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george osborne, independence referendum, politics

Prime Minister who will debate with leader of Ukip but not First Minister of Scotland.

Sunday Herald May 2014

It was back to the good cop/bad cop routine last week in the referendum campaign First, Chancellor George Osborne put the boot in, saying he’d starve an independent Scotland of currency by making any Scottish pound illegal tender in England. Then smiling David Cameron arrived in Scotland to be photographed with soldiers and children and promising new powers if Scotland behaves. Honestly.

The Prime Minister has come to Scotland four times since he first promised those new powers back in February 2012, and so far he hasn’t specified a single one – except the tax powers already in the pipeline under last year’s Scotland Act. I don’t know about you, but I’m beginning to get a little tired of this – and the deferential welcome these discredited politicians are accorded in Scotland.

Here is a prime minister who will debate with the leader of Ukip about the future of Britain in Europe, but not with the First Minister of Scotland about the future of Scotland in Britain. On BBC radio, Cameron said that Scotland would be “put to the back of the queue” for entry into the European Union almost in the same breath as promising an in/out referendum on British membership of Europe. The contradiction is so glaring you’d think even he would notice it. For the obvious conclusion would appear to be that the surest way to keep Scotland in Europe is to vote Yes to independence. Or do they just think we’re too stupid to notice?

Not only did the Prime Minister fail to itemise Holyrood’s new responsibilities, he also effectively ruled out any changes in the Queen’s Speech. He explained that there would have to be “agreement” among the UK parties before any new powers could be put through Westminster. Since there’s no consensus among the Unionist parties, this suggests that there is very little prospect of anything actually emerging.

If a bearded transvestite can win Eurovision, I suppose anything is possible. But believing in more powers is a bit like believing Scotland could win the World Cup: it’s theoretically possible, but vanishingly remote and ruled out for the time being. The Scottish Conservatives were supposed to have agreed their prospectus for “greater devolution” by now, and nothing has emerged. Perhaps they will, as some Tory insiders predict, promise to devolve all income tax. But the Scottish Labour Party has rejected this option and the Liberal Democrats want something different again.

No doubt there will be a common statement issued by the three Unionist parties at the start of the official campaign in August. But after a No in September’s referendum, does anyone seriously think they will have any enthusiasm for further constitutional change? No-one listening to George Osborne can be in any doubt about how Westminster – at least the leadership of the three main UK parties – regards Scotland.

He compared Scotland to Montenegro and Panama, and claimed that the UK would refuse to recognise Scotland’s currency after independence. “No ifs, no buts, there will not be a sterling zone”, he said. This means that the rUK would not only refuse to agree a monetary union, but would also seek to block attempts by Scotland to issue its own pounds on a one-to-one parity with the UK pound, as Ireland did after independence and as Denmark does in the EU.

In other words, since this would destroy cross-border trade with England’s largest trading partner, he would be prepared to see the UK economy ruined in order to punish Scotland for voting Yes to independence. As the Unionist former diplomat, Colin Munro, observed last week in The Guardian, such an attitude would be irrational and self-destructive. He said there would be “tough but sensible” negotiations on a currency union, which is obviously the case. He has had wide experience in precisely the part of the world that Osborne thinks is like Scotland – the former Yugoslavia – and he criticised the UK Government for “threatening that they would cut people loose”.

Most people in England would surely agree with that. Most banks agree with that. Deutsche Bank called last week for a sensible approach to the post independence currency arrangement that did not undermine trade. “It will be in the interests of both countries to ensure that these negotiations leave the newly independent Scotland in a financially viable position” it said. In other words – stating the bleeding obvious – if there were an economic war between Scotland and the rUK, there would be currency flight from Scotland and financial meltdown in the rest of the UK.

Professor Anton Muscatelli, the vice-chancellor of Glasgow University and a former adviser to Labour’s Calman Commission on devolution finance, calculated recently that not having a currency union could destroy up to £24 billion in cross-border trade. He said not having a currency arrangement would be “tantamount to economic vandalism”. What is really annoying is that everyone knows this. It’s like the boy holding a gun to his head and saying: “Do what I say or I’ll shoot.”

The UK is not in the business of self-harm, and these threats are designed simply to create fear of independence and engender a climate of economic instability: to encourage businesses in Scotland to make contingency plans for leaving in the event of “currency instability”. No wonder even a majority of Unionist voters in TNS poll last week thinks that the Better Together campaign is “steeped in negativity”. Where it is credible it is offensive; but mostly it’s just incredible. Like the idea of Scotland being thrown out of Europe, which candidates for the new presidency of the EU disowned last week.

The idea that Bulgaria and Romania would be allowed in while democratic, prosperous Scotland would be locked out is absurd. Eventually people will see through this web of artifice. Indeed, they already do. The leader of the Better Together Campaign, Alistair Darling, is getting the blame for the failure of the Unionist campaign to capture the hearts and minds of Scots. Somehow, hearts and minds aren’t what immediately spring to mind when Darling appears on the scene scowling and scolding. However, the fault is really with the PM and the Chancellor. Labour’s foreign affairs spokesman, Douglas Alexander, has a much surer grasp of Scottish and Union history and, instead of making threats about the currency, he argues for a “powerful Scottish nation in the UK family”. Alexander is certainly capable of making a credible case for a new federal UK, but he is hampered by clod-hopping coercion on the part of the Conservative members of the Unionist Coalition. It is too late anyway to change the character of this campaign because it would appear as if its leaders were uncertain about their message. The punitive and threatening tone will continue. Which is why this referendum race will not be over till it’s over.

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