Monday 19 February 2007

Interview with David Simpson

Last weekend I wrote (scroll down) about the Sunday Times article by David Simpson, formerly chief economic advisor to Standard Life. I am very pleased to present the answers given by David Simpson to ten questions on Scottish independence. These are essentially the same ten questions that were answered by Michael Fry (scroll down) back in October although the first two were altered slightly as they were originally asked in the context of Mr Fry's recent conversion to the independence cause.

1. Would you elaborate on why you are in favour of Scottish independence, in particular from your position as an economist?

I am in favour of independence primarily for non-economic reasons. If Scotland is really a nation then it should have all the characteristics of nationhood, notably self-government and representation in international organisations. However, I also believe that independence would have positive economic effects, for the reasons set out in my article in The Sunday Times (Scotland) of February 11th. Our rate of growth lags behind other European economies of similar size, and I think that this is in large part attributable to our culture of dependence.
2. Some who favour independence have rejected joining the SNP because their policies are perceived as being anti-liberal. Do you think that there is any likelihood of a radical realignment in Scottish politics? I’m thinking of some kind of merger between the “liberal” forces in the SNP and those Scottish Conservatives who are frustrated by the current state of their party. Might we even see a low-tax, small government party in Scotland while England dithers under Mr Cameron?
Just as it is within the power of the people of Scotland to decide whether they wish to have political independence or not, so it is up to those who wish it to bring about the re-alignment that you describe. My impression is that the disenchantment with conventional politics that seems to affect much of the contemporary Western world means that there may be scope for some quite radical realignments. These might include, as Mike Russell has suggested, movements to return some political power from elected representatives to the voters. The success of a political party in Scotland running on a “liberal” platform would probably depend on the perceived success or failure of existing arrangements for delivering public services.
3. Many English journalists, both in print and in the blogosphere, see Scotland as an economic basket case. It seems to me that the Scottish GDP per-capita isn’t too far from the UK or European average and that our problem is too much government spending and control rather than a fundamental weakness in our ability to produce. Do you agree?
I do not think we should pay too much attention to what English journalists write about Scotland. With one or two exceptions, they are usually not very well-informed. I agree with you that our businesses do not appear to suffer from an evident lack of capability to produce things that are in demand. I think the problem with Government in Scotland, (apart from the fact that the Executive lacks the power to promote economic growth in Scotland, and the Government in London lacks the will), is not that it spends too much money, but that it spends it very badly. What we need is not so much small government as good government.
4. Many of the aforementioned English journalists are now calling for Scottish independence. Do you think that they would be quite so keen should it become apparent that England/England and Wales/England, Wales plus NI would have a reduced status in the EU and the UN?

I doubt whether the rest of the UK would suffer a loss of stature in the EU and the UN as a result of the departure of Scotland. So far as I am aware, the departure of Ireland in 1922 was not perceived by anyone as a loss of English international stature. And I don’t think that England feels that its influence in FIFA is diminished by the fact of separate Scottish representation.
5. Sticking with Northern Ireland: In the event of Scottish independence, do you envisage the NI unionists moving towards a rapprochement with the Republic?
That is an interesting question. I think that here is already a slow but perceptible thawing of relations between the Northern Unionists and the Republic. For example, both agree to the existence of an electricity inter-connector between the Republic and the North, where electricity flows both ways at different times. (I am told that the southbound electricity is known as ‘Orange juice’, and the northbound as ‘Southern Comfort’.) But I think that resistance to the political integration of North and South is real, and doesn’t all come from the North.
6. To what extent are you concerned that prominent Scottish companies – the Royal Bank, Standard Life etc. – might flee southwards if independence looked likely? What could be done to counter any such plans?

I worked for Standard Life for thirteen years. I can’t think of any reason why the fact of independence would cause financial companies to move their head offices south. What would drive companies out of Scotland, financial and non-financial ones alike, would be an environment of taxes and regulation that is unfriendly to business. An independent Scottish Government would of necessity value its major companies, and would scarcely impose upon them the hostile regulatory environment that many of them now suffer at the hands of the Westminster Government.
7. I’m now thinking of my own situation. Like many born here I have English connections. My late father was English and one of my two sisters was born in England. Most of my adult life was spent in London. How can you reassure the many people like me who may be concerned about a splitting of family connections?
I don’t understand in what sense independence could possibly ‘split’ families? Most Irish people have close relatives in England. They are no more or less close to each other, whether Ireland is part of the UK or not. Nowadays, more and more people are choosing to migrate from one country to another. I have relatives in Canada to whom I am closer than I am to many of my relatives in Scotland. This has nothing to do with political boundaries.
8. I now turn to foreign affairs. Assuming the Scottish people wished to remain in the EU, would the Union accept us? Would the rest of the UK (perhaps just England & Wales) be deemed to be the continuing UK?
I am not a lawyer, but my understanding of the situation is that, upon becoming independent, Scotland would be deemed to be still part of the EU, as would the Rest of the UK.

9. What should happen to the nuclear weapons based on Clydeside? Should Scotland lease the site to England?

If an independent Scotland voted against having nuclear weapons on its soil, then I think it is unlikely that it would wish to lease bases for nuclear purposes to another country.
10. What should an independent Scotland do to alleviate poverty and welfare dependency in Glasgow and its surroundings?
The only way to alleviate poverty in Glasgow or anywhere else is to create jobs, and the only way to create sustainable jobs is to make the region concerned an attractive place in which to locate businesses.


David Farrer said...

Comments made on previous template:

Sam Duncan
I'm afraid I'll have to join in the chorus of "Thanks, but no thanks" here. 
One thing I spotted that really didn't add up was this: 
An independent Scottish Government would of necessity value its major companies, and would scarcely impose upon them the hostile regulatory environment that many of them now suffer at the hands of the Westminster Government. 
Huh? Why not? I've tried to make sense of this - really, I have - and it just doesn't follow. Is the idea that these businesses would be more important to Scotland than they are to the UK? 
Well, first of all there are businesses hugely important to the UK suffering under the same hostile regulatory environment right now. Just because a government should value the country's major companies doesn't mean it will, even if it's glaringly obvious to anyone with an ounce of intelligence. Politicians in general have rather less than an ounce of intelligence. 
And anyway, some of those are Scottish. Standard Life and RBS are both pretty high up on page one of the list of companies the British government should value. It doesn't seem to. Why should Holyrood be any different? 
Don't get me wrong, I might support independence if I thought there was the remotest chance of Scotland becoming a European Hong Kong, or the Switzerland of the North. But there ain't. Not a cat's chance in hell. Look at that mob in Holyrood. Do you honestly think they've got the brains to use their autonomy wisely? And look at the heavyweights who'd be coming back from Westminster to join them. Gordon Broon, the Economic Genius. John Reid, mastermind of the Home Office. And - God help us - Alec "bawheid" Salmond. 
Yes, maybe eventually it might eventually penetrate their thick skulls that the only way out of the hole they've created is to stop digging. But judging by Ireland's experience - not to mention Scotland's own undimmed enthusiasm for socialism throughout the 1980s - it'll be a long, hard slog.

21 February 2007, 01:59:44 GMT
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It took the Irish more than 50 years to stop being a bunch of tits and make some rational economic reforms. Not awfully encouraging.

19 February 2007, 19:26:55 GMT
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John Thacker
I am not a lawyer, but my understanding of the situation is that, upon becoming independent, Scotland would be deemed to be still part of the EU. 
I'm not sure that this would be the case. At the very least, there are enough parts of the EU that have secessionist movements of their very own that would like to block such automatic recognition. Spain is an obvious example, but there are others.

19 February 2007, 19:05:48 GMT
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David Farrer said...

Being English, maybe these points are non of my business. 
I am a unionist (or was before Nulabour destroyed it) but if the Scots want independence its up to them. 
However a couple of worrying thoughts 
The SNP seem to believe 3 highly suspect and typically socialist things. 
That they will get all the North Sea oil, and this will keep them in clover producing endless streams of tax revenues no matter how tighly the pips are squeezed. A tartan Zimbabwe? 
They will qualify for billions in EU aid which will allow them to keep spending 
That they can be more independent as part of the Integrationist EU than as part of the Union (however its eventually devolved.

19 February 2007, 16:06:08 GMT
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Andrew Duffin
"What we need is not so much small government as good government." 
The curse of managerialism in a nutshell. 
Boo, hiss!

19 February 2007, 15:06:16 GMT
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Higher public expenditure and even more state borrowing can't go on forever. That debt needs to be paid back eventually, normally through much higher inflation, Gordon's 'miracle economy' popping and massive job losses in both the private and public sector. That's when the real backlash against Labour will begin...

19 February 2007, 12:33:50 GMT
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low tax, small government party? in scotland? how you going to manage to win more than 15 votes with one of them? scotland is an international byword for labour voting deadbeats sucking on the public tit. they going to vote themselves off the dole? don't think so.

19 February 2007, 10:25:17 GMT