Tactics 1

This is going to be the first of three interconnected blogs.

The first of these might be seen as raking over old coals, but it concerns a matter I consider important in several respects. First of all to get right just how and why the SNP lost their majority in May. Secondly to argue for the creation of an independence movement, which I hope the Convention next Saturday (14th January) will take forward. And lastly, to make a few points about the development of an elite group of independence bloggers.

I am, as I often am, grateful to the Rev Stewart Campbell for this tweet he put out just before the bells at New Year.

This refers to the “furore” (I use the word loosely) prior to the Holyrood election of whether independence minded voters should use their constituency and list votes to vote for the SNP in line with #BothVotesSNP – or, while using their constituency vote to support the SNP, they should vote for someone else on the List. Various established independence bloggers, such as Rev Campbell on Wings, Peter Bell, James Kelly and GA Ponsonby were quite clear that # BothVotesSNP (indyref2, as well as their own blogs) was the route to follow, while various rag tags such as me, squeaked from the gutter that this was just wrong.

The specific problem with this is that while Campbell is correct that the Green List vote increased by as much as 50%, it was from 4.4% in 2011 to 6.6% last May. In that regard four extra seats is arguably not a bad return, but to expect lots of List seats on the basis of a 2.2% increase in their vote is at best silly, arguably misleading and perhaps serves only to divert our attention from something else. Moreover, the main reason for the loss of majority was the SNP’s overall loss of 12 seats on the List, so we need to examine this rather than just revert to what seems obvious, in many regards because it has been voiced so often.

Of course, the whole matter is largely academic (at least until the next Holyrood election), but it seems that some people cannot let it go. One example is “The ‘Tactical Voting’ groupies are in denial” (http://indyref2.scot/the-tactical-voting-groupies-are-in-denial) by GA Ponsonby. While it’s a bit dated (7th May), there are two specific reasons for revisiting it.

First because its argument is demonstrably false, but seems to be becoming the accepted wisdom, even though. Secondly because of another article on the same website, published on 26th November by Peter Bell, “A dissenting voice” (http://indyref2.scot/a-dissenting-voice)., which, it seems to me is symbiotic to Ponsonby’s argument of six months ago, but ignores its problems and in fact, if anything, compounds them. Most importantly it concerns the Independence Convention Conference on 14th January.

Ponsonby argues that the proposition was made that the SNP could secure a majority purely because of the constituency seats they won. Frankly, I don’t remember that argument being made at all, and I would very much like to see an instance of it. Certainly the polls suggested a very strong constituency showing, but with “local issues” always were possibly going to intervene, so winning the lot was never a certainty. Moreover, they would have had to win 65 of 71 constituency seats (or 92%) to have a very slim majority of one. In fact, they won 59, or 83%, which was an increase of 6 constituency seats.

However, I, and others, had argued for some time that, based on a series of opinion polls prior to the election indicating a high degree of success in the constituency section, that it was hard to see the SNP picking up too many list seats. Ponsonby’s response to this is

“We can never know how many SNP voters were influenced by the claim that their List vote was wasted, what we do know is that the fall in the nationalist List vote cost the party List seats and ultimately a majority.”

This quite simply is not true. Let’s see why.

The table below sets out the results for each electoral region. I think the association between winning constituency seats and not winning list seats is obvious by inspection.

Region

Constituency seats won by SNP

Regional List seats won by SNP

  1. Glasgow

9 of 9

0

  1. Central Scotland

9 of 9

0

  1. North East Scotland

9 of 10

0

  1. Mid Scotland & Fife

8 of 9

0

  1. West Scotland

8 of 10

0

  1. Lothian

6 of 9

0

  1. Highlands & Islands

6 of 8

1

  1. South Scotland

4 of 9

3

 

In the first two regions – Glasgow and Central Scotland – the SNP won all the constituencies and none of the list seats. In regions 3 and 4 – North East Scotland and Mid Scotland & Fife – they won all but one seat in each, but again no list seats. In West of Scotland they won all but two constituencies, but still no list seats. It seems we need to get down to somewhere about winning ‘only’ two thirds or three quarters of the constituencies before winning list seats becomes possible, Its only once we get to the last region – South of Scotland – that the SNP win a significant number of list seats – in this case three. But they had won only four of the nine constituency seats.

There is an interesting comparator here to 2011 in Glasgow, where the SNP won “only” five constituency seats, while Labour won four. When it came to splitting up the list seats, the SNP took two while Labour took three, with the Tories and Greens getting one each.

The lesson from this must be, the more constituency seats you win, the fewer list seats you will win – something that seems to kick in by the time you get to winning two third – three quarters of the constituency seats.

It can of course be argued that this is what the electoral system we have is supposed to do – to give us a Parliament which reflects the overall vote, unlike the Westminster constituency-based system, in which it is “to the victor the spoils”, which produces an outcome where with 37% of the vote you can form a majority government. In Scotland in contrast, with 46.5% in the constituency vote, you won’t be forming a majority government. But as someone who has argued for an electoral system in which the outcome is proportional to votes cast, to be critical of this seems very deceitful.

But Ponsonby’s claim is stronger than that. His claim is that “the fall in the nationalist List vote cost the party List seats and ultimately a majority”.

It does have to be admitted that #BothVotesSNP did not hold up. In the constituency section nationally they won 46.5% of the vote, but on the list vote they won only 41.7%, so there was ‘leakage’ between constituency and list votes. But how much did this matter? Specifically, is Ponsonby correct when he argues “the fall in the nationalist List vote cost the party List seats and ultimately a majority”? In fact, the following figures show the fallacy in this claim.

This was how the allocation of list seats in Glasgow played out – the winning party as each seat is allocated is shown in red.

Party

List vote

1

2

3

4

5

6

7

8

9

10

SNP

111101

11110.1

11110.1

11110.1

11110.1

11110.1

11110.1

11110.1

11110.1

11110.1

11110.1

Labour

59151

59151

29575.5

19717

19717

19717

14787.75

11830.2

11830.2

11830.2

9858.5

Con

29533

29533

29533

29533

14766.5

14766.5

14766.5

14766.5

9844.333

9844.333

9844.333

Green

23998

23998

23998

23998

23998

11999

11999

11999

11999

7999.333

7999.333

LD

5850

5850

5850

5850

5850

5850

5850

5850

5850

5850

5850

 

Regions only have 7 list seats, but I have developed this to the (fictitious) 10th seat to show just how difficult it is for a party to win list seats in our electoral system, when they have cleaned up in the constituencies. With their regional list vote – more than Labour and Tory combined – there would have had to be 10 list seats in Glasgow before the SNP, even with that size of list vote, would have taken a list seat. The reason for this is that they won all 9 constituencies in the Glasgow Region, so, with the voting system, their vote, from round 1, was divided by 10 (9 constituencies +1).

But more importantly for Ponsonby’s argument, the 7th seat was won with a (modified) Conservative vote of 14766.5 (their list vote too being divided by the number of seats won +1). The SNP vote is 11110.1 (their actual list vote divided by 10 – 9 constituencies + 1). Thus, for the SNP to have won even the last regional list seat in Glasgow, they would have had to have achieved a list vote of 36,564 greater than it actually was (the Conservative modified list vote 14766.5 minus the SNP modified list vote 11110.1 times 10 to allow for the 9 constituency seats already won). Thus, their actual list vote would have had to be more than 147,665 to beat the Conservatives to the seventh seat. But their constituency vote was 128,443, so even if all their constituency voters had voted SNP in the list, they would still have been 19,222 short by the 7th round. To sustain Ponsonby’s #BothVotesSNP argument, therefore, the SNP vote would have to have been still higher in the constituencies than it actually was.

In West of Scotland, the final list seat was taken by the Conservatives with a modified list vote of 17,822. In that region the SNP won 8 of the 10 seats. Thus the SNP list vote would have had to be more than 9 times (8+1) the Conservative modified list vote for the 7th seat – 160,398. In fact, the SNP list vote was only 135,827. But as the combined constituency vote was 148,660 it is clear not all their constituency vote followed the #BothVotesSNP advice. However, to win even just that 7th seat, the SNP vote would have had to be 160,398, and the question can be posed in West of Scotland, just like Glasgow, where were these votes going to come from, as what was needed was more than the constituency vote?

Ponsonby’s contention is that it was “tactical voting groupies” urging tactical voting on the SNP voter who caused the SNP to fail to do better than the list, which they would have done had the #BothVotesSNP advice been followed. Taking both these regions as examples, were Ponsonby’s argument true, then the SNP constituency vote would have had to be higher than it was in both cases. To have picked up even the last regional list seat, the SNP would have needed to increase their vote by almost 15% in Glasgow and almost 8% in West of Scotland.

There are therefore two reasons why the SNP lost their majority in May

  1. The electoral system worked as it was designed to do, to balance up in the list system the excesses of the “winner takes all” constituency section in order to give a more proportional outcome. If we average out constituency and list votes, the SNP took 44.1% of the vote and won 48.8% of the seats. The system did its job.
  2. The SNP did not win enough votes to overcome the electoral system. As we show above, in Glasgow and West of Scotland regions, even if #BothVotesSNP had been adhered to, they would still have failed to win even the 7th (and last) regional seat.

Thus rather than continuing to fight a dispute that they have not, and cannot, win, perhaps luminaries such as Stewart Campbell, GA Ponsonby, Peter Bell and James Kelly would do better to use their undoubted skills, reputation and reach to support the development of a wider independence movement. However, as we shall explore in part 2, this seems unlikely.

 

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Budgets and discretionary budgets

Kevin Hague in his blog (http://chokkablog.blogspot.co.uk/) suggests that the Scottish budget next year is slightly – only “slightly” – above where it was, in real terms in 2009/10 and 2010/11 before austerity really began to bite, so all this guff about Westminster austerity is just being put about by Nats. Here is his diagram to prove it

Facts as they say, are “chiels that winna’ ding”, and I have had to read Hague’s blog a couple of times to work out how he managed this, particularly when McLaren and Armstrong found just a couple of years ago (see http://fiscalaffairsscotland.co.uk/wp-content/uploads/2014/11/Long-term-Scottish-budget-projections.pdf) that, as I wrote in my letter in today’s Herald – http://www.heraldscotland.com/opinion/letters/15009794.Letters__Making_the_best_of_a_bad_job_when_the_block_grant_is_cut/ – in reply to Councillor Alex Gallagher

“starting from 2009-10 to 2018-19, there will be an overall cash terms cut to the Scottish budget of just over -4 per cent and a real terms cut of almost -20 per cent.

Thus, by April 2019 the Scottish block grant can be expected to be, in real terms, one-fifth less than it was at the beginning of this decade.”

Now there are a lot of things that one can say about John McLaren and Jo Armstrong, but hardly that they are a pair of Nats. While I don’t always agree with their conclusions, I would not challenge their expertise as researchers. However, in this case, they and Hague are totally at odds. How has Hague done this?

Then I found this little nugget

“The second step they take is to bury this Total Budget information deep in an Appendix on page 169 of the report. They use the up-front summary tables to instead focus on a few sub-totals that exclude things like Annually Managed Expenditure (AME) which, for example, pays for NHS and teachers’ pensions”

The government’s own definition of this is (https://www.gov.uk/government/publications/how-to-understand-public-sector-spending/how-to-understand-public-sector-spending)

“Total government spending

The total amount that the government spends is also known as Total Managed Expenditure (TME). This is split up in to:

  • departmental budgets – the amount that government departments have been allocated to spend; this is known as Departmental Expenditure Limits, or DEL.
  • money spent in areas outside budgetary control – this is all spending that is not controlled by a government department and includes welfare, pensions and things such as debt interest payments.; this known as Annually Managed Expenditure, or AME.”

The continue with regard to AME as follows

“Annually managed expenditure (AME)

Annually managed expenditure, or AME, is more difficult to explain or control as it is spent on programmes which are demand-led – such as welfare, tax credits or public sector pensions.

It is spent on items that may be unpredictable or not easily controlled by departments, and are relatively large in comparison to other government departments.”

Some points from this:

  1. First, contrary to Hague’s specific claim, AME is not spent on hospitals – in fact the document I refer to specifically includes hospitals under Departmental Expenditure Limits (this in paragraph 3, thus “Things that departmental budgets can be spent on include the running of the services that they oversee such as schools or hospital, and the everyday cost of resources such as staff).
  2. Secondly a great deal of AME for the Scottish government is basically just acting as a delivery person (I might have said “boy”, but that would be sexist?). For instance, I am the recipient of a teachers’ pension, but as I paid my contributions to the Westminster government, the liability is theirs, and while the payment might be made by the SPPA in Galashiels, it is doing no more than administering the obligations of the UK government. So, by excluding AME – which for instance will rise because the number of retired teachers rises (just one example for the avoidance of doubt – as the document referred to says, they are “demand led”) – allows a focus on the discretionary budget. AME rising reflects no credit on either the Westminster or Holyrood governments – they are demand led!

Or at least that is the polite version. For Hague to have said, as he did, that “They [the Scottish Government] use the up-front summary tables to instead focus on a few sub-totals that exclude things like Annually Managed Expenditure (AME) which, for example, pays for NHS and teachers’ pensions”. Those “few sub-totals” are in fact those areas of the Scottish budget on which the Scottish Government can in fact make their own decisions – AME is simply passing on money for and on behalf of Westminster. One, I think might have legitimately expected someone of Hague’s experience, not to say expertise, in such matters to have known this? Or perhaps he hopes that we don’t?

In short Hague’s graph is not only of little assistance to anyone wanting to understand the discretionary budget available to the Scottish Government, it is actually misleading, directing our attention to total quantum of spending, where not all of it is in the control of the Scottish Government. But, as always, Hague’s fan club piles in and laps this up totally uncritically (which is quite ironic as he often argues this is an indy-minded vice – one of them even refers to him as a god), which in turn will no doubt be repeated and might one day even become “the truth”, when in fact it’s not even an over-simplification – it’s just a lie.

Just who has the problem?

This concerns the most recent episode in the sequence of events since Craig Dalzell’s “Beyond GERS” (http://allofusfirst.org/tasks/render/file/?fileID=87DEEC95-C459-02D4-0248DDE75B7ADDB9). This paper, almost inevitably, drew the attention of “economic blogger” Kevin Hague (http://chokkablog.blogspot.co.uk/2016/11/data-errors-in-beyond-gers.html). Dalzell responds to this in a piece published by Wings (http://wingsoverscotland.com/out-of-the-cave/) which is responded to by “blogger Neil Lovatt” (https://rwbblog.blogspot.co.uk/2016/11/beyond-gers-goes-beyond-truth.html), and it is this which I am responding to. Thrown into the middle of it all is a highly critical reference to Dalzell in David Torrance’s SNP BAD column in the Herald on 21st November 2016 (http://www.heraldscotland.com/opinion/14917110.David_Torrance__While_skilful_at_big_picture_stuff__the_SNP_is_still_pretty_weak_on_boring_old_detail/) which is where the “blogger” references come from. In passing this is a typical Torrancism, not to let on who his “authorities” are. Hague, while he claims not to be a Unionist – rather a seeker after the truth – is persistently critical of anything that comes out in favour of independence, while Lovatt is on the advisory board of Scotland in Union. Its rather like the Dimbleby forgetting to tell us on QT when it came from Stirling on 17th November, that Merryn Somerset-Webb was not just the Executive Editor of Money Week, but, like Lovatt, on the advisory board of Scotland in Union.

Below I have reproduced Lovatt’s article. Dalzell’s comments are in red, Lovatt’s in black, and my comments on Lovatt are in green, but I will try to summarise my differences with Lovatt here to save you the pain of going through it all.

The issue is who is responsible for paying Scottish pensioners after independence? My own view on this is basically that enumerated by Steve Webb during his appearance at the Scottish Grand Committee in 2013, as reported at the time in that Nationalist rag the Scotsman (http://www.scotsman.com/news/politics/uk-mp-state-pensions-would-be-paid-after-yes-vote-1-3400799)

“State pensions would still paid after independence a UK minister has told MPs despite concerns raised by the Better Together campaign. Giving evidence to the Scottish Affairs Select Committee Lib Dem pensions minister Steve Webb said that anybody who had paid UK national insurance would be entitled to their state pension whatever the outcome of the referendum. He said: “Citizenship is irrelevant. It is what you have put into the UK National Insurance system prior to separation, answer 35 years, that builds up to a continued UK pension under continuing UK rules, the question is who is paying for it, but they are entitled to that money.”

Following this line of thinking, means that immediately post-independence pensions in Scotland would be paid by the UK govt, or only funded by them, the actual payment being made by the Scottish govt since the White Paper suggested that pensions made in Scotland would be more generous (eg if there was a higher rate in Scotland, then the payment to a pensioner would be part funded from the Westminster government + the Scottish “top up”).

Gradually of course this would change as people become of pensionable age who have spent some portion of their working lives in an independent Scotland, which would have received contributions from them, and thus created a liability for their pension to be paid in proportion by the UK and Scottish governments. In due course all payments would be paid by Scotland.

Lovatt is attempting to rubbish this in several ways

  1. The key problem is that he creates a contemporaneous link between who is entitled to a pension and who pays the pension, so that he can argue that English tax payers would be seriously pissed off about having to pay the pensions of people living in Scotland, some of whom (like me) voted for our independence and continue to leach off of them (as they would see it). But the reason for this is the manner in which the UK pension system has always worked – it has always been pay as you go – that contributions paid today are used to pay pensions today. Someone in receipt of their pension today is entitled because of the contributions they made in employment before they reached pensionable age. For instance, at one point I was making my contributions to my mum and dad’s pension. Now my kids will be making their contribution to my pension. What Lovatt plays on is that after independence, Scottish pensioners who have got their 35 years in, and have a claim against the Westminster government (as stated by Steve Webb) would be getting paid by tax payers in rUK. What he fails to pay any attention to (accidentally or otherwise) is that these Scottish pensioners have earned that entitlement through making their contributions to the UK NI system as required by the laws in place at the time. Of course that law could be changed, but it is very difficult to see how that could be done retrospectively. The issue then is not who pays, but who holds the liability and thus must pay.
  2. He muddies the water by treating funding paid by the rUK govt to pay Scottish pensioners their UK pensions by suggesting that rUK would never pay Scotland to pay its pensioners. But this would only be the Scottish govt acting as an agent – taking a very large payment and paying this to pensioners in Scotland for and on behalf of …. It would not be a payment for the Scottish Government – it would only be doing the delivery. What is fundamentally important is the liability for rUK to those pensioners, though I have no doubt the Daily Mail would make much of it, leaving out much that is important.
  3. Remarkably but conveniently from his point of view, Lovatt suggests “Pensioners will be designated as an rUK pensioner or an iScottish pensioner at the point of independence based on the residence at that time”, but of course the problem here is, to take a specific example, that if Sir Nick McPherson – former PS at the Treasury – decides to spend his retirement up here at the family but an’ ben – having been a Whitehall mandarin all these years – under this rule, he would get a Scottish pension. Indeed, would there not arguably be a motivation for an rUK to pack as many pensioners off to Scotland as they possibly could just before independence?
  4. Of course, the UK could change the law so that Scottish pensioners won’t get their state pension. But, how could that be done without roping in pensioners who live outside of the UK, but not in Scotland (eg in in Alicante, but not Airdrie) is not explained, unless of course a UK pensioner could go off anywhere in the world, just not Scotland. Moreover, Lovatt gets himself in a bit of a tangle, trying to avoid this one, when he says elsewhere that an rUK pensioner could come to Scotland and their pension would follow. This of course creates an image of Scots moving down to somewhere in rUK just prior to independence, securing their pension and then moving back up. What a tangled web they weave ………………….
  5. It is always difficult to argue with commentators such as this (Hague too is a good example of the genre) because Lovatt starts from the presumption that he must be right. For instance, we are told early on that there will be a “separate debt agreement” with Scotland. This is set out in relation to Dalzell’s claim that in international law (and he is only repeating what is in the UK’s govt legal advice for the 2014 referendum) that as a continuator state the UK gets all the assets, but also all the debts. But none of that matters to Lovatt – there WILL be a separate debt agreement. Scotland WILL accept its share of the UK’s debt, even if the UK claims continuator status. The claims of the Westminster government pass by pretty much without comment, when the claims of supporters of independence are shown to be wrong (to his satisfaction at least) or are comprehensively rubbished by association with their author. Dalzell apparently clearly knows nothing at all about pensions while Lovatt has been a pensions adviser! Moreover, that “agreement” (his word) will be the outcome of negotiation between Scotland and rUK, whenever these negotiations take place, and Lovatt seems to know the outcome already. Some guy! I am reminded here of some advice that Professor Einar Thorsrud, (https://en.wikipedia.org/wiki/Einar_Thorsrud) who was a Norwegian psychologist at their Institute of Psychology gave me when I had the privilege of meeting him when I was a very new postgraduate student at Glagow University. He advised me that if you go out looking for something you are very likely to find it. In other words, we need to have open minds and be guided by, or follow, the data. This is not a practice of such as Hague or Lovatt, who don’t even go out looking for something – they start from it and work their way back.

    One last point. You will notice that Lovatt first refers to a point 4. Therefore, Dalzell has points 1-3 in his Wings article. Hague remarkably perhaps, has nothing to say about them, though he had much to say in his first piece. Can we assume therefore that Hague agrees that the data sources used by Dalzell were appropriate (it’s a bit much complaining about not using a data set which at the time of writing Beyond GERS had not yet been published); that there would not be cuts to the money spent in Scotland on defence; and that there would not need to be rises in income tax, or at least only in income tax, and that instead we could not have a more effective tax system? It would be nice to think so, but probably not.

The red bits are Dalzell’s originals as used by Hague, while the green bits are mine.

Beyond GERS goes Beyond Truth

Craig Dazell has a problem. 

Whilst the author of Beyond GERS could plead ignorance of the facts whilst he wrote his badly researched essay he can’t do so now. He’s openly admitted that he’s read the critique by myself and Kevin Hague. 

So what was his response? Did he take on the criticism and amend his conclusions or reframe his perspective in light of the corrections? No, of course not, this is a post-truth author. He just doubled down on his own flawed conclusions and believed that simply typing out the same points, whilst throwing in a few strawmen will justify his errors. 

But he has a problem. In doing so he’s lost any ability to claim ignorance and moved firmly into the realms of deception. 

His response to the blogs falls into a few points two of which are largely aimed at my critique on debt and pensions (the two areas I have professional qualifications in and have worked with for 20 years) I’ll deal with both in detail here:

4. We’d Be Defaulting on the UK’s Debt

Oh dear. This isnt a good start. Had Craig actually bothered to read the point being made he would know that the position is that if there is any defaulting it would be an independent Scotland defaulting to its debt agreement with rUK. 

Actually if you read the paper, Dalzell is arguing much the same point as you – we don’t have a debt to default on. The debt belongs to the UK

No one disputes that rUK would be guaranteeing the current UK’s debt, however post-truth authors continue to ignore the fact that at the same time as the UK guaranteed its debt it also stated that a separate debt deal between an independent Scotland and rUK would be set up on independence. Therefore there is no question of an independent Scotland being able to default on the UK’s debt, missing this sort of detail is just typical of Dazell’s shoddy kind of attention to detail. 

Quite a laugh when its you who misunderstood what Dalzell was arguing. Or since I have more respect for you than that, chose to misrepresent him for your own reasons.

The stated objective of the Westminster government in the 2014 campaign was to have the rUK recognised as the “continuing” or, at least, the “successor” state to the United Kingdom (the difference is largely semantic. In the former, the UK would continue unchanged in law but with reduced territory and perhaps a change of name. In the latter, the UK would strictly cease to exist but rUK would inherit all of the rights and obligations of the former state) and for Scotland to be recognised as a “new” state (The link prior went so far as to claim that the 1707 Treaty of Union “extinguished” the country of Scotland as a legal entity despite the UK describing itself to the UN 2007 as being composed of “two countries [Scotland and England], one principality [Wales] and a province [Northern Ireland]”). 

Here Dazell get’s confused between a state and a country. You would hope that this basic sort of point would be apparent to him. 

Really? Try this http://www.infoplease.com/world/statistics/state-country-nation.html and you will find “Country and State are synonymous terms that both apply to self-governing political entities. A nation, however, is a group of people who share the same culture but do not have sovereignty. Oh dearie me! In any case, it’s hardly an answer to his point, though is it? In fact the UK shot itself in the foot (and several other places) with their International Law paper published in 2013, where Profs Crawford and Boyle work through – as Dalzell suggests in the next part of his article – suggest that the most recent instance of a state breaking up was the USSR/ CIS where Russia took all the assets (including the nuclear weapons as the international community might have been frightened having them, but not as frightened as if some of the other states had taken their share) but also all the liabilities. You might remember Michael Moore whining, on the day the paper was published that he hoped “Scotland would do the right thing” and take its share of debt.

This state of affairs would carry with it significant advantages for rUK – notably, it would lessen any serious challenge towards their holding the UK’s permanent seat on the UN Security Council which was the case when Russia became the successor to the USSR – but carries with it many obligations also. The historical precedents are clearly laid out and extensively referenced in my paper Claiming Scotland’s Assets but readers should also consider G.F. Treverton’s book on the subject Dividing Divided States.

Essentially, where one country successfully claims “continuing” or “successor” status then it accepts that all of the mobile debts and assets of the former state belong solely to it (non-mobile assets like mineral rights, military bases and public buildings – including public companies and any mobile assets deemed essential to their running – are almost always split geographically). This means that a “continuing” rUK owns all of the UK’s debt in its own name. Scotland can no more default on them than can a former lodger default on your mortgage.
Absolutely. No one (mentioned here) is arguing otherwise. Dazell has set up a rather obvious strawman to deliberately avoid the point being made largely because he cant answer it. The UK has stated clearly that an independent Scotland shall have a separate debt agreement with rUK. This isn’t something that is optional unless Dazell wants to explain how it would be possible for an Act of Independence to pass through Westminster without a debt agreement as part of it. Why would rUK MPs give Scotland a free pass on debt that it has helped to build up over 300 years? 

Because when a state divides then part of it may claim all the assets but they get the debts as well. The last 300 years are less important than going forward. In any event, whatever passes through WM will be the outcome of an agreement between Scottish and rUK negotiators. Your foresight is remarkable. Am I saying this is not what will happen? No, I am not. But I do wonder at your certainty that it is pretty much inevitable.

You make several mistakes of your own here on top of that. Dalzell has set out the position in international law, but you simply sweep that to one side. Does international law not matter? You sound kind of like Fox or Davies when they argue that “of course” the EU will continue to allow the UK access to the single market even if the UK does not allow that pesky free movement of people. In short you talk as if the UK has a free hand when the reality is that it does not, as it is subject to international agreements and precedent the same as any other state.

Secondly, that we would have a separate debt agreement was not the position of the UK govt all the way through the last referendum. Their initial position was that the UK would be the “continuator state” (to use Crawford and Boyle’s terminology). Then when they realised this would land them with all the debt, they shifted to a position where liabilities and assets would be shared out (which I think is where you are now). But of course, they could not even stick to that position, as, for instance, Hammond told us we could not “cherry pick” defence assets. Then we were told that institutions such as the BBC were core to the UK state and could not be shared. I think it unlikely that we would want the BBC, but the fact is that it has an asset value – for instance I think there would be a quite a few noughts at the end of a valuation of their back catalogue. How many times will Fawlty Towers, for instance, be repeated in how many countries. Just one programme! In there will be the question of who funds the pensions, for there is no doubt that anyone who attains pensionable age before independence has a claim on a UK state pension, just as folk like me who spent their career in the public sector have an ongoing claim to their occupational pension. How those liabilities and assets would be shared out, I have no idea (nor does anyone else). But as pointed out by Craig Dalzell, given the value of much of the UK’s assets (other than the non-mobile ones), we might decide it’s better that the UK keeps all the assets, but also the liabilities.

In other words, Mr Lovatt, the certainty of your critique of Dalzell at this point carries about much weight as the certainty of the Brexiteers.

One could argue this case, but it’s not credible and certainly isn’t credible for a group claiming to take a realistic approach to independence to argue it. 

Why because you say so?

Now, if the side negotiating on behalf of the UK wishes to make the case that Scotland should take on a share of debts, perhaps by offering a share of assets to their value, then this is something that Scotland could consider, accept or refuse. There is a very good case to be made that Scotland doesn’t actually need or want a population share of the UK’s mobile assets. 

Another attempt at a strawman on debt. The UK has stated that an independent Scotland would get a geographic share of UK assets (that’s all the land and natural resources in Scotland) and a population share of our financial assets (gold and FX reserves) – which is about £2-3bn on a net liability basis, which I’ve already corrected Dazell on. Alongside this we get a population share of debt. That’s about £130 billion of debt. 

As above, that is the UK position. It is not holy writ or anything like that. Your certainty is admirable but without foundation.

This isn’t optional. This isn’t something that a proto-independent Scottish government could refuse and then expect the Act of independence to pass through the UK Parliament. 

Oh come on – now you are only being ridiculous. There will at some point be an Act to put into effect whatever May et al can secure from the EU. What if they say “No. we want xyz instead”. Do you think the EU is going to fold and say “Ok then Westminster”. As Harold Wilson once said “Politics is the art of the possible”.

We may need a few £billion worth of military equipment – assuming we can’t buy newer or more appropriate equipment elsewhere. We may need a couple of £billion (those stalwart supporters of independence, Scotland in Union, estimated not more than £1 billion) to set up essential government departments currently lacking – assuming we can’t borrow the money at better rates on the open market. We may need a couple tens of £billions to support our new currency and set up the investment banks we’ll need to start rebuilding our economy. 
Where do these ‘tens of billions’ come to support our new currency? Does Dazell really believe that a new Scottish state could tap the debt market to borrow in debt denominated in the new currency to defend that new currency! He really does not understand how markets work. 

The main issue for lenders is that they want comfort that they will get their money back, along with their interest. I accept that as a new state there might be some premium to be paid on independence. But a new state with no debt must be an attractive option.


After that, it really does start to become a stretch to consider what other assets we would actually need which would justify accepting over £130 billion worth of debt. Answers on a postcard on that one please.

The assets we would need would be the geographic assets of Scotland (say the north sea for instance), these are current UK assets. Dazell (quite deliberately) completely fails to understand this point. Once again on independence Scotland gets the physical and natural assets of Scotland and a population share of the financial assets and liabilities.

The international law of the sea makes quite clear that the great bulk of the oil – certainly no less than 90% belongs to Scotland. Your point, other than indicating the current reality, in the event of Scottish independence is totally fatuous. You could do worse than starting off with a read at this

Young or old

I have a good deal of time for Politics Scot. Tonight he tweeted this (https://twitter.com/PoliticsScot)

In this regard, he is doing little more than repeating a widely held point of view – that it was the older generation that lost us the last referendum and could cost us the next one. In terms of relative vote, it is hard to argue with that. The issue, though is less how we lost the last one, and more how we win the next one, and what I want to argue is that focusing on the group that did most to cost us the last referendum might be quite the wrong way of setting about it.

The highlighted figures in the table, show the degree of resistance among the over 55s of practically every party (other than the SNP of course) to voting Yes next time. Therefore, the argument goes, we should be focusing on convincing the over 55s to vote for Yes.

The widely held view is that to be young is to be liberal, but old is to be conservative- or to be young to support Yes, but old to vote No. These figures support that thesis.

However, American research reported here (http://www.pewresearch.org/fact-tank/2014/07/09/the-politics-of-american-generations-how-age-affects-attitudes-and-voting-behavior/) suggests that while different age groups do have different political ideas, the young=liberal, old=conservative view does not always work. For instance, they show that those aged over 65 are pretty evenly split between Democrats and Republicans.

The classic quote on age and attitude is by François Guizot, who said, “Not to be a republican at 20 is proof of want of heart; to be one at 30 is proof of want of head.” But it has been shown by Alwin, Cohen and Newcomb in “Political Attitudes Over the Lifespan” (https://books.google.co.uk/books?id=3a927Jder6IC&printsec=frontcover&dq=%22political+attitudes+over+the+life+span%22&hl=en&sa=X&ei=SnO9U63AF9DLsATrtYKgDA&redir_esc=y#v=onepage&q=%22political%20attitudes%20over%20the%20life%20span%22&f=false) that “through late childhood and early adolescence, attitudes are relatively malleable…with the potential for dramatic change possible in late adolescence or early adulthood. [B]ut greater stability sets in at some early point, and attitudes tend to be increasingly persistent as people age.” In other words, while Guizot may have been correct about ages between 20 and 30, the argument should not be extended further – at some point our political views become relatively fixed.

Ghitza and Gelman show in “The Great Society: Reagan’s Revolution and Generations of Presidential Voting” (http://www.stat.columbia.edu/~gelman/research/unpublished/cohort_voting_20140605.pdf) that there exist in the US different political generations, each shaped by political events during their formative years: New Deal Democrats, Eisenhower Republicans, Baby Boomers, Reagan Conservatives and Millennials.

Now if we apply these ideas to the next independence referendum it may give us cause to think that the widely held nostrum – well expressed by Politics Scot – that we need to get the older generation onboard – just might not be as true as we might think it to be.

First of all, if attitudes at some point during adulthood become relatively fixed – or demonstrate a greater stability – then it will be the older generations who will be harder to get to change their minds. But secondly, and perhaps most importantly, while this might not be for those in the earlier stages of 55+ age group, anyone who is 70 or older grew up in a world where the United Kingdom and Great Britain actually meant something. It was a world where to say that the sun never set on the British Empire was actually true. It was a country which had stood alone against Hitler and been one of the allies that had defeated him. As Maurice Smith put it in a recent Newsnet podcast, “people who have grown up watching John Mills’ movies”. (http://newsnet.scot/archive/podcast-two-years-indyref-13-weeks-brexit-next/). This was the crucible in which their ideas were formed, and the idea of bringing that United Kingdom to an end will often be relatively more difficult than for younger age groups who have lived through a period of pretty continuous decline.

So if they are not to be targeted then who? If we go back to the figures in the table, then we can see that to secure a majority can be achieved in either (or both) of two ways.

If, as is common for opinion polls, we rule out the undecideds, then a majority could be secured by getting at minimum 29 No voters to turn to yes, nearly 6%. Where would that 6% come from? If we rule out the over 55s as ‘too difficult’ then it has to be from younger age groups. There are 239 No voters aged less than 55, so 29 of them would be 12%, from any party but less likely to be Conservatives, where the balance between Yes and No is more marked than even for SNP voters voting Yes.

Moreover, particularly among the youngest age group – 16-34 (where ideas are more malleable!) – the balance for Yes is particularly pronounced (55% Yes to 32% No). If political ideas are influenced – among this younger, more malleable group – by their peers then perhaps it is most likely that converts would be secured here rather than among the elderly as Politics Scot suggests.

But there is another group we have ignored so far – those characterised as undecided. Typically, these are either excluded from the final result, or it is assumed that they will allocate themselves in the same proportions as those who have made their mind up already. There are 73 aged less than 55 in the undecided category. For this group to push Yes to a majority. To take the Yes vote (440) above the No vote (497) would require nearly 80% of this undecided group to come across, so it is at best difficult, and probably unlikely that even persuading younger undecideds to vote Yes is going to secure a Yes vote. More likely that some combination of securing currently undecided votes and converting No votes to Yes, particularly among young voters, will be the way forward.

Therefore, if the view that our opinions do not usually change significantly with age are correct, then the more productive approach to secure a Yes majority might be, counterintuitively, not to focus on the group which relatively cost us the last referendum – older voters whose opinions were formed in a rather different United Kingdom – but to work harder to secure the votes of existing No votes among younger voters whose opinions are more receptive to new ideas, whose conversion might be relatively easier.

Words Matter

I was going to write last night about how the draft Bill for a second referendum was being reported, but time ran out on me. This morning I noted that Wings over Scotland have written about the same thing, but rather more extensively (http://wingsoverscotland.com/and-twirling-always-twirling/).

I had been going to satisfy myself with the observation that the Herald was presenting the story in a sort of “she’s keeping the independence option open” kind of way, but giving prominence to the statements one might have expected from Ruth Davidson about focusing on the problems of Scotland, and by Kezia Dugdale that she was “shifting the goalposts” by “suggesting that securing ongoing membership of the single market, rather than retaining full benefits of EU membership, would be enough to convince her to call off a second independence referendum” (http://www.heraldscotland.com/politics/14724618.Sturgeon_keeps_options_open_over_independence_despite_single_market_demands/).

However, that was not the way that it was reported in the Guardian, where the headline in Severin Carrell’s report told us pretty much all we needed to know about the approach. In contrast to the Herald – “options open” – in the Guardian independence was on the back burner – “Sturgeon shelves plan for quick second Scottish independence referendum” (http://www.theguardian.com/politics/2016/sep/06/nicola-sturgeon-shelves-quick-second-scottish-independence-referendum-bill).

The first couple of paragraphs tell their own story

“Nicola Sturgeon has shelved plans for a quick second referendum on Scottish independence after dire spending figures and a fall in public support for leaving the UK.

The first minister told Holyrood on Tuesday that her government only planned to issue a consultation on a draft referendum bill – a measure which falls short of tabling new legislation in this year’s programme for government.”

So instead of options open, according to the Guardian, Sturgeon is running away, because of the dreadful GERS figures, and – quite bafflingly – her appointment of Mike Russell (one of the most “combative figures” at Holyrood) as her Brexit minister. This remember is the same item of news – keeping the option on the table (despite encouragement to put it away) or running away.

As Wings points out, other newspapers had their own agendas, so the same item of news – remember – the independence referendum bill “has – in the space of a single 48-word sentence in a 4,600-word speech – been edged towards, backed away from, shelved, threatened, lined up, put on the back burner and consulted on”. Quite a remarkable set of interpretations for a single sentence. The problem of course is that none of them is entirely truthful, because the reality is that the next referendum is contingent on Brexit. In that sense the key decision-maker is not actually the First Minister, but the Prime Minister.

However, one would not get this impression from a reading of the UK press, as the above demonstrates quite fully. However, I want to focus on another example – David Torrance’s weekly SNP BAD article in the Herald headlined “Like Brown, Sturgeon risks letting the genie out of the bottle” (http://www.heraldscotland.com/opinion/14723055.David_Torrance__Like_Brown__Sturgeon_risks_letting_the_genie_out_the_bottle/). Essentially Torrance attempts to develop an analogy with the time when Gordon Brown had just become PM, and with the polls in his favour, after some prevarication, decided against a snap election for his own personal mandate, opting instead to go the distance of that Parliament, and ending up losing to the Tory/ Lib Dem coalition in 2010. Torrance’s argument is that Sturgeon is doing much the same thing, prevaricating and by doing so may end up losing support, if the tide for independence is fully in just now.

Yet Torrance recognises that the call for a second referendum is contingent on triggering Article 50, when all the reasonable options for Scotland retaining meaningful links with the EU have been ruled out or shown not be possible. He writes “When Article 50 is triggered and it’s confirmed that Scotland isn’t going to stay in the EU (or the Single Market, the First Minister’s “red line” continues to shift) the SNP’s strategists will have to decide how they’re going to respond”, and indeed there is an argument there that needs to be respected. A response will be needed, but it wont necessarily be to trigger the next referendum.

In this regard, Torrance claims, “I don’t get the sense those in charge necessarily see Article 50 as a decision point, rather they’ll continue to busk it, waiting for something to come up. But the trouble with this is that “something” bad may emerge.”. But how likely – or unlikely – is “something” bad to emerge? It is perhaps one of those accidents of history that the day before Torrance’s piece came out, the “normally discreet Japan Gov has very publicly slapped UK for Brexit”, as Robert Peston tweeted the evening before. The Japanese PM and ambassador to London have both warned the British government that if Japanese companies – which employ between them 140,000 in the UK – cannot continue to make profits working from here, then they will leave. In short the likelihood of “something” bad emerging is by no means that farfetched.

However, the real killer for Torrance’s SNP BAD hypothesis, is that, as he recognises himself, indyref2 is contingent on Article 50 being triggered. When will that be? Immediately after the 23rd June, we might have expected it to be triggered, if not now then very shortly. Then it became the end of this year. Then early next year. Then the middle of next year. Some suggest it might not be till 2019!

And whose decision will it be? It won’t be one for the FM, as the Secretary of State made clear (http://www.bbc.co.uk/news/uk-scotland-37276167) “”Scotland is part of the United Kingdom. The UK government is responsible for Scotland’s membership of the EU and for foreign affairs so obviously the UK government is going to take the lead in the negotiations in relation to our position in the EU. Asked if Ms Sturgeon could expect a “veto” over any position that emerges, Mr Mundell went on: “There isn’t going to be a veto for anyone in relation to the EU negotiations”. The decision, therefore, will be one for the PM.

Thus all Torrance’s talk of the Scottish Govt, letting the genie out of the bottle, is quite misplaced. If indyref2 is contingent on Brexit actually happening, then the person who has the first decision to take is Theresa May, and the indecision – and indeed lack of clarity – right now, is hers and her government’s.

But more than this, we would do well to wonder why Torrance, and those who share his opinions, are arguing for a vote they don’t want – indyref2 – which may bring an outcome they certainly do not want – independence. But their demand for indyref to happen now, before the full horrors of Brexit have had time to emerge – at the moment the Japanese have been uniquely clear, and even then we are talking about 140,000 jobs – is indicative of their thinking. If there is to be another referendum lets have it now, when the chances of a Yes vote are less. As John Curtice pointed out in his most recent blog, after an increase immediately after the 23rd June, support for independence has returned to around 46% (http://blog.whatscotlandthinks.org/2016/09/has-brexit-not-had-much-impact-on/), so let’s have it sooner rathe rather than later when Yes might win. My own view has always been that Brexit, of an by itself, no matter how much of a democratic outrage it might be, will not take us to independence. But the consequences of Brexit might very well do this.

When the possibility of another independence referendum is raised, there are two common retorts in the mainstream media. One is the Ruth Davidson approach, aping Johann Lamont during the last referendum, that there is a country to run. Remember “Scotland on pause”? Or to argue, let’s have it now. The former is a variant on the “once in a generation” argument, while the latter seeks to hurry it on, in the expectation that as time wears on, and the consequences of Brexit become more clear, the likelihood of a Yes vote increases. Both are attempts by Unionism to avoid the inevitable, or if not inevitable to hold it at a less than propitious time. We need to hold our nerve. Work remains to be done, as Robin McAlpine points out in “Determination” so that the independence offer is more convincing than last time. As Tommy Sheppard has said “every part of the that white paper [from the last referendum] is obviously going to have to be looked at and reviewed and dusted down and re-presented if and when we get to a next independence referendum” (http://www.scotsman.com/news/politics/snp-s-tommy-sheppard-urges-review-of-independence-white-paper-1-4194104).

But more than that, the Brexit and the current political situation in the UK – in particular leaving the UK with the most reactionary and right wing Tory government for many years – causes the tide to flow in our favour. As Eric Joyce wrote recently in his blog, former No voters – and he instances in particular JK Rowling who he says may support the Union but “loathes” the Tories – “realise that what’s in their hearts has become a never-neverland they’ll never get to visit. Then they’ll re-imagine Scotland’s future and choose social democracy in an independent Scotland over Tory ascendancy.” (http://ericjoyce.co.uk/2016/09/jk-rowling-is-the-folk-who-will-move-scotland-from-no-to-yes/)

 

On the possibilities of a European Super League

The BBC have reported (http://www.bbc.co.uk/sport/football/37168955) a statement by Alexander Ceferin, President of the Slovenian FA, and a candidate for the Presidency of UEFA now that Platini has had to vacate that role, that

“Any move to form a breakaway super league involving Europe’s top sides would lead to “war” between the clubs and Uefa” and is “out of the question”.

He goes on

“My firm opinion is that some kind of closed super league with just a few clubs in, without the possibility for the others to enter, is out of the question. It will mean a kind of war between Uefa and the clubs. If they want more revenues we should work on it. It is possible. The Champions League is the best sports product in the world, for sure. But it doesn’t generate the most money. So we should include them [the clubs] more.”

The BBC treats this at face value – if Ceferin is elected, and he has 20 nominations from member Associations, so at getting on for half of the 54 who is to say he won’t be – then there would be no super league.

There are I think two faults in this confident forecast.

First while Ceferin is right in that it would be a direct challenge to the authority of UEFA, a breakaway would lead to a war. But before saying it is “out of the question” we might do well to consider which side might win, and why. As Ceferin says in the second half of the quote “If they want more revenues” – do they ever – then the biggest clubs need to think about how best they might achieve this, and I am sure they are giving that a lot of thought. A super league would after all allow for higher ticket prices. There would be more opportunity for corporate entertainment, again at higher prices than they enjoy just now. However, the major variable, and the one that everyone pays primary attention to, is television. Right now, the king of the hill in that regard is the English Premiership. As the BBC report says,

“The Premier League’s new £9bn TV deal is one of the main reasons why European sides are so keen to see change.”

However, the Premiership has an Achilles heel. There are clubs in the Premiership which could easily be described as “global brands”, including Manchester United and Manchester City, Arsenal, Chelsea. Probably Tottenham and Liverpool as well, with West Ham and Everton as the next in line? Leicester in the future, perhaps, but one swallow does not …… etc. These are clubs for whom pay to view will always be interested, so the match between Arsenal and Liverpool on the first Sunday of the Premiership was always going to be attractive to TV. Perhaps Chelsea and West Ham as well, the following Monday. But Bournemouth and Manchester United, surely less so. And, unless you are from the North East of England, it’s unlikely that Sunderland and Middlesbrough was particularly enticing.

We can go through the season like this – games between any of the eight clubs identified as “global brands” will always be attractive to pay to view. Less attractive, but still with some pulling power, are games between those eight and the others. However, how often does television get landed with games between the other twelve clubs, which will have little attraction for them?

So far, however, TV has been able to do little about this. But imagine a European Super League, over an entire season. Let’s suppose it features the following eighteen clubs – Arsenal, Manchester United, Manchester City, Chelsea, Tottenham, Liverpool, Real Madrid, Barcelona, Athletico Madrid, Valencia, Milan, Juventus, Napoli Bayern Munich, Dortmund, Paris St Germain, Marseilles, Lyon. There is lots of scope to argue about whether these would be THE 18 clubs – for instance would there really be six clubs from England? But the point to be taken from that is that it is difficult to perm any two of these clubs without coming up with a game that TV would not value highly. There would be no “duff” weekends with such as Burnley playing West Brom. There would not only not be a duff weekend, but rather the difficulty for any TV station would be how to schedule all of the games of this league every weekend. If the Premiership contract is worth £9 billion, with “makeweight” matches many weekends, what value would the TV contract be for a league with no “less attractive” matches?

We are therefore looking at a TV deal which is some multiple of 9 billion. This would clearly be attractive for the non-English clubs who are currently in deals worth less than this. But if the English clubs were offered even more TV money than they get just now would that not be attractive to them? Could UEFA ever organize something like this? I rather suspect not, unless they could find a way to keep the “lesser” clubs happy.

Thus the weakness of the Premiership is that while it has its share of “superstars”, not all of its clubs – worthy as they all are – can be described in this way. A move away for the “superstars” has to be a possibility, just as the Premiership cut itself loose from the Football League when they realised they could do better for themselves by moving across to the FA which has singularly been incapable of controlling them. Just as the Football League was cast adrift, this would mean casting the “extras” in the Premiership adrift – such as Bournemouth, Southampton, West Brom, Sunderland etc.

Where would TV find the money though? It’s not like it’s a bottomless pit and sooner or later the armchair footie fan is going to say “enough”. But, if Arsenal, Manchester United, Manchester City, Chelsea, Tottenham and Liverpool are no longer in the Premiership then what value does its TV contract have? Certainly much less than it is now. Moreover, it is likely that the deal would be done not by a single TV company in the way of Sky with the Premiership, but by a consortium of pay TV companies including Sky, BT, Canal + etc.

But what about the players? One of the consequences of a player with any of the clubs in a Super League without UEFA endorsement would be that they could no longer play for their national sides. I am not suggesting that players are not patriotic, but imagine the conversation “Leo, we want you to sign a new contract. This will pay you 25% more than we pay you now, but you won’t be able to play in the World Cup or Copa America”. Sorry, 25% more dosh and getting a rest every summer! What’s not to like. Who knows, he might even pay his taxes?

So the war, is eminently possible, and without their superstar clubs and most of the best players, how long could UEFA hold out? How long – as with the Kerry Packer Cricket Circus forty years ago – could they hold out? This leads to the second point, that we need to read Ceferin’s statement very carefully, and in particular when he says “My firm opinion is that some kind of closed super league with just a few clubs in, without the possibility for the others to enter, is out of the question”. The key word here is “closed”. I have set out 18 hypothetical member clubs. Ceferin’s problem seems to be that the lack of a possibility for others to move on up to that league. For instance, there will certainly be clubs with the ambition who are not in that list – Espanyol, Villareal, Seville, Werder Bremen, etc Then there are the biggest clubs from the smaller countries – Porto, Ajax, not to mention Celtic.

If we put this construction on Ceferin’s statement, and add to that the biggest clubs recently putting Karl-Heinz Rummenigge and Gianni Agnelli up to call for the creation of a super-league (and you don’t put guys like that in to argue for you if you don’t really mean it) then perhaps the principle has already been conceded and the only issue is whether the League would be closed or whether there would be some form of promotion and relegation. Either way, the future may not be all that far off.

 

 


 

Known unknowns, known knowns, unknown knowns and unknown unknowns

The categorisation in the title- or at least part of it – is often attributed to Donald Rumsfeld when he was American Secretary of State for Defence (though he certainly was not the first to use it). The full quote goes

“Reports that say that something hasn’t happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult one”

Of most concern to Rumsfeld therefore were unknown unknowns, which the British Columbia Royal Commission of Inquiry into Uranium Mining in 1979 distinguished from known unknowns as follows

“Known unknowns result from phenomena which are recognized, but poorly understood.”

So for instance, we don’t fully understand weather – will threatening clouds just pass over, or will it rain before I get back- so if I go out for a walk I might take an umbrella as “insurance”.

“On the other hand, unknown unknowns are phenomena which cannot be expected because there has been no prior experience or theoretical basis for expecting the phenomena.”

Many of the demands for information made by Better Together during the last referendum could often be categorised in either of these ways. Questions would continuously be posed so that if there was no answer then they could say “see, they don’t know” (the known unknown, or in some cases the unknown unknown). Or if there was an answer to use it as a platform to pose further questions. One instance of that strategy was the BBC’s well-worn style “warning about …….”, linked to independence. Craig Murray helpfully even provides an illustrative list (https://www.craigmurray.org.uk/archives/2013/04/bbc-the-new-hammer-of-the-scots/), though as Murray points out, these are only those where both “independence” and “warning” both appear in the same title.

  • ‘Scottish independence: Pension shortfall warning’
  • ‘Scottish independence: Warning over “weakened military”‘
  • ‘Scottish independence: “Havoc” warning from pensions firm’
  • ‘Scottish independence: Luxembourg warns against “going separate ways”‘
  • ‘Scottish independence: Barroso warning on EU membership’
  • ‘Scottish independence: Michael Moore issues warning over vote question’
  • ‘Scottish independence: “Border checks” warning from home secretary’

An interesting example is the last of these, “border checks”, since the Home Secretary in 2014 has now become our Prime Minister. The contemporary BBC report says that (http://www.bbc.co.uk/news/uk-scotland-scotland-politics-17505302)

  1. “Ms May claimed independence could lead to mass immigration problems.” – quite why this was the case was never explained. Perhaps if independence had been such a disaster there would have been widespread hunger so that Scots were fighting to get out? If the reaction of rUK in these circumstances was to erect border posts to keep starving people out, then even on the basis of that rather unlikely hypothetical, should we not be looking to become independent?
  2. “Afterwards, the home secretary said she envisaged “some sort of border check” if Scotland joined the European Schengen common travel area” – but at the very least there was no certainty that Scotland would have joined Schengen – indeed Better Together would tell us often as they could that we would not be able to join the EU for many years. In any event, how would the EU have benefited from forcing Scotland – which has no direct border with any country other than England – to join Schengen. A more intelligent proposition would have been that Scotland, like the Republic of Ireland, would have joined the Common Travel Area, which has operated to the satisfaction of most since 1922 as the Home Office were disinclined to patrol the porous and meandering border between Northern Ireland and the Republic. Just why Scotland would be treated differently was never made clear – a known unknown.
  3. “Ms May called for clarity on the issue as part of the independence debate.” – or put another way, May was calling on Yes to get the European Commission to opine on whether they would insist on Scotland being forced to join Schengen, even though the Commission would only reply if such a request came from the government of a member state, which in this case was the government at Westminster, of which May was a member. And there is a parallel here with Tom Peterkin this morning (http://www.scotsman.com/news/snp-seeks-a-way-to-avoid-border-checkpoints-after-independence-1-4208480) and May two years ago, in that the onus in both is placed on Scotland. Peterkin’s report appears with the headline, that “SNP seeks a way to avoid border checkpoints after independence”, but even he is eventually driven by the facts to quote Fabian Zuleeg, chief executive of the European Policy Centre and one of Sturgeon’s panel of EU advisers that all parties “would do whatever they can to avoid” a hard border

    In fact, clarity could have been provided in both cases if London had advised us just why the border between Scotland and England was so much more difficult than the border between the two parts of Ireland, that it would have to be managed much more rigorously. But that question has never been put. We know that London is anxious not even to be seen to do anything that might undermine the peace process in Northern Ireland, and making a “hard border” between the North and the Republic is the last thing they would want. Why, when illegal immigrants could just as easily get to Dublin, travel north to Belfast and thence into the UK, is Scotland different? Instead when in 2014 independence was put on the back foot on this matter the standard “scaremongering” response was made – when really it is London who should be answering the questions, particularly when on 24th June on Any Questions Chris Grayling (Secretary of State for Transport and leading Brexiteer) was quite certain – the day after the EU referendum – that the Common Travel Area would continue as before.

    Yet this has barely scraped the surface of the debate about Scottish independence. Only those who argue for Scottish independence are expected to fill in the gaps of the known unknown. Only we are expected to know the unknowable. Professor Patrick Dunleavy (LSE) said during the last referendum debate that the Scottish Government would need the forecasting ability of the “Delphic Oracle” to be able to answer the questions from Better Together (and their allies in the media). Such requirements do not apply to London, and it is not as if their position brooks no uncertainties, particularly since 23rd June and the vote for leaving the EU.

A more contemporary example appeared in the Herald in the last seven days. It was started by a reply to a letter by the doyen of Herald letter writing Iain AD Mann who had questioned why it was that Scotland was being singled out for special attention because of the deficit GERS suggests we are running (http://www.heraldscotland.com/opinion/letters/14682154.Readers__39__Opinion__Why_should_Scotland_be_the_only_nation_berated_for_debt_/). This drew the following response from Peter Wylie of 26 New Street Paisley, who variously appears to be a consulting actuary and to work in insurance and pensions (coincidentally 26 New Street Paisley is given as the address of the local Conservative Club).

Mr Wylie wrote (http://www.heraldscotland.com/opinion/letters/14686248.Readers__39__Opinion__It_is_the_Union_that_has_helped_so_many_Scots_to_achieve_greatness/)

IAIN AD Mann (Letters, August 15) seems to think that because the United Kingdom has borrowing of £1.62 trillion, an independent Scotland should be able to cover the shortfall of £9 billion in its revenues identified in the recent report by Government Expenditure and Revenue (Scotland) – GERS -– quite easily by government borrowing.

He does not seem to understand, first of all, that the amount of UK national debt has no relevance to the question of whether or not an independent Scotland would be able to cover a shortfall in revenues by borrowing.

The UK national debt is funded by the issue of government securities that are mainly bought by UK-based financial institutions such as insurance companies, pension funds and investment funds. In an independent Scotland there would almost no market within Scotland for government debt. The financial institutions that are based in Scotland, Standard Life for example, could not invest in the debt issued by a Scottish government because the bulk of their liabilities would still be in sterling because about 90 per cent of their customers are in England.

An independent Scottish government would have to try to sell its debt abroad. It is unlikely that debt expressed in a Scottish currency would be attractive to foreign investors but taking on the liability to repay borrowing in other currencies would be very risky.

If the Scottish currency fell against the currency in which the borrowing had been made, the cost of servicing the debt, which would be a lot higher than the cost at which the UK government can borrow because of the fact that an independent Scotland would have no track record in borrowing and, more importantly, repaying borrowing, would increase sharply and the deficit the debt was supposed to cover would get worse.

Mr Mann says “it is perfectly feasible that if Scotland had the normal borrowing powers of a self-governing nation we could cover negative variations between income and expenditure”. The probability is that attempting to do exactly this would have disastrous consequences for us all.

Peter Wylie,

26 New Street, Paisley.

I have highlighted the most contentious points, which I addressed in a reply to Wylie (see below). These are

  1. His claim that there would be no market for Scottish government debt, which is clearly a known unknown – not impossible, but clearly a “worst case analysis” without further evidence
  2. Why would Standard Life not invest in Scotland when they are a global brand which must deal in a great many currencies – not even a known unknown. Just wrong.
  3. Some countries do indeed sell their debt in the currency of other countries, and it is indeed risky, and can become expensive if currencies move against you. But that point depends crucially on his first two points being correct when one of them is just wrong and the other much less than certain.
  4. It is probably right to say that initially an independent Scotland might have to pay a premium by virtue of being the new kid on the block. But how much more? For how long? Or looked at another way, for how long will the UK be able to get by with interest rates as near zero as makes no odds?

There is the possibility that Mr Wylie is correct, but as an actuary I am pretty sure that he knows its not a probability and in any event is well within the territory of the “known unknown”.

My own reply to him appeared in the Herald a couple of days later (http://www.heraldscotland.com/opinion/letters/14692096.No_evidence_that_Scotland_would_be_unable_to_address_challenges_all_small_countries_face/) – you might recognise the analysis?

PETER Wylie (Letters, August 17) takes Iain AD Mann (Letters, August 15) to task for thinking that an independent Scotland could cover its £9 billion deficit “quite easily by government borrowing”. But in so doing he treats what really are “known unknowns” (to quote Donald Rumsfeld) – what we know we don’t know – as “known knowns” – what we know we know (or in Mr Wylie’s case, what we think we know).

One example is why Standard Life would not buy into Scottish government debt. Since it considers itself a global business, even if “90 percent of its customers are in England”, it must deal in a whole range of global currencies. Yet according to Mr Wylie they would be deterred from investing in Scottish debt for currency reasons. Surely if the return is reliable and competitive, then investors would be happy to invest? The issue is not the currency in which they are paid, but the reliability of return, and in this regard, for the UK, even with the fall in the value of the pound since June 24, and the prospect of Brexit is informative as the UK is still able to sell gilts to manage its debt.

How much Scottish debt would be owned domestically is certainly a “known unknown”, but how is it that other small countries – or even some large ones – which do not have a financial services sector on the same scale as the UK, get by? Or is Scotland uniquely disadvantaged in this regard?

His final “known unknown” is that the cost of servicing debt for an independent Scotland would be “a lot higher” than for the UK government. Leaving to one side what “a lot higher” actually means, and more importantly whether the UK will continue for much longer to be able to finance its debt at present rates of interest, the premium on Scottish debt would depend on the scale of deficit we face on independence. Let’s suppose that is not before 2020. What will the price of oil be then? What level of UK debt would Scotland actually have to take on? If “known unknowns” exist, then these are examples.

In short, Mr Wylie in sketching out his severe, if not apocalyptic, view of the future, really does ignore Mr Mann’s core point, that if arguments, such as Mr Wylie’s, are to be redeemed then they really do have to be obliged to present evidence why an independent Scotland would be unable to address the challenges that every other small country does. Certainly presenting “worst case analyses”, such as Mr Wylie’s, singularly fails to do this.

This form of challenge is, I would argue, more effective against the “scaremongering” response that seemed standard in Yes. To demand that they redeem their claim, and expose its own uncertainties is harder work, but has more substance than just asserting that it is scaremongering. A scaremonger is defined in the Cambridge English dictionary as “a person who spreads stories that cause public fear”. The problem often with Better Together, and increasingly with the Unionist case is that these are stories which either lack evidence, and/ or are contrived or made up.

Just today Derek Bateman has written in his blog about, in effect the scaremongering of elements of the Scottish media, trying to suggest that attempts are being made by indy supporters to silence them. Among the arguments that Bateman uses to nail this are that when you consider

“James Foley, beheaded by jihadists. John Cantlie still held by ISIS two years on. US reporter Alison Parker shot dead live on air. Gadzhimurat Kamalov hit six times in a drive-by shooting in Moscow. Of the 27 journalists known to have been murdered so far this year, 37 per cent were related to politics, according to the Committee to Protect Journalists.

……

I knew an editor in Kashmir who published what rebels told him or he would die, a female reporter from Chile who had been forced not to tell the story of abductions under Pinochet and a Yugoslavian journalist who feared he could not work under threats from Serbs and Croats as the Balkan conflict got under way. (All encountered in the US in 1991).

I’ve had my notes examined and my camera crew’s film vetted by Israeli security, been delayed at a Romanian airport while my director’s passport was held up (for a bribe) and recorded secretly in China after being denied a journalist’s visa. I had to go up a stair into a room full of unsmiling men to ask ‘Sinn Fein’ permission to record voices on the street in West Belfast.

Believe me, working as a hack at Holyrood is a doddle.” (my emphasis). http://derekbateman.scot/2016/08/21/can-i-quote-you/ strongly recommended

It is worthwhile remembering this when the next one flounces off Twitter or closes their Facebook account. Torrance has had his shot (for a few days), Neil Oliver has told of vile cybernats who have hounded him off a Twitter account it appears he didn’t use that much (and which didn’t give him the evidence to support his claim). One wonders who might be next? But the important point is that faced with this bleating, what is needed is a critique and Bateman offers this in spades. In addition to the above Bateman offers a reasoned denunciation of such as Torrance and Daisley, and this is where we have to go. When a claim is made by Unionists then it has to be challenged with a reasoned argument, pointing to its errors, exaggerations and fictions rather than whine “scaremongering”. It is almost certainly true that creating uncertainty, doubt and worry is their aim, and that the charge of “scaremongering” is both accurate and legitimate. But beneath all that lurks a Unionist argument (of sorts) which can be critically appraised and potentially be shown to have little force, being at the limits of what is likely or even possible.