Belfast Telegraph

Referendum defeat has left SNP stronger

By Liam Clarke

What would have happened if Scotland had voted for independence in September? It is too soon to tell for sure yet, but the early signs suggest that the SNP is better off as things stand.

Nicola Sturgeon is at the helm and looks like the sort of leader it needs to have, and it is agitating for another referendum. The bookies are predicting it may be part of a coalition government with Labour, and Alex Salmond is being sent to Westminster to handle that.

If it had won the referendum, it would instead be contemplating a possible funding crisis. The Wall Street Journal pointed out earlier this week that "a barrel of crude costs about half of what it did just six months ago and oil prices are set to post their largest yearly losses since 2008, when prices plummeted from record highs amid a global recession. Crude oil and petroleum products are on-track to be the worst-performing commodities of the year".

That could all change; anyone who can accurately predict the movement of commodity prices like this would quickly become a millionaire.

The assumption amongst the Scots Nats, though, was that prices had already bottomed out and would soon rise again. They built their economic forecasts on that.

It always pays to look at the downside for us, too. Now that the Government has agreed, in principle, to devolve corporation tax to us, we should still keep negotiating until the power actually comes our way.

The section outlining the consequences comes in an annexe that says: "The block grant will be adjusted to reflect the corporation tax revenues foregone by the UK Government due to direct and behavioural effects."

This means that the cost of corporation tax will go up if it attracts more industry here - the "behavioural aspects" are probably meant to reclaim revenue from firms which move to Northern Ireland, but trade elsewhere in the UK.

On the other hand, "second-round effects on other taxes" won't be considered at all. This means that, if London gets more income tax revenue and saves on welfare payments as a result, then we will receive none of the benefits and there is no proposal to devolve such taxes with us.

We shouldn't let David Cameron's offer slip, but we shouldn't bite his hand off, either.

The Executive has landed us up to our necks in debt already. It needs to pay attention this time.

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