith love and support, has repeatedly been shown
to deliver real results.
Children who benet fromhigh-quality childcare are
healthier, do better in school and in later life. And, the
benet is greatest for those children who currently have
the least in life.
The late, great professor of economics, Ailsa McKay,
writing last year, said: The gains of investment are great-
est for the most deprived children.
Thats why Jackie Brock, chief executive of Children in
Scotland has called our plans a game changer.
That is the opportunity that can be grasped with in-
dependence. It is an opportunity that no party can cred-
ibly offer with devolution. Even straining every sinew to
expand nursery care within the current constitutional
settlement, the most that will be delivered is an incre-
mental increase with little or no revenues returned to
Scotland to help fund further expansion.
The debate over Scotlands competing futures is fully
joined. The arguments are being tested. A choice of two
futures is before us.
We can choose to take control of Scotlands wealth,
to set our own priorities and to put all our energies into
making Scotland the fairer and wealthier society we all
want it to be.
We can choose a better future.
I believe on 18 September we will grasp the opportu-
nity of independence and transformthe lives of women
and children.
lAileen Campbell MSP is minister for children and young
people
n Childcare is already devolved to the Scottish
Parliament. All parties at Holyrood support increases in
childcare.
n The SNPs plans, which they say hinge on separation,
are not funded. Instead they say they will have increased
tax from getting economically inactive parents into
work.
n However, the Scottish Parliaments independent
research centre found that there were around only half
the number of economically inactive parents that the
SNP policy required to go into work.
n The additional cost of these plans will be between
1.1 billion and 1.4 billion. Without knowing where
this money would come from, the SNP policy is totally
unconvincing.
n Expansion of childcare by the Scottish Parliament al-
ready saves families 707 per child per year
n With independence we can phase expansion of child-
care to 30 hours a week the same as primary school
n By the end of the rst parliament, vulnerable two-
years-olds and all three and four-year-olds will be enti-
tled to 30 hours
n 700 million pledged in the rst independent parlia-
ment to support increased childcare
n An increase in women in the workforce of 2 per cent-
age points could boost tax revenues by 200m (0.5 per
cent). If we match Swedish levels an increase of 6 per
cent tax revenues could increase by 700m
AT A GLANCE
AT A GLANCE
CHILDCARE
THE CASE FOR NO
BY KEZIA DUGDALE
CHILDCARE
THE CASE FOR YES
BY AILEEN CAMPBELL
Nationalists argue
that redirecting
spending will allow
for better childcare
but opponents say
that there simply
isnt enough money
Neither side of the independence debate is likely to cite Tony Blair with enthusiasmbut they
both echo his 1997mantra of prioritising education Picture: Reuters
Learning from the Scandinavian model
Are Scots as willing as their Nordic neighbours to bear the costs of a better education system?
E
DUCATION, Education and Ed-
ucation, were famously Tony
Blairs priorities in 1997. Few
would like to cite the former
Labour leader and Prime Minister in the ref-
erendum. But the electoral strategy is much
the same; both sides promise better educa-
tion and childcare to entice the voters.
Especially Yes Scotland has made claims
about the effect of independence and of how
it will improve education.
In the comprehensive document Scot-
lands Future from November last year the
pro-independence side asserted that: With
independence and the powers over the
tax and benets system we want to extend
the support we give to our youngest chil-
dren and their parents, to expand childcare
provision and deliver additional rights and
opportunities for parents, so that Scotland
matches the very best in Europe. The same
document also promises reduced class sizes
in the early years of primary school.
Anxious not to be outdone, Labours Mar-
garet Curran, the shadow secretary of state
for Scotland, has promised that her party
will introduce 25 hours of free childcare a
week for every three and four-year-old and
15 hours a week for vulnerable two-year-olds.
None of the other unionist parties have out-
lined detailed proposals for what their pri-
orities will be in the event of a No vote.
Whether one can trust one side over the
other is an open question. But to understand
the consequences of a possible Yes vote it is
instructive to look at the philosophical argu-
ments underpinning the SNPs vision of the
so-called Scandinavian system they want to
emulate.
In his New Statesman Lecture in March
this year Alex Salmond spoke of his wish to
carry out a Scandinavian-style transforma-
tion of childcare policies. This is not the
only time the First Minister and his govern-
ment has looked to our eastern neighbours
for inspiration. In 2013 Nicola Sturgeon ap-
pointed Jon Kvist of the University of South-
ern Denmark to advise the current SNP ad-
ministration on welfare.
What are the policies that an independent
Scotland under SNP-leadership is likely to
pursue? What will Professor Kvist suggest to
his Scottish paymasters?
If current policies in the Scandinavian
countries Denmark, Norway and Sweden
are anything to go by, we can expect more
money to be allocated to childcare and to
higher education.
Childcare is likely to see the most drastic
change. In Sweden the maximum you pay
for childcare is 1260 Swedish Krona or
113 per month. This is as hard-pressed
Scottish families know considerably lower
than in Britain. According to the Family and
Childcare Trust, an average British family
pays 315 per month for full-time childcare.
Primary school class sizes are also lower;
20 in Denmark, 19 in Sweden against 25.9
in Britain, according to the OECD.
Another central argument for independ-
ence is cheaper higher education. In the
aforementioned Scotlands Future, the SNP
promised that it would protect free tuition
fees for Scottish students. In Denmark they
have gone one step further. In addition to
free tuition, the Danish students receive a sti-
pend of approximately 580 per month.
This spending spree comes at a cost. The
Scandinavian countries have some of the
highest levels of income tax in the devel-
oped world. In both Denmark and Sweden
the average tax rate is over 55 percent even
for the lowest paid workers.
Some including former Prime Minister
Gordon Brown have criticised Salmond for
wanting to create a Nordic welfare state with
Irish levels of taxation. Some may counter
that Norway has shown that it is possible to
combine high welfare spending with rela-
tively low taxation. But although Scotland
is the second-largest oil producer in Europe
few analysts believe that Edinburgh can em-
ulate Oslo. Scotlands oil reserves fall short of
Norways. They cannot pay for Scandinavian-
style welfare.
The only realistic option is higher
taxation. If an SNP government is re-elected
after a Yes vote in the referendum, we can
expect taxes to increase to pay for the spend-
ing. But this may not deter voters. What
many opponents of independence have not
considered is that higher taxes may be popu-
lar if they pay for good services.
In Sweden taxes are not considered too
high. For several years Save the Children
has put Sweden at the top its league table
of places where it is best to be a parent. Swe-
den is sixth on the United Nations Human
Development Index (the UK is 16th); and
ranks second in its table of child wellbeing
in rich countries. Maybe Sweden proves that
its worth paying high taxes. And maybe a
majority of the Scottish voters are willing to
make a change to a more Scandinavian sys-
tem. They get to choose on 18 September.
Conict
BY MATT QVORTRUP
No. Yes.

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