The Widmann Blog: economics

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Les tickets restaurant

When I worked in Champs-sur-Marne (Paris) last week, I was impressed by the way most of my co-workers would jump into their cars at 12 o'clock, drive to a nice restaurant, have a leisurely two- or three-course meal and then return to work around 1.30.I then realised it wasn't just because they were really fond of good food, but also...

Det danske parallelle univers

Måske er jeg ved at blive for præget af det dystre økonomiske billede, man præsenteres for overalt i Storbritannien i disse år, men jeg var lige ved at få kaffen galt i halsen, da jeg så dette indslag i Jyllands-Posten: For det første ville det undre mig, om nogen britisk bank ville låne en husejer 80% af boligens værdi som...

The jobs created by independence



Dutch Embassy
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Independence sceptics are often worrying endlessly about the jobs that might disappear as a result of Scottish Independence.

However, many jobs will be created as a result of independence. Here are a few areas that spring to mind, but I’m sure there will be many more.

  • A lot of countries will open embassies in Edinburgh — we can’t be sure of the number, but there are about 60 embassies in Dublin, and about 75 in Copenhagen, so one would expect a similar number. Some of these will be small, but others will be huge, and there will be lots of local jobs needed to set them up and keep them running, on top of the money created by embassy employees finding places to live and spending money in local shops and restaurants. Of course Scotland will need to finance a similar number of embassies abroad, but we’re already paying about 10% of what the UK are spending on representations abroad, so I reckon there’ll be a net gain.
  • There will be ministries created for the previously devolved areas. Using Denmark as a basis (it’s probably a better guide than using 10% of the UK), there might for instance be about 850 employees in the Scottish Foreign Office in Edinburgh and about 150 in the Scottish Ministry of Defence.
  • Even if the SNP at the moment claim it won’t be needed, I think it’s likely there will be a Central Bank of Scotland, even if it’s just to administer a currency board. Using Denmark as a guide again, there might be more than 500 people working there.
  • There are other government offices of various kinds. For instance, the DVLA in Swansea almost 7000 employees — a Scottish DVLA would therefore probably have at least 700 employees. On the other hand, there are UK government offices in Scotland — for instance, the HMRC accounts office in Cumbernauld AFAIK covers an area larger than Scotland — so it’s somewhat complicated to work out exactly the net number of jobs created in Scotland.
  • Some companies would need to create separate Scottish subsidiaries. For instance, mobile phone companies would presumably need completely separate organisations in Scotland. I’ve no idea how many companies we’re talking about here, or how large their Scottish operations are, but we must be talking about thousands of jobs moving to Scotland. Of course there will also be companies based here that will need to create English subsidiaries in the same way, but I have a feeling the net effect will still be very positive for Scotland.

Of course there won’t be a perfect match between the jobs that will disappear and those that will be created — you can’t retrain a nuclear weapons worker to become a Foreign Office employee overnight — but I think on the whole it seems likely that independence will be very good for Scottish employment figures.

A Scottish currency board

Several articles, such as this one in the Scotsman, have covered the Chancellor of the Exchequer's announcement that Scotland after independence won't be able to use the pound:The Treasury confirmed that, while it could not block Scotland from using the currency, it could be reduced to a situation where it had no say in fiscal policy, was prevented from printing its own money and was locked out of any valuation decisions.Treasury officials confirmed this would mean Scottish banks, which are...

Predictions for 2012

After my disastrous predictions for 2011, here are my predictions for 2012:The referendum on Scottish independence won't take place yet.SF will leave the Danish government.It will again become possible to get a Danish passport in Scotland.The euro will not collapse – all current members will remain inside the Eurozone.The British inflation rate (measured by CPI) will not fall below 4%.UEFA...
Why the UK should have joined the euro
Most British commentators and politicians seem to be very happy that the UK never joined the euro. There's sadly a lot of schadenfreude in the British media at the moment, as if the UK was doing well while the eurozone...
Telling the truth
I quite liked this interview with a trader, Alessio Rastani, on BBC:My guess is that many people are thinking like him, but it's not often they say it out loud.I just hope he's being a bit too pessimistic!

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