Current Affairs: Scotland’s decision

Scotland’s decision: The Scotsman’s verdict

 

The Scotsman

 

With exactly a week to go before our historic referendum on Scottish independence The Scotsman gives its verdict on the choice before us

We have been given a historic opportunity. We have a say in a decision that will have a fundamental and far-reaching impact on all our lives, our country and its future. We will all make that decision on where we believe the best interests of Scotland and the Scottish people lie. We will make that decision from a position of pride in our country and belief in ourselves.

One of the questions at the heart of the referendum debate has been: “Could Scotland be a successful independent country?” There is only one answer to that: of course it could. We are a nation of innovative and hard-working people, with a culture of altruism and egalitarianism. We can stand alongside any country in the world, large or small, and hold our own.

Scotland could be a successful independent country, but next week’s question is: “Should Scotland be an independent country?” What we then have to look at is whether this is where the greatest success will lie.

As we approach this pivotal moment in our history, there are issues to be weighed and measured. There are some areas where straight answers are not clear, and they are not only worthy of examination but it is absolutely crucial that examination takes place.

The debate has seen strong arguments on both sides and throughout we have endeavoured to air all arguments fairly and give a voice to as many shades of opinion as possible. That will continue regardless of the position we take on the referendum today.

Perhaps the first area to be examined is currency. The Scottish Government’s preferred option is a formal currency union between an independent Scotland and the rest of the UK (rUK). The Scottish Government has accepted that our best economic interests lie with the pound. The Governor of the Bank of England, Mark Carney, said in a speech in Edinburgh that, for a formal currency union to be possible, an independent Scotland would have to cede some sovereignty.

He said this week that a currency union between rUK and an independent Scotland would be “incompatible with sovereignty” and both statements probably amount to the same thing; that some political power over factors that would have an impact on the currency would have to sit with the remainder of the UK. We don’t know exactly how much sovereignty we would have to cede yet.

There are other problems with a formal currency union that would allow Scotland to continue operating under the UK economic mantle. The three main Westminster political parties have declared against it, saying they will not enter in to one. The First Minister has dismissed this as “bluff and bluster”, saying that position will change after a Yes vote. To add pressure to bring about that change, the First Minister has said that if rUK won’t share the Bank of England in a formal currency union then Scotland would not pay any share of the UK’s accumulated £1.6 trillion of debt. It is argued that Scotland would have no legal or moral obligation to pay that debt. What English politician would lay his people open to that financial cost, goes the argument.

And although this rejection of formal currency union may be political posturing, because that’s what politicians do, and of course pledges have been broken in the past, underlying a formal currency union is a political decision that would seem to be difficult to thole if you were an rUK politician.

You would be asking the people of your country, with their savings and assets and taxes, to be the ultimate backing for a foreign country. A foreign country that has just decided to leave a union with you and set out on its own. And all this when the very real banking collapse is still a vivid memory with the effects still being felt. Those taxpayers are already unwittingly large stakeholders in the Royal Bank of Scotland. That has to be a difficult ask. And it may well be right, under the law, following a Treasury statement to reassure money markets, that Scotland has no legal responsibility for the UK’s debts and the UK has taken full responsibility for them, but the assertion that Scotland has no moral obligation for part of that debt will sit awkwardly with a lot of Scots; Scotland had a part in running up that debt. Is it fair and right to walk away from that? Is it the best way to start a new relationship with a country that is still going to be your closest partner and ally?

Should the politicians all act as they have said they will, and refuse a formal currency union, the most likely fall-back position is sterlingisation – an informal currency union where we just keep the pound. But there are significant problems with an informal currency union without any political union. There are arguments over the effects of this and the cost of this, but regardless of them, political power over decisions that could affect Scotland’s currency would sit in London with no input from Scotland.

It is clear that any currency union would leave some power residing outside Scotland. But we don’t know how much. We also do not know what impact Scotland walking away from the UK debt would have – some say the markets would welcome a debt-free country which had the nous to get itself in to that position and it could then borrow at really good rates, others that we would be regarded as untrustworthy defaulters. We just don’t know. And in the event of Scotland going its own way on a new currency, that would also probably have an impact on borrowing costs and interest rates. What can we take from all that? It seems highly likely that there will be a cost implication here, but we don’t know what it is.

The issue with EU membership and what that brings is also a difficult one. It seems clear now that Scotland will not be automatically and immediately accepted as a member of the EU and that there will be some admission procedure to be gone through. We do currently fulfil many of the convergence criteria, but what we would have to do for membership is unclear. It may well be the case that common sense on the rest of Europe’s part would be to accept Scotland in, and that we would be welcomed as a valuable member, but there is no certainty of that. Possibly of greater consequence is doubt over some of the special agreements the UK has negotiated and enjoys over the euro, borders and rebates.

This whole issue is, of course, complicated by the doubt over the UK’s position in Europe, with the referendum on membership promised by David Cameron. But it is probably wise not to let that form a part in Scotland’s decision, given there are fairly fundamental questions, not least whether Mr Cameron will still be in power in 2017 to deliver on his promise.

So, in tick-list terms then: Europe is generally seen as a good thing for Scotland, but the future for an independent Scotland in Europe is unclear. We just don’t know what the terms of that would be.

Defence is another major issue. It is said that the primary responsibility of the state is the safety of its citizens. Some people will vote for independence just because it will come with a pledge to clear nuclear weapons from our country. Weapons of mass destruction are an emotive subject, there are deep and fundamental issues about their morality. There surely must be huge doubts about whether our society now would mandate their use in any circumstances, there are questions over their military value given the changing nature of the threats to our security, and there is the far more pragmatic question of their cost for their perceived benefit. But those issues should be separated from Scotland’s constitutional future. The proposal, as things stand, is that an independent Scotland would become nuclear-free but would still be a member of Nato. How we can take the principled stance to free ourselves of nuclear weapons and then shelter under Nato’s nuclear umbrella is difficult to reconcile. The bottom line is that, as a Nato member, we would be part of an organisation whose back-stop is nuclear strikes. All this assuming we were to be accepted as a Nato member on the terms we outline. Again, opinion is divided on the subject but we don’t know for certain. It stands to reason we would be more secure as a member of a larger alliance, especially when it comes to intelligence sharing.

There are many other unknowns in many other fields, not least the actual cost of creating a separate Scotland and how that Scotland would be represented around the world and what relationships it would have with other countries.

But unknowns are a part of all life, we all have to deal with them and plan for them as best we can.

The benefits for an independent Scotland are posited as bringing decision-making vital to our creation of the society we want to see to the people best-suited to make them – the Scots. And that by doing so we will improve social justice in our society, making us fairer and more equal and reflecting and retaining our cultural values and sense of identity.

But we are already holders of many of the levers that allow us to create a society that reflects our desires and values. And more are on the way in the Scotland Act 2012, including greater control over taxes.

And that’s without any more powers which have been promised as part of this referendum battle.

We are in complete control of education, which must be the surest way of shaping the future we want, we are in charge of health, which is the very practical delivery of how we care for people. The NHS has become an emotive topic in this debate, because it is close to us all for very practical reasons but also because it is the embodiment of the altruism and egalitarianism that forms a large part of our collective identity. But we can shape the NHS in Scotland as we choose.

We have our own unique legal system and we are predominantly in charge of the policing of our society.

All these policies are formulated by the people we Scots vote for, with the decisions taken by our parliament in Scotland.

We have already gone our own way and created a different country in many big areas, including no tuition fees, free care for the elderly and free prescriptions.

The biggest factor in creating a prosperous and equal nation is the economy, and an independent Scotland would, of course, be able to stand on its own two feet, but under current proposals some of the levers needed would lie elsewhere and stability is under threat and that could come at a cost.

Next week, for many people, it will be independence at any cost. Others will weigh cost against benefits, risks against potential gains and losses.

There are significant uncertainties with the proposals before us. There are some major parts of life that will be changed and we do not know what those changes are or what impact they will have, and at a cost we cannot calculate at present. It is clear there will be some constraints on what an independent Scotland can do.

The political Union has helped to provide security and stability. And over the centuries Scots have played a large part in shaping that Union. Many, many Scots have benefited from opportunities it has afforded. We are a part of the fabric of the United Kingdom. We are a significant part of its history.

Does the Union cast a dark shadow over us? It does not seem that way, Scotland is a prosperous, peaceful, successful country. We are confident in our national identity with our own distinctive society. We have our history and heritage.

So, with the choices before us, the conclusion is that we are better together, that Scotland’s best interests lie not in creating division but in continuing in the Union and using its strengths to help us continue in our success.

That is not a view taken because of fear, or lack of confidence, or lack of patriotism. It is the very opposite.

It is not a view that simply does not want to take risk. It is a measured view that assesses risk against possible benefit and loss. It is seeing where the best interests of the Scottish people lie, understanding the benefits of working with the people in these islands in collaboration and partnership and seeing the opportunity to shape the strongest, most secure, fair and just society that we all want.

Business&Finance: Scotland’s fateful choice

Scotland’s fateful choice

The case for union is overwhelming. The path of separation is a fool’s errand

The Financial Times




The United Kingdom ranks as one of the most successful marriages in history. England, Scotland, Wales and Northern Ireland have survived ancient hatreds, tribal rivalry and war. Each nation has been enriched by a journey of enlightenment, empire, shared energy and enterprise.
In eight days’ time, this splendid mess of a union, to quote Simon Schama, the British historian, risks being separated into its national parts. Scotland will vote in a referendum to decide whether to stay in the UK or sunder bonds stretching back to 1707. Opinion polls suggest the result is too close to call, a prospect which has alarmed financial markets, wrongfooted allies and sent a complacent coalition government scrambling to find a last-minute sweetener to win over the Scots.
 Empires and nation states are not immune to break-up, but there is little precedent for a hitherto stable modern democracy splitting apart in peacetime, in the middle of an economic recovery. This is not the time for recrimination. For the moment, it is enough for this newspaper to declare that the path of separation is a fool’s errand, one fraught with danger and uncertainty.
Scotland is a proud and vibrant nation. Scots have contributed disproportionately to the union. They have played a leading role in arts, commerce, literature, the military, politics and sport. But a vote in favour of secession would be an irreversible act with profound consequences, not merely for 5m Scots but also for the other 58m citizens of England, Wales and Northern Ireland (including 750,000 Scots living and working outside Scotland who under the terms of the referendum have no say on the future of their country).
The act of separation would diminish the UK in every international body, notably the EU. It would raise complex – and still unanswered – questions about the common defence of the British Isles, the future of the currency and political arrangements for the rest of the UK. Above all, a Yes vote would ignore the lessons of the 20th century, a chapter in European history indelibly scarred by narrow nationalism.
A union born of a now-lost empire is one entirely suited to the world of the 21st century. The nation states that prosper in the age of globalisation are ones that bind themselves together in mutual endeavour. The experience of small states in the wake of the financial crisis is far from happy. Iceland and Ireland were left cruelly exposed. Further east, the Baltic states, brave and resourceful as the Scots, are members of the EU and Nato but still feel vulnerable to the bear’s paw of a revanchist Russia.
The case against secession cannot rest on nostalgia, though the Better Together campaign has been lamentably short of passion compared with the energetic, well-funded Yes effort run by Alex Salmond, the beguiling first minister of Scotland. It must rest first on an understanding of the political forces which have made independence a tempting prospect for Scots, as well as a hard-nosed assessment of the risks involved for all concerned.
The debate about devolving power to Scotland goes back more than a century. Keir Hardie, the Scottish Labour leader, proposed home rule in 1888 but his call carried little resonance. Scots were playing a leading role in ruling one-quarter of the world’s population. Glasgow was famed as the “second city of the empire”.
The ties that bind have loosened over the past 70 years. The empire is gone, and the workshop of the world is no more. Scotland’s transition to a post-industrialised economy has been painful, though its overall economic performance over recent decades has been strong.
 England and Scotland have grown apart politically. In the 1950s, the Conservative and Unionist party – to remind David Cameron’s party of its proper name – had an absolute majority of parliamentary seats in Scotland. Today, the Tory party’s representation has shrunk to a single MP, partly a legacy of Margaret Thatcher’s ill-judged poll tax and the benign neglect of a strong pound which devastated manufacturing north and south of the border. The discovery of North Sea oil in the 1960s further reinforced Scottish nationalism.
Tony Blair believed he could stymie the nationalist movement with more devolution of powers. His Labour government established a Scottish parliament at Holyrood. In retrospect, devolution did nothing to halt the secular decline of Labour in Scotland. Too many of the party’s heavyweights treated Scotland as a rotten borough to help them to power in London. Devolution may have encouraged further divergence on policies such as pensions, social care or university education from those in England.
Mr Salmond, a seasoned operator, has exploited the populist mood. Voters are angry about austerity caused by the financial crisis and alienated from the political establishment. Mr Salmond casts himself as an insurgent representing a new brand of civic nationalism in which the Scots will have control over their fate in a fresh young democracy.
 Mr Salmond’s Panglossian pitch is that the Scots can have the best of all possible worlds.Mr Salmond can tug on the emotions of his fellow countrymen but he has given few credible answers about the challenges – economic, social and international – which would face Scotland. His Panglossian pitch is that the Scots can have the best of all possible worlds: independence, the monarchy and the pound, and that a Scotland which retreats into a narrower nationalist identity will somehow be better equipped to prosper in a world of globalisation.
His argument contains glaring inconsistencies. A currency union demands a political union. The eurozone’s travails show us as much. Mark Carney, governor of the Bank of England, made clear again this week that political independence is incompatible with maintaining sterling as the currency of choice. Mr Salmond insists the English establishment is bluffing. This is no bluff. The currency uncertainty will blight every aspect of the Scottish economy, from commercial lending to mortgages. Without total clarity, every Scottish citizen is left exposed.
Mr Salmond claims that separation is the best guarantee of future prosperity. His calculations are based on much wishful thinking covering vital matters such as the future oil price and how much of the UK’s debt would be assumed by the Scots. He presumes that it serves no one’s interest to be unreasonable about the terms of divorce, but he underestimates the psychological shock. No one can predict the consequences.
 Nor is it obvious why Scotland will gain early and automatic entry into the EU. Other European states with their own separatist movements – notably Spain – have little incentive to agree to a quick deal. The only certainty is uncertainty, at a high cost to Scotland and the UK. The shift of deposits and money out of Scotland this week is a harbinger.
There must be a better way. Britain needs a new political settlement that implements at home what it preaches in Europe: subsidiarity. For too long, the British government has imposed a “Whitehall-knows-best” policy on the nations and regions. More devolution is the answer, but not at any price. Mr Cameron and his London-based colleagues should tread carefully in the coming days. It is far from clear how England, the preponderant power, would fit into a federalised union in which Scotland enjoyed all political gifts short of independence.
Everything turns on the vote on September 18. It is not too late to remind the Scots and the rest of the UK how much they have benefited from being British. Great Britain stands for an expansive and inclusive view of the world. The union is something precious, not a bauble to be cast aside. In a week’s time, the Scots can vote with a sense of ambition to build on those successes. Rather than retreat into tribalism, they can continue to be part of a nation rooted not just in history and culture but a common destiny which over three centuries has served all so well.

Business&Finance: Santander Chairman Emilio Botín Dies Aged 79

Santander Chairman Emilio Botín Dies Aged 79

 

Mr. Botín Built Up Spanish Bank From Local Lender to Global Powerhouse

The Wall Street Journal

Emilio Botín, chairman of Banco Santander S.A.  SAN.MC inYour ValueYour Change Shorand widely regarded as one of the most powerful people in Spain over the past three decades, has died of a heart attack at the age of 79.

Mr. Botín, who built up Santander from a small regional lender into one of the largest banks in the eurozone, died overnight, the Spanish bank said Wednesday. Santander's board plans to meet later in the day to pick a new chairman.

In recent years, observers have said Mr. Botín had privately expressed a preference for his daughter Ana-Patricia to succeed him at the helm.

The Botín family is the largest shareholder of the bank, if all its stock is combined, but the bank's capital is highly fragmented, and it is unclear whether Ms. Botín would have enough board support to succeed her father.

In a note to investors, Nick Anderson, an analyst at Berenberg Bank, called Mr. Botín "a legendary character…[and] a phenomenal deal maker" whose passing marked "the end of an era."

Mr. Botín was born in 1934 in Santander, a small city on the northern coast of Spain that was traditionally the busiest trading port for Castille, the interior region around which the early modern Spanish empire was created.

The Botíns have controlled Banco Santander since the early 20th century, when Emilio Botín's grandfather became chairman. Emilio Botín became a board member in 1960, and succeeded his father as chairman in 1986.

An avid golfer and able negotiator, Mr. Botín took advantage of government plans to force mergers in Spain's banking sector, with the aim of creating larger lenders that would better able to compete in the European market.

The implosion of larger rival Banesto SA, which was taken over by the government in late 1993, offered a key opening for Mr. Botín, who secured the purchase of the troubled lender at an auction the next year.

From that point, Mr. Botín increased the scale of Santander through an aggressive series of acquisitions, gaining a reputation for deal-making that soon went beyond Spanish borders.

The purchase of the U.K.'s Abbey National in 2004, a then-rare move by a Spanish company into the British market, was a key step along the way. Several acquisitions in Latin America have also contributed to Santander's rapid growth.