Camels, Customs, Cuts and Currency

The SNP’s positions are increasingly absurd. We shouldn’t help normalise that.

I spend a lot of time working with activists in emerging democracies, often in North Africa. A friend there used a saying I hadn’t heard before: “Don’t let the camel stick his nose in your tent, for soon you will have the whole camel in your tent.” I’m sure it’s more poetic in the original Arabic, but it is a warning that allowing seemingly innocuous things to happen unchallenged can lead to bigger, far worse things.

With that in mind, this week I want to expand on a piece published yesterday for the Reform Scotland think tank. In it I argue:

The SNP no longer look like the formidable and disciplined message machine they were in 2014. Unless Alex Salmond succeeds in deposing his protégé, they will still have a skilled communicator at the steering wheel, but behind her an impatient party has wandered all over the political map.

One of the untold stories of UK politics is how ridiculous many of the SNP’s arguments have become. The breakdown in relationships that the Salmond civil war has exposed gets all the headlines, but the intellectual rot goes far deeper.

The passage of time has made many of the old nationalist arguments obsolete: Brexit means Scexit would create a hard border; the near complete loss of oil revenues removes the ability to pretend that leaving the UK means more public spending; and new tax and welfare powers mean the SNP have the ability to change things within the UK, denying them grievances to exploit.

With their leadership unable to make sense of this new picture, the nationalist movement has spent the last few years clumsily jamming in the pieces of a jigsaw that no longer fits together.

Bordering on the Ridiculous

I covered the Scexit contradictions of the SNP before and won’t go over old ground.  We saw an example this week of the hole they have dug for themselves by making opposition to trade borders the justification for ignoring the 2014 vote to remain in the UK. On Question Time Jeanne Freeman was pressed by Ian Murray on the logic of creating a new border between Scotland and our biggest trading partner, England.

Ian Murray MP @IanMurrayMP

📺 Here is Jeane Freeman denying the reality that if an independent Scotland somehow left the UK and joined the EU, the trading terms with our largest trading partner - the rest of the UK - would be set by Boris's dreadful deal. #bbcqt

Having just said that Scotland should vote to leave the UK so we could re-join the EU, Freeman denied that Scotland’s trade with the rest of the UK would be governed by the EU-UK trade deal. That can only be true if Scotland outside of the UK was also outside of the EU.

Meanwhile SNP figures, including Nicola Sturgeon and Deputy Leader Ian Blackford have suggested there would be no hard border between the UK and Scotland because we would have the same arrangements as between Northern Ireland and the EU. Leaving aside the fact that Brexiteers promises of no hard border between the EU and Northern Ireland has only been possible by creating a border in the Irish Sea, Northern Ireland remains part of the United Kingdom.

So their position appears to be that we will leave the UK, but still be in the UK single market, and that we will join the EU but somehow be both inside and outside the EU single market.

Cooking the Books

For decades North Sea Oil revenues meant nationalists could make all manner of promises without any of the hard work of real politics. A temporary spike in oil prices, and so oil taxes, meant the campaign Nicola Sturgeon managed in 2014 was based almost entirely on proclaiming the official public spending statistics. These figures, known inside the beltway as GERS, were offered every day as proof that leaving the UK meant increased funding for public services and welfare. Now the same numbers show the oil revenues are all but gone, and our share of the money distributed around the UK is worth the equivalent of most NHS spending. With the statistics showing leaving the UK means losing this money, Nicola Sturgeon, and her entire campaign have switched to discrediting GERS.

It is embarrassing to watch.

When they’re not reaching for the Trump playbook and denying the facts of our finances, they’re cooking the books.

For example, Andrew Wilson, tasked by the leadership of the party with solving the GERS problem, wrote in the Financial Times that we shouldn’t think the loss of our share of revenues from the rest of the UK was a problem because Scottish taxes pay for all devolved spending plus welfare spending. Everything else, he argued is optional. It sounds reasonable until you realise that included in that list of ‘optional’ spending is: our entire aid budget; our entire defence budget; our entire budget for embassies and a diplomatic service; our entire national rail network budget; hundreds of millions of pounds of R&D investment; the wages of all civil servants working on tax and benefits; and all national debt repayments.

Other SNP politicians, and ‘think’ tanks argue that Scotland will be able to fill that gap because we won’t have to pay for pensions. We’re asked to believe the country we would have just given two-fingers to will shout us for the single largest item of public expenditure. This is surely a failure of political imagination. If we’re going to pretend that billions of pounds of public expenditure will be picked up by the taxpayers of other nations, why stop there? Let’s have New Zealand pay for our NHS. Peruvians can pick up the tab for policing.

Admittedly I’m not a fiscal economist, but I’m pretty sure that when you’re trying to make the public finances add up, pretending you don’t have to pay for pensions or a national defence is just cheating.

The most extraordinary thing about all these efforts to imagine away our deficit is that at no point does any nationalist pause and consider that they are performing such accounting gymnastics to try to solve a problem that would only exist because of their nationalism. It is leaving the UK that creates this fiscal crisis, so why to create it when we could be getting on with the job of making Scotland fairer now?

Funny Money

It is on currency that things start to get *really* wild.

The SNP were rightly traumatised after 2014 by the rough time we gave them on currency issue. It was where undecided voters intuitive sense of the economic risks of nationalist adventure became tangible. Nicola Sturgeon bemoans how the pro-UK side exercised a “veto” over her preferred currency policy in 2014. While this was a weakness that was exploited by the No campaign, we didn’t’ create it. It came from the SNP’s lack of confidence in their own proposition: they know voters don’t want the economic upheaval they offer.

The leadership position on currency is still based on avoiding telling voters the truth: changing country means changing currency. Sturgeon parked on the policy of Sterlingisation, that is using the UK’s currency but without any of the powers or protections of a central bank. This could, says the architect of the plan, last for up to ten years (ten years!).

The importance of a central bank and our own currency is not a hypothetical consideration. Twice in the last decade we would have faced ruin without the power of a central bank and a reserve currency. In the financial crisis where Scottish banks were bailed-out, mortgages saved and a depression averted, and then again in the current pandemic where individual families were bailed out by furlough cash. These were only possible because we controlled our own currency. Experts have been queuing around the block to warn just how crackers this policy is.

The leadership appear to be entrenched around Sterlingisation, but the party ranks have deserted this post. At successive SNP conferences the grassroots rejected Andrew Wilson’s plans and then elected his arch critic Tim Rideout onto the party’s main policy committee. At first commentators thought that the party grassroots had rejected Sterlingisation because it was stupid, it now seems it wasn’t stupid enough.

Here, with links because you wouldn’t believe me if I didn’t share them, are a few of the ideas being put forward by Mr Rideout from the SNP’s main policy committee.

• Rather than the decade long process advocated by the leadership, “Scotland will be introducing its own currency within a couple of months.”

• This is no big deal as setting up a central bank is apparently a bit like running a bureau de change from a portacabin: “A basic Central Bank needs about £15,000 of IT, a bank accounting software package, a connection to the inter-bank payment system, a couple of people to run it and a one room office.”

• Scotland won’t need to borrow from international markets because we can just print money instead.

• And we don’t even need to tell anyone that we are printing money. The SNP has a secret plan to print money.

So depending on who wins this fight inside the SNP we either do without a currency until we have completed a decade of cuts; or we’ll immediately set up a new currency and pay for public services by running it through the photocopier in the portacabin central bank. Like Alien vs. Predator, whoever wins…we lose.

It’s hardly surprising that not even SNP parliamentarians understand their own currency policy well enough to explain it with any credibility.

Back to the Camel

In Scottish online politics, all of us have built up an unhealthy tolerance for utterly ludicrous positions. We’ve spent so much time patiently explaining to our SNP counterparts that pensions need to be paid for, or that having a central bank is quite important, that we haven’t noticed that our good-faith counter arguments provide a normal seeming context to abnormal politics. Our very participation in these debates, our good-faith engagement, has legitimised a bad-faith politics. Facts constantly grind against falsehood and fantasy until we’re all desensitised. The politically absurd has become normalised by being admitted into evidence for the jury to evaluate when it should be laughed out of court.

We allowed the camel’s nose into our tent.

Nationalists should not be allowed to offer half-baked ideas for these fundamentally important economic issues. When they hint about defaulting on our share of the UK’s debt; or brush over the different currency ‘options’; or use euphemisms like ‘transition’ when setting out public spending plans; or obliquely talk about ‘trade offs’ when discussing the border, we should all make them get specific. Politics is about making your opponent choose. Think back to Alistair Darling skewering Salmond on currency during the 2014 STV debate. Salmond thought he could style it out when asked about what his plan B was. Darling refused to legitimise that, he refused to move on, and in doing so, refused accept that it was reasonable to not tell us what currency we would end up using.

I’ve written about how the Holyrood elections should be about whether the SNP deserve a majority rather than what happens if they win one. Whatever happens over the years ahead, the debate about whether we should leave the UK should not be framed in terms of the right of the SNP Government to re-run 2014, but in terms of the responsibility they have to set out exactly what it is they are asking us to choose.

While they are still all over the place on what currency we’d use, what their new border would look like, and how we’d fund the NHS and other services, they cannot credibly pretend to be ready for another vote. The challenge is simple: How can you possibly ask people to make such a big decision when you can’t even decide among yourselves?