Lessons from Canada

,DSC_0976.JPGScotland faces years of economic stagnation, job losses and capital flight if the nationalists impose a 'neverendum' on the country.

That was the message from the inaugural Scotland in Union anniversary lecture this week.

More than 100 people attended The Scotsman Hotel to hear our guest Peter Scowen, a Montreal-born journalist, give his experiences of the two referendums in his home province and the economic damage it caused.

He told the audience:

“In 1960, Montreal was Canada’s most vibrant city. Once the seat of the Canadian Parliament, it was the country’s first metropolis and its economic engine during the fur-trade boom of the 18th and 19th centuries.

“In the summer of 1967, Montreal hosted a world’s fair that drew more than 50-million visitors. Nine years later, the city would host the Summer Olympics - the only Canadian city to ever do so.

“Fifty years later, Montreal is a shadow of its former self. Its economic growth stalled in the late 1970s and has never recovered. Today it ranks a distant second to Toronto in population and economic power. 

“So what happened? The answer is complicated, but a key contributor to Montreal’s stagnation has been the politics of separation.”

He also said they were lessons for Scotland from the Quebec experience:

“Quebec and Scotland are different in important ways, but they have a very similar problem - a portion of their populations has been persuaded of the case for separating themselves from the larger country. Both have pro-independence parties that have had remarkable electoral success but which have lost referenda on separation. Both independence parties hope to hold another. Both vow that independence can be achieved quickly, without cost to voters, and without acrimony.

“Scotland risks a protracted stay in this frustrating limbo. With the Scottish Nationalist Party in control of Holyrood the independence agenda could remain at the forefront of Scottish politics for a generation.  

“In this scenario investors will not know from election to election where Scotland stands on the issue of independence. Some investors may be indifferent. But many of them will choose to invest south of the Border, or in another European country altogether, because they will be more confident that they will not face the upheaval that Quebec companies faced after 1976, and yet they will still enjoy access to the Scottish market.

 “This is the main lesson of Quebec’s neverendum for Scotland and indeed the whole of the UK. But there is another lesson, this one for the pro-UK side. In the 1995 Quebec referendum, federalists made the mistake of focusing their arguments against independence on economic issues. They forgot about the cultural side of life, and failed to make the case for a Quebec that could enjoy its unique identity as both French and Canadian. Suddenly, the polls showed that the Yes side was going to win. Only a last-minute show of affection and need by English-speaking Canada prevented disaster. And even then, the pro-Canada side only won by a few thousand votes.

“Nationalism cannot effectively be countered solely with arguments about a reduction in GDP, an increase in bond rates or a potential loss of investment. National identity is an emotional issue, and for some the economic costs resulting from separation would simply be a price worth paying. Anyone desiring to keep Scotland in UK needs to take this argument on by showing how Scots culture and national identity is best preserved and enhanced by staying with the rest of Britain rather than by breaking away from it.”

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