Dear Alex Salmond

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tl:dr

Dear Alex Salmond

Citigroup made an announcement the other week warning investors about Scotland due to the current uncertainty about its future. In light of this warning you dutifully appeared on the radio to calm any concerns about the solvency of Scotland in the wake of independence. Citigroup suggested that Scotland didn’t have a large enough population to support the annual subsidy for wind farms, your reply was to point out that Scotland was going to sell electricity to the English and all the generated power wasn’t just for the local economy. However, you seem to not understand what a subsidy is, because you completely missed the point of the warning. So let me explain the problem for you.

 

Wind power, and offshore wind power in particular, is the most expensive form of energy per unit of electricity produced. This is why the UK government provides incentives and subsidies because the tipping point where fossil fuels become more expensive than renewables hasn’t been reached yet. On its own this wouldn’t appear to be a problem, you could just continue with fossil fuels, except that fossils fuels are quickly running out and climate change is taking hold of the planet. So the UK government takes action to address these issues by providing incentives and subsidies to make renewable energy more economically competitive and wind farms more attractive to private enterprise, in the process guiding us to a clean, green and energy secure future. If Scotland became independent and didn’t continue to provide these  subsidies then the country would either have no wind farms or wind farms with electricity that was too expensive to sell. To keep wind power economically viable the Scottish government has to continue these subsidies, which places the country in the peculiar position where the more wind energy you sell to the English, the more it costs the Scottish people. I’m sure the English would love to buy all your cheap wind power paid for by the Scottish government, but it simply isn’t a sustainable prospect.

During your radio interview you also pointed out that Scotland received over £750m in foreign wind power investment to paint a picture of a bright future ahead of Scotland. This is really a nasty bit of spin, the investment figure may be correct, but how much of that money ends up in Scottish pockets? Foreign investors, buying turbines manufactured in Denmark and Germany, low value short term construction employment, profits which go overseas, and only leaving behind a small group of maintenance workers as long term employed. That sort of investment makes Scotland a staging area for someone else to make money. Its exploitation of Scottish resources for foreign gains which isn’t something to shout about.

I also question your true motivations for independence. Something that I find quite revealing is the wrangling over how to word the question in a referendum. The debate is whether to vote for independence or increased financial powers, but the question I have is why so much debate? The answer is clear, the public might be scared off if voting for independence but increased financial powers sounds so much more acceptable. The motivation of the debate is to work out the most likely question that will result in a win, not to do what’s best for the country, which in turn reveals self interest and ego are playing a large role in your decision making process. Upon analysis we see that a vote for increased powers is merely a vote for independence by another name, and for some reason you have failed to communicate this to the Scottish people. Coupled with what appears to be a form of wilful ignorance towards the economic consequences, I’m almost certain that the only person to come out of independence better off will be yourself.

In the event of independence, or even increased financial powers, Scotland would have to become financially self sufficient. For two different countries on the same currency to offer different tax rates from one another, yet continue to receive the same benefit from the wealth distribution programmes of the other, would be grossly unfair. This then leave’s the country in the sticky situation of being on someone else’s currency and having no control over it. The reason we have wealth distribution programmes is to mitigate the effects of an overly competitive South-East of England by preventing uncompetitive areas of the country from falling off the map with regeneration and infrastructure investment that provides a level playing field. In the event of Scottish independence, the country would be unable to resist the brain drain of London and unable to devalue its currency to maintain competitiveness. Why do you want to devolve the UK into another form of the EU? We only have to look at the EU for a stark warning; Ireland, Portugal and Greece found themselves in this situation and quickly descended into financial disaster. It is almost inevitable that separating the UK into a new ‘Pound Zone’ would lead to the collapse of the Scottish economy and leave the new British government with the task of bailing Scotland out just to prevent its own currency from collapsing. This leaves you with one choice (joining the euro is just the same problem on a different currency) to create a new Scottish Pound independent of the valuation of the GBP. The not insignificant side effect of this is to create a border between England and Scotland where once there was none, essentially de-incentivising new cross boarder business and tourism due to the new hassle of having to deal with two currencies instead of one. It also places existing business relationships at risk as local suppliers to local companies across the border may choose to look within its own economic zone due to new currency uncertainty and fluctuations. Finally, given the high probability of the UK joining the Euro in the event of  a more integrated Europe, the entire process of creating a Scottish currency to keep Scotland competitive will have been a complete waste of time and money.

This doesn’t even account for the potential cultural backlash between England and Scotland that could sour business relations. Or the shrinkage of the amount of money the Scottish government will have to spend per head on public services and investment now that the city of London, which has the highest GDP in Europe, no longer contributes to the Scottish budget. I’m sure the English would love to share the wealth of London with 5m fewer people, however, this would leave Scotland in some trouble. And that last sentence is really the most important point of all, because the British Union has never been about who comes out on top, or who can keep the most money from the other, otherwise the union would have broken up a long time ago and London would probably be its own independent state. Even if it were possible for you to make a clear economic argument for independence due to the fact that Scotland would be better off, is it a good moral decision to suddenly try and abandon the union now that the tables have turned given that for decades investment has come from the south into Scotland. Would a prosperous Scotland not take pride in a net contribution to Great Britain?

Do you sincerely believe MP’s in Westminster are deliberately doing down Scotland, and if not then what is the motivation of your argument if both ideology and financial independence can be thoroughly discredited. I’m not saying Scotland couldn’t be independent, and I’m not saying Scotland couldn’t deal with its own finances with the right planning, in reality I’m sure Scotland would likely be on its own feet in no time, but it seems plainly obvious that Scotland is, and will continue to be, better off as part of the British Union. The real question is what’s the point?

The real problem here is that we still see ourselves as different, Scotland, England, Wales and Northern Ireland. But we need to evolve our thinking beyond our outdated notions of nationalism, British money for British people, British decisions for British problems, and eventually Europeans. As much as I believe the rational conclusion is that independence is not only bad for Scotland but ultimately pointless, my fear is summed up in a quote by Robert A Heinlein, “Reason is poor propaganda when opposed by the yammering, unceasing lies of shrewd, evil and self-serving men”.

Your sincerely

A Concerned Citizen

This post is posted on Monday 21 November 2011.
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Tagged as: Alex Salmond    Independence    Scotland    politics    union    article   
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  1. jamespoynton posted this
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