Michael Fry: Muckraking prevents a clean fight

WE NEED fewer slogans and more substance in the debate over Scotland’s future.

WE NEED fewer slogans and more substance in the debate over Scotland’s future.

Muck and fudge have marked the first week proper of the campaign for the referendum on Scottish independence in 2014. Let us hope both sides find means to clean up their act a bit, and firmer ground from which to address us: we would not want them to sink under the weight of their own waffle, would we?

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The muck comes from Better Together and its allies – presumably in the expectation that, if you chuck enough of the stuff, some will stick. We have learned in the last couple of days that an independent Scotland would have a huge budget deficit, that taxes would rise, that spending would crash and that in general the heavens would fall on us. This conveniently follows if you attribute 92 per cent of North Sea oil revenues to England.

John Cridland of the CBI, who gave such a self-evidently impartial assessment, offered the parallel of what happened to Slovakia on its separation from the old Czechoslovakia in 1993: its economy shrank by 4 per cent. It may not be an exact parallel, because the Czechs actually wanted rid of the Slovaks, who they regarded as whining scroungers. This may sound familiar, but the English have not yet said they want rid of the Scots, at least not officially.

More to the point was that the new Slovakia and the new Czech Republic found themselves saddled with a problem going back many years, connected with the joys of socialism they had experienced. In the midst of the slump resulting from the end of socialism the Czechs, too, found the going heavy. Their industrial performance in 1993 included a fall in output of 5 per cent. Is Cridland forecasting a similar sequel for England in 2015?

It is not one atypical year of crisis that we should look at, but what happened afterwards when things returned to normal, or rather to a new normal. They have carried on, not in perfect friendship but at least in reasonable harmony, which is, after all, in the interest of both.

Any initial Czech glee at leaving the idle Slovaks in the lurch has been confounded by the fact that the next-door neighbours put in the superior economic performance over the last two decades, although they have yet to catch up with the Czechs. Anybody who has been to the Slovaks’ beautiful capital of Bratislava, or even to more remote towns such as Kosice and Prešov, will be able to sense the verve of a nation that feels itself liberated.

How did it liberate itself? As an independent country, it had the power to pull itself up by its own bootstraps: personal and corporate flat taxes at 15 per cent, no deductions from dividends, employees working hard and working flexibly because they keep what they earn. We cannot conclude that an independent Scotland would follow the same path as Slovakia – it probably would not. But the choice would be there. Enough of muck? Turn to fudge. It has been coming from Yes Scotland, which could easily rename itself Scotland Maybe But Only If ...

The proviso represents a perceived requirement that everything in the Scotland of the future, even in an independent Scotland of the future, should remain so far as possible just as it is in the dependent Scotland of the present. This looks to me like a logical impossibility, but if not I take refuge in the immortal words of The Leopard, the hero of Giuseppe di Lampedusa’s great novel, set in a Sicily no less suspicious than Scotland of the real world round it: `In order for everything to remain the same, everything has to change.’

I would say the workers’ paradise that has been built, largely by the Scottish Labour Party, in the last half-century bears quite a close resemblance to the various versions of the workers’ paradise that existed in Eastern Europe till that springtime of nations in 1989: the same grimy towns, the same dreary housing schemes, the same dowdy proles, the same working to rule because there is no use working for anything else, the same culture of corruption among apparatchiks self-selected for their unquestioning conformism. When it does change, if it does change, it too will change through upheaval And will it be bliss in that dawn to be alive? Not, so far as I can judge, if the Yes Scotland campaign has its way.

Take, for example, the matter of the currency. It may well be appreciated why nobody in his right mind could want to join the euro at the moment, though some vague promise doubtless would be extracted from the independent Scots. But to me the prospect of continued attachment to sterling is scarcely more palatable. It is not exactly as if the British pound is the Swiss franc, with a sound history of maintaining its value over many decades. An unstable currency serving an economy largely reliant on one of the world’s great centres of speculative investment, and with a domestic environment at times geared to the deliberate inflation of house prices for the sake of homeowners’ votes, is not, to say the least, a formula for low inflation. I have no doubt that the more subdued Scottish economy has for a long time been run with interest rates far higher than are merited by its underlying conditions. In Scotland there would then have been a permanent deflationary bias.

Compare all that with, for example, the history of the Norwegian krone. I recommend study of its record to anybody as an example of a really well-managed currency.

There are often great storms on the international financial markets but through them the krone has sailed serenely on, seldom suffering any great fluctuations and only for a short time if it does.

Presumably the aim of policy has been to maintain the best available conditions for exporters, and the warmest congratulations must go to successive governors of the Norwegian central bank for having carried through that policy.

I dare say every so often the governor offers a slap-up dinner to the directors of the oil companies at which they all agree what would be good for the krone in the period ahead.

Why should Scotland not do the same? It seems to me preferable to being (at best) one voice among half-a-dozen at the Monetary Policy Committee of the Bank of England.

But I fear that, up to the referendum in 2014, we will hear little of such substantive issues, as opposed to the mouthing of slogans which form the normal content of Scottish politics. Would it not be nice, though, if for once, just once, the muck hit the fudge?