Alex Salmond, Scotland's first minister, hopes to convince Scots to vote for independence. Simon Dawson/Bloomberg
Alex Salmond, Scotland's first minister, hopes to convince Scots to vote for independence. Simon Dawson/Bloomberg

Whatever Scotland decides, Westminster’s bubble has burst



With opinion polls roughly evenly split, voters in Scotland decide today whether to sever links with the rest of the United Kingdom.

Should the Yes campaign prevail, both sides will begin negotiations on formal division, taking in such issues as Scotland’s claims on dwindling North Sea oil reserves, the British Armed Forces, currency arrangements and the status of a newly-minted sovereign border. David Cameron, the UK prime minister who allowed the referendum, will face resignation calls and some are predicting the postponement of next year’s general election as constituency boundaries are redrawn.

The No campaign is judged to have misread the mood in Scotland and relied too much on the principled but unenlivening former chancellor Alistair Darling and former prime minister Gordon Brown to outline the “Better Together” case. The prime minister and major party leaders have visited Scotland only in the past couple of weeks, proffering last minute concessions in the hope of avoiding cataclysm.

The Daily Mail, one of the UK’s most widely read papers, yesterday pleaded: “To our Scottish cousins we say sorry for England’s inept political class and beg you to stay in our great British family.”

Since the Acts of Union over 300 years ago, Scotland’s economic, martial, artistic and engineering genius has played a key role in the development and rise to prominence of the UK as a world power. The Scots are, quite simply, stitched into the DNA of British identity.

The hundreds of thousands of Scots who live south of the border are testimony to this. The economies are intertwined. Scottish regiments have helped project British power abroad for years and the country’s ultimate deterrent, in the shape of nuclear-armed submarines, slip quietly in and out of berths at Faslane.

The Scottish economic case for separation appears to be inconclusive. Tax receipts do not cover current, let alone future public expenditure. Exploitable oil reserves are, in the eyes of serious people, not of sufficient size to finance promised spending increases. Access to the European Union gravy train is not guaranteed and companies based in Scotland, especially in the financial sector, are threatening a southern exodus. Westminster has all but rejected a currency union. Why, its politicians ask, would what is left of the UK underwrite a currency used by a sovereign territory over which it has no fiscal sway?

Separation also threatens economic and political stability south of the border, however. Money markets do not respond favourably to dramas of this kind. Nor do overseas investors. Westminster will have to show real leadership in announcing the future plan for the economy and the pound if currency speculators are to be kept at bay.

The UK’s place in the world as a key proponent of democracy and the rule of law, its diplomatic and economic heft and international reputation – would be diminished. Those who adopt a triumphalist, “good riddance” attitude to the Scots will soon learn that a broken union will prove politically, socially and economically debilitating for the rest of the UK.

Although the Queen would remain Queen of Scotland (she sees Balmoral as the family home), republican sympathies there are strong and political cohesion relies in part on the erroneous depiction of the monarchy as a symbol of the “usurpers” in the South. Further afield, separation could enliven trends towards social and political Balkanisation from Catalonia to Quebec.

The prospect of Scottish independence is only the latest illustration of a social and political trend towards wholesale rejection of centralised and aloof governmental systems.

Inroads into mainstream voting patterns made by the UK Independence Party (UKIP) are as much a sign of the rejection of what is perceived by many to be an isolated governing class as it is of European integration. The Conservatives were wiped out as an electoral force in Scotland years ago. They were found to be irrelevant to life lived so far away from the “City State” of London and its commuter belt.

There is little to distinguish the Conservative, Labour and Liberal Democrat leaders in terms of policies, background or rhetoric, many feel. All appear to lack sufficient understanding of the hopes and fears of the struggling working or middle class person making a go of it outside the sacred confines of the London orbital motorway.

The government and mainstream parties had 18 months to make the case for union but they only got serious two weeks ago when polls began to indicate danger. The lack of a serious duty of care to the Scottish challenge has, it might be argued, served to vindicate the Scottish National Party’s broader claims that Westminster simply does not care.

If the union is still intact after the vote, the referendum process will nevertheless transform British politics and society. Scotland will be granted virtual home rule, igniting serious rows about the constitutional relationship between the Westminster and Scottish legislatures.

Devolved taxation and spending powers will continue to raise issues about a lack of national uniformity in areas such as university fees and health care, but the union, which is so much a part of the UK’s national character, economic potential and diplomatic standing, will remain – for now.

There might also be a deeper democratic dividend if government makes genuine efforts to focus on areas outside the Westminster “bubble”, re-empowering local politics and local communities along US-style “direct democracy” lines. The state is far too big, its legislative and tax-raising discretion far too wide and it will not be long, even if Scotland remains in the UK, before other parts of the country become restive.

Martin Newland is a former editor-in-chief of The National

Game Changer

Director: Shankar 

Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram

Rating: 2/5

The Bio

Favourite vegetable: “I really like the taste of the beetroot, the potatoes and the eggplant we are producing.”

Holiday destination: “I like Paris very much, it’s a city very close to my heart.”

Book: “Das Kapital, by Karl Marx. I am not a communist, but there are a lot of lessons for the capitalist system, if you let it get out of control, and humanity.”

Musician: “I like very much Fairuz, the Lebanese singer, and the other is Umm Kulthum. Fairuz is for listening to in the morning, Umm Kulthum for the night.”

Top investing tips for UAE residents in 2021

Build an emergency fund: Make sure you have enough cash to cover six months of expenses as a buffer against unexpected problems before you begin investing, advises Steve Cronin, the founder of DeadSimpleSaving.com.

Think long-term: When you invest, you need to have a long-term mindset, so don’t worry about momentary ups and downs in the stock market.

Invest worldwide: Diversify your investments globally, ideally by way of a global stock index fund.

Is your money tied up: Avoid anything where you cannot get your money back in full within a month at any time without any penalty.

Skip past the promises: “If an investment product is offering more than 10 per cent return per year, it is either extremely risky or a scam,” Mr Cronin says.

Choose plans with low fees: Make sure that any funds you buy do not charge more than 1 per cent in fees, Mr Cronin says. “If you invest by yourself, you can easily stay below this figure.” Managed funds and commissionable investments often come with higher fees.

Be sceptical about recommendations: If someone suggests an investment to you, ask if they stand to gain, advises Mr Cronin. “If they are receiving commission, they are unlikely to recommend an investment that’s best for you.”

Get financially independent: Mr Cronin advises UAE residents to pursue financial independence. Start with a Google search and improve your knowledge via expat investing websites or Facebook groups such as SimplyFI. 

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

The specs: 2018 Chevrolet Trailblazer

Price, base / as tested Dh99,000 / Dh132,000

Engine 3.6L V6

Transmission: Six-speed automatic

Power 275hp @ 6,000rpm

Torque 350Nm @ 3,700rpm

Fuel economy combined 12.2L / 100km

How tumultuous protests grew
  • A fuel tax protest by French drivers appealed to wider anti-government sentiment
  • Unlike previous French demonstrations there was no trade union or organised movement involved 
  • Demonstrators responded to online petitions and flooded squares to block traffic
  • At its height there were almost 300,000 on the streets in support
  • Named after the high visibility jackets that drivers must keep in cars 
  • Clashes soon turned violent as thousands fought with police at cordons
  • An estimated two dozen people lost eyes and many others were admitted to hospital