Edinburgh-based fund manager Angus Tulloch on why he’ll be voting ‘yes’ in the Scottish referendum.
Should Scotland vote to separate from the UK in September? Or should it vote to remain part of the UK?
I know what I think, and right now more people agree with me than not: the unionist camp looks most likely to win the referendum in September. But within the separatist camp there are several people whose opinion I respect on most matters, and I have long been keen to understand what they see that I don’t.
So I asked Angus Tulloch, an Edinburgh-based fund manager (and one of the UK’s best fund managers at that), to sit down and talk me through what it is that makes him want to vote ‘yes’. We both have a lot of our meetings at one or other of the branches of Valvona & Crolla (Edinburgh’s best deli/café), so that’s where we meet. Coffee ordered, we dive right in.
Is Scotland really so different?
The union has been a “great thing for everybody” for years, says Angus. But times have changed. “People in Scotland feel increasingly they’re going in a different course to other people, particularly those in the southeast of England.” There is a greater feeling that “things should be a little bit more equal” and a “sense of wanting to control one’s own destiny”.
I can see the second bit (everyone wants to control their own destiny and the Scots could actually do so). But while I can accept that lots of people in Scotland believe they have different values to the English, the Irish and the Welsh, I remain to be convinced that it is true. Most surveys I have seen show that, across the UK, attitudes are more or less the same (see the British and Scottish Social Attitudes surveys).
Angus isn’t having that – he points to education: a higher percentage of people in Scotland go on to higher education than in the wider UK, for example. It is also astonishing how many world-class universities Scotland has, given its size.
It’s true that Scotland’s universities are fantastic, but given that I am currently having personal experience of the failings of state primary education in Scotland, I’m not sure I can accept the general premise that basic education is better in Scotland than in the UK as a whole.
The potential of Scotland’s resources
We move on. It is, says Angus, also about a “desire to be accountable”. People “constantly say we are being subsidised when I don’t believe we are… I would like to prove that we can stand on our own two feet… we’ve got very strong assets”.
There is endless argument just now over how rich Scotland is or isn’t (the answer depends on how you allocate the oil; how you forecast oil revenues; and how you adjust the UK figures to back out Scottish GDP numbers).
But, says Angus, it doesn’t really matter if we are in the “top decile or the top 20 or the top 50” – compared with other parts of the world, Scotland “is a rich country”. It also has huge potential “in terms of energy and water”.
Given the right policies, it could be growing an awful lot faster than it is – most small countries in Europe are growing much faster than Scotland at the moment. That’s “tragic”.
What are the right policies, I wonder. Right now, says Angus, government policy is very “southeast-centric”. Take the HS2 rail project: “the automatic assumption is that it starts in the southeast and moves to the north”, rather than starting from the north.
I don’t really get this argument – I’d love a fast railway to start from outside my front door, but if railways are for moving people around, surely it is best to start building them where most of the people are?
But it isn’t just about railways, says Angus. HS2 is a symptom of the lack of thought given to Scottish connectivity by Westminster. There is no particular lobby against expanding airports in Scotland, yet “all the talk is of developing airports in the southeast”.
Meanwhile, the UK has the highest airport taxes in Europe: an independent Scotland would half, then abolish them, and get more people travelling through pretty quickly.
OK, I say, that’s a reasonable micro-policy – although I guess the lost revenues from abolition would have to be made up elsewhere. But what macro-policies could Scotland put in place that could help it to grow faster – growth being the best way to reduce inequality?
Get rid of the dependency mindset
The key here, says Angus, is that “if you have a small country in a partnership between business and government, you can very often achieve an awful lot more than you would” when you are just a small element of a country in which the government has “many, many other priorities”.
Too much of the business community is focused on what can go wrong rather than right. But “if you empower people you are always staggered as to what they can achieve”.
The number of entrepreneurial, well-educated Scots you meet abroad is “remarkable”. Get rid of the “dependency mindset” in Scotland, create the right conditions and “some of them will want to come back and start businesses back here”. Scotland could have a lot of the Singapore about it.
I love all this talk. I’d really like to live in a small, wealthy nation, running a fiscal surplus, setting up a sovereign wealth fund and jam-packed with educated, entrepreneurial people. But how, I ask Angus, do we get from here to there? However you do the numbers, you can’t make state spending as a percentage of Scottish GDP much lower than 45%.
This problem is not specific to Scotland (all Western states are slowly collapsing under the weight of debts run up as a result of overly enthusiastic vote buying), but it makes Scotland very different to Singapore.
There is no easy answer, says Angus. But it is a challenge for everyone, and it is important to recognise that, however it might seem, “we’re not voting for any particular party” in the referendum. “We’re voting for the right for people to take responsibility for getting their act together, and making this a more prosperous nation.”
Balancing the books
What about the state of the public finances in Scotland at the moment? “John Swinney [Scotland’s finance minister] has managed to balance the books extremely well to date.” And the fact that Scotland will start with debt and run a hefty deficit from day one?
Scotland “will have to stop running a deficit”, or only run one if it is spending on infrastructure: “I don’t think we have been spending nearly enough on infrastructure.” But how will it stop running a deficit?
Everyone has to do this, says Angus, and in Scotland “I think people will take the pain if they feel accountable and responsible”. They don’t feel they have the government they want – when they do, when local accountability is in place, these hard decisions won’t be so hard.
“We’ve been through a long period in which everything has become much larger… these things tend to go in waves… and I think we will now move to… have much more local accountability.”
That local accountability will, however, come hand-in-hand with being part of a different, very large unit: like most separatists, Angus is keen on Scotland being part of the European Union.
I’m always lost on this bit of the argument. Why, I ask, would Scotland not want to be part of a federation with its nearest neighbour and border-sharer, but want to be part of one with Europe? “Because Europe has got to combine on certain things in the external political area… we have to combine and look at things much more globally than we have in the past.”
The numbers are meaningless
We move on to talk about the numbers – how wealthy is Scotland really? How big would the deficit be? How would the tax regime change? But these questions verge on pointless. We don’t have good data now, and we’ve no idea who might be in government post-independence. So, the future is even more impossible to forecast than usual.
Add it all up and the argument comes down to this: there’s trouble ahead, but an independent, accountable Scotland will be better able to make the tough decisions for a better future than it has in the union.
Here’s the thing. I agree with Angus that a Scotland that looked rather like Singapore (perhaps with a tad more democracy) would be nice. But I see two problems.
First, I’m not sure the other voters for separatism are after the same kind of state. Second, even if they were, I can’t see how we get from here to there. Is it really conceivable that Scotland could be the first Western nation to have a go at rolling back the welfare state? Angus thinks yes. I think it’s too unlikely to be worth the risk of voting yes.