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This Week in Brexit: What Scotland Lost

by John Brian Shannon

Congratulations to Prime Minister Theresa May for working out a ‘confidence and supply’ agreement with Northern Ireland’s Democratic Unionist Party (DUP) to allow the present minority Tory government to continue in office.

Theresa May strikes ‘confidence and supply’ deal with DUP

And congratulations to DUP leader Arlene Foster for negotiating so well on behalf of her jurisdiction, thereby gaining £1.5 billion in additional infrastructure and other funding.

That’s a ‘Win-Win’ for the Tories and for the Democratic Unionist Party — and more importantly (sorry, Theresa and Arlene!) it’s a ‘Win-Win’ for residents of Northern Ireland.

Theresa May signs ‘£1.5 billion’ deal with the DUP

Infrastructure in Northern Ireland is in bad shape and the funding appears at an opportune moment, as there comes a point when it becomes cheaper to tear down a bridge (for example) than to pay ever-increasing maintenance costs.

The same is true for all infrastructure. Whether roads, bridges, hospitals, schools, airports, or the underground infrastructure that carries water to homes and businesses, all of it has a ‘best before’ date where leaving vital infrastructure spending for too long can cost more than the savings of not doing the work.

The Conservative/DUP deal: what it says and what it means

Of course, £1.5 billion isn’t going to fix it all. But I wouldn’t be surprised if two years of successful DUP ‘confidence and supply’ support gets the residents of Northern Ireland additional infrastructure spending allocations, courtesy of DUP leader Arlene Foster and Prime Minister Theresa May.

And why not? Arlene Foster prevented a divisive and perhaps extended Parliamentary crisis — one that would’ve prevented much good from being done in the United Kingdom.

Speaking of which; See how infrastructure spending is increasing in Northern Ireland, and how it isn’t in Scotland? Not only additional spending, but PM May and DUP leader Foster also negotiated more devolved powers for Northern Ireland.

NOTE to Nicola: It’s great to have a particular ideology, but when it costs your jurisdiction £1.5 billion in the form of missed infrastructure funding, it’s time to review what you think you’re accomplishing!

Loss of opportunity is also a metric by which UK leaders must be measured — it certainly is for heads of government everywhere else — and not as much as it should be, but it’s still an important marker of successful leadership.

Nicola Sturgeon of Scotland’s SNP missed the boat. Arlene Foster of Northern Ireland’s DUP didn’t. And UK Prime Minister Theresa May begins to look like a bit of a deal-maker, which can only be viewed as a good thing as we head into Brexit. Well done, Theresa!


Related Articles:

Why Scotland needs the UK

by John Brian Shannon | December 22, 2016

If Scotland chose to become an independent nation it would become a prohibitively expensive operation in very short order, and Scotland would need to find a big brother to pay its bills — as Scotland isn’t economically viable on its own.

The first thing that any country must consider (whether it’s a brand new and independent country or not) is national defence and public security. It’s the historical reason that nation-states were formed in the first place and without national defence and public security, a country is nothing. It then becomes the target of a hostile takeover.

Therefore, Scotland would require its own (viable) military from the first day of independence. Requiring immediate and large-scale expenditures and an annual operating budget.

The operating budget would be equal to $10 billion per year to properly maintain the force. But the first year especially, would be very costly — as a brand-new and fully-functioning from Day One military, would need to be created from scratch.

First purchase: An entire Navy – $5.6 billion for hardware alone

Britain - If Scotland separates from Britain, it will need four Navy Destroyers in order to protect it's islands, sea-lanes and regional interests. Pictured here; the French Navy destroyer FS Forbin (D620) in the Arabian Sea (U.S. Navy photo by Mass Communication Specialist 2nd Class Rafael Figueroa Medina/Released)

Pictured here is the highly regarded French Navy destroyer FS Forbin (D620) in the Arabian Sea. (U.S. Navy photo by Mass Communication Specialist 2nd Class Rafael Figueroa Medina/Released)

If Scotland separated from the United Kingdom, it would require four modern Navy Destroyers in order to protect its far-flung islands, sea-lanes and regional interests, and such vessels typically cost $250 million to $1 billion each, depending upon the type and capability level.

An independent Scotland would spend $2 billion on new destroyers alone

That’s before training and hiring the crews, and provisioning those ships with food, fuel, and ammunition (all combined, these provisions are called ‘ship’s stores’) and building the necessary naval port facilities, and training and hiring of onshore maintenance and security staff — all of which would come from the annual defence budget.

In case of Brexit, Scotland would need Navy frigates comparable to the highly capable Royal Netherlands Navy HNLMS Holland, a modern warship that won't become obsolete anytime soon. Image courtesy of navyrecognition.com

If Scotland became independent from Britain, Scotland would need 10 Navy frigates comparable to the highly capable Royal Netherlands Navy HNLMS Holland, a modern warship that won’t become obsolete anytime soon. Image courtesy of navyrecognition.com

An independent Scotland would also need many frigates, perhaps 10 of them; Some frigates would be rigged as minesweepers, others as destroyer escorts, others as anti-submarine warfare (ASW) ships, while others would be rigged for anti-piracy and interdiction roles.

And all of them would need to have so-called ‘wet bays’ where small, fast boats can quickly exit the main ship and race out to board any suspected ship or to conduct rescue missions, or to assist green water patrol boats in their respective missions, and all of them would need onboard helicopters and crews. Frigates with wet bays and helicopters usually cost in the neighbourhood of $200 million to $400 million apiece.

Scotland would be looking at $2 billion just to buy the empty, but brand-new frigates

That’s before training and hiring crews, and provisioning those ships and building naval port facilities, let alone training and hiring onshore maintenance and security staff, which would come out of the annual defence budget.

Brexit - If Scotland were to separate from the UK, the first purchase would need to be (approx.) 20 of these Svalbard-class (or equivalent) icebreaker and offshore patrol vessels. KV Svalbard (W303) pictured. Norwegian Coast Guard photo.

If Scotland were to separate from the UK, the first purchase would need to be 20 Svalbard-class (or equivalent) light-icebreaker offshore patrol vessels. Norwegian Coast Guard vessel KV Svalbard (W303) pictured. Norwegian Coast Guard photo.

And, Scotland would need (almost more than anything) about 20 Svalbard-class light icebreaker, coastal patrol vessels. Although no longer in active production, the Svalbard-class ships operate in the same region and have an excellent service record.

Ka-Ching! That’s $1.6 billion, just for green water defence craft

That’s before training and hiring crews, and provisioning those ships and building naval port facilities, let alone training and hiring onshore maintenance and security staff, which would come out of the annual defence budget.

Note: Although some articles reported that these ships cost the equivalent of $20 million apiece when they were being produced, it’s only because Norway simply built the new Svalbard hulls, then took everything they needed (engines, radars and sonars, warfare electronics and weapons systems, and almost everything else from their recently retired naval ships) and installed them on the new Svalbard ships. This lowered Svalbard costs from (approx.) $80 million, to $20 million per unit.


Second purchase: An entire Air Force – $1 billion please!

Brexit and Scotland independence

The SAAB Gripen fighter-bomber jet is the obvious choice if Scotland becomes independent, as these jets are famous for their low maintenance cost and high performance.
“Gripen has stable, affordable acquisition and low life cycle costs. This gives air forces a reliable basis on which to budget for operations and fleet sustainment over the long term. Gripen’s inherent reliability and low maintenance footprint boosts force levels and operational effectiveness.” — from the SAAB Gripen website.

Scotland would also need to acquire an Air Force from the very first day of independence. It would need at the minimum, 20 SAAB Gripen fighter-bomber jets and seven long-range search and rescue, and reconnaissance aircraft, like the Aurora. And five KC-135 airborne refueling tankers to ensure those aircraft don’t run out of fuel over the North Sea.

Britain - In case of Scottish independence, Scotland would need five CP-140 Aurora Maritime Surveillance Aircraft, considered the Gold Standard among maritime surveillance aircraft by Western nations. Image of Royal Canadian Air Force Aurora aircraft.

In case of Scottish independence, Scotland would need five CP-140 Aurora Maritime Surveillance Aircraft, which are considered the Gold Standard among maritime surveillance aircraft. Image of Royal Canadian Air Force Aurora.

The Gripen fighter jets cost $40 million per unit. And for surveillance aircraft, the Lockheed CP-140 Aurora is the automatic choice for any Western military at $25 million per copy, and for refuelling tankers the undisputed king is the $35 million per unit KC-135.

Britain - If Scotland leaves Britain, it needs the ability to refuel its military aircraft. A KC-135 Stratotanker refuels an F-16 Fighting Falcon. (U.S. Air Force photo by Tech. Sgt. Mike Buytas)

If Scotland leaves Britain, the ability to refuel its military aircraft in-flight is paramount. A Boeing  KC-135 Stratotanker refuels an F-16 Fighting Falcon. (U.S. Air Force photo by Tech. Sgt. Mike Buytas)

Scotland would be looking at $1 billion just to buy the various aircraft

That’s before training and hiring crews, and provisioning (bombs and bullets) and building airfield facilities, let alone training and hiring maintenance and security staff, which would come out of the annual defence budget.


Third purchase: An entire Army – $1 billion+ for hardware only

Britain defence - Challenger 2 tanks and Westland Helicopters

Britain’s legendary Challenger 2 tanks escorted by stealthy (ultra-quiet) Westland helicopters in wargames at Salisbury Plain.

Oh, I forgot to mention that Scotland would need a 10,000-person Army, and due to financial constraints, those soldiers might need to be shunted between the Scottish Army, the Air Force and the Navy, on a daily, weekly, or monthly basis (as required) to keep all positions covered. The weakest link in any chain, is the link that isn’t there.

That’s before the provisioning of army bases, the hiring and training of infantry and tank and other military vehicles personnel, let alone hiring and training on-base maintenance and security staff, which would come out of the annual defence budget.

Note: The Army, Air Force, and Navy cost estimates assume the Scottish government donates at no cost to the military, the necessary land for naval port facilities, for military airfields, and for army bases and training areas.


Military-only costs for a newly independent Scotland

In the first year, Scotland would need $30 billion (conservative estimate) just to field a small, but respectable, Navy, Air Force, and Army. All of those would be required from the very first day of independence, you simply can’t leave a country unprotected while you spend a couple of years shopping for and having navy ships built.

And it would cost $10 billion per year thereafter, across the entire Scottish military, just to keep all seats filled, wearing appropriate military uniforms, military personnel fed and sheltered, with all regular pay and pensions paid, and never find themselves out of fuel or ammunition. (Want your army to quit en-masse? Run them short of ammo)


Other Independence Costs

Thus far, and we’ve only talked about defending Scotland, we’ve yet to talk about creating a national currency were Scotland to be truly independent, a federal reserve-type banking system, a Scottish police force and an MI4 (GCHQ) an MI5 and MI6-equivalent role security agencies, nor have we talked about the creation of a Scottish foreign affairs office to promote Scottish trade abroad and to assist and protect inward investors, and to assist and protect Scottish companies doing business in other countries. All of that must be paid-for by Scottish taxpayers.

Where to find that money? In the markets? The IMF? If so, what’s the collateral?

Scottish debt-to-GDP would be 100% in the first year, and get worse every year from that point… unless the oil price happened to skyrocket to $140 barrel, stayed there permanently, and huge oilfields were suddenly found in Scottish waters. Not likely.


If Scots want true independence, Scottish taxpayers will pay three-times more tax

Remember, the true cost of Scottish independence from the UK could easily surpass $20 billion annually, in addition to the first year start-up costs. And, if it’s true independence that Scots want it will be Scottish taxpayers footing the bill, via much higher personal, sales, and corporate tax rates.

But if Scots want EU membership, their economic overlords would be the European Parliament

Why do I say ‘economic overlords’?

Because, based on the principle of ‘No taxation without representation’ I suppose reverse taxation (subsidizing an entire country, where the money flows from the EU to Scotland) the Scots wouldn’t receive much representation for their tax payments.

In fact, as the EU would be funding Scotland’s budget deficits, the EU would get to make the majority of Scotland’s decisions from the safety of Brussels. Which is quite a-ways down the road for Scottish citizens if they ever felt the need to stage a peaceful protest.

If Scots want continued UK membership, the present paradigm continues

At present, Scotland receives 16 billion pounds sterling more, than it contributes to the UK economy, on an annual basis. Not a bad deal for Scotland! But yes, some decisions are made in London for the betterment of all Britons. That can seem unfair if you’re a Scottish citizen and your heart was set on a certain policy or outcome. Still, it’s the best deal on offer.
(But if you find a better offer, take it!)

Imagine Scotland no longer having that 16 billion pound annual subsidy from the UK, and needing to pay $20 billion USD for one-time costs to create a brand-new armed forces, and thenceforth having to pay $10 billion USD annually to keep the armed forces fed, clothed, sheltered, trained, paid, and a with reliable supply of fuel and ammo.

Without the UK contribution, Scottish independence (military costs only) amount to an annual difference of $29.7 billion USD. Something important to note; The first year of independence (military costs only) amount to $49.7 billion USD.


What Scotland and the devolved regions really need are people selected from their own region to be employed as Cabinet Ministers in the Westminster government (not only a UK Cabinet Minister for Scotland, Northern Ireland, and Wales, but a Cabinet Minister for England too) who represent the interests of their particular region within the UK central government.

In this way, devolved governments and their taxpayers will have better representation and more engaged relationships with the central UK government, and thereby receive superior governance outcomes from the UK government.

And isn’t that what fair government is all about?


Related Quote: “If I had asked people what they wanted, they would’ve said faster horses.” — Henry Ford