Scotland politics

Scottish independence: Can you trust the campaign posters?

Ahead of the Scottish independence referendum on 18 September, campaigners have been getting their messages out on billboards and posters

But can you trust them?

We asked the experts to give their verdicts on the arguments put forward by the pro-independence Yes Scotland campaign and Better Together, which is arguing the case for the Union.

Yes Scotland: Scotland's wealth

Image copyright Scottish Political Archive

Prof Peter McGregor, head of economics at Strathclyde University, says:

Does the Financial Times analysis, referenced in the poster, show independence would result in Scotland being "richer than the rest of the UK and in the top 20 wealthiest countries globally"?

The answer to this question is no.

The analysis said: "Assuming a geographical allocation of North Sea oil and gas production, the Scottish economy would rank among the top 50 in the world by size of GDP and would be relatively wealthy, richer than the rest of the UK, and in the top 20 countries globally in terms of GDP per head."

GDP is a measure of the total goods and services produced in an economy in a year, so GDP per head of population is an indicator of how much output is produced on average per person and is widely used as an indicator (albeit an imperfect one) of how affluent a country is.

There's fairly widespread agreement that an independent Scotland would indeed be likely to gain "a geographical allocation of North Sea oil and gas production".

However, the statement in the poster would only be strictly accurate if the only effect of "an independent Scotland" was that it received a geographic share of North Sea oil and gas, and GDP and population were otherwise unaffected. This is a very unlikely outcome.

We can't infer the impact of independence from a simple comparison of two numbers - GDP per head with and without a geographic share of oil and gas - both of which are measured before independence. In practice, independence is likely to have an impact on both GDP and population, and therefore on GDP per head.

There is no simple way to determine the likely economic effects of independence.

Verdict: There's nothing wrong with the arithmetic in the FT's analysis, but it does not imply that independence will cause Scotland to become richer than the rest of the UK or that Scotland would be among the top 20 wealthiest countries.

Better Together: Keeping the pound

Image copyright Better Together

Catherine Schenk, professor of international economic history at Glasgow University, says:

There are four statements in this poster that can be tested.

1. Is it possible to keep the pound without remaining within the UK? Yes, it is possible.

The governor of the Bank of England has not ruled it out. The chancellor and leaders of other UK parties have warned that they would not support an independent Scotland using the pound, but they could change their minds once the implications for England are more clear.

England could only stop Scots using the pound by imposing exchange controls on cross-border transactions - which would be costly and damaging to English producers and financial institutions.

2. Does keeping the pound mean more jobs? It depends on how the pound fluctuates relative to a hypothetical Scottish currency.

If the Scottish currency becomes more valuable than the English pound because of strong oil revenues, for example, this might increase the cost of Scottish exports and reduce demand for labour in these industries.

But most jobs in Scotland are in sectors that are not traded internationally (e.g. public and private services) so the effect on these jobs won't be as important.

And, at the same time, imports will seem cheaper, lowering the cost of living and the cost of production in some sectors.

3. Does keeping the pound mean cheaper mortgages? Not necessarily.

The most important determinants of the cost of a mortgage are the loan to value ratio and the term of the mortgage.

Scottish mortgages tend to have a lower loan to value ratio because property is cheaper here.

Some argue all interest rates would rise because a new Scottish government's borrowing costs would be higher than the UK and this would feed through to retail mortgage rates offered by Scottish financial institutions.

But the mortgage market is increasingly international and banks and other mortgage providers can raise funds to lend from many sources.

4. Does keeping the pound mean lower credit card bills? Probably not.

How much we use our credit cards and therefore the size of the bill each month isn't closely related to the pound.

Credit card interest rates are not closely related to underlying base rates and credit card providers in Scotland come from many countries with access to a wide range of competitive money markets.

Verdict: Not proven.

Yes Scotland: Child poverty

Image copyright Yes Scotland

Morag Gillespie, senior research fellow at the Scottish Poverty Information Unit, says:

Earlier this year, the Child Poverty Action Group in Scotland published Poverty in Scotland 2014, using figures from the Institute of Fiscal Studies to estimate that between 50,000 and 100,000 more Scottish children would be living in poverty by 2020 as a result of UK government tax and benefit reforms implemented since 2010.

A key concern related to poverty is the stigma that those experiencing poverty face.

The imagery of a child in ragged clothes and dirty shoes reinforces stigmatised attitudes towards people experiencing poverty which are often misplaced.

Children in poor families are often clean and well turned out despite low family incomes.

Verdict: The poster is worthy of partial trust. The claim of 100,000 more children in poverty is reasonable, but the imagery reinforces a stigmatised view of poverty, so weakening confidence in the potential for a different approach by an independent Scottish government towards those experiencing poverty.

Better Together: Pensions

Image copyright Better Together

Prof Paul Spicker, Grampian chair of public policy at Robert Gordon University, says:

There are three different kinds of pensions to be considered.

The state pension is based on insurance, and it is paid to everyone who has contributed. The scheme is being reformed; the basic rate will be higher, but some people on higher wages may receive less than they would have with the state second pension.

The Scottish government has pledged to respect all existing commitments, and even to pay a slightly better rate; but the numbers of pensioners are growing, and it will be difficult to do this without increasing taxes.

The second set of issues relate to private and workplace pensions. If Scotland became independent, pension schemes that stayed as cross-border schemes would have to become fully funded, and others would have to split into English and Scottish schemes.

This would be a nuisance rather than a major threat to pensions in Scotland. Most public workplace schemes (e.g. for teachers, police, local government and the NHS) are already split into Scottish and English schemes and would not be affected.

Third, a range of other benefits are provided to pensioners, including pension credit, housing benefit, and council tax reduction.

Some of these benefits have already been cut by the UK government, and upratings have been lower than inflation.

Several announcements have been made cutting pensioners' entitlements: they include cuts relating to capital assets, mortgage interest recovery, pensioners who work and mixed-age couples.

It would not be true to say, then, that pensioners are not being affected by welfare reform now. It is very uncertain whether the UK will continue to pay for bus passes, TV licences for over-75s or winter fuel; but Scotland may have other priorities, too.

Verdict: It is not clear the proposals for independence do put our pensions at risk.

Yes Scotland: Osborne's cuts

Image copyright N/A

Prof Martin Chalkley, centre for health economics at York University, says:

This poster suggests that, if Scotland votes "No", the UK government's policy of cutting public expenditure will result in cuts to NHS Scotland.

It actually goes further by implying the UK government's policy will impact directly on the number of nurses. This isn't quite right.

There is not a single National Health Service for the UK - NHS Scotland is Scotland's "own" NHS, and, as a consequence of devolution, how much is spent on health care is the choice of the Scottish government.

There is of course a limit. The overall budget the Scottish government has available is set by the UK government, and maybe the poster is hinting at that.

The idea that UK government policy dictates how many nurses there are in Scotland is more far-fetched.

Such decisions are made at the level of NHS Scotland itself, influenced by the budget it gets from the Scottish government.

The Scottish government already has discretion regarding how much to spend on health care. Independence would give it more discretion, through the ability to increase taxes and borrow more.

Verdict: Can the public trust this poster? Yes and no. Probably more no than yes.

Better Together: Job prospects

Image copyright John Erskine

Dr David McCausland, head of economics at Aberdeen University, says:

In this poster, the Better Together campaign appeals to fears about the uncertainty of independence - that we put at risk something we value.

And there's nothing more valuable to the welfare of families than stable and secure employment.

One source of uncertainty is economic security - would a small economy like an independent Scotland have the financial muscle to bailout a financial system that is many times larger than the economy?

Such uncertainties may mean companies reduce or postpone investment in Scotland. This puts jobs at risk.

And given declining revenues, higher taxes may be required to maintain public spending. This high-tax environment may not be attractive to business, again putting at risk job creation.

The "Yes" campaign offers some alternatives. They argue we will have greater fiscal control. Scotland deciding who gets taxed, and where the money is spent.

Giving incentives to create jobs in promising areas, say, with a strong export focus (though governments tend not to have good track records in "picking winners").

Or creating jobs in particular industries, like renewable energy (though these jobs are heavily subsidised which may not be sustainable). But these are at best a small consolation compared to greater fears and uncertainties.

Verdict: This poster is probably right, given the uncertainty over the currency, fears over economic security, and declining revenues.

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