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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.
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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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?
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.
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.
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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.
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.