Scotland's Economy

Project fear relaunched to justify backtracking on vow

Screen Shot 2015-04-10 at 16.01.17Westminster never wanted to give Scotland any more powers – they fought tooth and nail to keep devo max off the ballot paper because they knew it would either win or split the No vote, allowing Yes to win out right.  They only promised more powers when their own polling suggested they were in danger of losing, and they have been backtracking ever since.

They know that more powers, specifically the vow of substantial new devolution is very popular and they know they can’t attack it or be seen to obviously backtrack. So they have chosen the deceitful tactic of targeting one of the foundation stones of more powers full fiscal autonomy, because they see it as vulnerable to political spin, since people don’t really understand what it means. They are clearly about to throw the mother of all scaremongering campaigns against full fiscal autonomy, but we have been here before.

We will hear fears of a big deficit with full fiscal autonomy, that differing tax rates will mean confusion and a race to the bottom. We will hear from Westminster’s friends in big business who will talk about uncertainty affecting investment; they will claim it will cause a huge black-hole and threaten pensions, to place older people in fear of losing their paltry incomes. And why not? It worked during the Independence referendum and they calculate that it will work again. You might think its a suicidal tactic, after all, talking Scotland down and referendum scaremongering sunk them in the polls. But a Labour insider boasted to me that the more powers argument is keeping the SNP vote high, and if they destroy the case for more powers then they destroy the surge.

Project fear is alive and well, Westminster’s new ‘No to more powers’ campaign has Jim Murphy as its new cheerleader and will come in three stages.

Stage one was when the London media jumped on YouGov research, claiming the vow didn’t make a difference. This was the groundwork for a retreat from more powers. You can see their rationale – “we offered a vow but it didn’t make the difference therefore we don’t have to implement it.”

Stage two is to undermine the more powers rationale with scare stories and then, avoid the fury backing out of the promise would create, by scaring enough people into thinking it was actually a bad idea so they’d get away with it.

Stage three will be for Westminster to pass a massively watered down more powers offer so they can pretend the vow as delivered, despite the fact that nothing of any substance will have been devolved and certainly not the job creating, economy growing powers the people want and deserve.

Yes we couldn't believe it either!

Yes we couldn’t believe it either!

The obvious problem is the SNP would call this a material change to the constitutional promises and that would mean they would be duty bound to call for a new referendum in their 2016 Holyrood manifesto. They would likely be able to command a majority under such circumstances and so we would go again. Cameron has the solution, saying yesterday he “would not sanction a second referendum on Scottish independence, insisting that the issue had been ‘settled for a lifetime’.” 

Unsurprisingly this has now been backed up by Milliband who today essentially said that he wouldn’t let Scotland down by giving us more powers. Clearly the unionist parties intend to still show a unified face to Scotland.

There are several problems with this approach. First of all, banning the right to call another referendum will backfire more severely than project fear on the votes for the unionist parties in Scotland, (David Cameron doesn’t care). A precedent has been set, we now know the process for achieving independence; if a party with a referendum in its Holyrood manifesto can command a majority they have the right to call one. If Westminster outlaws future referendums on independence having failed to deliver the promises that won the last one, then that amounts to nothing less than a full scale assault on democracy.

Secondly, the whole premise is based on a lie, the Vow did matter – the YouGov poll stated the vow was the main motivation for voting NO for 3.4% of No voters. That means the vow created the single largest weekly movement in the campaign, stopping the YES momentum dead in the last week, and suggests that without it the result would have been even closer. But more importantly the “main reason” definition hides the fact it was a contributory factor for many, many more whose main reason lay elsewhere but were still undecided. Research done by Lord Ashcroft in the immediate aftermath of the referendum showed the VOW itself was just one of many promises of more powers which had a  cumulative effect of more powers promises was one of the main deciding factors. Ashcroft asked No voters what was the most important reason for them to vote No.  25% of No voters ranked “a No vote would still mean extra powers for the Scottish Parliament” as their most important reason for voting No.  It it is reasonable to assume a Yes vote was more than possible if those promises had not been made or if the people had known they would not be delivered.

Same old rubbish but some will fall for it -again

Same old scares but some will fall for it -again

In Wednesday’s Leaders Debate Jim Murphy claimed full fiscal autonomy would result in a £7.6billion black hole in Scotland’s finances, based on calculations done by the Institute for Fiscal Studies. The problem is that his claim is just a load of scaremongering nonsense. More powers isn’t just about who pays the bills, it’s about the Scottish Government getting control over powers to create jobs, to create a fairer and more equal society that will make more people economically active, to invest in productivity improving measures that will grow our economy, to implement bespoke tax and regeneration policies that will increase revenues and, in the medium to long term, make the bills easier to pay.  It would also take negotiation on service charges and a fairer cut of defense costs, as well as debt interest payments that would reflect Scotland traditional fiscal contribution to the UK.  That would save Scotland from billions a year being ripped from our national accounts and labeled a deficit.  The best time to negotiate these is when Scotland holds the balance of power.

In short, if we have a black-hole sized deficit now under Westminster’s control then that is Westminster fault! Must we give Westminster more time with all the economic powers retained so it can do more damage to Scotland’s economy?

The Westminster parties don’t want Scotland to have more powers because if we made it work that would mean in a future referendum they wouldn’t be able to create uncertainty and fear, as voters would see the nation was pretty much independent already.

A staged movement towards more powers including full fiscal autonomy, an evolution rather than revolution, is what the people of Scotland have a right to expect. It’s what was promised during the 2014 democratic process and it had a major impact upon that process.

Everyone involved in the YES movement, no matter what party you back at election time, must start campaigning now to have the powers we were promised delivered – or it’s all been for nothing.

Do you think Scotland should be granted the powers it was promised, Yes or No?

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About the author

Gordon MacIntyre-Kemp

Gordon MacIntyre-Kemp is the Founder and Chief Executive of Business for Scotland. Before becoming CEO of Business for Scotland Gordon ran a business strategy and social media, sales & marketing consultancy.

With a degree in business, marketing and economics, Gordon has worked as an economic development planning professional, and in marketing roles specialising in pricing modelling and promotional evaluation for global companies (including P&G).

Gordon benefits (not suffers) from dyslexia, and is a proponent of the emerging New Economics School. Gordon contributes articles to Business for Scotland, The National and Believe in Scotland.


  • well its about time Business for Scotland started counteracting the :claims £7.6b budget hole; £15b loss to Scottish economy due to oil price drop – where was the lucid counter to this with facts ? We are now seeing a return to the too wee, too poor myth. We need BFS to spend some time setting up on the website the facts and figures of taxes raised in Scotland from the various industry sectors and govt spending, a simple balance of accounts that people can use in arguing our case. The pensions issue is also still used against independence and FFA.

  • The way I see this is , this deficit is a budget deficit and it is based on the present budget presented by Osbourn . It beard no relation to what a budget presented by a scottish Government would be and in the case of full fiscal autonomy or independence ,that would be several years in the future. It seemes infantile to use a deficit based on incompitence to compare with a possible budget presented by a Scottish Government which up to now has a very good fiscal record.
    This so called black hole is a ficticious aportionment of Scotlands share of a deficit which includes all the things that an independent Scotland would not have such as Trident ,Westminster ,House of Lords Etc ,Etc and most of the things that a Scotland with full fiscal autonemy would not be paying for.
    For Labour to say that a deficit would impact on pensions in an independent Scotland ,is basicly lying as what they are doing is attempting to present a budget for an independent/ full fiscal autonomy Scotland some years in the future based on what a possible aportionment of a present deficit is at present, so therefore what they are in efect doing is saying that in the future if Labour was to be in power in an independent/full fiscal autonamy Scotland then THEY would lower pensions. (appoligies for spelling ,dyslexic and spell check is not working)

  • “…the YouGov poll stated the vow was the main motivation for voting NO for 3.4% of No voters”

    So, six months after the referendum, 3.4% of No voters say the promise of more powers was their main motivation for voting no.

    On 18 and 19 September 2014, Lord Ashcroft Polls asked No voters what was the most important reason for them to vote No. They were given three options and asked to rank them in importance. The options were: the risk of independence is too great; a strong attachment to the UK; a No vote would still mean extra powers. 25% of No voters ranked “a No vote would still mean extra powers for the Scottish Parliament” as their most important reason for voting No.

    The 3.4% of No voters who still say that extra powers was their main motivation for voting No would not have swung the referendum; but at the time it wasn’t 3.4% who gave this as their main reason it was 25%. That 25%, who expected extra powers, was decisive.

  • In combatting these black hole claims, it should be robustly pointed out that UK now runs an annual ‘black hole’ of £90 odd billion and the share of this attributed to Scotland (£7.6billion or whatever) is based on some dodgy or opaque assumptions, such as what counts as UK infrastructure spend (HS2 for example)and maybe also any cases where Scottish tax revenues are credited to rUK if head office or point of export in rUK. We urgently need from the Yes side a clear exposition of how FFA, or devo-max if we want to call it that still, could work. Has this work not been done already? Am I right in thinking that there would need to be an agreed calculation representing Scotland’s fair share of UK-wide services and the UK deficit, and a charge would be made for our share of annual interest payments made by UK on their total deficit?

  • This is an extract from an article in ‘The Herald’ on 11 February, 2012 –

    ‘But in a contribution to the UK Constitutional Law Group the experts say allowing Westminster to grant the referendum power should not be an acknowledgement of sovereignty.
    “It is important any such agreement should be not taken as an unequivocal endorsement of the view Westminster alone is entitled to authorise a referendum on the constitutional future of any part of the UK,” they say.’

  • When did the name change from Home Rule or Devo Max? FFA will sound very complicated (a new SNP ruse) to the readers and watchers of the Record and BBC.

    At the end of the day, does it matter how many people voted NO because of the Vow? What does matter is that the Vow (Home Rule/near Federalism) was made and therefore must be adhered to. If it is not then Cameron, Milliband, Clegg, Brown and the Daily Record were lying to the Scottish public. Oh…wait..

    O/T slightly..Now that oil has been discovered in SE England does that mean their economy is now doomed as well?

  • Alex Salmond put his finger on it when said that folk didn’t want to appear foolish by admitting they were swayed by ‘the vow’ into voting ‘No’. Nobody likes to admit being taken for a fool and would tend to say it was something else that had decided them.

    Very perceptive.

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