The Myth of the Squeezed Middle

One of the biggest frustrations of Liberal Democrats in the 2015 General Election was the manner in which the Conservative Party tried to claim credit for tax cuts they opposed in 2010. The Lib Dems had a policy of increasing the "personal allowance", which is the amount an individual is allowed to earn free from income tax before they have to start to pay the basic rate. The Coalition delivered on this promise, raising the personal allowance from £6475 in 2010-11 to £10600 for the tax year 2015-16.

This wasn't a cheap policy. It cut-into the tax-base of the UK by taking some people out of tax completely and drastically reducing the tax liability of everyone on low and middle incomes. It amounted, for almost everyone in full-time employment, to an £825 cut in their annual tax-bill. If the threshold had only kept-up with RPI inflation, it would only have risen to £7490 over this period, which would have only cut basic rate payers' taxes by £203. To have a tax cut of over £600 in real terms for the overwhelming majority of workers in the UK clearly wasn't nothing.

Paying for It

There were two steps the Coalition government took in relation to income tax that were intended to defray the cost of this policy. The first was to introduce a "taper" on the personal allowance. When you started to earn over £100kpa, you would lose £1 of your personal allowance for every £2 you earned above that. This created, it should be acknowledged, an anomaly whereby the marginal rate of tax paid by someone earning between £100k and £120k was actually higher than the rate paid by those earning more than that.

The other step taken was to cut the threshold above which higher rate tax would become payable. Higher rate tax is levied at 40p in the pound, and was paid on income above £43875 in 2010. As of the tax year 2015-16, this threshold kicks-in for income over £42385. This has the effect of increasing the amount of income taxable at 40p instead of 20p by £1490. This, in and of itself, increases total tax liability by up to £298.

Effect on Tax Paid

The combined effect of the changes to the personal allowance and the size of the basic-rate band is that basic rate-payers got a cash-terms £825 tax cut, whereas higher rate payers got a tax cut of £527. If both the zero-rate (personal allowance) and the basic-rate bands had expanded in-line with inflation, higher-rate payers would have expected a £1375 or so tax cut. If inflation is your standard, therefore, it's absolutely true to say that higher-rate and upper-basic-rate income tax-payers saw "fiscal drag" increase their tax liabilty in real terms (2015 prices), to pay for a substantial tax cut for everyone else.

A £622 tax cut represents about 4.6% of a full-time minimum-wage-earner's annual income. For someone on £20k, it represents 3.1%. If you earn the median household income, about £27k, that's a 2.3% cut in your taxes as a proportion of your gross income. These are very real gains which, although clearly not the whole story when you take-into account tax credits and benefits, have in themselves significantly helped most working people.

By contrast, higher-rate payers saw a maximum real-terms (2015) increase in their taxes of £803. This would apply to those earning over £50k or so, which is where the higher-rate threshold would have been had both the personal allowance and basic-rate-band been indexed to RPI inflation. That means a hike of 1.8% of their gross income. In effect, therefore, their tax hike, at its worst, is still much smaller than the tax cut everyone else got.

Is this fair?

Let's be clear who this higher-rate tax band affects: HMRC estimates show that if you are a single person and you earn over £40kpa, you are among the top 10% of household earners in the UK. For an adult with a working partner and two children, this would typically place you in the top 20% of household earners. Put more bluntly, the lowest earning four in five of adults do not and most probably will never, pay this tax.

If you put it in those terms, I suspect most people would be content and say that as a tax-priority, the lowest 4/5 of earners being given tax cuts off the backs of very small tax rises for the top 1/5 was fair.

The counter-argument, and an argument that has reared its head now that the Scottish Parliament is going to get the power to set thresholds and rates of income tax, is that over-time lots of people who would never have paid higher-rate tax in the past have now been pulled-into this category and that this is unfair. We hear the classic invocation of nurses, firemen and teachers in support of this. An audience-member in the BBC's Scottish Leaders' Debate on Friday said the very same. This rate was meant for rich people not for good and honest public-sector workers.

Never mind, of course, that a nurse has to reach band 8 of 9 on the standard pay-scale even to get close to the level of income necessary for higher-rate tax. Almost all of the positions at that pay-grade are managerial and consultant-level positions. Your conventional understanding of even a senior nurse on a hospital ward is going to be no higher than band 7, who earns less than the higher-rate threshold. In teaching the position is similar: in the public sector schools only senior management and principal teachers earn more than the threshold, and of those who do, most earn on or around the threshold. The extra tax they pay is barely if even off-set by the personal allowance tax cut they have already taken to the bank. Presenting the threshold cut as an attack on typical public sector workers is, frankly, deceitful diversion or brutal ignorance.

"Things were better in my day"

It does not even follow that levels of taxation have especially risen for middle-earners in the last 25 years or so. Let's take 1990-91, the tax year immediately before I was born. The personal allowance was £3005 (£6161 in 2015 value) and the higher-rate kicked-in at £23705 (£48601 in today's money). You'll notice this isn't too far away from the thresholds in 2010 once you've taken inflation into 2015 money into-account, and if anything both the personal allowance ends and the higher-rate threshold kicks-in at a slightly lower level of income than both at inflation adjusted 2010 rates. But all of this ignores the fact that the basic-rate of income tax was 25p, not 20p, in 1990-91.

That 5p extra means every higher-rate-payer was paying more than £2100 more in basic income tax than they otherwise would, an amount which is not-offset by a higher threshold for higher-rate tax, which cuts their taxes by just over £800, assuming a basic rate of 25p applied. If we applied the 1990-91 tax code in terms of rates and bands and adjusted for inflation, these high-flying nurses and teachers would be over £100 a month worse off!

Current Proposals

The Conservative Government at Westminster proposes to raise the 40p threshold ahead of inflation, to £45k and eventually £50k, in order to try to "remedy" this "unfairness", whereas the SNP Government have (in my view, correctly) chosen only to raise the threshold to account for inflation in Scotland. The reality of the Conservative policy especially is that in cash-terms the top 10% of earners will essentially get a bigger tax-cut than the lowest paid 90% in this country.

Even the SNP policy is imperfect, however. If Scotland is to be serious about ending austerity, we should not just be looking at the thresholds at which taxation applies. We should also be looking at the rates at which taxation applies. There are perfectly reasonable areas for disagreement about the Scottish Rate of Income Tax (SRIT), which the SNP refused to use to raise revenue on the grounds that it would also be levied on basic-rate payers. I covered the flaws of their reasoning on this in a previous post a while back. But when the Scotland Act 2016 powers come into force, there is the choice to raise revenue by raising the higher-rate of tax without raising the basic-rate, or not raising it by as much.

If the SNP were to slightly lower the higher-rate threshold (rather than to increase it with inflation) and to introduce a higher-rate of between 41 and 42p, they could have asked the top 10% of Scots to pay what they would have been asked to pay with an increase in the SRIT, without asking for a penny more from the rest of Scotland. It would not have raised as much, but it would have made something of a dent in the austerity cuts they claim not to like that are coming from Westminster. When the Scotland Act 2016 comes into full effect, they could have even used this slight increase in tax on the wealthiest Scots to protect and even supplement the welfare policies they think the Conservatives are bearing-down too hard upon.

The Live Election Debate on Tax

This would have been a more meaningful debate to have than the false one that's taking place between the SNP and Scottish Labour about the 50p rate in the Holyrood election campaign. Amusing as it is to call Sturgeon a Tartan Tory for parroting George Osborne's lines on a 50p rate, she's probably right: Scots earning significantly over £150kpa probably do have significant incentives to arrange their affairs so as not to be designated a Scottish taxpayer. As a side-point, it's also difficult to see how an independent Scotland's tax code would vary so much that they could painlessly prevent that reality. Those earning less than that, however, probably don't. You're more likely to raise more revenue from the top 10% of earners through adaptations to the higher rate than you are through the additional rate of income tax.

If the SNP cannot explain why they won't cut the threshold and levy a 41-42p higher-rate, it rather calls the bluff of the public reasons they gave for not supporting the rise in SRIT. If Nicola Sturgeon wants to run Scotland as a country with taxes not significantly at variance with those of the United Kingdom as a whole and largely in conformity with George Osborne's fiscal envelope, that's fine by me, but she should at least be up-front with the Scottish people that she's no social justice warrior in doing so. One of the big arguments made by the SNP about independence is that our current fiscal gap would not be a problem because we would totally change the dynamics of the way we tax in our state. The evidence increasingly suggests that the more tax power the SNP get, the more obviously centrist, cautious and happy to dovetail HM Treasury they become. Perhaps they're the best kind of Unionists after all.

Alas, in the heat of an election campaign, having a debate about policies that actually affect people's lives and can make a difference tend to fall by the wayside. I doubt Sturgeon or Swinney will ever need to have, let alone give, an answer to these obvious questions.

Choo Choo or Cuckoo?

I've been mulling over Labour's latest plans to "renationalise" the railways. Regular readers and friends will know that I'm not the type instinctively to support state ownership of services unless there is a compelling specific reason that regulation alone is insufficient to get the best service.

A Private Eye Classic

On the railways, though, I've always been more sympathetic to renationalisation. Maybe it's just that when I was reading The Railway Stories as a child, the post-nationalisation Fat Controller seemed a more jovial chap than his Fat Director predecessor. It does seem to be the case that fares outstrip general inflation, provide mediocre value for money compared to other forms of transport on short-haul, and even prove more expensive and time consuming than some flights between major cities. For example, if I were to book a couple of weeks in advance, I could travel from the centre of Glasgow to the centre of London and back by plane, including bus transfers at either side, for as little as £70 or so. Allowing for getting to and from airports, and check-in, the whole experience would typically take about 3 to 3.5 hours. By contrast, the cheapest train ticket from Glasgow Central to Euston, buying two singles, would be between £120 and £130, depending on how flexible I was prepared to be with the time of day. That journey would also take 4.5 hours. Even with a 16-25 Railcard, the airlines come in cheaper. If time and comfort were not a factor, I might as well be getting the 9.5 hour overnight Megabus and getting some change out of a £20 note.

It seems just instinctively ludicrous that rail travel has to be so uncompetitive with other forms of transport and, in Britain's rail's case, apparently so much less good value for money than that of other countries.

The case for renationalisation is, however, overstated. Virtually all of the ills of the British rail system seem to get blamed on it. Delays, cancellations, overcrowding, prices, cost to the taxpayer. Yet it all seems to ignore the fact that "privatisation" as we know it is actually quite a bit more complicated than people let on.

For instance, Andy Burnham blamed the fact he had to take a rail-replacement bus service to Labour Party conference on privatisation in a Tweet earlier today. I suspect he wasn't being entirely serious, but it is a myth that reliability problems are a consequence of privatisation. Rates of cancelled and late trains have fallen significantly since the era of British Rail, and in the small number of cases where the operators fail, they are heavily fined for it. This is part of the reason why, when franchise renewals come up, operators are so dependent on their reliability rates on other services, as any mismanagement significantly cuts their (narrow) profit margins, should fines become frequent. For my own part only once in my life have I been on a rail replacement bus service, and it was amusingly enough, while travelling to Munich from Prague on a state-owned DeutscheBahn express train! The grass is not always greener, it seems.

It's also worth pointing out that many cancellations and delays are not actually the responsibility of the train operators, like Virgin, Cross Country, Scotrail Abellio and the like. While these companies do run the services on a day-to-day basis, they are not in charge of two pretty big aspects of the railway system, namely the mechanical maintenance of the vehicles and the operation and maintenance of the rail infrastructure, like track, signalling and stations. If you're on a rail-replacement bus service, the chances are it has little if anything to do with the people whose franchises the Labour Party wants to end. It is more likely that it is an issue for which NetworkRail, a wholly state owned company, is responsible. If it is not a problem with the railway network itself, but with the rolling stock, that is primarily a failing on the part of a group of companies that, as far as I can see, Labour has not given any indication what they wish to do with. The people providing mechanical maintenance of trains are not Virgin Trains or Scotrail but Porterbrook and Eversholt. These are private companies with no franchising agreement with the government than can simply be "allowed to expire" before being replaced by a state-owned company.

If the Labour Party want to renationalise the railways, they'd have to either buy-out these companies or make their franchises refuse to lease their rolling stock in preference for a new state-owned supplier. This could create a litany of EU competition law problems for no real discernible benefit. One has to ask what the point is in remunerating up-front all these private investors when that money could instead go directly into rail expansion and electrification projects. Rolling stock isn't cheap, and there are legitimate arguments that the rolling stock companies are stuck with a business model that prevents prompt upgrading of rolling stock and that they extract profit from dated assets. But these companies are also heavily indentured in order to own this rolling stock in the first place. If they lack the capital to invest in new rolling stock, what good does it do to isolate them as a supplier before the government has the means to procure enough rolling stock of its own?

The best case for rail renationalisation for me is one of transparency. The system concocted by the Tories in the 1990s to try to generate an internal market was unnecessarily complex and seems to have lost the benefits of vertical integration of different parts of the supply chain. We probably wouldn't save much money in terms of subsidy of the operating companies if they were all state-owned, but bringing them back under public ownership would at least be a step in the direction of transparency about what parts of the system are profitable and what ones aren't. The drawback is, of course, that if part of the system is unprofitable, it's no longer the case that private companies are assuming part of the risk and the consequences, subsidy notwithstanding.

The gamble of renationalisation is that, with the best will in the world, some of the capital that makes new infrastructure possible will dry-up. Rail projects are extremely expensive at the best of times (see both HS2 and CrossRail) and if you start removing companies that own often debt-secured rolling stock, which are owned mostly by pension funds, from the picture, government has to make a much bigger contribution in the short-term to keep services running at their current levels. East Coast was a success in public ownership because it cut its cloth and had a new management system put in place. Sometimes governments will be a better arm's length manager for a particular franchise at a particular stage in a route's lifetime. Attempts to extrapolate that isolated success network-wide, without a clear answer to the question of how Labour proposes to change the other stages in the rail delivery process, however, is just populist and nostalgic.

To see ourselves as broadcasts see us

A vexillological ménage à trois

Okay, so the European Parliament elections don't exactly have a track record of engaging the public in enthusiastic debate. The turnout in the UK was 34%. In Scotland it was even worse: 28.5%. They are often seen as an opportunity for a protest vote or to make a statement about domestic issues. It provides an opportunity for those outside of mainstream politics to shout rather loudly and incoherently without any semblance of actual accountability, to energise the already malcontent. That leads to the election of, at times, questionable and populist (such as UKIP), and in worse cases, overtly racist, representatives (the BNP).

The failure of mainstream political parties to engage the public as a whole with European politics is not a failure which is unique to the UK. It is, nevertheless hugely regrettable, considering the importance the EU has in international relations and on our domestic affairs. The EU is the forum through which we establish complex but economically vital relationships not just within Europe but beyond, with some of the largest and some of the fastest growing export markets in the world. It is the forum through which we bring about unprecedented levels of multilateral cooperation on criminal justice, the environment and globalising industries like financial services. As a coherent whole, it has both the economic and political clout to ensure the influence of the interests of European countries in a world where the big decisions are taken by the US, China, Russia and increasingly India and Brazil. It provides an important counter-balance to US dominance of western interests and without it, European influence would surely suffer.

Alas, the consequence of people failing to make the "positive case" for the EU has meant that our public discourse about it is overwhelmingly negative. A combination of misinformation, apathy and cautiousness on the part of its advocates has created a narrative and a set of terms for debate that make it difficult for mainstream parties to support the EU in a concrete and public way. The EU is always discussed in the context of reforming our relationship with it (usually code for taking powers back) or whether we should be part of it at all. Notwithstanding Tony Blair's proud EU credentials, Labour's relationship with the EU has always been ambivalent, even since the days of the EEC. Wilson's referendum was, let's remember, a get-out-of-jail-free card to prevent a split of the type seen within the Tories since Maastricht. In Scotland, we get a slightly softer narrative about EU hostility, and the SNP have spoken in the past about "independence in Europe" as being part of their vision. The message, however, is always timid and scarcely if ever made with enthusiasm.

With this in mind, I thought the Party Election Broadcasts of Scotland's main four parties ahead of the European Parliament Elections in May were instructive. I found them telling, not just from the perspective of attitudes towards the EU itself, but of Scottish politics more broadly.

Where is Europe?

The first thing I observed is that two parties don't seem to want to talk about the EU at all. In neither the SNP broadcast, nor the Labour broadcasts, were the words "European Union" even uttered. Neither of these parties, both nominally pro-EU, seem to have anything to say about how decisions are made in the elections we have in barely 3 weeks' time. No discussion about climate change. No discussion about our economic relationship with Europe. No discussion about the benefits to us as EU citizens. No discussion about the challenges the EU faces in terms of reform and helping us better to tackle the problems that remain stubbornly immune to borders. They seem to be banking on the inherent apathy people have towards these elections and institutions, in the hope that they won't be asked actually to do anything about it.

All this Referendum Malarkey

The second thing I noticed is that the SNP broadcast just talks about independence and the referendum. It's a rehash of previous general broadcasts they have used to support their raison-d'etre. It was rather light on actual substance in terms of new arguments for independence, repeated some pretty tired themes with which anyone with a television set in the last decade will now be familiar (still bashing on about Tony Blair's illegal war in Iraq, misleading platitudes about university education, ending "rule by Westminster politicians" and the like). If they were looking to use this broadcast as a springboard to winning a 3rd seat in Scotland on 22nd May, this was a pretty uninspiring way to do it, and its lack of freshness probably will not help them noticeably in the independence referendum.

It does, though, prove symptomatic of the one-dimensional outlook they are taking to politics in Scotland at the moment. Everything is seen through the prism of the referendum, and an opportunity to make capital there, while other meaty issues get swept under the carpet. Far from making the case for "independence in Europe" this broadcast was using one poll to affect another, something which others have pointed out may in fact fall foul of OFCOM's rules on Party Election Broadcasts. Rule 18 specifically provides that "the purpose of a PEB must not be to promote any particular outcome of a referendum". Given the only reference to a polling day in the broadcast is 18th September, you have to think they've got a point, albeit it is OFCOM more than the SNP that would have questions to answer.

Where is Scotland?

The third thing I noticed, first and foremost, was that the broadcast last week (23rd April) on behalf of the Scottish Labour Party, er, wasn't. It was the generic one put out by Labour across the UK. And, as I pointed out earlier, it has nothing to say about the EU elections. It is a three minute David Morrissey voice-over diatribe about David Cameron and the Tories, and their top-down reorganisation of the NHS with a swipe about the Lib Dems breaking their promises on tuition fees. I point this out because not only was it a London hand-me-down, but it was talking about things that are totally irrelevant to voters in Scotland, where different policies are pursued. It continued to give me the distinct impression that Labour just doesn't get devolution, the long-standing irony given they delivered it.

They don't know whether they like centralisation for solidarity or subsidiarity to allow for genuine difference. It's not just a problem for them in Scotland. When Ed Miliband talks about creating regional ministers in England, that's not a creed of localism. On the contrary it ignores the people and bodies at a more local level who already exist. His solution is not to give Yorkshire a man in Westminster, but Westminster a man in Yorkshire. Labour, in embodying this top-down concept of local power, find themselves institutionally at odds with the EU debate. Their problem is they don't know what the EU is for either. They can't talk about a vision for Europe or what they want to do with the EU, because they don't have a big idea for it. They don't really get the European principle of subsidiarity, so they don't know how to fight for it.

I had thought this was the only offering Labour would give Scotland, but it was brought to my attention that this evening they did in fact release a Scotland specific broadcast. It was much the same story, though. Combining the failures of their UK-wide broadcast with that of the SNP, they managed not to talk about the EU, mutter platitudes about the independence referendum and not say much else. Though not as explicit as the SNP broadcast, this too could arguably fall foul of the OFCOM rules for irrelevancy.

Partial credit for candour

At least the Tories had the courage to talk about the European Union in their broadcasts, both their UK-wide one and their Scottish one. They outlined the broad achievements they believe Cameron has secured in the EU, the broad areas they want to change about our relationship with the organisation, and what their policy is on a future referendum. You can disagree with their policies, but both their UK and their Scottish message actually dealt with EU-issues, and in a way which was at least relatively constructive rather than overtly hostile as we hear from UKIP.

An idea for Europe

Which leaves, among the parties still holding seats in the European Parliament from Scotland, the Liberal Democrats. Now of course I'm biased. But it's not as though the Scottish Lib Dems have an unblemished track record on Election Broadcasts. I still have the occasional nightmare thinking about Tavish Scott's wind-tunnel "Save our Police" disaster in 2011. But the Lib Dem effort this time round is pretty much the only one with a clear, unequivocal, positive message specifically about EU issues and how the EU works for us, pitched to a Scottish audience to deal with our concerns. It talks about trade, growth, employment, education initiatives like Erasmus, environmental standards, cross-border co-operation on crime and raising employment protections across the single market.

Will these broadcasts significantly impact the way people vote on 22nd May, or even if they vote at all? Probably not. But that's surely all the more reason for our political parties to take on the responsibility of using platforms like that to explain to people why they should care and why they should learn about what it is the EU does and how it affects their lives. If we treat the EU elections just as an excuse to propagandise about whatever side of Scottish independence or to ram home the mid-term-blues of the government of the day, is it any wonder the only people who are left caring about Europe are the nutters who want out of it? Scotland isn't as Eurosceptic as the UK as a whole. There is no serious danger of the majority of the Scottish population wanting out of the EU.

But if Scotland's two biggest parties won't make the positive case for the EU, either in its current form or reformed, it is only the cause of international co-operation that suffers. With every election that fails to break 40% turnout, we entrench the apathy without quelling the antipathy, on a popular mandate that withers the further we move away from 1975. If people don't trust or won't support, institutions which benefit them and their children, and their children after them, then our political class have only themselves to blame.

The Death of Nuanced Debate

Binary choices make for polarised debates

Constitutional reform is something I care passionately about. There are significant problems with the way the United Kingdom looks to enable its people to govern themselves. I was converted to Scottish independence by a growing scepticism that Westminster was capable of reinventing itself and producing a credible approach for a new relationship between London and Holyrood. And yet I find myself utterly despairing at the argument and the attitude underpinning the Yes campaign. More than that, though, I find myself utterly scunnered with the way this debate is being engaged with, and the disrespectful misrepresentation and hostility being pursued by both sides.

Sturgeon v Carmichael - a Dirty Battle in a Disgusting War

Take this evening's Scotland Tonight debate. The general consensus of viewer and pundit alike is that Nicola Sturgeon defeated Alistair Carmichael and comfortably too. But she did so with a kind of politics and approach to debate that simply isn't worthy of a people answering difficult existential questions about their future. She constantly interrupted Alistair Carmichael before he could get a word in edgeways. She ducked and she dived several legitimate questions, including on the currency and European Union membership, engaging in irrelevant whataboutery (and sometimes, outright lies, for example that the currency is anything more than a legal instrument relying on Westminster statute applying to the United Kingdom).


Fudging Democracy

She trotted out tired lines about Scotland getting Tory governments "forced" upon it, ignoring the inconvenient reality that in 2010 it was Scottish votes that denied the Tories a working majority (or for that matter that more Scots voted for the Tories or for the Lib Dems in 2010 than for the SNP in 2011) and the fact that the SNP support decisions about Scotland being made by the European Commission and Parliament, bodies which respectively are not elected and in respect of which Scotland would have a SMALLER proportion of the representatives than the UK Parliament. She made no effort whatsoever to try to defend the central notion of independence, that it's not "getting the government we vote for" it's deciding who the "we" should be when we address particular challenges within our society.

Does she think that welfare is something on which better political consensus and delivery can be achieved through governments in Edinburgh or governments in Westminster? Does she think that international disputes and problems like climate change or EU decision-making or conflicts in the Middle East are better addressed through lots of Western states working loosely together through discrete actors in an intergovernmental organisation like NATO, or fewer, more integrated units in the same kinds of organisation? Are nuclear weapons more or less likely to be dispensed with in the context of Europe and further afield if Scotland works within the UK structures, or if it acts distinctly on the international stage? Those are the real questions that independence address, not a flippant "Scotland didn't vote for the Tories". She's already assuming that the answer to "who is the most effective actor" is *always* Scotland, without ever explaining why international organisations are different from the UK in this respect.

False Equivalence

She seemed more determined to "beat Alistair Carmichael" than actually to explain and defend the positions her government had adopted in the White Paper. She asked ridiculous questions of Carmichael, like what powers he could "guarantee" would come to Scotland in the event of a No vote. Of course he can't answer that! The proper way further devolution should be delivered is by way of a Constitutional Convention, involving multi-party discussions and input from civic society. There is no point in holding such a Convention just now, when it could be rendered redundant by a Yes vote, and since the Liberal Democrats do not comprise a majority of Scottish seats in any Parliament, it would be inappropriate for Alistair Carmichael to start dictating the terms of that process or the outcomes. He does not control the Scottish Labour Party or the Tories. The most he can do is to point her to Scottish Lib Dem policy, the detailed provisions for Home Rule set out by Ming Campbell. It's not his fault if she hasn't read it.

"But people are asking for the SNP to give answers to everything" comes the retort. Okay, so plenty idiots at BetterTogether have asked stupid things from dialling codes to Doctor Who. But that's not what Alistair Carmichael asked you. Engage him on his merits. He asked you not about "everything" but about things that either a) have to be decided in the event of independence, negotiated under their watch, as an exercise of sovereign power in the event of a Yes vote or b) serve as permanent structural limitations or opportunities to what an independent Scotland can do, irrespective of its internal democratic structure.

Misleading on the Currency

So the first example: currency and the EU are perfect examples of this. A Yes vote *triggers* a change in the legal relationship between us and international organisations and with the central bank of the United Kingdom. We therefore need to have an explanation what the people who will actually be negotiating on behalf of Scotland will do when they set up the framework of our independent state. We need contingency plans that properly articulate first of all what our preferred kind of structure is but then secondly what structure we would adopt in the event we were unable to reach agreement with other parties.

So if the UK Government says that it will agree to a currency union, but only with specific measures for fiscal oversight of an independent Scotland, what kind of fiscal oversight would the SNP tolerate and what kind oversight would it reject? If the UK insist on a level of oversight greater than the Scottish Government are prepared to accept, because it would impinge on our fiscal levers more than it benefits us in terms of things like transaction costs, what is their plan B? Will they unilaterally adopt the pound, without a lender of last resort? Will they create a central bank with a pro-rata share of Bank of England assets and issue a Scottish currency at par? We need to know that they've given proper consideration to the alternatives, many of which, incidentally, would be more in Scotland's interests than to enter into a potentially very inflexible currency union. The smart response would have been to say that it is more in the interests of rUK to have a currency backed by North Sea oil revenues than for Scotland to choose willingly to enter into a currency union, gaining only limited transactional benefits, when Scandanavian countries have enjoyed far more flexibility and strength when combining oil revenues with independent currencies, and that Scotland is being magnanimous by agreeing this interim arrangement, in respect of which fiscal policy would be carefully monitored across the UK to assuage the markets that both new countries could hold their own.

But what did Nicola Sturgeon do? She lied. She said that the pound is "Scotland's" currency and that we "own" it too. First of all, you can't "own" a currency. It isn't an asset. It isn't "property". Currency is just a legal instrument used (usually by a state) to facilitate exchange of goods and services, issued against the value of reserve assets held by a central bank. Now of course there will be negotiations about what happens to the assets of the Bank of England, just as with all the institutions that are arms of the British state in the event of a Yes vote. But the assets, though controlled and owned by those institutions, are DIFFERENT from the institutions themselves. Scotland does not "own" a shareholding in British institutions. That's just not how our state is structured. We are a (legally) unitary state, not some sort of multi-national corporation. There has to be a negotiation about the division of assets (again, not institutions) and liabilities precisely because independence is the creation of a new state from part of the UK's old territory, rather than a disaggregation of a clearly demarcated confederal union. By giving inaccurate information about the true situation, Sturgeon may have done enough to persuade the layman that Carmichael's arguments about a currency union weren't relevant or especially penetrating, but she debased the proper understanding of what it means to be independent and how that transitional process would operate.

Fudging the issues on the EU

Similarly on the European Union. Sturgeon promised (without really justifying it at all) that the process will be straightforward, and that it will be in the interests of the other members to go along with Scotland enjoying membership on completely protected terms as good as they are just now, with opt-outs and rebates in full. All Nicola Sturgeon had to do was admit that membership wouldn't be automatic, but that there would be significant trade and movement consequences that would harm the rest of the EU if they were not to respond pragmatically to the new situation. She could have pointed out that even if we didn't get an ERMII opt-out, that in practice the obligation eventually to join the Euro is unenforceable. She could have pointed out that imposing Schengen rules on Scotland would bring no rational benefit to anyone in the rest of the EU because, being an island rather than on the Continent, all travel arrangements to and from Scotland would still involve an air or sea journey, which still involve passport controls. She could have pointed out that it was in the interests of those in continental Europe and of the rUK to allow Scotland to have a Schengen opt-out and to be part of the Common Travel Area, because to do otherwise would benefit LITERALLY no one.

But she didn't. Instead she made misleading statements about Scotland "already being a member" of the European Union. John Swinney did the same on Newsnight half an hour earlier. Scotland is NOT a member of the European Union. It is a territory that just happens, at this moment in time, to be part of a member-state of the European Union. Sturgeon was hiding behind a lie that doesn't even help her case. Instead of tackling head-on the question about the terms of Scottish membership and what renegotiation would actually mean, which if played right would have been a thoughtful and intelligent dismantling of the real world consequences of the "uncertainty" of EU membership, she turned it into an "us and them" debate, trying to imply that the UK was trying to act contrary to Scotland's interests.

Scaremongering

The thing about these kinds of situation is that they do not have an actual comparator in the event of a No vote. The default position in the event of a No vote is the full provisions of the Scotland Act 2012 enter into force and Scotland gains, among other things, partial powers in respect of income tax and stamp duty land tax, beyond which anything that changes further will require the consensus of the political parties. Nicola Sturgeon mentioned that EU membership was under threat in the Union. No it isn't. If you vote No, there STILL has to be an outright General Election victory for the Tories or Tories with UKIP before an EU referendum is even remotely on the table. The Tories couldn't even win an overall majority in 2010, with 37% of the vote, and with the failure of the Boundary Reforms, the absolute best they can hope for is to be the largest party, which is still very unlikely. The idea that the UK's membership is under threat is ludicrous, and scaremongering straight out of the BetterTogether song-book.

And then there's the fearmongering about cuts to the block grant. The SNP cannot have this both ways. They complain that the funding formula is unfair because it takes inadequate account of what Scotland contributes to UK taxation by way of the oil revenues. Not only does this jar inconsistently with the more "redistributive" model of justice they sign up to for Scotland, but it also makes them completely hypocritical when they then complain that any (at the moment, tentative) moves to construct an alternative to Barnett based on need might lead to Scotland receiving slightly less, in order to balance out historical disadvantage to Wales and the North East of England.

Even to give effect to Scotland having more control of its own taxes, however, Barnett ultimately needs to be done away with. In the event of a No vote, the SNP will presumably argue that the Scottish Parliament still needs more fiscal powers, to control income tax, corporation tax and capital gains tax. But at the point Holyrood controls most of its revenue, the Barnett formula, ultimately a spending formula, thus neither particularly good at assessing contribution or need, simply has to be abolished. By refusing to engage with the alternatives to Barnett, and by painting it as a zero-sum game, they are actually making it more difficult, not easier, to bring about more control for Scotland over its affairs and more fairness in the way Britain is being run from a financial perspective.

The Real Challenge

And this rather goes to the nub of the problem with this debate. The sensible, constructive dialogue that is necessary to get a true consensus on constitutional reform, is being drowned out by some absolute drivel and a polarised discussion about what the real options are. Westminster is not going to turn around and significantly cut Scottish spending without a quid-pro-quo over revenue control, and it's not going to take powers back in the event of a No vote. That would be absolute suicide, would lead to another independence vote within 10 years and a landslide for Yes. But equally, the framing of this debate as a binary question has culled any hope of free, independent thinking about what independence really means for Scotland and what the nuanced alternatives could be if only people were less needlessly antagonistic. In the event of a No vote, the SNP have backed themselves into a corner whereby they have created a prophecy of doom for Scotland. We need to know that they won't make it self-fulfilling by sulking in the corner saying "I told you so" and to be sure that they will show a genuine commitment to more powers for Scotland, unlike how it was with the original Constitutional Convention.

To be clear, I'm not just criticising the SNP. The Unionist parties have had an appalling attitude towards Scotland in the last six years, refusing to work with the SNP in 2007 on a referendum, refusing to work with them on the National Conversation and designing their response to Scottish politics to "dish the Nats" rather than simply to produce a relationship between citizen, Holyrood and Westminster flexible to modern requirements and capable of projecting Scottish and British interests onto the international stage. They need to banish the absolute dinosaurs like Ian Davidson, and start to talk constructively about how the very idea of sovereignty can be reinvented in the British state, reshaping what it means to exist in a multi-national union and to question the very premise that nation-states are the most desirable state of being. They need to talk about direct representation of the devolved administrations in EU delegations. We need a more consensual approach to decisions about things like national security and the intelligence services. We need to trust the devolved institutions to have direct control over welfare decisions. We need to make them, and the councils below them, responsible for raising most of what they spend. Creating a governing structure rooted in the idea of accountability rather than asking to whom the buck can be passed and who else can be blamed for difficult policy and spending decisions.

My real worry is that Scotland, far from being betrayed by the Tories, will ultimately be betrayed by its two biggest parties. An SNP who have bet the house on a narrative that this referendum is all or nothing, and who will therefore have a stake in proving that, and a Labour Party who, when it even pays attention, wishes this referendum were about all or nothing and will treat it as such if they win. Scottish politics has been poisoned by this referendum and the politicisation of the most basic facts and legal realities about how we govern ourselves.

Donald Dewar spent most of the 1990s telling Ian Lang "to have some imagination" about the possibilities for the future of Scotland in the face of the UK Government's opposition to devolution. What we've been given is a choice between Labour's void of imagination and the SNP's delusion.

Equal Marriage - Contact your MP

My MP John Robertson (Labour) - are
you in support of equal marriage?

Please check the Coalition for Equal Marriage website to find out if your MP has indicated how they intend to vote on the extension of marriage to include same-sex couples in England and Wales. If they have not publicly ventured their opinion, please write to them and ask them to publicly state their support for Equal Marriage, or otherwise state their reasons for not doing so. I noticed today that my MP has not made clear his intentions, so I contacted him using this website and hope to receive a reply soon. I also asked him to take action to ensure proper representation of transgender issues in this new piece of legislation, something regrettably and all too easily neglected when dealing with these questions. What I said is included below.

Dear John Robertson,

I write to you both in a personal capacity as one of your constituents and in my capacity as President of Glasgow Liberal Youth and Glasgow University Liberal Democrats. As you will be aware, the House of Commons will be voting on a Bill which proposes to extend marriage to same-sex couples, both for civil ceremonies and for certain religious ceremonies (but in the latter case only where that religious denomination is not banned from doing so and where they wish to do so, thus not compelling any unwilling celebrant).

Although this legislation does not apply to Scotland, which is dealing with this matter through its devolved institutions, this is fundamentally a question of civil rights, and the recognition in England of same-sex marriages entered into by people in Scotland and vice versa remains a very important issue, especially given that it is quite common for people to have family both sides of the border.

As I understand it, you have not made your views on this matter public, and groups such as the Coalition for Equal Marriage are unaware of your voting intentions. It is a matter of vital interest for your constituents, many of whom will be an LGBT minority group that we know your intentions on this matter, so that they may maintain confidence that you stand firmly in support of their civil rights. I was hoping, therefore, that you could confirm both to me and publicly, that you intend to support these new measures when they come before a vote in the House of Commons, so that we can make the whole United Kingdom a more free, more fair and more equal society.

I have an additional concern I would like you to raise with the government at Westminster in relation to this legislation, insofar as it affects those seeking to have a change of gender recognised under the Gender Recognition Act 2004. As things stand, if someone seeks to change their gender and they are in a marriage or a civil partnership, that "contract" ceases to be valid, since both marriage and civil partnerships expressly exclude (under law) same-sex and opposite-sex composition respectively. If the opportunity is available to you, please ensure that an amendment is put in place that guarantees that no marriage or civil partnership will become invalid by reason of gender reassignment. In practice this may require that civil partnerships are extended to heterosexual couples, or that civil partnerships are to be abolished and all existing such partnerships converted into civil marriages.

If you could possibly attend to these matters I should be most grateful.

Yours sincerely,

Graeme Cowie

Better Together: the literature examined

After the hustle and bustle of Glasgow University Freshers Fair, I decided to take a look at the literature of the Better Together campaign. I will leave aside for a minute the irony of an "all party non-party campaign" having its literature disseminated through local Labour Clubs. I wanted to take a look at the substantive claims behind their leafleting campaign and to see what the "positive case" for the continuation of the Union between Scotland and the rest of Great Britain and Northern Ireland.

Their campaign leaflets pursue this idea that a strong Scotland inside the UK can have "the best of both worlds", offering the benefits of localised government without the risks of independence. Security in numbers, if you will. Their opening gambit is that Scotland could survive as an independent state (or as they call it "separate country"), but that being part of the UK "is the best possible choice for our future". This is a welcome statement and considerable progress on what many have said in the past.

And so to the substance. The leaflets provide 10 arguments in favour of the Union. I'll list them in turn:

"Scots are represented by over 270 embassies as part of the UK, the world's largest diplomatic network (Source Foreign and Commonwealth Office."

Yes. This is true. The UK has a lot of embassies in other countries. But I'm left wondering "so what"? Are they suggesting that Scotland could not maintain an effective embassy presence across the globe? Given our countries are so close and have a long-standing history of relative peace among each other, surely an independent Scotland could share or pool embassy support with the UK (and for that matter, other friendly EU countries) in instances where it would make no economic sense to set-up our own without fear of diplomatic spats undermining the protection and support these buildings offer to travelling citizens?

Besides, on independence it is completely feasible to ensure, as part of the settlement, that all Scots born persons/residents with UK citizenship can retain the citizenship of the old state, either automatically or by election. Their children could thus also acquire that citizenship and would also be protected. For, at a minimum, two generations of people, the entire populus of "Scots" could continue to enjoy all the diplomatic benefits of UK citizenship they currently enjoy. There is precedent for this with the terms of settlement in Ireland, and indeed those born in Northern Ireland continue to be eligible for citizenship of the Republic or the UK (some have dual citizenship). It is therefore hugely questionable that an independent Scotland means Scots will lose the protection offered by the UK diplomatic service (at least not in the medium-term). In the next 40 years or so, there is nothing to stop the Scots expanding their diplomatic presence across the globe; indeed being freed from the confines of UK foreign policy it may be the case that we can set up embassies in countries with more hostile attitudes to the UK in the Middle East and elsewhere, should we choose to do that.

"Scotland exports twice as much to England, Wales and Northern Ireland as to the rest of the world (Source Scottish Government)"

Yes. We do export a lot more to the rest of the UK than elsewhere. I'm glad that we have established that "trade is good". Why is this a point for the Union? Will people south of the border and across the Irish sea stop buying whisky from us if we become an independent country? Free trade is something that is enjoyed throughout the European Economic Area, all those signatory to the European Free Trade Agreement, and all those who are members of the European Union. Scotland can and will continue to trade a lot of stuff with England, Wales and Northern Ireland, if it becomes independent.

The only circumstances in which this is a legitimate point is if either Scotland or the Rest of the UK decides to withdraw completely from the EU, EEA and EFTA. Now I know there's more Euroscepticism down south than in Scotland, but at the very least, surely we can agree that total withdrawal from the single market is not a likely prospect for either prospective state. It is at least amusing to see Tories in the better together campaign articulate so effectively the benefits of free trade with our neighbours, something they so often overlook when talking about the European Union and related bodies. In any case, surely it is in Scotland's interests to diversify its export markets? It must be far healthier in the long run, surely, to sell more to developing economies like China, India, Brazil and Singapore than simply to constrain ourselves to modest exportation on the same set of islands. There is a massive untapped market out there crying out for stuff that we can and are making in Scotland. Irrespective of independence or otherwise, let's go get it.

"One in five workers in Scotland are employed by English, Welsh and Northern Irish firms. (Source HM Treasury)"

Good. Free movement of capital and workers is a great thing. Why is this an argument for the Union? English companies can operate in Scotland now, and they will still be able to on independence. Vice versa is also true. The laws governing companies and their operations is already distinct north and south of the border, with different rules applying. There is no clamour to alter radically company law in Scotland or the RUK, and English companies would face little, if any, problems continuing to operate and trade in Scotland, hiring Scottish people.

"31,000 workers in Scotland have jobs with the UK Government. (Source HMG Departmental Employment Statistics)"

Government work doesn't get abolished just because Scotland becomes an independent country. Those jobs are probably based in Scotland because they relate to administrative work relevant to Scotland (most likely operating out of the Scotland Office). With the transfer of competencies for things like foreign affairs, defence, taxation etc to Scotland itself, there would be a reduced demand for jobs in London (and by the way, a hugely disproportionate number of UK government jobs are in London), and that demand would instead fall in Scotland (admittedly mostly in Edinburgh, as the administrative capital and where the Scottish Parliament is). We'd need tax officers. We'd need a larger civil service to deal with our new competences (the cost of that being off-set by no longer funding the UK civil service). The work of government in Scotland would be more substantial to reflect the increased number and scope of decisions our state would have to take.

Even so, I'd question why a large UK government bureaucracy is an argument for the Union. Perhaps Westminster has been hiring too many people in a civil service capacity, meaning that there is less money to go directly into the provision of public services. The cut and thrust of this, though, has to be "government doesn't stop just because Better Together say so."

"Scottish banks were bailed out with £470 billion from UK taxpayers (Source: Scottish Parliament Information Centre & National Audit Office)"

I'll take the figures as read. Again, though, I'm asking "so what"? Scottish taxpayers money was thrown at transnational corporations with bases in Scotland and for what? To safeguard deposits? No; there was already a government guarantee scheme on those up to £35k per person at the time of the crisis in 2008. For borrowers? No; their loans weren't repayable on demand. If those banks went bust their loan agreement would become an asset to whatever phoenix banks or new organisation took them on, and would continue to be paid under the terms of the agreement. It seems to me that the UK government bailed out the banks simply because it could; not because it was necessarily the best idea. Sometimes having the powers of an economy of scale makes you do things you should really think twice about. If government is going to be tempted to make bad decisions I don't want to give it the chance to make them.

Other small countries like Iceland adopted a different approach to their banks. They let them default, because their governments could not bail them out. That way the actual risk takers (the bond-holders and the investors, and the chief executives) were the ones that lost out; not the ordinary taxpayer and not the ordinary customer. Iceland has recovered pretty strongly from the financial crisis so far, considering some started to label it as a basket case. It is certainly true that countries like Ireland and Spain have had more problems with their domestic banks, but that can be attributed to the huge political and socio-economic imbalances within the Eurozone. I could be wrong, but I don't think Scottish independence supporters are seriously contemplating joining a monetary union with massively macroeconomic and fiscal divergence any time soon. A Sterling zone certainly wouldn't do that any time soon and I don't see any fully developed economy queueing up to join the Euro in its current state. Put simply bailing out the banks wasn't the be all and end all of Scottish prosperity and it wouldn't be in an independent Scotland.

"800,000 Scots live and work in England and Wales without the need for papers or passports (Source General Registrar Office for Scotland)"

That's wonderful. People can live and work in other countries without passports or work permits. If only someone had thought of that idea before. Oh wait. They did. It's called the *European Union*. Any citizen of a member state of the European Union can move about and work in other member states and be treated just as a domestic citizen would. The UK currently has a treaty with the Republic of Ireland which allows people to move between the two countries without showing their passports at the land border, and a similar agreement exists among many European countries called the "Schengen Agreement", which removes border checks there too. Perhaps Better Together would like to explain to us why it is that, in an independent Scotland, there would have to be border posts at Gretna.

It would be politically very stupid for either the Scottish or a rUK government to refuse to enter into such a treaty. Certainly my understanding of the Scottish Government's position is they'd want such a treaty to be put in place, in the same way as the UK government maturely dealt with the question with the Irish. The ball is firmly in Westminster's court on this one. Again, though, I'm delighted that the Tories are joining a campaign on a principle that is central to the European Union of breaking down borders and welcoming people from other countries to live and work here without limits.

"The UK has the World's 2nd biggest aid budget, delivered by life-saving Scots in East Kilbride. (Source Department for International Development)"

I'm not going to go for the easy target here. Though I might be thought of as a "deficit hawk" I completely agree with the principle and goals of the international aid budget and though it needs reformed I think it should be much higher. The question I'd simply ask is this: why can't this continue post independence? What is it about an independent Scotland and a rUK state that makes them less likely to maintain that level of international development aid together? What is to stop them channelling that aid together through a treaty that shares the same institutions? What is to stop them co-ordinating that aid together through NGOs? Put simply, why does independence mean the combined IDA budgets of the successor states will fall and/or be less effective? Answers on a postcard, Better Together.

As an aside, well done East Kilbride. I don't know what you actually *do* or why you do it, but well done.

"The UK means Scots get a seat at the top table at the UN alongside Russia, China and America (The UK is a permanent member of the UN Security Council)"

I have a lot of sympathy with this argument. The way the UN is structured does give considerable incumbency power to the permanent members of the Security Council. Whether that *should* be the case is another matter, but in international relations we work with what we have. The permanency of that position is mostly predicated on the notion that the UK is a nuclear power. In the long-term, I'd rather we weren't, but I am realistic enough to know that the bargaining and nature of disarmament talks ought to benefit from a moderated voice such as our own in dealings with the Chinese, Russians and US.

An independence settlement would obviously have to address the question of what happens to the UK's nuclear-armed submarines (currently based in Faslane in Scotland). There is strong talk of an independent Scotland refusing to continue to host those weapons. I don't think that will happen (at least not immediately; there may be a transitional lease agreement with the rUK) but if we accept that they will eventually be removed, I struggle to foresee a situation where the rUK would decide simply not to relocate or replace them at an alternative port (even if it isn't as strategically convenient a place).

If they did seek to disarm, I would hope that they would do so in the wider context of disarmament discussions internationally, and that they'd seek assurances of their place on the Security Council, at least for long enough that a proper discussion about its governing structures could take place. The threat to having a moderated "European" or "British" voice on the UN Security Council is, though, both indirect and modest in the event of Scottish independence.

There is a legitimate question, in any case, as to what the Scottish people actually see as their role in the world. Institutions like the UN and NATO have clearly done some good, but they have also been seen as quite aggressive uses of military and diplomatic power by large states on those less able to defend themselves. You don't hear Australia, New Zealand and Canada asking to become part of the UK again to have their voice heard at the table of the Security Council. Independence gives states more freedom to decide which conflicts and international agreements they want to involve themselves in. You have to ask yourself, to what extent do the views of ordinary Scots (or for that matter, ordinary Brits) are reflected in the actions of the UK as their "representative" political actor in international politics. I suspect not a lot. If the UK is making good decisions in international forums, I suspect an independent Scotland would support them. Independence doesn't mean completely divorcing ourselves from international political consensus; on the contrary it gives us greater flexibility as to when we want a part in it.

"Scots save billions on the cost of mortgages due to the UK's AAA credit rating. (Source HMT Analysis)"

First of all, I want to know what the assumptions are here. Billions saved as opposed to what? The *UK* having a poorer credit rating? Scotland itself having a poorer credit rating? Are they implying that an independent Scotland would not be able to sustain a AAA credit rating? What are the economic assumptions for that? How are you linking the government's credit rating to the solvency and liquidity of banks (and thus by extension, the security and cost of ordinary citizens' mortgage agreements)? To what extent do the nominal credit ratings and central bank interest rates of the UK actually correlate to real-world commercial lending? What is it specifically about an independent Scotland that would change that? We need an explanation before we can meaningfully assess what the actual comparator is here, and how likely it is.

Further, I want to know *how many* billions are being saved here. There were, as of 2010, 2,357,424 dwellings in Scotland. (Estimates of Households and Dwellings in Scotland, 2010: Table 1). If we assume that all of them had mortgages (which they don't), a saving of £1 billion over all of the mortgages would be the equivalent of about £424. Because they haven't substantiated this claim, we can't say exactly how many billions (thus how many times we'd have to multiply that £424 figure) or whether this is annually or over the course of the entire mortgage. If it is annually, that does look like a reasonable saving. For many that will be the equivalent to an extra two months' repayments every year. If, however it's over the course of the entire mortgage, that's a saving of less than 0.5% of the value of the median house price in Scotland. That's minute. Most would barely notice that difference over a 25 year period.

This claim can accurately be summed up as weasel words and blank assertion. It provides no analysis as to whether credit ratings are actually particularly accurate reflections of underlying economic performance, it provides no analysis of why UK institutions are specifically stronger than would be Scottish ones, and it provides no analysis as to why a minor change in Scotland's credit rating would significantly affect the cost of a mortgage to your average Scottish home-buyer.

"The pensions of 1 million Scots are guaranteed by the UK welfare system. (Source Department for Work and Pensions)"

It's official. According to Better Together, the UK Government is the only government capable of raising funds for, and paying funds out for, the pensions of old people and those formerly employed by the state. There is no analysis here at all about why these pensions cannot or will not be protected in an independent Scotland. They have not explained why this is an argument for the Union. This is like saying "the trees in Scotland are green with it as part of the UK. This is an excellent argument for why Scotland and the UK are better together".

And that's just the point

To me, these claims, with the honourable exception of realpolitik with the UN on foreign policy, represent a fundamental misunderstanding of the debate by Better Together. It's not enough simply to say "there's lots of nice stuff in the UK". You have to explain, rather than simply state, why these nice things cannot, or are less likely to be able to be, achieved in an independent Scotland working in partnership with the rest of the UK and Europe. You have to explain specifically why it is that these things are only made possible with a UK. You have to explain why Scotland won't still work closely with the UK on issues like trade, international development aid, foreign policy.

You also have to explain why the UK is best placed to deliver more in decentralised and effective democratic government than an independent Scotland. You need to show the Scottish people that you're serious about proper federalism or significant transfers of taxation and legislative powers to the Scottish Government, rather than piecemeal changes like the new Scotland Act. You have to show Scotland why the social union between our countries cannot survive without the political institutions of Westminster and its relatives. You have to show us why those political institutions represent a better way of doing things (either as they are now, or with specific and prioritised reforms) than to transfer those powers to Holyrood and to let Scotland remould its own institutions with its own new Constitutional Convention in the run up to establishing a new independent country.

Yes Scotland: you'll have to do better than
social democracy milk and honey too

And let's be clear, I'm not exonerating Yes Scotland or the SNP Government in this. The appropriate argument for YesScotland is not simply "no more nukes" or "land of milk and honey, free tuition, infinite healthcare, free burgers for everyone" either. It has to be about explaining why the opposite is true in those questions above. They have to explain why Scotland can maintain the benefits of economies of scale without the negative effects of excessive centralisation of bureaucracy and decision-making to Westminster. They have to explain why, structurally and realistically, institutional reform will be done more timely and better by an independent Scotland, and explain why a new constitution for local control of our affairs will be better achieved through Holyrood than Westminster. They have to explain more clearly (and they have started to do this) why you don't need the political and institutional structures of the UK to benefit from the commonality of our cultures and outlook in social union. They need to give a broad idea (though clearly not every last minutiae of specifics) of the choices Scotland will have in positioning itself in the world: to show us how our structures can fit in with institutions like the EU, NATO and the UN, should we choose to be a part of them (and on all three fronts, I hope we will).

But as I have indicated, I don't see answers coming from BetterTogether. None. None at all. There has to be a stronger case for the Union than that. If there isn't, then I cannot for the life of me understand why YesScotland aren't miles ahead in the polls. This debate has to get a lot smarter on both sides and it has to do it soon. Independence is not about speculation about which constitutional settlement gives you the most stuff; it's about being the country we want to be, with the institutions we want to have, and regaining control of our society and moulding it into what we want it to be.

My response to the UK Scottish Referendum Consultation

I have responded to the UK Government's consultation on the Scottish Independence Referendum and enclose my comments verbatim below. I would strongly encourage all, regardless of their political persuasion, to make their views known so that we get the most considered and appropriate result. Constitutional law is not something to be treated as a political weapon (by either side of this debate) and legal clarity is imperative.

To whom it concerns,

Please find attached the document containing my response to the consultation document published by the UK Government in respect of the delivery of a legal and impartial referendum on Scotland's constitutional future. I trust that the UK Government is content to give considerable ground on its assumed position, which I consider to be untenable on a number of grounds into which I elaborate through my responses.

Kind Regards,

Graeme Cowie

Q 1: What are your views on using the order making power provided in the Scotland Act 1998 to allow the Scottish Parliament to legislate for a legal referendum in an Act of the Scottish Parliament?

A: This is probably the most appropriate cause of action, given the s30 procedure requires proper consultation with the Scottish Parliament itself. The alternative would be to make for such a provision as an amendment to the current Scotland Bill, which has its merits in certain respects which I shall elaborate on in question 3 and also in 4-6.

Q 2: What are your views on the UK Parliament legislating to deliver a referendum on independence?

A: Clearly it has the legal power to do so (unlike the Scottish Parliament at present), but on a principled constitutional level and on a basic political level this would be incredibly stupid. Not only would it lend itself to allegations that Westminster was “dictating” the terms of a referendum to an SNP administration with a clear political mandate on the matter, but it would also allow English, Welsh and Northern Irish MPs a say on the formulation of the questions. This is a matter for Scotland and its representatives alone.

Q 3: What are your views on whether the Scotland Bill should be used either to:
i) give the Scottish Parliament the power to legislate for a referendum; or
ii) directly deliver a referendum?

A: As I explained in response to Q 1, there is an argument for doing the first of these rather than issuing a s30 order, which I will elaborate upon later. As for the second, I emphatically reject it for the reasons highlighted in my response to Q 2.

Q 4: What are your views on the oversight arrangements for a referendum on Scottish independence?

A: In general terms, I agree that there should be constitutional consistency of matters of franchise and performance of electoral procedure by the existing bodies. However, I would draw attention to one of the recommendations from the Calman Commission, a provision supported by all of the parties with representation in the Scottish Parliament, that matters such as the franchise and the arrangements for local and Scottish Parliamentary elections should be devolved in the Scotland Bill down to Holyrood. The UK Government's decision not to implement this proposal through the primary legislation should be revisited. It logically follows that if Holyrood is to be allowed to set the franchise conditions for those elections, that it should control similar functions for any referendum which only applies to Scotland.

Q 5: Do you think the Electoral Commission should have a role in overseeing a referendum on Scottish independence?

A: Yes I believe that the Electoral Commission is the appropriate body for oversight of the referendum. I do not believe a Referendum Commission set up separately (regardless whether it is set-up by Holyrood or Westminster) is either necessary or expedient. The EC has shown itself perfectly capable of carrying out both UK-wide and devolved referendum oversight without any questions of impartiality.

Q 6: What are your views on which people should be entitled to vote in a Scottish independence referendum?

A: In general terms, those who should be allowed to vote should be the same as those who are eligible to vote in the Scottish Parliamentary elections. I notice that this question omits to respond to a key area of contention, which relates to the age at which people should be allowed to vote. Without entering into the politics (e.g. accusations of opportunism on one side, and of inconsistency by some on the other) my response to this should be understood in the context of my response to Q 4. The franchise arrangements for Scotland-only elections and referenda should be a matter for the Scottish Parliament to decide. On the principle, I believe they should be allowed to lower the voting age to 16 should they so desire, but it should be done for all Scottish elections through an Act of Scottish Parliament at some point within the next twelve months once the Scotland Bill (with my recommended amendments) passes into law.

Q 7: What are your views on the timing of a referendum?

A: This should be a matter principally for the Scottish Parliament. Contrary to the suggestion in the document, there should be no “sunset clause” of any kind in the event the power is extended either through a s30 order or through the Scotland Bill. The SNP have indicated they wish to hold it in the Autumn of 2014, which is a date completely within the scope of their manifesto pledge and they should be entitled to move forward on that basis.

A reasonable restriction may be that the power may only be invoked once in X number of years (to prevent perpetual referendums on the same issue) but as a matter of expediency, that matter should be agreed upon in advance with the Scottish Government. I note that Alex Salmond has said that this issue is very much a “once in a generation” issue and a mandatory interval of between 10-20 years between referendums on Scottish independence would make sense.

Q 8: What are your views on the question or questions to be asked in a referendum?

A: There should be two questions on the ballot. The first should be a question about whether or not Scotland should become an independent sovereign state. The second should read, approximately, “notwithstanding the response given to the first question, should the Scottish Parliament have (e.g.) full taxation powers and extended competence in several other presently reserved areas.” In the event that the first question receives more than 50% of the popular vote the second question should be completely disregarded.

I do not share the view of the UK Government that a second question somehow “complicates” matters, though the ordering and wording of the questions should be very carefully crafted so as to leave absolutely no doubt that, notwithstanding the response to any “devo-max”-esque question, a majority vote for independence will be honoured. The idea that the people of Scotland can't understand a very basic premise of a two-question referendum on connected but alternative propositions is frankly rather insulting. There are only likely to be a maximum of three campaigns anyway (a Yes-Yes, a No-No, and a “Yes to more powers, No to independence”). The “Yes to independence, No to more powers” group would be so ridiculously tiny and arguing almost as obscure a proposition as someone in 1997 saying “there should not be a Scottish Parliament but it should have tax powers”. There are genuine areas in need of clarity here, but the UK Government must desist from looking for obfuscation when it's not actually there.

Q 9: What are your views on the draft section 30 order?

A: The Order in its current form is manifestly inappropriate in light of the various issues I have elaborated upon above. The proposed Schedule 5A has a number of problems which I shall list:

Para 2: It is not necessary to require that a referendum not be held on the same day as other elections. Whilst that may be expedient in and of itself to hold a poll on such an issue outside of other election cycles it is inappropriate to insist on such a provision, especially given that the UK Government only as far back as May 2011 held a referendum on the Alternative Vote at the same time as Scottish Parliamentary elections AND English local council elections. Given Scotland's rather negative experience with multiple polling in 2007 I doubt the Scottish Parliament would seek to hold simultaneous polls in any case.

Para 3: This is a blank sunset clause. There should be no sunset clause on the power to hold a referendum. As I explained earlier a reasonable time provision would be to impose a mandatory waiting time between polls on the subject matter of between 10 and 20 years.

Para 4: This provision seeks to prevent a second question being present on any ballot. For the reasons I gave earlier, this provision should be removed.

Para 5: This limits the franchise to those entitled to vote for “the Parliament”. In the interests of clarity I would insert the word “Scottish”. For the reasons I gave above this may yet involve the lowering of the franchise if you (wisely) reconsider Calman's proposal about devolving the essential components of Scottish Parliamentary and local council elections to Holyrood for consideration.

Para 6: This is a connected issue to Para 5. The thrust of this provision is fine, as long as the relevant derogations are made to allow the Scottish Parliament to make the changes it sees fit in the ordinary course of business rather than simultaneously with the Referendum Bill.

Everything is Arbitrary

Well, okay, not quite. But this post was prompted by a Twitter discussion with Kevin McNamara (@WoolyMindedLib) in relation to the changes to constituency boundaries overseen by the Boundary Commission. The aim was firstly to reduce the number of seats in the House of Commons to 600 from 650 or so and secondly to equalise constituencies (that is, to make the number of eligible voters in each single-member constituency as consistent as possible).

The main bone of contention Kevin seemed to have was that whilst he agreed with equalising constituencies the 600 figure was "arbitrary". He agrees that there's scope to reduce the overall number of MPs, but he argued that it was better to equalise the constituencies first.

There are a few issues with this. First of all, 600 is no more or less "arbitrary" than any other number of constituencies. They could have picked 100 if they really wanted to, although most would argue that single-member constituencies that large would not be appropriate for a body wielding so much power. It may be that you think the number of seats is greater than is necessary to represent adequately whilst maintaining efficient decision-making But anyway, the main point is that 600 is no more "arbitrary" than 601, 623, 646 or 19.

The second issue is that you should equalise the constituencies before reducing the number of MPs. The problem with this is that you sort of, well, can't! By reducing the number of constituencies, you definitionally have to divide up existing constituencies into new ones or, well, disenfranchise all of those in the abolished constituencies! You can only change the number of MPs by changing the boundaries so that they represent a larger or smaller proportion of the electorate.

If you start a review with a view to equalising constituencies, you need a number in mind for roughly how many constituents you want in each constituency. The thing is, this is directly related to the number of MPs you're going to end up with. If A is the total eligible voting population, B is the target standard number of eligible voters in each constituency, and C is the number of seats available, then C=A/B. We have to assume that A is relatively constant, because we can't just invent new people! So the size of a constituency is inversely proportional to the total number of seats.

It is therefore no more arbitrary to decide the size of equalised constituencies than it is to decide the total number of seats. You are setting exactly the same thing. If you equalised constituencies first, then reduced the number of MPs later, you'd just have to completely redraw the boundaries again. It would be a redundant exercise.

Another arm of Kevin's argument is that we should be able to make constituencies more equal by setting the number of constituencies afterwards. Except you can equalise constituencies without changing the total number of seats at all! All you do is don't eliminate any constituencies, but shift the boundaries about according to population distribution. If anything, making special cases for smaller "communities" like the Highlands, as many try to argue in favour of, harms not the arbitrariness of the number of seats, but the very premise of equal constituencies itself.

And that sort of leads on to my more general point about this boundary review. Making substantial special cases of communities in representation fundamentally misunderstands the notion of an electoral system where individuals vote for electors. Members of Parliament represent constituents, not communities per se; their community representation exists only insofar as a community happens to be partly or wholly contained within their constituency. In truth, constituencies themselves are relatively arbitrary. Attempts are made not to create absurd situations where bits of a constituency are landlocked from the rest, or to prevent the drawing of boundaries so as to create an inherent advantage for one party or group. Gerrymandering can still happen even when the size of constituencies is relatively equal. For example, you could ringfence seats with predictable voting patterns so that they become uncompetitive even if the overall numbers are roughly the same.

What we observe about the current system is that the old boundaries created an inherent bias towards Labour, and that not all of that was itself down to unequal sized constituencies. This explains why Labour won a handsome majority (66 seats) off 35% of the vote in 2005 whilst the Tories fell considerably short (by 20 seats) with 36% in 2010. Equalising constituencies does not, in and of itself, eliminate this gerrymandering, although the actual act of redrawing the seats has the practical effect of reducing its effects. Whether that has served simply to gerrymander in reverse rather than undo that which already exists is a legitimate point of discussion. I think there is a case, from a Lib Dem perspective, to argue that this is the case, although I do not find this terribly convincing. The new boundaries can only really be judged by some actual elections to see how they operate in practice, and even then there are other variables at play there. I'm rather more convinced that the problems people are pointing to are rather more fundamental, and pertain to the necessary effects of single-member constituencies.

It would be a lot easier to end gerrymandering and to equalise voter influence if we adopted some form of proportional representation. Larger multi-member constituencies, chosen by preferential method, are much more flexible to deal with large variations in population density. If a natural region does not comfortably correlate with a fixed "number" in mind, you have more options to maintain a constant voter value. Not only can you increase or decrease boundary sizes, but you can also increase or decrease the number of representatives without inherently prejudicing any particular party.

Distribution and number of seats can absolutely affect to a greater extent the outcome of an election than a relatively modest change in the system by which our representatives are elected from FPTP to AV. But it is procedural in character and a question of administration of the existing system rather than an overhaul of the way we elect our members of parliament. The idea that we need a referendum every time the boundaries and number of seats are tweaked by the Electoral Commission is, I think both impractical and misguided. It is an administrative and not a substantive concern.

Ed Miliband's Tax Cut for Rich Graduates

So Ed Miliband has decided that Labour's policy on tuition fees is to reduce the cap in England from £9000 per year to £6000 per year. He says that this will be funded by more taxes on the banks and increasing the rate of interest paid by the highest earning graduates.

The reason? This is what he says, in an ever so pious dig at the coalition:

"We can't build a successful economy if the kids from all backgrounds are put off going to university."

Now we can debate the rights and wrongs about the Coalition policy until the cows come home. But let us look at what practical difference this actually makes. I have used the projections that MoneySavingExpert.co.uk deduced. I refer you to the red table at bullet point 17 "How much do you pay".

As we have established many times before, the loans repayment programme (thus in practice for a student, their tuition fees) has a 30 year limit, after which any existing "debt" is written off and the system effectively operated as a graduate tax on their earnings over the earnings threshold (currently £21k).

If a student earns less than £35k as their initial graduate salary, and their earnings rise to slightly less than £140k after 30 years, they will not have paid off their student loan, regardless of whether or not they actually chose a course that charged £6k a year or £9k a year. There is no appreciable link between what that graduate "owed" and what they "paid" for their University education.

Contrastingly if a student earns around £50k initial graduate salary and that rises with career progression and inflation etc. so after 30 years they are earning over £200k, they will pay back the whole of their student loan, and will do so well before that 30 year period elapses. In this instance, it therefore matters a lot more how much they "owed" and it correlates much more closely to what they "pay". The difference for that student taking a £9k course rather than a £6k course is that they pay about 50% more, because, funnily enough, they owed roughly 50% more.

So can you see where I'm heading with this? Yep. That's right. Lowering the limit on tuition fees to £6k has ABSOLUTELY no effect on the lowest-earning graduates, but represents a potentially HUGE saving for the most affluent of graduates! Since we have established that the funding system is effectively a kind of graduate tax, this means that Labour are advocating a TAX CUT on the richest beneficiaries of an English University education! The difference between what is owed is substantial enough that the interest rates they'd need to charge the richest graduates to make them pay the same, let alone more, would be of Wonga.com proportions compared to those they pay now.

And of course, this poses the question of where the Universities are going to plug the hole in the finances this creates? Are we to expect more direct state funding? Where is that coming from without increasing the deficit? "Tax the banks" Labour reply. Well here's the thing. Your bonus tax raised absolute pittance compared with the Coalition's banking levy. Just like with the very tuition fees you promised you would never introduce, you command no credibility for delivery.

But that is not even the worst thing about this sordid affair. The worst thing is that Labour, by engaging in this piece of political misrepresentation, are perpetuating the very myths that they have used to scare young people into thinking they can no longer afford to go to University under the Coalition changes. They are doing the very thing that the Lib Dems got crucified for: politicking with the tuition "fee" when they know full well that that headline figure is of zero relevance to the majority of graduates, for whom the repayment matters. They have scaremongered those from poorer backgrounds into believing they can no longer aspire to a University education and all the benefits that brings. Yet their own policy does absolutely nothing to help these people. There is nothing about maintenance grants, which are what really affect the ability of the poorest to be able to go to Uni. This throws money at graduates who are already benefiting in a huge financial way from their degree.

Remember, this is the Labour Party. The Party of Keir Hardie, of Nye Bevan and of Clement Attlee. Those men would be turning in their graves if they saw what this manipulative and regressive cabal led by Ed Miliband and Ed Balls has become.

The Labour Party. Party of the Poor? Words truly fail me.