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Brexit makes Scottish independence much more economically attractive

In 2014, a brighter future outside the rUK was patriotic wishful thinking. Now it is almost a certainty.

It is difficult to think clearly when you watch the utter hypocrisy of our Prime Minister, lecturing the Scottish National Party about politics not being a game, moments before she needlessly rejects a Lords amendment to secure the rights of EU citizens in the UK. Everyone knows those rights will be guaranteed during the negotiations, so it would be so easy to seize the moral high ground by doing that now. But I’m not sure our Prime Minister, and her MPs, would recognise the moral high ground if it was staring them in the face.

But thinking as clearly as I can, and it is very early days, it strikes me that there is a crucial difference between any new Scottish referendum and the one held in 2014. In 2014, there was clear short-term economic pain, with no specific reason to believe things would improve in the longer term. This time there is still that short-term pain, which could be even greater than in 2014, but this time there is a very bright light at the end of the tunnel.

Scotland's First Minister Nicola Sturgeon had no choice but to announce a second Scottish referendum. Brexit is a huge economic and political change since 2014, and she would be neglecting her duty to the citizens of Scotland not to explore ways she could avoid a hard Brexit fate for her people. She was given no choice by the decision to leave the single market, made not be UK voters but by the Prime Minister.

Yet it is also difficult to forgive the SNP for inventing the term Project Fear, which became the vehicle by which the Leave campaign was able to pretend that Brexit would not be the economic disaster it almost certainly will be. It is difficult to forgive them for trying to pretend that the short term costs for the Scottish people of leaving the UK would not be severe. I thought then that it was a huge risk to bear those short term costs when the long term benefits outlined by the SNP appeared to be little more than wishful thinking.

But Brexit changes everything. The economic cost to the UK of leaving the EU could be as high as a reduction of 10 per cent in average incomes by 2030. If Scotland, by becoming independent, can avoid that long-term fate then you have the prospect of eventual economic gain right there. But it is more than that. If Scotland can remain in the single market it could be the destination of the foreign investment that once came to the UK as a gateway into the EU. By accepting free movement, it could benefit from the immigration that has improved the UK public finances over the last decade. No, that is not what you read in the papers or see on the TV, but I’m talking about the real world here, not the political fantasy that seems so dominant today.

There is an additional issue regarding the short term costs of independence. With little oil at a low price there is no doubt that the rest of the UK (rUK) is currently subsidising Scotland by a significant amount. Under David Cameron it was reasonable to suppose that this subsidy would continue for some time, if only to prevent another referendum. I do not think we can make the same assumption about Theresa Brexit May. The prospects for the UK public finances under Brexit are dire, yet after the Budget there seems no way that the Conservatives will put up taxes to pay for the extra resources the NHS and other public services so desperately need. As the situation gets steadily worse, nothing - absolutely nothing - will be safe from continuing austerity. To be brutally honest, if the SNP loses another referendum, even the formidable Ruth Davidson will not be able to prevent Scotland being plundered by this government.

Set against that, however, is the fact that Scotland currently does a lot more trade with rUK than with the EU. If Scotland became part of the single market, and that resulted in trade barriers being created between Scotland and rUK, the immediate impact on Scotland's trade would be negative. That would be another short-term cost. But in the longer term, Scotland would be better off with this arrangement. To see why, imagine two parts of this island, one which has easy access to the huge market which is the EU and one which did not. It is obvious which part would be expected to grow more rapidly.

There are a huge number of issues that still need to be clarified regarding this second referendum. Will the SNP still go for, or at least appear to go for, staying in a monetary union with the rUK and keeping sterling just because it is the more popular option, even though having their own currency is a much more sensible in economic and political terms. Will they be honest about the short term costs? Will the EU give them the chance of staying in the single market or EU, or will they insist they join the queue? What will the UK/EU deal be, and how would that impact on Scotland if it joined the single market.

But the bottom line is that the case for Scottish independence is now much stronger than it was in 2014 in the following sense. In both cases there will be severe short term costs. But in 2014 a brighter long term future outside the rUK was patriotic wishful thinking. Now, if they can stay in the single market, it is almost a certainty.

Simon Wren-Lewis is an economist at the Blavatnik School of Government and Merton College, University of Oxford. This is a slightly revised version of a blog post on Mainly Macro

 Simon Wren-Lewis is is Professor of Economic Policy in the Blavatnik School of Government at Oxford University, and a fellow of Merton College. He blogs at mainlymacro.

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How the Lib Dems learned to love all-women shortlists

Yes, the sitting Lib Dem MPs are mostly white, middle-aged middle class men. But the party's not taking any chances. 

I can’t tell you who’ll be the Lib Dem candidate in Southport on 8 June, but I do know one thing about them. As they’re replacing a sitting Lib Dem (John Pugh is retiring) - they’ll be female.

The same is true in many of our top 20 target seats, including places like Lewes (Kelly-Marie Blundell), Yeovil (Daisy Benson), Thornbury and Yate (Clare Young), and Sutton and Cheam (Amna Ahmad). There was air punching in Lib Dem offices all over the country on Tuesday when it was announced Jo Swinson was standing again in East Dunbartonshire.

And while every current Lib Dem constituency MP will get showered with love and attention in the campaign, one will get rather more attention than most - it’s no coincidence that Tim Farron’s first stop of the campaign was in Richmond Park, standing side by side with Sarah Olney.

How so?

Because the party membership took a long look at itself after the 2015 election - and a rather longer look at the eight white, middle-aged middle class men (sorry chaps) who now formed the Parliamentary party and said - "we’ve really got to sort this out".

And so after decades of prevarication, we put a policy in place to deliberately increase the diversity of candidates.

Quietly, over the last two years, the Liberal Democrats have been putting candidates into place in key target constituencies . There were more than 300 in total before this week’s general election call, and many of them have been there for a year or more. And they’ve been selected under new procedures adopted at Lib Dem Spring Conference in 2016, designed to deliberately promote the diversity of candidates in winnable seats

This includes mandating all-women shortlists when selecting candidates who are replacing sitting MPs, similar rules in our strongest electoral regions. In our top 10 per cent of constituencies, there is a requirement that at least two candidates are shortlisted from underrepresented groups on every list. We became the first party to reserve spaces on the shortlists of winnable seats for underrepresented candidates including women, BAME, LGBT+ and disabled candidates

It’s not going to be perfect - the hugely welcome return of Lib Dem grandees like Vince Cable, Ed Davey and Julian Huppert to their old stomping grounds will strengthen the party but not our gender imbalance. But excluding those former MPs coming back to the fray, every top 20 target constituency bar one has to date selected a female candidate.

Equality (together with liberty and community) is one of the three key values framed in the preamble to the Lib Dem constitution. It’s a relief that after this election, the Liberal Democratic party in the Commons will reflect that aspiration rather better than it has done in the past.

Richard Morris blogs at A View From Ham Common, which was named Best New Blog at the 2011 Lib Dem Conference

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