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16/10/13 10:00

Independence from the Political and Economic Union

First Minister Alex Salmond
Dalrymple Hall
2 September 2013

In the sixth and final in a series of speeches the First Minister delivered over the summer, Mr Salmond set out how, following a vote for independence in next year's referendum, Scotland will continue to participate fully in five unions - the European Union, a defence union through NATO, a currency union, the Union of the Crowns and the social union between the people of these isles - but will seek independence from the political and economic union.

Below is an abridged version of the First Minister’s speech, focussing on its main theme, or you can listen to the full speech here.


There is a final union, the political and economic union, which we seek independence from.

We do not want decisions on the economy, welfare and foreign affairs made by a Government we did not choose and do not support.

I am 58 years old. For almost two thirds of my life, Scotland has been ruled by Governments that it did not elect. That is simply no longer democratically acceptable.

It is not just democratically unacceptable, it is socially and economically unacceptable. An independent Scotland would never have participated in the illegal invasion of Iraq, and it would never have introduced something as socially regressive as the bedroom tax.

Last Thursday, we avoided a headlong rush to engagement in Syria by the skin of our teeth. But even then, the Commons rejected a positive amendment supported by the vast majority of Scottish MPs for finding a route to a solution through the United Nations.

An independent Scotland would look to play a constructive part on the international stage – we would work with our allies to help the victims of conflicts, contribute to conflict resolution and ensure that war criminals – people who use chemical weapons - are indicted before the international criminal court.

It’s worth saying a bit more about the bedroom tax, too. In 1748, the UK Government introduced a ludicrous tax called the window tax to Scotland - the more windows a house had, the more tax you paid. It resulted in blocked-up windows in houses across the country, as people tried to reduce their tax bills.

The window tax has become famous because it was so ridiculous. But actually, the bedroom tax is even worse. The window tax was based on the idea that there might be a link between the number of windows a house had, and the amount of wealth its owner had. There was at least some sort of progressive intention behind it. There’s no such intention with the bedroom tax.

The bedroom tax is a perfect example of our current democratic deficit. Not just because it’s unjust – although it is, deeply unjust; 80% of the households affected include a disabled person – but because it is legislation which would never have been passed by a Parliament with Scotland’s problems and priorities at its heart.

It is a policy driven primarily by rising rental and housing benefit costs in London and south-east England, not here in Scotland. And yet in Scotland, 100,000 people will be penalized unless they move to single-room accommodation – despite the fact that we only currently have a supply of 20,000 single-roomed socially rented houses.

By contrast, successive Scottish Parliaments – and this is the parliament as a whole, rather than any single party - have legislated for progressive purposes.

Tomorrow is the first day of the next parliamentary session. I’ll be setting out the bills which this Government will introduce into the Scottish Parliament over the coming year.

So it’s worth looking back at the track record of the Scottish Parliament over the last 14 years.

The first Parliament, from 1999 to 2003, established a right to personal care for the elderly – something which currently helps more than 77,000 people across Scotland, but benefits far more by providing a sense of security, greater peace of mind. The second parliament took bold action to tackle Scotland’s health inequalities through the ban on smoking on public places. The third parliament reintroduced free university tuition. This parliament is seeing world leading action to tackle Scotland’s relationship with alcohol, and legislation to expand and transform early years’ education and care.

At the same time, we have adopted policies to support economic growth. For example here in Aberdeenshire, more than 5,000 businesses benefit from the small business bonus scheme. That’s 45% of all business properties in the area.

These achievements don’t belong to any one party. Many of them commanded support across the parliament. That’s not surprising. It simply reflects the fact that members of the Scottish parliament – of all parties – have worked together to reflect the values, and promote the aspirations, of all of you - the people who voted for them.

But although this Parliament has introduced measures to make society more cohesive and more equal, we live in a state – the UK – which is one of the most unequal in the developed world.

By next year, the UK Government’s cuts to welfare spending will total almost £2 billion in 2014-15. Most of it money taken out of the pockets, not of the out-of-work, but of those in work and earning low wages.

Yet last year, the UK Government announced £350 million more of spending on the next stage of Trident renewal. That money is barely a third of one per cent of the estimated £100 billion lifetime total cost of the decision to replace the Trident system.

How can any Government choose to embark on expenditure of £100 billion, to renew Europe’s largest concentration of weapons of mass destruction, while implementing socially regressive policies such as the bedroom tax across the country?

European nations such as Denmark, Sweden and Norway are among the ten most equal countries in the Organisation for Economic Co-operation and Development.

Under devolution we can frame policies which allow us to do a bit better than the rest of the UK, to mitigate Westminster’s mistakes.

With independence, decisions about Scotland’s future would be taken by the people who will always make the best decisions – the people who live and work in Scotland.

I just want to outline some of the positive choices an independent Scotland could make. These are just four options out of hundreds – the real point is that we would have the ability to make these choices.

It’s approximately 50 years since oil was discovered in the waters off the north east coast. The squandering of our oil wealth is one of the greatest pieces of economic mismanagement in this nation’s history.

A generation ago Scotland was more prosperous than Norway. Both countries discovered oil in similar quantities. Now Norway is over 60 per cent more prosperous than the UK or Scotland.

But we know that there are decades more reserves of offshore oil and gas. So an independent Scotland could establish an oil fund – creating stable public finances ensuring that our natural resources benefit future generations – not just this one.

A second choice relates to Scotland’s higher and further education system. People come from around the world to study and to work in Scotland. Instead of discouraging that, as the UK Government is trying to do, why not encourage it? Independence would allow us to attract students and skilled workers to come to Scotland.

A third choice would be to use our taxation powers to boost our competitiveness. For example we could eliminate aviation passenger duty to encourage more direct links to Scotland.

Price Waterhouse Coopers has found that reducing or abolishing air passenger duty could more than pay for itself, provided we had control of all tax revenues. The reason is obvious - increased receipts from other taxes, such as VAT from tourism, would more than compensate for the reduction in APD.

It’s the holy grail for politicians or economists to be able to reduce a tax while increasing revenues. Yet at present, Scotland can’t take this simple and hugely beneficial step to increase our competitiveness. For Fraserburgh – forty miles from Aberdeen Airport, but 600 miles from Heathrow, that would make a huge difference.

And as well as creating a more prosperous country we could build a fairer country. That’s a fourth choice we would have. We could abolish the bedroom tax and establish a welfare system which meets Scotland’s needs and Scotland’s values.

Conclusion

Ladies and gentlemen, the six unions I have spoken about this summer show that an independent Scotland would maintain and strengthen its relationship with the rest of the UK, the European Union and countries from across the globe.

The political and economic independence we seek means that we can renew and recast those relationships, and also make better decisions for Scotland while also

A Scottish Social Attitudes Survey earlier in the year asked whether people in Scotland trusted the Scottish government to act in Scotland’s best interests. 71% did. For the UK government, the figure was 18%.

It’s not surprising that there is already a clear majority of people in Scotland who want the Scottish Parliament to have control over welfare and taxation. By September of next year, I believe that that support will have turned into support for independence. The poll today in the Sun suggests that this process might be faster than I anticipated.

A vote for independence will complete the decision-making powers of the Parliament.

With independence, we can make our own decisions, not mitigate other people’s mistakes. We can deliver for Scotland, not lobby in London. We can create a welfare system that makes work pay without reducing people to penury or despair. We can use our tax powers to encourage innovation, investment and job creation across all parts of the country.

And we can use all the powers of independence to build a fairer and more prosperous country.


Background:
During the summer of 2013, the First Minister made 6 major speeches on an independent Scotland’s place in an interdependent world. He put forward the view that Scotland is currently a member of six unions:

  • The political and economic union
  • The social union
  • The currency union
  • The union of the crowns
  • The defence union through NATO
  • The European Union

The Scottish Government wants to become independent from one of these unions – the political and economic union.

The social union will remain, regardless of Government policy, since it rests on ties of history, culture, family and friendship which are not dependent on Governments.

The current Scottish Government will choose, as a matter of policy, to remain in the currency union, the union of the crowns, the defence union and the European Union; and it will use the powers of independence to recast these unions and make them work more effectively for Scotland and Scotland’s neighbours.

The six speeches were made on the following dates -

12 July, 2013 – Nigg Fabrication Yard – introduction to the sequence of speeches
16 July, 2013 - Chief Minister’s Lecture, Isle of Man – Currency Union
25 July, 2013 - Shetland summer cabinet - Defence Union through NATO
21 August, 2013 - Hawick summer cabinet – European Union
28 August, 2013 - Campbeltown summer cabinet – Social Union and Union of the Crowns
2 September, 2013 - Fraserburgh summer cabinet – Independence from the Political and Economic Union

The idea of the six unions was explained in each speech, meaning that there are some overlaps in content between the six speeches. In addition, each of the summer Cabinet speeches began with very specific local references relating to the programme of events around the cabinets themselves. We have therefore published abridged versions of the speeches, focussing on the major theme of each speech.