Scotland Decides

10 September 2014

So what have we learned in the run up to the referendum?

The broadcast debates are over, the advertising budgets spent, and no more can be done to influence the outcome. So what have we learned in the run up to the referendum?

Many would say ‘not a lot’. The ‘Yes’ campaign was strong on aspirational hope and a belief that Scotland can do better by going it alone – that fresh start providing the opportunity to address problems without the baggage of ‘how we got there’, and a sense of ‘don’t worry, it will be alright on the night’. The ‘No’s’ played the doom-monger card highlighting the potential risks of Scotland walking an economic tightrope without the UK safety net underneath to catch them if they fall. The unfortunate reality is that neither side presented fully worked proposals particularly with regards to the thorny issue of pensions, perhaps because, without a crystal ball, they couldn’t? 

But some of this ‘grey’ area should have been developed further. What happens if an independent Scotland became a member of the EU? Would UK pension schemes with members across the UK become subject to the EU pension fund directive requiring full solvency?; ‘Yes’ believe a compromise would be negotiated, but what that may look like (assuming it was granted in the first place) no one knows. Similarly on currency, the call and bluff games going on between two camps have yet to be resolved and the future currency of Scotland remains a mystery to us all. 

Elsewhere, Scotland’s lower life expectancy and the possible impact this should have on the State Pension age has long been documented, but neither side has articulated just how they plan to address the fundamental problems that contribute to this - how do we reverse Scotland’s image as the sick man of Europe? - rather than treating the symptoms by adjusting the State pension age (SPA). The demographic challenges of adequate State pension provision are very real in both Scotland and UK – and these challenges will continue to exist irrespective of the referendum outcome.

In the event of a ‘No’ vote, Scotland may be granted further devolved powers, but again it is not yet clear whether these would cover responsibility for pensions. If they do, how different would this be to having this control under independence? – the same challenges would remain. Scotland can afford to spend more on pensions and welfare benefits should it so wish; it comes down to assessment of priorities – money spent on this cannot be spent elsewhere.

With such little clarity on the detail of how policies would work through in an independent Scotland, what chance did the public have of making a rational, informed choice as to their best option? But neither do they know what the ‘status quo’ would provide – the ‘No’ campaign was effectively a coalition of political parties, each of whom may take a different direction should they come to power. Many of the public will feel let down by the quality of the debate, and will cast their vote based on what their heart tells them as the factual information is incomplete. 

One thing is crystal clear – pensions are a political ‘hot potato’ affecting the lives of millions, and will remain so irrespective of the referendum outcome.

Malcolm Paul
Director 0131 456 6820