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Scotland's Independence Vote Could Shake Up Industry
dcblogs writes: Scotland is not a major high-tech employment center, but it has good universities and entrepreneurial energy. About 70,000 people work in tech out of a total workforce of about 2.5 million, or about 3%. By contrast, financial services accounts for about 15% of employment in Scotland. But passions are high. "Honest, I've never been so scared in my life," said Euan Mackenzie about the prospect of separating from the U.K. He runs a 16-employee start-up, 1partCarbon, in Edinburgh, a platform that builds medical systems. "For tech start-ups, funding will be tougher to find and more expensive, there will be no local banks, access to EU markets and the freedom of movement will be curtailed," said Mackenzie. "As someone who enjoys risk and new opportunities, my company will remain in Scotland and make the best of whichever side prevails on Thursday, but the effect of independence on tech start-ups and the whole Scottish economy will be cataclysmic," he said.
While continuing to be protected by UK's nuclear deterrent, so the principle of the stance is somewhat compromised.
A lot of "yes" campaigners seem to have been sold on the idea that any warning of economic doom upon a "yes" vote is scaremongering, bullying, or "undermining the Scottish democratic process." Bullshit. Many intelligent people looking at this from a rational perspective have concluded that the "sweet spot" for Scotland is staying in the union and having devo-max; basically getting it both ways, with lots of self-government combined with a net financial income from the rest of the UK, as well as obviously ease of trade.
However, the pro-independence SNP are 100% blinkered on independence, at any cost. They will therefore paint warnings like this as lies designed purely to scupper their frankly loony picture of a prosperous independent Scotland, and a lot of Scots buy into it. Shame, really.
Americans might look on with bemusement; I can understand that. I guess it's a bit like Florida choosing to break away from the US, having a pro-Florida political party endlessly demonizing "them" (the rest of the US) as causing pretty much every economic and political woe Florida has going for it. As an English guy, I think this whole situation really sucks. If the UK breaks up, the whole of Britain will be worse off for it, but I suspect Scotland will take the bigger brunt of the pain. And given that it will have made the decision, it will deserve to.
== Jez ==
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Which would make it different from the majority of Europe's nations in what way?
No kidding!!! What do you say at this point?
Ahhh, so the one-sided emotional campaigning ("Think of the ch... checkbook!") has made it to /. too.
Free, as in your money being freed from the confines of your account.
They say that if they default on British debt obligations (as they say they will if they don't get "fair share" of Bank of England assets), they can still secure loans from the continent. It is unlikely that anyone in Europe will spite UK this way, and there is no way Brussels is going to take another debt-laden country. Without admittance to the EU, they're going to find it hard to secure the financing and trade deals they're going to need to make this work. This is a case of optimism and boredom triumphing over reason.
You seem to have misunderstood. Most of Europe's non-nuclear states are protected - de factor if not by treaty - by the European nations that are armed. Scotland would be an unremarkable addition to that list.
Part of being a nuclear power in a geographically close-knit federation is that your umbrella will cover people other than your allies. That's just the lay of the land.
No kidding!!! What do you say at this point?
The yes campaign is telling people they can keep the pound and join Europe. Not gonna happen, it isn't for Scotland to decide. 28 countries have to decide they are totally cool with a bit of the UK splitting off and joining Europe. That means 28 countries have to want to set a precident for bits of themselves splitting off, declaring independence and joining Europe. They have to also decide that they are totally cool on Scotland having an opt out on the Euro that nobody else apart from the UK has and nobody else likes.
The rest of the UK doesn't particularly want a currency union with Scotland, and it wouldn't be popular with the Eurozone countries to have a more formal sterling zone (they don't care about the small overseas territories, but a second full size country in a currency union would be a big deal).
The No campaign says independence would be bad for Scotland and bad for the rest of the UK and everyone else.
The Yes campaign says independence would be good for Scotland and bad for the rest of the UK and everyone else.
They both agree that independence would be a massive pain in the arse for everyone outside of Scotland, and they are 50:50 on how much of a complete and utter pointless pain in the arse it will be within Scotland.
Its not the Bank of Englands assets that Salmond wants, its the Bank of England itself. He wants to be able to retain the BoE as a lender of last resort, while maintaining a say in how Sterling fiscal policy is created - inflation controls, interest rates, ability to borrow at a base rate etc etc etc.
Without the BoE, Scotland would need to set up its own lender of last resort, or risk having less foreign investment as Scottish banks have to borrow on the standard market, which is a lot more expensive.
There is no positive to the rest of the UK to allow an independent Scotland to continue to have access to the BoE in the capacity it wants to, which is why the Westminster government parties have all ruled it out - Salmond mean while continually pushes the fact that "Ireland was allowed to have a currency union with the UK when it was granted independence in the 1920s" but ignores the fact that the Republic of Ireland did not actually have a currency union as it had no say in fiscal policy in the few short years where it actually used Sterling as its currency, it simply just used Sterling like any person on the street does. Then they pegged the Irish Pound to Sterling for the next 50 or so years, again with minimal fiscal decision making as a result.
Salmonds other argument is that Scotland cannot be held liable for any debt that the rest of the UK has already acknowledged responsibility for, which Westminster did the first time Salmond made his threat because any doubt over that would cause fiscal policy difficulties with foreign markets - but that doesn't mean foreign lenders cannot view Scotland as a higher risk as a result, because it is after all refusing to take a portion of the debt it helped create.
Whatever happens, Friday is going to be very very interesting - if its a "Yes" then Salmond starts making his demands and then runs into difficulties where he insisted there wouldn't be any (currency union, which he has insisted all along would happen, despite being told time and again that it wouldn't, and membership of the EU, which Salmond has again insisted would be nearly instant while major EU politicians and leaders have said a newly independent Scotland would be required to apply to join as a new member state, the same as any other new member state seeking membership).
If its a "No", Salmond won't back down but will probably use it to fuel more dissent toward Westminster, insisting on another referendum in the near future.
Ho hum, the weekend is going to be fun.
That's all well and good, but Kickstarter campaigns, banks, and EU membership don't happen overnight. I imagine that the interviewee is thinking about his business situation twelve months from now, not four years down the road.
No kidding!!! What do you say at this point?
The UK does not have a ground based deterrent. Our nuclear deterrent consists entirely of submarine launched ICBMs with one submarine in an unknown aquatic location at all times (which could be just about anywhere where the water is deep enough to hide a submarine). In terms of what it "covers" - the range is irrelevant in the sense that we're not going to nuke ourselves or our allies - it only matters in that the missiles can reach Moscow. In terms of whether we'd use them in the rest of Europe's defence (either through NATO, altruistically or through fear for ourselves) is the question of political guesswork, bluffing, double bluffing, prisoners dilemmas and so forth that is the basis of mutually assured destruction. The short answer is: who knows, the only way to find out is by "experiment"...
Charlie Stross recently posted a very good take on this: This is a permanent change. Whatever happens during the first few years is basically irrelevant, compared to the long-term results. Did Norway separating from Sweden cause short-term economic upheaval? Does that matter at all a century later?
This is a long-term change, not a short.term one. Any voter should consider the probable situation twenty or fourty years from now, not whatever happens in a year or two.
Trust the Computer. The Computer is your friend.
A lot of people think that Scotland is walking blindly towards independence without knowing what they're doing. I'd like to remind them that Scotland has voted for independence twice before but both times it's been blocked. In 1914 Scotland voted for independence from the UK, but then the First World War started and it was conveniently dropped. In 1979 Scotland voted again for much more local power through devolution, but some dodgy rule dictated that at least 40% of the total registered electorate had to vote for devolution, and even though they got the majority winning by 51.62% Yes to 48.38% No the vote was overturned because the Yes vote comprised only 32.9% of the total possible vote. So this has been a long time coming.
The UK's nuclear submarines are based in Scotland.
All of the jobs at the naval base in Faslane will be gone along with the nuclear weapons. A future Scottish government might, therefore, decide to allow the UK to continue to keep its submarines there.
All I want is a secure system where it's easy to do anything I want. Is that too much to ask ~~ Randall Munroe
But I do have very distant Scottish ancestry.
I would support and 'Aye" vote. For too long the English have ruled over Scotland after beating the Jacobites at Culloden.
If they can't use the Pound after independence, they should switch to the Kilogram - its worth 2.2 times as much.
Probably not, but it's hardly a surprise that people who were practically Marxist guerillas didn't fully think through what they were doing.
Post independence Ireland's economy went down the shitter for a loooooong time and lots of people were very miserable. Emigration was rampant and Ireland became a place supported by remittances, like a third world country. It wasn't until they modernised their economy that things started to improve.
This is like saying someone MUST divorce their spouse because they can always just get back together. I think you'll find this campaign has huge potential to wreck relations between Scotland and the rest of the UK. In the short run it won't just make Scotland poorer, it'll hurt everyone. Not to mention that the most common justification for independence can be summed up as "the English are nasty and unfair and everything wrong with Scotland is their fault".
With respect to trade, unfortunately the independence negotiations could be very complicated and nasty if they vote yes, as Salmond has promised the moon including things he knows he can't get. When he's told - again - he won't be able to get the things he wants, he'll once again blame the English and start trying to make the breakup as nasty as he can to try and save face. A trade war or widespread unofficial boycotts are not exactly unthinkable.
Heck, I wasn't planning on going on vacation to Scotland any time soon but I wouldn't have been against the idea. But after watching all of this?? Why would I go somewhere where apparently 50% of the population are quasi-Marxists who think all English people suck?
Indeed - the U.S. Navy still has a pretty big presence in Scotland. It's how I ended up with a half brother there.
So, the inrush of global partners wouldn't happen. More to the point, why would they rush to jump into bed with a government that has already stood up and said it is seriously considering reneging on UK debt? Which, by the way, is not the norm for newly independent countries and would be remembered by the markets. If they lent at all, they would certainly require paying for it. You really want to pay Greek interest rates on your government debt?
Think Venezuela, not Norway.
[FUCK BETA]
Naw - there was a bill before Parliament that disappeared when war started, but no vote, unless you can provide me with evidence to the contrary
"There are and will continue to be plenty of banks in Scotland."
In order for banks to lend, they must have deposits. Given the risk of holding money north of the border, a 'Yes' vote will generate a stampede of cash south on Friday. There may be banks, but they won't have any money to lend
"There is and will continue to be freedom of movement".
Really? If Scotland has left the EU, then it will be necessary to impose border controls
"There is and will continue to be access to European markets."
Only if you get to renegotiate membership of the EU. Good luck with that until you've agreed to pay your share of the UK's debts, and then only if you are nice to the Spanish
"Scotland has and will continue to use The Pound, and there is nothing the UK government will be able to do to stop them."
Sterlingisation will result in substantially higher interest rates for all bank loans as the risk of holding money in a country without a lender of last resort is significant.
"Prices are will remain competitive; arbitrage and competitive pressures will prevent large price rises."
This, at least, is accurate because you admit there will be price rises. If you are very lucky there won't be a toll on the M6 north of Carlise and the A1 north of Berwick, but it would certainly be rational for us to impose one to pay for the cost of maintaining roads to enable good to travel to and from Scotland.
"Russia will NOT invade Scotland... FFS! Why do I have to comment on this kind of purile shit?"
Given Putin's ambition and Scotland's oil, an attempt seems like an entertaining prospect. Not a visible invasion at first of course; Scottish socialists would start rioting as a result of the economic chaos following Scotland's ejection from the EU and then invite Russian peacekeepers to restore order. A referendum would be organised for Scotland to join the Russian Federation.
Of course that's not likely - but the idea that Scotland should become freeloaders like many other European countries, dependent on Uncle Sam to protect them from a bear that is demonstrably on the prowl is disappointing.
Yes, because of course no bank would ever want to be in a new country with an educated workforce, low unemployment, and lots of natural resources! Small places like Luxembourg and Switzerland are absolutely barren, devoid of banks, money, or access to markets! The poor people of Liechtenstein and Monaco are starving and barely literate! Don't turn Scotland into a dump like Norway!
(That was sarcasm, for the sarcasm-impaired.)
Indeed - the U.S. Navy still has a pretty big presence in Scotland. It's how I ended up with a half brother there.
Where's the other half gone?
I'm not an expert, but I play one on slashdot.
I don't really understand the political or economic motivations of Scottish independence.
The political side would make more sense if Scotland was greatly different than UK culturally and had a significant short-term history of English subjugation. The Scots really aren't an ethnic or racial grouping, except at some micro level and don't seem to have a serious complaint regarding discrimination on language or religious grounds.
The economics make less sense -- Scotland has been economically integrated with the larger UK for a long time. Had Scotland split off in 1850, it would have been at a time when economies were smaller and much more locally self sufficient and it would have had time to develop into something that The economy seems much more regional now and it will be a hard transition to a more standalone economy.
You're mixing up currency and currency union. Salmond has been deliberately obfuscating this so the confusion is not surprising, but they are different things.
Post independence Scotland could continue to use the pieces of metal and paper we tend to think of as "the pound". It could still express prices in pounds. The UK cannot stop this nor would it care to do so, even if it could. Scotland can keep the currency.
Currency union is an entirely different matter. Currency union is about decision making and who pays for what in future should things go tits up again. This is not a physical object or landmass that can be split up. It's called a "union" because it involves people working together. This is categorically not on offer because Scotland has shown no preference for economic policies compatible with the rest of the UK, really it's shown the exact opposite. So English people working together with Scottish people to create unified economic policies on this wouldn't really be possible, the disagreements are too deep and English people outnumber Scottish quite significantly. Thus it'd only make sense if Scotland agreed to give up most of the independence it had just won. Otherwise it'd be Greece all over again. Profligate teenager wouldn't even begin to describe it.
There is one situation in which CU could actually make sense - if Scotland strongly and consistently voted for the same economic policies as the UK had, and could be trusted to do so for the forseeable future. However this isn't a Scotland that anyone has been seeing during the independence campaign, so it's hard to imagine things changing anytime soon.
With respect to the debt, I think in the event of independence all the opinion polls suggest the UK will take a firm line. No currency union and they split the debt equally too. It's not up for debate. This is actually a fair position - split the debts and financially each goes their own way - but I doubt Scotland will go for it, and the amount of pain that could result for both sides is quite astronomical. This is why such a large proportion of people don't think independence is worth it.
I was presuming that the nukes in Scotland would be moved south, as the Scots have made it clear they don't want them.
Yes, but have you seen the recently leaked list of key military and economic assets to be targeted by Trident in the event of Scottish independence?:
(1) Alex Salmond's secret command bunker, 'The Salmon's Lair'.
(2) MIRV attack on all Speyside distilleries, centred on Glenlivet.
(3) The Edinburgh Woollen Mill Global Headquarters, Glasgow.
(4) The Gilded Balloon theatre, to neutralise the threat from Edinburgh Fringe elements, once and for all.
(5) Submarine detonation at Loch Ness, in an attempt to create a rampaging Godzilla-style radioactive monster.