Newcastle’s chief executive explores the implications for the north
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Perhaps more than any debate in living memory, the referendum on the future of Scotland’s place within the UK is one that requires more light than heat, including for people, businesses and public services in Newcastle and the wider region.
So, while we in Newcastle have been careful to avoid the ‘yes-no’ debate directly, we have been very active in thinking about the potential impact on our city.
Yet, despite listening to some leading economists, the striking thing about this debate is just how much remains speculative, particularly as both campaigns eschew any hint of pre-negotiation ahead of September’s vote.
Of course, we do have some clear pointers; we know what the independence white paper is proposing. We are also clearer on the UK government’s positions, on issues such as monetary union as well as further tax raising powers in the event of a ‘no’ vote. Alongside this, some big companies in Scotland have gone public on possible implications for their future, be they regulatory or financial.
In thinking about what this might mean for Newcastle, you won’t be surprised to hear me say there are potential risks and opportunities for us. For example, a more prosperous Scottish economy could be good for the north, particularly in areas such as marine and off-shore technologies where we share skills and capacity.
Differing tax and regulatory policies could attract high-income tax migrants and companies to the north. On the other hand, there are concerns about Scotland pursuing a more aggressive industrial policy. There are some very specific risks for the north-east, not least the possible impact on our airports of Scotland lowering air passenger duty. But, of course, it’s far from certain that an independent Scotland could afford to operate an aggressive policy of fiscal incentives in practice.
Much of this is speculative but we are likely to face a mixture of possible pros and cons. Coupled with this are commitments from the Scottish government and Scottish cities to work more closely with the north of England whatever the outcome of the referendum. We welcome such an approach because it lifts the debate beyond the zero sum game and focuses much more on how we can all benefit from future collaboration on issues such as rail infrastructure.
So, for Newcastle, our position is about being more than a spectator in this debate. We know the current Scottish government is preparing to negotiate with the UK government in the event of independence and the other main parties in Scotland are preparing their ‘asks’ in the event of a ‘no’ vote. So, in the north-east, we have to be clear on our own ‘asks’; this is our opportunity as much as it is for the people of Scotland.
Of course, this is not something Newcastle will start to do in September and it’s certainly not something we’re doing alone. With other councils and partners (including across the north-east and the Core Cities), we’ve already started the conversations with the government about what we need to drive successful economic and social growth, making the case for greater devolution of powers and economic freedoms; pushing for a fair share of investment and a fairer approach to local government funding; and, driving more radical approaches to place-based funding.
So, we are not allowing what is admittedly an important debate about the future of Scotland to deflect our own focus on creating an economy in Newcastle and the north-east that is competitive on a global stage.
Pat Ritchie, chief executive, Newcastle City Council