PINSTRIPE

I listened to Nicola Sturgeon recently when she spoke on the implications for Scotland of the current Brexit difficulties. She has a mission in life which I don’t agree with but she was clear and thoughtful.

Let’s then make the mental leap that Nicola is a sensible person who wants the best for Scotland and common sense solutions which actually work. She therefore must know that full independence for Scotland is economically daft. What could be done to improve the conditions within which businesses in Scotland operate to help them create the wealth we need? The answer is sustained stability. The double uncertainty of EU exit and the UK’s future creates the situation where investment decisions are deferred, leading to a self-fulfilling downturn.

Nicola's issue that there is not a democratic mandate for Brexit has force but she applies it too narrowly - the real point is that there isn't a democratic mandate for the whole of the U.K. to leave - not just Scotland. The EU referendum rules were that a 50.1% vote prevailed, that is not what proper democracy means and is at the heart of the divided nation problem we now have. The National Union of Mineworkers had a rule (until Scargill took over) that before the Union called a strike a 55% vote in favour was required. In other words they wisely realised a far reaching action needed a decisive mandate. 51.9% of the electorate and only 2 of the 4 parts of the United Kingdom in favour is just not enough to give Brexit legitimacy. The only thing which would be worse is a referendum on Scotland leaving the UK won or lost by just a few votes.

For a new UK prime minister to lose nearly one third of its territory , which would happen if Scotland left , would be embarrassing. Theresa May as a new incumbent has more room to manoeuvre now than she may ever have. She should use that short lived advantage to bold effect.

The new dimension is that the UK Government can now borrow virtually for free. The case for borrowing and using that money to develop the productive capacity of the economy is powerful.

Here’s the deal:

Theresa May announces plans for the renewal of the United Kingdom. This comprises two key elements. The first economic, a huge boost to infrastructure spending with an emphasis on bringing the UK together – a new train line reducing journey times from Scotland to London to two hours with work starting immediately in Scotland , the A1 upgraded to motorway over its full length, the A9 dualled all the way to Inverness, the M8 a proper 6 lane motorway, the A75 a dual carriageway. Sounds fanciful? Take a trip to Germany where this quality of infrastructure is everywhere.

The second element is political. The replacement of the House of Lords by a second chamber for the UK parliament located in Glasgow, elected by regional proportional representation but with the requirement that before a major constitutional change (for example approving the terms of the Brexit deal) was effected a majority of the representatives of each of at least 3 of the 4 parts of the UK must be in favour. In return Nicola Sturgeon announces that the SNP has achieved a fair deal for Scotland within the UK and her party will no longer seek to leave.

The result? Jobs and economic regeneration, a sense of British renewal and shared endeavour, inclusion and better balance between the parts of the U.K., an enduring political settlement within which to prosper.

Pinstripe is a senior member of Scotland's financial services community