Salmond keeps contradicting himself on Scottish independence
POLITICS is a nasty, brutish business – so I have no time for those Scottish nationalists who are now bleating about how badly they are being treated by the London and European establishments. The Scottish National Party (SNP) spent years poisoning many Scots against the UK, using half-truths and propaganda;
it cannot now complain when the unionists finally turn their own big guns against them.
The message from Brussels to Scotland yesterday was simple: if you quit the UK, that also means quitting the EU. An independent Scotland would have to reapply to join the EU, and for that it would need the agreement of every EU member state. Speaking yesterday, Jose Manuel Barroso, the president of the European Commission, appeared to have in mind other countries worried about their own break-up having an incentive to block Scottish membership. "Spain is opposing even the recognition of Kosovo so it's, to some extent, a similar case", as Barroso put it.
It is good to see Alex Salmond, the SNP's leader, and his fanciful claims being shredded left, right and centre. One of his key arguments was that Scotland could enjoy all of the benefits of independence – as he sees them – without any downside: no cuts to public spending and welfare (a claim which is certain to be proved catastrophically wrong sooner rather than later), no need to leave the pound or the Bank of England's protective umbrella (Royal Bank of Scotland and Halifax Bank of Scotland were the two greatest casualties of the crisis), no need to leave the EU and no need even to lose the monarchy (that final point is true, though Ireland eventually became a Republic after it left the UK).
Yet the EU Treaties are quite clear about what a new country needs to do to join the EU. That said, would Spain or anybody else really block Scottish membership? And if they did, so what? Couldn't Scotland negotiate a bilateral free trade and free movement of people deal, allowing it to retain far more genuine independence but benefit from the EU's advantages? Wouldn't that be quite a lot better? Perhaps, but that is not what Salmond wants or what he has been promising.
He is contradicting himself for another reason: if he does succeed in joining the EU then he will be forced to give up the pound. The UK won't let Scotland be part of a banking union – but there is nothing it could really do to stop Scotland using the pound informally. But EU rules will block this: all new member states must sign up to join the single currency; and a condition of that is that they must all operate their own central bank and make sure they take part in various forms of financial regulation and potential bank bailouts.
Joining the EU would mean Scotland immediately entering into the first phase of economic and monetary union; and eventually the final one, which involves adopting the euro. Scotland would not be given the right to opt out, unlike the UK or Denmark; of that we can be certain.
One reading of the Treaties would even suggest that Scotland would have to have its own temporary currency (not sterling) prior to joining the EU. I doubt that – but it is clear that the nationalist case is full of holes.
FALLING PROFITS
Here is a fact you probably didn't know. The FTSE 100's profits actually fell last year. In fact, as the accountants UHY Hacker point out, FTSE 100 companies paid, in total, £51bn in tax on profits of £143bn in 2013, a fall from the £58bn paid on profits of nearly £188bn in 2012. The result is that the average effective tax rate shot up to 27.6 per cent of profits (on an unweighted measure), up from 24.5 per cent, dramatically reversing a downward trend in the previous four years. There were, admittedly, special circumstances, including massive fines and settlements, but so much for the recovery and for the coalition cutting tax on business.
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