Why the English should care more about losing Scotland

A few months ago I spoke on a panel in London at an event organised by Retties and Kleinwort Benson to discuss the implications of Scottish independence, or failing that ‘devo max’.

Hundreds of people were invited, not many replied, and about 20 came.

We presented. There were no questions. Then, eventually a bored looking man at the front put up his hand. “Why should I care?” he asked. This floored all of us rather. We had simply assumed that everyone cared about the possible break-up of the regions making up the world’s sixth-largest economy.

It’s a point James Mackintosh picks up in the FT today. The willingness of the UK’s investors to ignore the entire issue suggests, he says, quite a degree of “complacency”.  Why? Because it does matter.

Right now, the polls increasingly suggest that the Scots are likely to vote to stay in the union, but if they don’t, the whole of the UK will face a period of stunning political uncertainty about everything from monetary policy to border controls and even the nature of the next rUK election.

It is “impossible to think that bond and foreign exchange markets would not react badly” to all this.

But it isn’t just the short-term financials that the rest of the UK should worry about. We can’t begin to forecast exactly what the effect on everyone will be of the five million-odd Scots leaving the union, but we are already a smallish country, so it seems likely that the rest of the world would seize on the change to force a discussion of the UK’s global role.

Will a reduced UK still be a nuclear power? Will it still have its permanent seat on the UN Security Council? Sir John Major has said he doubts it, and Vice-Admiral John McAnally doesn’t think so either. Instead, he says, Scotland and England will be reduced to “two struggling nations on Europe’s periphery”.

The UK would also be likely to lose even more influence in Europe: at the moment, in terms of member-state population size, it is part of the ‘big three’ after Germany and France. Without Scotland, the UK falls behind Italy.

Look at it all like this and it seems clear to me that while a break-up of the union won’t be great for people living in Scotland, it won’t be much good for those living in England, Wales and Northern Ireland either.

PS There has been talk of Scotland having its own stock exchange if we vote yes. The London Business School has just released a report on how the ‘Scotsie 100’ – the Scottish companies listed on the London Stock Exchange – would have done if their index actually existed.

It isn’t bad: since 1955 investors would have seen an annual return of 5.7% a year in real terms (dividends reinvested). But it isn’t great either: investing in the rest of the market would have produced 6.8% a year.

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16 Responses

  1. 16/07/2014, Wronging the rights wrote

    I am English and I don’t care. I don’t care because, like 11 out of 12 citizens of this ‘Union’, I don’t get a say in the matter. If the Scots choose to leave, and I hope they do, I will no longer care what happens to them. Good luck to them, I think they might need it. Maybe not today, maybe not tomorrow, but soon and for the rest of their lives: to coin a phrase.

    My hope is that Scottish independence could be the catalyst for a much needed shake up of what is left of the UK. It might give us the necessary push to take our proper place in the world order, the penny finally dropping on what many of us have know for many, many years, that we are no longer a world power or even a regional power. The Security Council? What’s that anymore? Ask the people of Libya, Syria, Iraq and a dozen other countries what relevance the ‘failed’ Security Council has to the human race in 2014. Who cares what John Major and the’Fleet-less’ old Admirals think? Why should we be influenced by these tired old frats who only look backwards to a version of England that’s as long gone as the Roman Occupation?

    And the money, eventually will talk, and those who have taken precautions will come out OK. So, Bye Scotland, and thanks for all the oil…

  2. 16/07/2014, Wronging the rights wrote

    I hereby patent a new term for use in the next few years with regard to Scottish Independence. The ‘Scexit’.

    Remember folks, you heard it here first

  3. 16/07/2014, Clive wrote

    It might us (UK with/without the Scots) good to realize we’re not a major player in the world anymore, certainly not militarily or politically. It’s only in financial matters that we ‘punch above our weight’ and that as many drawbacks as benefits. All this pretense that we can influence events in Libya, Syria, Afghanistan, Iraq etc etc is so simply day-dreaming.

    As for the Scots – a number of them believe they subsidize the rest of the UK via “their” oil. A number of Brits believe the opposite and that we subsidize them. If they want to go, fine, got my blessing (as do any people that want independence). Time will tell who was right. Do I care if they go ? No, not at all.

  4. 16/07/2014, Clive wrote

    oops, typo, should have said “It might do us….good…”

  5. 16/07/2014, GFL wrote

    South of the border no one is discussing this – even the Scots I know, that live in England, very rarely talk about it.

    I think people are just bored of politics in general. Without trying to sound cynical, most people get to their late 20s or early 30s and realise their vote is about as influential as Nick Clegg in the coalition. The only people that actually vote are pensioners and younger/gullible people that haven’t worked out what a scam the system is.

  6. 17/07/2014, Clive wrote

    GFL

    I’m not young, not a pensioner, but I vote – guess I must be gullible :-)

  7. 17/07/2014, joe sod wrote

    The one country Scottish nationalists no longer use as an example for independance is Ireland. When the Irish celtic tiger economy was in full flow this was the benchmark used by Scottish nationalists in the drive for independance. The way Ireland was run into the ground and the way it was bullied by Europe into complying fully with the ECB and bailing out all its banks is a realistic example of how events can go. Even nationalists in Northern Ireland no longer want a United Ireland. Scotland is a rich country now anyway in world terms, why would it take such a risk to maybe become a small bit richer. Scotland will never become a Norway it could become another Ireland though with all the messy political problems that Ireland faced.

  8. 18/07/2014, Dai wrote

    I am a big fan of Merryn. As you can probably tell I am Welsh ! I recently had a lovely holiday in Scotland staying with my Welsh brother in law who lives now in Scotland .His view is that the vote is very close .He personally is in favour of the split.
    I have some great friends all over the UK and personally would like the UK to remain as one .
    Many people who live outside England,perceive that the English consider that the UK revolves around England ,particularly the South East ! Look at Merryn’s headline and the comments of the Vice Admiral ! No mention of Wales ! This sort of thing simply encourages the Nationalists ! If Scotland goes Wales will be next ; and then what about Cornwall ? It was a big mistake in my view for the politicians to pander to nationalistic politicians in both Wales and Scotland.

    • 19/07/2014, Leothegas wrote

      Luckily Cornwall is not inhabited by a majority of Cornish born people, if it has ever been since the mining boom. MK gets very little support, so unless you want to follow Daniel Gumb and live out on the moors in perfect isolation, I’m afraid we will be tied to the Union for ever more.
      If we were given the vote, as the Scots are given on our affairs, I’d vote them out. We want the ship building and Subs down here in Cornwall,we might even take a stab at financial services with the increase in prosperity that will bring.

  9. 19/07/2014, GFL wrote

    GB splitting is not such a bad thing – competition regarding taxation and spending amoung the individual states could be healthy.

  10. 21/07/2014, Merryn wrote

    @Dai – good point on Wales. I will try harder!

  11. 21/07/2014, Merryn wrote

    @GFL – we can have all that competition with devo max – no need for the admin nightmare and the conflict involved in splitting a state.

  12. 21/07/2014, CityFarmer wrote

    England should positively want to be shot of both Scotland and Wales without them England would not face sucessive socialist Governments whose majorities have resulted from Scottish and Welsh MPs sitting in Westminster even though they have there own ‘Governments’. Just look at the electoral maps, Scotland and Wales are blocks of red. England is generally blue.

    Long term it would be hugely beneficial to the English economy.

  13. 21/07/2014, EM99 wrote

    The supporters of independence want Holyrood to govern them rather than Westminster in the belief that it will lead to a better government and a better use of resources. I realise that will upset some people in elites who like the power structure the way it is (presumably because it benefits them). The FT / Standard and Poor’s / OECD among others think that Scotland would be a feasible country in it own right. The author may be concerned that the UK will lose its seat on the security council but many of us are concerned about food banks, having nuclear weapons next to our major population centre and having some of the worst life expectancy in the developed world. When you have to start referencing John Major, I think you know that the argument is lost.

    Best wishes,

    Ed

  14. 11/08/2014, Myles42 wrote

    I am English but have lived in Scotland for 24 years by choice and think that those who get a vote on 18th September will be gambling as there is no way either side has any meaningful facts on any argument other than a split will cost everyone a lot of money in the short term. I do not trust either government and their records prove this is wise but will only vote with an eye on the future for the next generations.

  15. 16/08/2014, fandangle wrote

    Alec Salmond made a serious mistake in not allowing the rest of the U.K. to have a vote on Scottish independence. Had he done so, I am sure he would have won the vote. Would Scotland be better off ? No I don’t think so. The rest of the U.K.would be immeasurably better off though. Labour Governments might be a thing of the past, and for our economy that would be a wonderful thing. For far too long we have suffered from the cycle of Labour screwing the economy for someone else to fix it. The loss of 8 million Scots (of whom very few are nett tax payers) would be of benefit to the rert of the U.K.

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