A dark star, in theory, is a sun so dense that its gravitational field overpowers light itself, sucking in every ray that attempts to escape its surface. Much like Greater London, says Alex Salmond, the first minister of Scotland who’s leading the drive for independence in a Sept. 18 referendum, the outcome of which has become too close to call. In a March speech in Edinburgh, Salmond quoted a professor named Tony Travers, who said, “London is the dark star of the economy, inexorably sucking in resources, people, and energy. Nobody quite knows how to control it.”
Scots are already free to eat haggis, drink Irn-Bru, and toss poles. They have their own parliament and courts. But they can’t escape London’s orbit, and they aren’t happy about it. Those campaigning for “yes” in the referendum promise that independence would finally give Scotland escape velocity, and make it, in Salmond’s words, “a northern light to redress the influence of the dark star—rebalancing the economic center of gravity of these islands.”
It’s not England from which many Scots wish to detach themselves. It’s London, the oversize hub controlling the revenue of an undersize empire. The Scots’ prickliness is understandable, and an untethered Scotland would satisfy the romantic yearnings of nationalism—Braveheart without the gore. Outright independence, however, would rupture valuable commercial ties for uncertain benefits.
The referendum is being watched closely, because the Scots aren’t the only restive people in the world. If the Scots lower the Union Jack after 307 years, the republicans in Northern Ireland could make another push to get out of the rump kingdom. Cities in Wales and England will seek “devo max,” which is how U.K. politicians describe the maximum devolution of power from the center to local governments. In Spain’s Catalonia, President Arturo Mas says a “yes” vote in Scotland would be positive for the region’s independence movement, which Spanish Prime Minister Mariano Rajoy is trying to squelch. A Scottish “yes” might even please Russian President Vladimir Putin, who could portray it as a precedent for eastern Ukraine breaking away from Kiev.
In the United Kingdom the tension between center and edge is especially acute because London is dominant in two crucial respects. First, it’s the most populous, the richest, the most international city in the U.K. by far—the unquestioned commercial and cultural capital. London has snapped back from the financial crisis faster than any other U.K. city. It remains a magnet for people and investment from all over the world. Real estate firm Savills estimated in January that property in London’s 10 richest boroughs is “worth 9 percent more than Scotland, Wales, and Northern Ireland combined.”
Even some Londoners say their city is too dominant, although the specific complaints are sometimes hard to evaluate. Last year, Vince Cable, U.K. secretary of state for business, innovation and skills, who hails from Twickenham near Heathrow Airport, said London “is becoming a giant suction machine draining the life out of the rest of the country.” A report last year by Deutsche Bank (DB) analysts in London on business cycles in different parts of the U.K. said “the overall pattern that emerges … is one of the rest of the U.K. dancing to the capital’s tune but out of time.”
Beyond that, London is the capital of one of the most centralized governments of any wealthy nation. Revenue from taxes flows inward and is then disbursed outward in a thoughtful yet rather lordly way. In the U.S., the federal government raises about 60 percent of all taxes. In the U.K., the figure is 95 percent, giving Westminster and Whitehall enormous power over every corner of the nation, out to the remotest of the Shetland Islands.
The closeness of the independence polls in Scotland reflects the tug-of-war among Scots, who both want to go forward alone and fear doing so. Scotland is strong in energy, biotech, textiles, food, beverages such as Scotch whisky, and electronics. Productivity and incomes are reasonably high. But Scotland, which leans left, is also politically committed to high social spending. Salmond is counting on capturing 90 percent or more of North Sea oil tax revenue after independence to help pay for that spending, but geologists disagree on how much longer the hydrocarbons will flow. On Sept. 8 the unaffiliated Centre for Economics and Business Research estimated that an independent Scotland would begin life with a 2016-17 budget deficit of more than 6 percent of gross domestic product. “The probability is that the fiscal pressures on the new government of an independent Scotland would be substantial,” the Centre said. Notwithstanding Salmond’s bravado, the best laid schemes of mice and men gang aft agley.
(Bloomberg Businessweek)
