Monday, 8 April 2019
Could Scotland Push For A 2nd Referendum?
In 1707 Scotland and the Scots we're bought and sold for English Gold or so say the words of Robert Burns. When, in reality the union had formed 54 years earlier with the formation of the Commonwealth between the two countries with the United Kingdom coming into force 1 May 1707.
A Remarkable alliance by all accounts, on one side the English were concerned that the Scots would form or rekindle an old alliance with the French, turning against the English. England had become reliant on many Scots regiments to fight within the army of the then Commonwealth, the fear that these troops would change sides was a real and present danger. On the Scottish side they were heavily in debt following an investment intended to create a great trading route between the Atlantic and stretching across the Pacific. With every Scot, or those that could invest £5 invested in a new pioneering venture based in Panama. This failed impoverishing Scottish folk, hence the term coined by Robert Burns. Whilst the term had negative tones the intent was honourable, and of mutual benefit.
Today we have a real and present danger that the Union will be shattered after a no deal Brexit. This has reduced somewhat due to the SNP losing seats at the last election but it hasn't disappeared. With Parliament behaving the way it has, this could be the catalyst that forces the disintegration of the union, not Brexit.
In many ways this should give time for reflection by those ardent Brexiteers. On one hand the European Union is not flavour of the age, but the historic union between the two great Kingdoms is, and a delicate path forward has to be found. The fragility of the UK is further at risk due to the parliamentary shenanigans. Brexit has been mishandled.
The UK is worthy of saving, and the EU is worthy of leaving. We have a long and powerful history together, fought in wars together. We have a shared language, a shared monarchy, and we have both benefited economically and will continue to do so once we are through this, what is a silly season in British Politics.
Scottish secession will be won or lost based on ideology, emotion and a misguided dislike of all things English. This would be a travesty as undoubtedly we have prospered together. The EU presents a real and present danger to Scotland should they get their hands on this culturally rich kingdom. However, Scotland could well be a bystander in the success of Great Britain and those that remain in the United Kingdom.
In the Union's favour is of course the economic circumstances. Scotland's economy is reliant on oil, during the last referendum for Scottish Independence the oil price hovered around $120 per barrel, looking poised to accelerate northward, today we have $60 approx. The economic situation is a far cry from 2014. Even 2014 the economic well-being of Scotland was far from assured. Today it would make no sense at all, particularly when you look to the Eurozone and their lacklustre growth. For sure Scotland would need to participate in the Euro and the eurozone has been a straight jacket to many EU economies.
Let's be clear for Scotland to be a success austerity would need to bite more severely than it has. Taxes would have to rise and public spending would need to be cut. The Remaining UK tax payers subsidise Scotland to the tune of £1000 per head per year.
The EU have made clear Scotland will leave the EU when the UK leaves the EU. Scotland would have to join the EU by taking its place in the queue. Membership is not at all assured. Spain will most certainly veto membership fearing a backlash from Catalonia. Although, in 2017 Spain have said they would not veto Scotland joining it is generally felt that that was an enforced political posturing.
To detract from the emotional passion to pull away from England, there are several factors to consider:
- The Scottish English border would be a headache for the EU.
- Scotland’s exports to England and Wales are today four times larger than they export to the EU.
- Scottish businessmen and women will most certainly migrate south causing a significant exodus of wealth and jobs from an already beleaguered nation.
- The subsidy argument should not be dismissed, the EU would need to take up the slack at a time when they are reeling from the loss from what is the equivalent of 20 EU states.
The upshot is that the economic losses for Scotland from leaving the UK are probably greater with the UK out of the EU. Meanwhile, as the EU’s problems mount, and indeed the chances of an EU break-up rise, the wider case for Scotland to leave the UK looks weaker still. Suppose Scotland left the UK, believing that the EU would give it shelter, only to find that the EU had broken up. What a fate that would be. So, in contrast to the prevailing conventional wisdom, I believe that a Scottish secession from the UK is now much less likely than it was a few years ago. Click here
Sunday, 7 April 2019
The UK Global Links Are The Envy Of The EU.
I have two threads running under this blog title. 1. Brexit, 2. Asia and Asia's Century. Today I will look at the combination of the two and how it matters, of course once we have the courage to finally leave the regulatory constraints of the EU.
The UK has a great deal to be pleased about, we have links throughout the world. Links that have stood the test of time, with many countries that will soon be deemed Goliath’s in terms of their economic capacity. Then there is NAFTA an association that we would be able to step into with great ease, indeed the door has already been opened. We have the five eyes some of which overlaps with NAFTA, then of course we have the Commonwealth of Nations by all accounts a remarkable progressive group of nations, these in part overlap with NAFTA and the five eyes.
We have allowed this group to fade in our consciousness which has been in a way not helpful in terms of our relationships in or outside of Europe, for these nations economies can no longer be deemed insignificant, India for example will soon become the 4th largest economy. Collectively their GDP represents an enormous opportunity to the UK. This is an organization versed in our legal system making trading easily possible. English is the major language forming excellent communication routes, and of course our Monarch is the head of the Commonwealth. In an illustration below I highlight a book by David Howell a former Conservative Cabinet Minister, titled “Old Links New Ties”. In it he emphasizes that the Commonwealth is a ‘network stretching across 54 independent nations, embracing 16 realms and 38 republics or other monarchies and somewhere above 2 billion people, just about a third of the human race – and on paper at least an economic colossus with 20 per cent of the world’s trade and growth prospects that would make European eyes green with envy’.
I make much of Asia and the growth this region represents and of course our ties are historic throughout this region. For me I have focussed on Indonesia, primarily as this is a country that has captivated me since the early 90s. But let's be mindful this region whilst it has many ties to the realm of course it is only part of the story. Several dynamic, economically progressive African nations they to have links to the UK. These bonds surpass cocktail parties and banter amongst the embassy elite, although these are important, these countries armies are plugged into the UK system, from Sandhurst to Whitehall the links are formidable. Then you have health, legal systems, trade practises, monarchy etc. the historic bonds of time are in place and will serve us well for the future.
Many economic observers foresee the African economies as being on the cusp of significant growth much the same as the tiger economies of the past. Sadly when the UK joined the EU in 1973 our ties were downgraded within the Commonwealth. We deemed the Commonwealth passé perhaps not our smartest endeavour given the stifling regulation that has come down the Euro pipe.
It's not my intention to overplay the Commonwealth. Of course, they are a group of nations not an organized trading bloc within a “Customs union” such that the EU is. However, David Howell makes a significant point that in today's technological environment such blocs are yesterday's story, the future belongs in the increasingly networked, digital world's that these countries have been at pains to develop as their cities emerged into modern metropolis’. What the Commonwealth offers its members is a set of connections and linkages that facilitate trade. At the heart of it lies the English language and similar institutional and legal structures based on the British model. There has even been a suggestion of creating a Commonwealth investment bank, a Commonwealth business visa and a Commonwealth airport queue. Even though these do not sound like game-changers, the possibilities from increased Commonwealth trade should not be lightly dismissed. After all, the EU began with the humble-sounding European Coal and Steel Community.
From remain side of the argument there is great store that the UK is too small. We will never be able to go it alone. Then you reference say Singapore, you then have the argument; they are small and dynamic, a niche player if you like you can not compare a UK as though it is Singapore. It seems the argument is circular, you have to be large or small you can not be mid sized for here we will wither and die. This is a misnomer as the UK is still the 5th or 6th largest economy, it's larger than Russia, Brazil or India.
It is predicted that the UK will soon be the largest economy in Europe after all since the establishment of the Eurozone our growth has surpassed Germany and is double that of France. As I have said in previous notes the UK population is set to grow and become bigger than that of Germany.
It is time to show courage and insist we leave, and hope the Eurozone adapts and returns sovereignty to the nation states. But alas if you listen to Verhofstadt his mantra is always to transfer sovereignty into Europe.
Thank you for reading my ramblings.
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