- Posted August 26, 2014 by
London, United Kingdom
Interview: The Londoner
At the beginning of my trip, I spoke with Nicholas Leatham in London in hopes of getting a good London-area view on the Scottish referendum. Also, Nick has a strong background in finance so he will be able to shed some light on some of the tricky economic issues surrounding the independence vote.
Bo Brennan: Could you go ahead and introduce yourself?
Nicholas Leatham: I am the finance director for a leading advertising agency and I live in London. I am originally from just outside London near to Reading and I have a German mother and English father.
BB: From your understanding of finance and economics, what do you see are the benefits for Scotland if they become independent on September 18th?
NL: Without knowing the detail it is hard to say precisely, but my understanding is that it would be control of the expenditure of their own tax revenues and the benefit of the income generated from any assets that remain in Scotland. Most notably this includes the government revenue generated from the North Sea oil fields. There would also be all the tourism revenues that are brought in from visitors to Scotland. Scotland may also choose to make their country appealing to investors by keeping the rates of corporation tax low and therefore may be better able to attract foreign investment (rather like Southern Ireland).
BB: What about the economic difficulties that Scotland will face?
NL: The main one that seems to be pushed is the loss of the GBP sterling currency. There would be costs associated with creating or switching to any new currency, but there is nothing to say that the value of this currency couldn't be pegged against the sterling pound.
I think the main impact would be the loss of tax revenues, due to large corporates favouring to move their operations to the UK from Scotland, rather than remain in a newly formed independent state. At least for a reasonably long period of transition. Most big businesses don't like uncertainty and there will be questions that cannot be answered at this stage in remaining in an independent Scotland.
I'm also not totally sure of the facts, but my guess is that the average net GDP contribution in Scotland is lower than the rest of the UK and so as such the UK is helping to subsidize Scotland. As far as I understand, unemployment and health care costs are higher in Scotland than in the rest of the UK. However, I may be completely wrong, and this impact may be negated by the ability to keep the full value of income generated from their own assets.
It is also not clear as to whether they would be able to remain in Europe, which may impact their trade and subsidies from the EU and there may also be costs involved in applying for re-entry into the EU and completing the assessments.
You also have the costs of issuing new passports to all residents and setting up border controls etc.
BB: How do you think independence would economically impact the rest of the U.K. and, more specifically, London?
NL: It would undoubtedly make the UK weaker, but would probably be unlikely to have any significant long term impacts. Without knowing the net GDP figures and the tax expenditure versus treasury receipts ratios I would not know what the financial impact would be. It would again create a period of transition and uncertainty and would hinder, for a period of time, the UK, in its ability to compete as effectively on the global stage.
BB: In your opinion, does Scotland 'feel' far away from London? In terms of culture and values, does the average person in Scotland have much in common than an average person in London?
NL: The cultures and values are different and should be celebrated for this reason, but no different from the tens of cultures you find up and down the country, whether in the midlands, north east or west Cornwall etc. The UK has a long history and therefore has many different cultures and, with its attraction to foreigners, the culture is constantly changing and becoming more holistic and more multi-cultural. This does not mean we lose our identities, just that we gain more tolerance and acceptance of the myriad of identities that surround us. Economic factors contribute to our ability to move forward and strengthen our willingness to accept and understand one another.
Scotland is a developed western European nation and therefore there is as much in common between Londoners and Scotland as there is with all the developed European nations. There is also a very transient population in both geographies.
BB: Is independence going to affect your personal or professional life at all?
NL: Not likely. My business is centered in London with an international client base. We support all brands and businesses that come to us whichever nation they are from. As we return to growth from one of the longest recessions in history it would be a shame if we were to slow down the path to recovery due to creating uncertainty or making ourselves less competitive. Cultural identity is not created nor preserved through independence but economic stability can be undermined if it is not managed well and especially at such a vulnerable time.
BB: What do you think it means to be British?
NL: Understanding that we come from a whole range of backgrounds and cultural identities and being willing to accept this and being proud of being part of a long history as a nation.
BB: Do you think Scotland will vote yes? If you had a say in
the matter, how would you vote and why?
NL: I think it will be close, but I think they will vote no and despite the emotional feelings, will know in their hearts that this was the better choice. I would vote No as I do not believe that in this modern world there is a place for too much nationalistic pride. It is better to focus on preserving your culture and promoting it to the world and keeping an open mind as well as being collaborative with all nations. The more we keep together the stronger we are.