Meeting on Arran: Arran Women for Independence – A very personal response to a thought-provoking presentation
Like many on Arran, I struggle to sort the spin from the truth or half-truths in the debate about independence. At a recent meeting of the Yes Campaign, Philippa Whitford spoke with authority and simplicity to a large audience, using a straightforward model of Deficit and Debt, aiming to show that Scotland is better off than the UK as a whole and can stand-alone. But let’s just revisit a few of the supportive points in the cold light of day.
Added value through ownership on North Sea oil and gas?
Government Expenditure and Revenue Scotland (GERS) figures for 2011/2012 were employed to illustrate the point. That at once seemed surprising, since the latest figures for GERS 2012/2013 were published in March. These more recent figures indicate a less favourable scenario for Scotland simply due to the 25% drop in price of coal and a definite decrease in the tradable value of North Sea oil. For example taking North Sea Revenue, UK government income was £6.5billion in 2012/13, down from over £11billion in 2011/12. The fact is that revenue from the North Sea energy resource can fluctuate greatly from one year to the next, just like all commodities on world markets. This variability is on top of seeing the cost of production steadily rising year on year as the larger oil and gas fields are exhausted. So dependence on oil and gas revenues could be economically challenging and very risky for an independent Scotland. In other words don’t bet on oil.
I suggest we now put, The full text of Sally’s letter can be read here (click file link) It includes questions on Ms Whitford’s view of the NHS, and ends with the words, I want the very best for Scotland and its communities, just as we all do. The important thing is to vote, and be a part of this historic decision making process.
The NHS – Safer in Scottish hands – look at NHS England
Philippa Whitford, a breast surgeon at Crosshouse Hospital, clearly stated in her criticism of NHS England that the NHS’s new CEO appointee there, Simon Stevens, is an American with a background in the private American health sector. The implication was obvious, the end of a free NHS, but in fact the label is misleading. He turns out to be English with a very NHS oriented career path. Mr. Stevens was born in Birmingham, in 1966 and educated at a state school and Balliol College, Oxford. He was a Labour councillor for Brixton, in the London Borough of Lambeth 1998-2002. From 1988 to 1997 he worked as healthcare manager in UK and internationally. In 1997 he was appointed Policy Adviser to two Secretaries of State for Health (Frank Dobson and Alan Milburn) and from 2001-4 was health policy adviser to Tony Blair. He was a key figure in Mr. Blair’s drive to reform the health service through the introduction of national service standards and waiting time targets, the creation of foundation trusts and the extension of competition, choice and the use of independent providers. Prior to this he worked in the NHS for more than 10 years, including as group manager at Guy’s and St Thomas’ Hospitals, a general manager of mental health services in North Tyneside and Northumberland, and a director of primary care in two health authorities. He then became the president of the global health division of United Health Group, the US-based health giant, hence the disparaging label. On his appointment he is reported as saying that “The next five years are going to be extremely challenging for the NHS, but compassionate high quality care for all is as vital as ever. It will be a privilege to lead NHS England – at a time when the stakes have never been higher – because I believe in the NHS, and because I believe that a broad new partnership of patients, carers, staff and the public can together chart a successful future for our health service.” Do read his recent speech on the challenges for the NHS (www.england.nhs.uk/2014/04/01/simon-stevens-speech). These challenges are just as great in Scotland. Our population too is increasingly elderly: modern advances in medicine are expensive, as are drugs. We are experiencing in NHS Ayrshire and Arran an attempt to combine Health and Social Services to streamline patient care and reduce hospital costs. Nowhere is exempt from increased scrutiny on effective and efficient spending of resources. Need I say more!
Free prescriptions in Scotland
Philippa Whitford then talked about free prescriptions in Scotland and how important it was to retain this benefit; a fair point but is the situation really any different to England? Around 90% of prescriptions in England are currently dispensed free of charge. This of course includes hospital dispensing. But the reality is that specialised targeted drugs demanded by us are expensive. A statement made by UK Health Minister Earl Howe said: “This government has made tough decisions to protect the NHS budget and increase it in real terms, but charges for some items remain an important source of revenue to support the delivery of high quality NHS services. “This is particularly important given the increasing demands on the NHS, with spending on medicinal drugs alone almost doubling since 2000.” Essentially the issue is not about free prescriptions but about the future staggering cost burden facing both NHS organisations north and south going forward.
The Scottish Government spends proportionally more per head of population – good or bad?
A key point made during the course of the presentation was that public spending overall in Scotland is higher than the UK as a share of GDP whether North Sea GDP is allocated by geographical or population share, thus implying an advantage. Is this in fact a good or a bad thing ? The money has to come from somewhere, our pockets or the North Sea, and North Sea revenues are dwindling. Clearly there are implications for taxation going forward.
If allocated on a geographical basis, Scotland’s North sea revenues have fluctuated between £11.6billion and £5.6 billion over the last 5 years: i.e. between 11% and 21% of total Scottish Revenue over this period. Forecasts of taxable earnings from the North Sea are highly unreliable as stated earlier and the Scottish Government’s forecasts of North Sea Revenues are more optimistic than those by the UK’s Office of Budget Responsibility.
Total public spending in Scotland was £65.2 billion in 2012/13, according to Scottish Government published figures. This includes spending by the Scottish Government and Scottish local authorities but also spending by UK Government departments in Scotland. Benefit payments made by the Department for Work and Pensions to recipients in Scotland are therefore included in this £65.2 billion figure. Public spending in Scotland accounted for 9.3% of the UK total in 2012/13. This is higher than Scotland’s share of the UK population (8.3%).
The comparative figures look like this :-
Public spending per head in Scotland and UK £: HM Treasury data (identifiable spending only)
| 2008/09 | 2009/10 | 2010/11 | 2011/12 | 2012/13 | |
| Scotland | 9,394 | 9,913 | 9,944 | 9,941 | 10,152 |
| UK | 8,146 | 8,724 | 8,740 | 8,631 | 8,788 |
| Scotland (Index UK = 100) | 115 | 114 | 114 | 115 | 116 |
Scottish Government data (identifiable and non-identifiable spending)
| 2008/09 | 2009/10 | 2010/11 | 2011/12 | 2012/13 | |
| Scotland | 11,408 | 11,852 | 12,158 | 12,227 | 12,265 |
| UK | 10,263 | 10,796 | 11,046 | 10,95 | 10,998 |
| Scotland (Index UK = 100) | 111 | 110 | 110 | 112 | 112 |
Source: Scottish Government, Government Expenditure and Revenue Scotland, March 2014. HM Treasury, Country and Regional Analysis, November 2013
What does the Scottish Government spend money on?
TOTAL MANAGED EXPENDITURE: SCOTLAND 2012-2013
Top 6
| Social protection | 34.4% |
| Health | 17.3% |
| Education and training | 11.7% |
| Public sector debt interest | 6.2% |
| Defence | 4.6% |
| Transport | 4.3% |
Bottom 6
| Employment policies | 0.3% |
| Science and technology | 0.4% |
| International services | 1.0% |
| Agriculture, forestry and fisheries | 1.4% |
| Enterprise and economic development | 1.6% |
| Environmental protection | 1.9% |
Are these to really be our priorities with just 0.4% revenue spending on science and technology and 1.9% on environmental protection? Just two allocations of government money close to my heart. In the last 3 years there have been extensive cuts in staff at Scottish Natural Heritage (SNH) and Scottish Environmental Protection Agency (SEPA), the two organisations charged with caring for Scotland’s marine and land environments, and the quality of water, in rivers, estuaries and the marine waters. A low priority judging by the uncontained pollution from salmon farms and the enormous number of regulatory violations perpetrated by these operations on the west coast. And then there was Donald Trump’s golf course on the most beautiful of Scotland’s sand dune coast, an SSSI (Site of Special Scientific Interest), approved on appeal by the SNP government despite objections from SNH and many others, and after being turned down by the local council. It appears that it is only the push from EU legislation, not Scottish government initiatives, that has forced Scotland to clean up its rivers and estuaries in the past 10 years, and indeed will drive the change to the EU’s Good Environmental Status by 2020. I think it is clear where most of that additional expenditure per head is being spent in Scotland and it is not directed at a more healthy future.
Better pensions with an independent Scotland?
A question on pensions was raised at the meeting. In 2012/13 spending on state pensions in Scotland was £6,783 million. Additional spending on benefits for pensioners in Scotland on top of state pensions is £3,364 million, giving a total of £10,147 million on all state benefits and pensions to people of pensionable age.
So, for the state pension alone, expenditure in Scotland is equal to 8.3% of total spending on pensioners within the UK. For all benefits paid to pensioners, expenditure in Scotland is equal to 9.1% of the UK total. (Scotland’s population is currently 8.3% of the UK’s. So spending above 8.3% could be said to be disproportionately in Scotland’s favour). Can an independent Scotland really match this added benefit on its own?
Source: DWP Benefit Expenditure Tables (Autumn 2013; DSDNI Social Security Agency Annual Report and Accounts 2012/13 http://www.dsdni.gov.uk/ssa-annual-report-2012-13.pdf)
The Institute of Chartered Accountants of Scotland (ICAS) produced a report in February 2014 entitled Report on Scotland’s Pensions Future: Have our Questions been Answered? Worth a read for details, many contentious issues raised on this subject. They also suggested that Scotland would have to pay more than £750m to set up a viable tax collection system after independence.
Can we afford to be complacent about currency at independence?
The currency issue was raised at the meeting and Philippa Whitford gave examples of Ireland/Northern Ireland and the reunification of Germany as reassurance. It is worth remembering that the Irish Punt was pegged to the British pound prior to Ireland adopting the Euro, which later caused it endless financial difficulties from which it is still recovering. Germany is still wrestling with the monetary fallout from reunification after 20 years from granting east and west Deutschmark parity. There are three options for Scotland: pound sterling, independent Scottish pound or the Euro. The obvious mark of independence would be to introduce a new currency or Scottish pound. This would require a new Scottish central bank to issue the currency, oversee the financial system and conduct monetary policy perhaps independent of the Scottish Government. But this will lead to transaction costs not simply the percentage taken by the monetary exchange but the greater costs in dealing with the uncertainty of a variable exchange rate. We have already seen the volatility of oil revenue, which will directly impact on the value of the Scottish pound. Capital movement in either direction in anticipation of the new currency would make the initial transition very challenging.
So what are the implications for trade? Trade with the rest of the UK is a huge part of Scotland’s economy, representing almost two thirds of its total trade and worth an estimated 68% of output. But for the rest of the UK, trade with Scotland is a much smaller share of its economy – around 6% of its output. Trade linkages between Scotland and the rest of the UK are particularly strong in financial services. Scottish Insurers sell 6% of their products in Scotland and 94% to the rest of the UK. About 16% of mortgages sold by Scottish firms are to Scottish postcodes and 84% to the rest of the UK. A different currency will involve major transaction costs and it is not surprising firms in the investment industry say they will move on to secure their business.
All this has serious implications for stability, and confidence internationally affecting value of money in our pocket and the bottom line, the cost of borrowing
Scotland continues to benefit from free higher education or does it!
Philippa Whitford made a strong case for continuing free higher education in Scotland. We already have heard in the media over the last months from the university sector concerns about present cutbacks and their inability to raise funds from Scottish and other EU students. Joining the EU and the Euro (one monetary option) would enable UK students to also study for free at Scottish Universities, and based on present student numbers that would be an additional £150million black hole in Scotland’s higher education budget but the expectation is that the cost would rise.
The impact of independence on the higher education sector would be substantial and far greater than that acknowledged by the Scottish Government. Scottish Universities receive 50% more in research grants from the UK Research Councils than they would if allocation was based on population share. In the event of separation Scotland would cease to be part of the UK Research Council ambit. Further, in global networking terms, Scotland’s universities and researchers would lose access to the UK’s Science and Innovation Network (SIN) based in British Embassies, High Commissions and Consulates around the world. This network is key to enabling Scottish research community access to sources of international funding and expertise. Scotland’s biomedical and science research has an international reputation and it is unclear how a separate Scotland could replicate such a far-reaching and high quality structure.
Defence spending – as long as somebody else takes responsibility!
There was very vocal support from the audience when Philippa Whitford mentioned Faslane and Trident and their removal following independence. To date the most explicit pledges include: that the whole cost of security and defence will be no more than £2.5billion. 15.000 full-time and 5,000 reserve personnel to include “current raised and restored UK regiments”. But in practical terms, there are many unanswered questions. Will Scotland have a defence force army heavy? What does “earliest safe removal” actually mean when the United Kingdom, rightly or wrongly, believes that its safety and that of NATO requires Trident to remain for the foreseeable future? Will this separate Scotland impose unilateral nuclear disarmament on the UK, and how might that effect any proposal for Scotland to be part of NATO? Finally, how will an independent Scotland deal with the 3,000 service personnel, 800 of their families and 4,000 civilian workers, largely from Babcock Marine, forming a major part of the economy of Argyll and Bute and West Dunbartonshire? These are real people, real families with skilled jobs and part of the Scottish community.
What does all this add up to?
As I listened to Philippa Whitford, I knew I was hearing one positive buzz for independence delivered powerfully and with authority. Someone in the audience even suggested there are huge amounts of oil under Kilbrannan Sound ready for exploitation. I don’t think so ! There is a feeling about, that to be a Better Together proponent is somehow possibly being disloyal to Scotland and that emotional feelings of national identity override more hard headed probing. So questions that raised issues were not really appreciated at the meeting. We need a debate, and that needs to include those precious, often intangible things that bind us to a Union inside the wider national identity of the UK. Culture, language, creativity, democracy, institutions, literature, the Enlightenment, Youth culture, fashion, art and shared history. For anyone seeking to read more see Simon Schama 9th May 2014 on the FT website “A splendid mess of a union should not be torn asunder” www.ft.com/comment
Finally, statements were made about Scotland and its people not being represented in the UK Parliament decision making. I keep hearing this. Over my lifetime there have been many elections when the party I supported was not in the Government of the day, whether at Holyrood, Westminster or even Brussels. But I have always had a representative to whom I can address concerns. That is the valuable democracy we all share. Voting is part of that; my grandmother stood with others to finally get her vote in 1928: she told me I must always use it, so I do. It is important for women to remember that history: in 1918, the Parliament of the United Kingdom passed an act granting the vote to: women over the age of 30 who were householders, the wives of householders, occupiers of property with an annual rent of £5, and graduates of British universities. About 8.4 million women gained the vote. In November 1918, the Eligibility of Women Act was passed, allowing women to be elected into Parliament. The Representation of the People (Equal Franchise) Act 1928 finally extended the voting franchise to all women over the age of 21, granting women the vote on the same terms as men.
I want the very best for Scotland and its communities, just as we all do. The important thing is to vote, and be a part of this historic decision making process.
Sally Campbell
May 2014
