Carmichael: 3 questions the SNP must answer on currency, pensions and costs after independence

Carmichael Inverness speech

In the beautiful surroundings of Bishop’s House in Inverness, Liberal Democrat Secretary of State for Scotland Alistair Carmichael gave his first keynote speech. The whole thing is published below the cut, but here are the highlights:

  • The Highlands and Islands have never been better represented in Government – a boy from Colonsay and a boy from Orkney in the Cabinet.
  • How you vote in the referendum does not determine how Scottish you are – once you start mixing patriotism and politics, you quickly get into dangerous territory.
  • The UK’s greatest hits. He said it wasn’t a list of them, but it so was. And pretty compelling, too.
  • 3 questions for the SNP:
  • What’s your Plan B if we can’t have a currency union between Scotland and the rest of the UK?
  • How much more will pensions cost us if we leave the UK?
  • How much will independence cost?

I get the feeling these 3 are the start of many. Overall, it’s a strong speech delivered with humour, passion and sharpness. He’s put the Nationalists on notice that he’s going to be very specific with them. They won’t get away with squealing about who they want to debate, or how Scottish anyone is,

The trio of questions, he clearly thinks, are things the SNP will not be able answer in anything like a satisfactory manner. The currency issue affects every single one of us every day. It affects the value of our mortgages. What will be the value of the pound, the euro or the Salmond in our pocket?

Scotland’s demographics show an ageing population. How will it pay for pensions. Are we not safer with the economies of scale the UK offers – 60 million people pooling resources is bound to be better than 5 million, after all?

And the cost. A new passport office, financial, broadcast, energy and business regulators, foreign office, embassies, army, broadcast, energy and business regulators and many more things will have to be funded. Some are one-off set up costs, but the SNP tells us we can have a land of milk and honey with no tough financial decision making at all. Cos it’ll all be fine. That’s not remotely sustainable.

I also get the impression that any answer involving the word “scaremongering” or their usual casual “it’ll all be fine” type faux reassurance will be demolished pretty quickly. Alistair debates Deputy First Minister on 27th November. I can’t wait. They are both very good debaters and it should be good.

What was missing?

There was no way he was going to get all the important stuff into one speech. In the future, though, I want to hear the “f” word from him, though. We heard the excellent Secretary of State for Scotland today, but we need to hear our Liberal Democrat in the Cabinet telling us  what sort of Scotland he wants to see, unfettered by our Better Together partners. Of course we’re not going to get everything we want in any pre 2015 joint declaration, but our position on more powers,working towards a federal UK is distinctive and we need to showcase that.  Willie Rennie has tended to make the running on the future powers, but we need to hear a cohesive Liberal Democrat position from Alistair, Danny, Nick. Federalist hearts need to be set racing.

I think he also needs to talk about the need for more liberalism. Let’s look at Scotland’s main political parties. On one hand, you have the illiberal, authoritarian, centralising SNP who think nothing of casually quadrupling pre-charge detention in an afternoon, or removing one of the pillars of Scotland’s justice system, corroboration, without giving any evidential safeguards, who have centralised and diminished our police and fire services. On the other hand, you have the illiberal, authoritarian, centralising Labour Party who were at least held back from doing their worst by Liberal Democrats in coalition for 8 years but care more for collectivism than freedom.

I get that we need to have clear messages that focus on the benefits of the UK over independence. That’s the main flavour of the whisky, if you like, but there’s room for some background notes which tug at the heartstrings of liberals and federalists too.

Here’s the speech in full. It’s long, but worth it:

Pleasure to be here in Inverness today – as an MP of 12 and half years I’m used to making speeches, but this is my first keynote speech as Secretary of State. In terms of where and when to make it I gave my office only one instruction – it was not going to be in the central belt!

It is an enormous pleasure for me to be here in the city of Inverness, capital of the Highlands. This is a city that has seen enormous growth and change over the decades and is now home to many businesses in a wide-range of fields, but which is still identifiably a Highland community in its feel.

This seat is home to my friend and colleague Danny Alexander. I have been privileged to work closely with Danny over the years and we have both been Ministers in this coalition Government and he has become an enormously influential voice for the Highlands.

When Danny speaks, people in Government listen – and Danny takes every opportunity in his job to speak up for the Highlands.

Now in Cabinet a boy for Colonsay who represents Inverness sits across the table from a boy from Islay who represents Orkney and Shetland. The Highlands and Islands have never been better represented in Government.

I am very proud to take up the role as Secretary of State for Scotland particularly at the current time. Right from the start I got to see how quickly the labels get put on you on this job.

Their labels as a ‘bruiser’ or any of the rest of it are all a predictable part of how the press covers politics. Not all labels are so benign and I have gone from being a Viking warrior to being a ‘supposed Scot’ all in the space of four weeks.

The latter description was, I suspect, designed to provoke. It certainly did tell us something about this debate – that I’m not alone in experiencing.

Not content with trying to divide the UK, the supporters of independence also seek to divide our fellow Scots – depending on their voting intentions in the referendum.

I tell you this – once you start mixing up politics and patriotism you can quickly get into dangerous territory.

I am proud to be a Scot and come from a family that as far back as we can trace, have always lived in Scotland.

My father is a native Gaelic speaker and as a child and a young adult I competed at local and national Mods.

I was educated in the Scottish state sector and studied Scots Law at the University of Aberdeen and qualified as a solicitor in Scots law. I have held a commission as a Procurator Fiscal Depute – one of the great ancient offices of the Scottish legal system.

Since 2001 I have represented a Scottish constituency in the House of Commons.

I look forward to Hogmanay as much as Christmas Day.

I drink malt whisky and I’m partial to the occasional Tunnocks tea-cake.
What else do I have to do for these people to regard me as a “true” Scot as opposed to being a “supposed” one?

No one has a right to question my Scottishness or anyone else’s come to that.

Polls would suggest that most people in Scotland want to remain part of the United Kingdom. Many others do not.

A few weeks ago, in yet another effort to have a debate about the debate rather than having the debate itself, Alex Salmond called on David Cameron to debate independence. He wanted, he said, to see the Prime Minister “argue against Scotland”. Not, you note, “against Scottish independence” but “against Scotland”. In the nationalist mindset it seems to be the same thing.

Let me be clear: You are not a better Scot if you support independence. Nor are you better if you don’t.

Being a part of the UK doesn’t undermine our Scottishness – our identity as Scots is not and never has been at threat.

This is not a debate about patriotism – It is a debate about our constitution and about whether or not we should continue to work togetheracross the United Kingdom, or whether we should go it alone.

A lot of airtime gets devoted to what independence would mean for Scotland – and rightly so – there are plenty of questions, I’ll return to just some of those later.

But before we make a choice about our future, it is worth reminding ourselveswhat it is we have right now as part of the United Kingdom.

 

The nationalists like to take us right back to 1707 and even further to Bannockburn. Don’t get me wrong – history is important: but our recent history is just as important as the more distant. That recent history has been one of collaboration, of partnership, of working together.

 

I’m not going to turn this speech into ‘the greatest hits of the UK’ – but I will say this: we have achieved a great deal working together. And I don’t think those of us who believe in a strong Scotland within a strong United Kingdom spend enough time talking about that.

 

So next time someone asks ‘what has the UK ever done for me?’ I want you to remember this….

 

Together our economy is stronger and more secure.

 

We have a domestic market of 60 million individuals rather than just 5.

 

We have 4.5 million companies rather than 320,000  – with no boundaries, no borders, no customs, but with a common currency, single financial system, and a single body of rules and regulations.

 

I am in no doubt: businesses right across Scotland have no wish to change this system.

 

I put it like this: we have a stronger place in the world with a great and wide network of embassies and diplomatic offices across the globe – supporting our businesses overseas and looking after Scots abroad.

 

As part of the UK we are a major player on the international stage: with significant influence in the EU, UN, G8 and other international institutions.

 

We can and do make a real difference to people in other parts of the world in times of trouble, as our work in the Philippines is showing right now.

 

At home the benefits of our United Kingdom can be seen not just in the make-up of families like mine and many others right across the UK, but also by the more than 700,000 Scots who live and work in other parts of the UK and the 30,000 people who travel between Scotland and the rest of the UK each day to work.

 

All of us benefit from a common passport, a single tax and national insurance system, meaning that people as well as goods and services can move freely.

 

 

Where it makes sense to have decisions taken in Scotland by the Scottish Parliament responsibility has been devolved to Holyrood. It is a constructive and positive approach.  Devolution within a United Kingdom really does give us the best of both worlds.

 

Week two of the job and the crisis at Grangemouth petro-chemical plant landed on my desk. That illustrated well what the best of both worlds gives us: working together John Swinney and I could bring together the resources of government to secure the future of the plant more effectively than we could working separately.
That is why at the start of this year we embarked upon a detailed programme of work to examine Scotland’s position in the UK today and to make clear the choices that would face all of us if the UK family were to break up.

 

 

These papers have been detailed and evidence based and together set out a detailed case that shows every part of the UK makes a valuable contribution and that together we are greater than the sum of our parts.

 

When we go to the polls next year we’ll be asked the question: ‘Should Scotland be an independent country?’. We’ll be asked to put our cross in a box saying yes, or a box saying no.

 

That simple act – will be replicated right across Scotland from the highlands and islands, to the borders; in our great cities and our rural communities.

 

Each of us will be asked the same question. And when we answer – we will all do so on the basis of what is best for us as individuals, for our families and for our communities, now and in the future.

And the benefits of being part of the United Kingdom can be seen in our future as much as our past:

There are the challenges we already know about: by pooling our resources we are better placed to meet some of the demographic challenges that we will face in the future.

Funding pensions through contributions from the working populations of Scotland, England, Wales and Northern Ireland is more sustainable than simply trying to fund our ageing population in Scotland alone: you don’t need to be an expert economist to work that one out.

Then of course there are things that we can’t predict:

Fifteen years ago the idea of broadband roll out across the UK, including our remotest areas would have sounded like a pipe-dream.

And yet here we are, with UK wide funding helping to join us up and bring us all closer together.Twenty per cent of the UK broadband budget is being spent here in Scotland – that’s more than any population-based share – and we can do this because we pool our resources across the UK.

We need to ask ourselves: what will the next broadband be? And will it be more sustainable to fund it by clubbing together as the UK or doing our own thing in a separate Scotland?

It is this past, present and future United Kingdom that we need to think about when we go into the polls next year.

But right now attention is turning to the Scottish Government’s White Paperwhich will be published in just less than two weeks. And rightly so.

This is after all a long awaited document.

Whilst we have published our analysis – on the legal implications of independence, on financial services, on the economy, on the challenges of an oil fund, or on the currency – what we’ve so often heard in response is ‘wait for the White Paper’.

The First Minister tells us that this Paper will resonate down through the ages and Nicola Sturgeon has said it will answer all the questions –  boy does it need to.

But before we get to the detail let’s start with ‘The ‘why?’  Why do the nationalists want independence?

Since signing the agreement with the Prime Minister over a year ago to ensure that we would have a referendum, the answer to ‘why’ seems to have become less clear, rather than more.

In the few areas where the Scottish Government have sought to offer any answers, they – ironically – seem obsessed with UK wide solutions. According to them:

We will leave the UK…but have a shared currency and keep the Bank of England working as lender of last resort;

We’ll leave the UK…. but continue to share a UK welfare system;

We’ll leave the UK….. but still get UK warships built in Scottish yards;

We’ll leave the UK…but still share a single set of financial regulations….

The logic of the Scottish Government’s position has left many scratching their heads in puzzlement.

But in truth it is just part of a pattern we see from the Scottish Government. They are doing this to offer false reassurance. Independence would prove very different in practice and the SNP know it. Right now all they are proving is that they are prepared to say anything and promise everything to try to win votes.

But let’s be generous and leave that most fundamental question of ‘why become independent’ to one side for a moment.

The Scottish Government have another duty in the White Paper: to explain how independence would work and what it would mean. This is an important decision for us all. The details matters. We cannot be offered a prospectus of ‘it will be alright on the night.’

Now we know that for many issues all the White Paper can do is provide a wish-list of what the Scottish Government might like to secure in negotiations:

An independent Scotland would need to sit down at the negotiating table with the rest of the UK – who would then be a separate state from us.

Sit down with the member states of the EU and the Allies of NATO to thrash out an enormous amount of very important detail.

In each case an independent Scottish state would be pursuing its interests, just as the other states would pursue their interests.

So the Scottish Government should take the opportunity in the White Paper to tell it straight about the fact that many important issues will need to be negotiated and they need to be upfront that there can be no guarantees in advance.

But that does not excuse the First Minister and his team for dodging some fundamental independence questions that they can answer.

The White Paper must be frank on a few fundamentals of independence if they are serious about bridging the credibility gap that exists with their plans.

Today I am posing three very straight-forward questions that need to be answered if people in Scotland are going to get any closer to knowing how independence will work and what it might mean for them.

Let’s start with the Pound in our pocket. Or, to be precise, the UK pound sterling in our pocket.

This is fundamental.

The First Minister is fond of saying that the Pound is as much Scotland’s as it is the rest of the UK’s. It is now, but if Scotland decided to leave the UK, we would also be leaving the UK currency.

Public international law is clear: the UK would continue. The UK’s currency would continue and the laws and institutions that control it like the Bank of England would continue…for the continuing UK

But if Scotland became an independent country, we would need to put in place our own currency arrangements; new currency arrangements.

The First Minister says he wants a currency union with the rest of the UK.

The UK Government – and plenty of others – have pointed to the challenges of currency unions between different states. You only need to look at the Euro area to see that everything can appear fine in year one, and how quickly circumstances can change.

And there are examples of currency unions that have failed. When Czechoslovakia broke up the Czechs and Slovaks tried it. It lasted 33 days.

The bottom line is that a currency union may not be in the interests of Scotland or the continuing UK and it is highly unlikely to be agreed – not because of any malevolence, but because it wouldn’t work.

It would be very foolish for anyone to vote for an independent Scotland on the basis that they will get to keep the pound. It’s high time that the Scottish Government stopped claiming that a currency union is a given and instead answer this first question: will the White Paper set out a credible Plan B on currency?

Pensions are another fundamental building block of any state.

The UK and other developed countries are facing rising pension costs because of ageing populations. Independent forecasts by the ONS confirm that the demographic challenge Scotland faces is greater than the rest of the UK.

We will have more elderly and retired individuals receiving pensions compared to those of working age who are paying taxes.

So my second question is will the White Paper set out how much more pensions will cost each of us in the future if we leave the UKand leave behind 90 per cent of the people that are currently paying into the larger UK pension pot?

Finally, the overall price tag of independence is something we never hear anything about. John Swinney’s private paper to his Cabinet colleagues said a new tax system alone would cost more than £600m each year.

Setting up a new Scottish state from scratch will not be cheap. The White Paper must tell us how much it will cost us to set up.

But in truth it’s not just the one off set up costs we need to think about.

In public we see the Scottish Government promising more and more ‘goodies’ for an independent Scotland. But people aren’t daft: we know that every goodie has to be paid for.

So I want to know how much we are expected to pay to go it alone as an independent state.

Rather than making empty promises, the White Paper has to tell us how an independent Scotland would fill the black hole.

Ok – I’ll admit – that’s more than three questions – trust me I could ask plenty more.

But what I’d really like to hear are the questions you want to see answered when you open up the White Paper.

Because this must not be a document that Governments alone pore over – as much as Alex Salmond might like it, this isn’t a debate between the UK and Scottish Governments.

An independence debate that is the sole preserve of the politicians will be a sterile and unrewarding experience. I want people in all parts of Scotland to have a voice.

I want to hear from business, from voluntary groups, from trade unions, from churches and charities.

And I want to hear from you.

Indeed, despite the approach of those Nationalists who question the right of ‘supposed Scots’ like me to speak out, this is a debate that each and every one of us has a right to be involved in: we each have a voice in this debate.

So, now, I want to hear yours.

 

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings

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15 Comments

  • David Allen 13th Nov '13 - 4:54pm

    Nice camera work, GCHQ!

  • The independence debate is not, and has never been, about identity – at least not on the Yes side.. If that were true woe would not see large numbers of people who have chosen to settle in Scotland supporting the campaign, and we do.
    However, having said that, it is difficult to see how arguing that Scottish shipbuilding should be punished by massive job losses if Scots fail to vote in the manner preferred by the LibDem leadership, as Alistair has been doing publicly of late, could be seen as anything other than naked anti-Scottishness. I would appreciate seeing the counter argument to this.

  • Caron Lindsay Caron Lindsay 14th Nov '13 - 1:58pm

    It’s just logic, Bob. It’s all up in the air if there’s a yes vote – I can’t see voters in England being happy about their warships being built abroad. Alistair is doing no more than stating the obvious. I personally think that pudding was a bit over-egged, but there is no guarantee that we’ll keep the work if we go independent.

    Alistair is telling Scots the truth as he sees it. To describe him as anti-Scottish for having those views is unacceptable.

    It’s interesting that Nationalists are talking up this tiny proportion of his speech and not the 3 major questions he asked.

  • If Scotland votes to leave the UK – I will adopt Irish citizenship! … and can do so.

    As a Scottish descendant I feel equally aggrieved by 3 things, namely to:
    * decry my inability to do anything other than to say to my Scottish brothers and sisters “please stay with us”;
    * apologize for all of those south of the border who have ever offended, and who show crass indifference about this fundamental constitutional referendum as though it is not vitally important; and
    * appeal to all those have the ability to vote by virtue of their residency, to support the union – we down south need you – the union will not be the same whatever happens – Scotland will obtain devo-max in any event – a policy that needs to be applied to all 4 nations.

    We need to progress towards a federation of 4 mutually respecting nations, with maximum devolved powers, respecting our intertwined ancestry, for the common good, inside the larger EU. This will require further constitutional reform in Westminster – including the resolution of the West Lothian question and an appropriate House of Lords.

    I know that I am biassed, but i have a special affection for Eire … but a step too far for now!

  • “* apologize for all of those south of the border who have ever offended,”

    And what about those north of the border who have offended the English? Getting rid of 5 million people whose most visible representatives consider themselves to be oppressed, colonised and hard done by in the UK, (to the extent that English politicians are considered to be a liability for the Yes campaign and that even the current system of devolution, where the Scots vote in our elections but we don’t vote in theirs is considered to be intolerably restrictive) would be such a great lift for the English psyche, comparable perhaps to the period of decolonisation in the 1960s and could even lead to a flowering of art, music and culture comparable to that period too. I really think there also needs to be a referendum in England on whether or not to continue the union in its current form.

  • Caron, there is no guarantee the ships will be built on the Clyde if we vote no. If the pressure of independence is lifted, there is no political reason for this to happen and history suggests strongly that we will no longer be favoured by Westminster governments of any colour. Remember the decision to give the Trident maintenance to a marginal Tory seat in S W England, rather than Rosyth. And there are already calls for the ending of Barnett and a further redistribution of Scottish income to poorer regions of England. The post-no situation looks particularly bleak for us.

    I cannot agree with your description of over-egging in relation to Alastair’s statements. The man is paid from the scottish block grant to promote Scottish interests, and his first priority was to travel to Portsmouth and tell them they will be saved if Scots have the temerity to vote yes. This is hardly acting in our interests, is it?

    Given his woeful appearance on Newsnicht, he clearly has yet to master the basics of the arguments, or even the basic economic and political facts which underpin the debate. His predecessor was far more effective.

  • @simon Shaw
    There is nothing illogical in the SNP’s position. This week Philip Hammond refused to rule out the option of the contract being awarded to Govan in a indy Scotland, while reiterating that Govan was by far the best place to build the ships. That does not become untrue, just because Scotland becomes independent.

    Westminster may choose to pay the massive premium in investment and delay and repatriate the contract for political reasons, or may carry out its plan for joint procurement with Brazil, Canada, Turkey, India et al ( and iScotland). Or it may go for the fast, low cost option of Govan. These choices are also available if we vote no, but without the imperative of heading off independence.

  • @Simon Shaw
    Do you mean a Yes would lead to a bleak future for Scottish shipbuilding, which may be true as we cannot be sure that independence will not lead to an angry backlash from the rUK. Or do you mean that Scottish self-determination would be bleak. Even the inestimable Al Darling doesn’t take that line any more, despite believing that oil will run out in just 2 years.

  • Caron Lindsay 14th Nov ’13 – 1:58pm
    – I can’t see voters in England being happy about their warships being built abroad

    Really Caron? Would that be as incredible as Trident being built abroad? Or a new generation of nuclear power stations being owned by the Chinese State?
    Next you will be telling us that voters in England would be unhappy about the rich paying their taxes abroad in small islands like The Caymans or Belize.

  • Oh my god! I wonder if it’s too late for USA Australia, India Hong Kong, Malaysia, New Zealand, etc etc to change their minds?

  • Frank Bowles 17th Nov '13 - 12:29am

    Mmm, I agree about the f-word but despite all that our constitution says I wonder how much the party actually believes in it. The English and Federal parties have essentially merged. Even Shirley Williams talking at the Scottish conference opined that devolution had essentially put federalism to bed. I asked this question at the federal conference session on devolution and the responses seemed faintly embarrassed. On the stage we have become “one of the three unionist parties”; I may be voting No in the referendum but I am no more a unionist than a nationalist and I am profoundly uncomfortable by the negative sniping of Better Together. I am no fan of the centralised, illiberal London-centric United Kingdom but see no point in spending a fortune to create a centralised, illiberal Central-belt-centric independent Scotland. Let’s build an alternative proposition for a federal country which will make Scotland “independent” without having to create a separate sovereign state and which gives power back to local people!

  • Frank Bowles 17th Nov ’13 – 12:29am
    On the stage we have become “one of the three unionist parties”

    I just cannot understand why the Liberal Democrats in Scotland have allied themselves with the reactionary unionist parties. If I had a vote for independence I would take the opportunity. It is the only significant constitutional change on offer. With the failure of the Westminster coalition to deliver on electoral reform or do anything about the obscenity of 850 unelected Lords you Scots may not get another chance for generations.

    You would also be helping out those of us in England who recognise that the old feudal monarchical mess of the UK is a failed system that serves the rich and powerful while the rest of us can go hang.

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