Smile and be a Villain
This claim turned up in comments on The National yesterday, from John Stuart Wilson. Since it's based on data, it needs to be taken seriously:
However, there are a few points in the above claim which are not clear:
- the Scottish finance industry employs 160,000 people, out of a labour force of 2.6m. This is 1 in 16. Where does the writer get his figure of 1 in 12 from?
- the UK-wide finance industry employs about 2m people, out of a labour force of 32m. So the Scottish economy is no more dependent on financial services than the UK-wide economy is.
- some financial institutions focus on customers in foreign countries, which is why the London financial sector is so keen to retain its access to the EU. How does this square with the writer's claim that banks don't want their customers to be in a different country?
- What's meant by 'located in a foreign country'? Many financial institutions have staff in one country and owners in another: HSBC, Santander, RCI, Clydesdale Bank (until 2016), to give a few household names. If the author means that banks which are currently headquartered in Scotland will move their headquarters after independence, that isn't a big deal. And if he means that they'll move their staff away and close up shop, that's implausible - why would any businessman with a brain walk away from a 5.2m customer base that has a reputation for financial probity?
- the lender of last resort would not be the Scottish government; if the economy went pear-shaped, the lender of last resort would be the IMF, and the banks would stay. Thirty countries in the world have become independent since 1984, and they all have banks. Greece, ranking 24th among European economies in terms of per-capita GDP, still has banks. Why does the writer believe that banks would leave if the lender of last resort were the IMF?
A more plausible explanation of John Stuart Wilson's post is that an independent Scotland would properly regulate its financial sector, squeezing out malpractice, and making it more difficult for the sector to make money. So, as far as financial operators with that mindset are concerned, Scottish independence is a lousy option. Arguing against independence on that basis is of course a thoroughly villainous activity, but until we get answers to the questions above, we can't be sure that John Stuart Wilson's claims are honest and believable. Can we please get sufficient clarification from him to show that his stance on this is an honourable one?
Our largest on-shore private sector employer is the finance industry. It accounts for, directly and indirectly, 1 in 12 jobs. It doesn't want to be located in a foreign country from 90% of its customers. (Ask yourself: how many local authorities and SMEs currently send their monthly pension scheme payments to Belgium to have them managed there?) And it will not accept the loss of a LOLR [lender of last resort] backstop. So independence will cause major job losses in Scotland, as these firms relocate to the rUK.
However, there are a few points in the above claim which are not clear:
- the Scottish finance industry employs 160,000 people, out of a labour force of 2.6m. This is 1 in 16. Where does the writer get his figure of 1 in 12 from?
- the UK-wide finance industry employs about 2m people, out of a labour force of 32m. So the Scottish economy is no more dependent on financial services than the UK-wide economy is.
- some financial institutions focus on customers in foreign countries, which is why the London financial sector is so keen to retain its access to the EU. How does this square with the writer's claim that banks don't want their customers to be in a different country?
- What's meant by 'located in a foreign country'? Many financial institutions have staff in one country and owners in another: HSBC, Santander, RCI, Clydesdale Bank (until 2016), to give a few household names. If the author means that banks which are currently headquartered in Scotland will move their headquarters after independence, that isn't a big deal. And if he means that they'll move their staff away and close up shop, that's implausible - why would any businessman with a brain walk away from a 5.2m customer base that has a reputation for financial probity?
- the lender of last resort would not be the Scottish government; if the economy went pear-shaped, the lender of last resort would be the IMF, and the banks would stay. Thirty countries in the world have become independent since 1984, and they all have banks. Greece, ranking 24th among European economies in terms of per-capita GDP, still has banks. Why does the writer believe that banks would leave if the lender of last resort were the IMF?
A more plausible explanation of John Stuart Wilson's post is that an independent Scotland would properly regulate its financial sector, squeezing out malpractice, and making it more difficult for the sector to make money. So, as far as financial operators with that mindset are concerned, Scottish independence is a lousy option. Arguing against independence on that basis is of course a thoroughly villainous activity, but until we get answers to the questions above, we can't be sure that John Stuart Wilson's claims are honest and believable. Can we please get sufficient clarification from him to show that his stance on this is an honourable one?
John Stuart Wilson's post is patronising drivel. You shouldn't have reposted it.
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