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Scot Nationalists' march on Westminster may be GOOD for UK IT

So long as you're not a defence contractor, anyway

By SA Mathieson, 12 May 2015

The Scottish National Party had an astonishing election night. It previously had six Westminster seats; it now has 56 of Scotland’s 59 MPs, some elected on swings in excess of 30 per cent, with most of its seats gained from Labour. It already runs the Scottish Parliament as well as 11 of Scotland’s 32 councils, although some in coalition with other parties. It overwhelmingly dominates Scottish politics.

During the campaign, Scotland’s first minister and SNP leader Nicola Sturgeon said she wanted to help lock the Conservatives out of Downing Street through a deal with Labour and other left-wing parties. But the Conservative party surprised most, by winning a small majority of 12. It can govern on its own.

And yet, the SNP does expect to have a lot more power – for three reasons. Firstly, it is now the third largest party at Westminster: it expects to have representation on every select committee and chair a couple.

Next, with all those MPs it could decide controversial votes. For example, it opposes the Snooper’s Charter draft communications data bill, and if other opposition parties do likewise, it would only take a few libertarian-minded Tories like David Davis to get this legislation stopped – or, at least, toned down.

Finally, the Conservatives under David Cameron already plan to transfer some more powers from Westminster to the Scottish government in Holyrood – which the SNP runs, and looks highly likely to hold in next year’s elections. David Cameron said on returning to No. 10: “In Scotland, our plans are to create the strongest devolved government anywhere in the world, with important powers over taxation.”

Nicola Sturgeon is pushing hard for more: “What we will argue for is priority devolution of powers over business taxes, employment, the minimum wage, welfare, because these are the levers we need to grow our economy to get people into work paying taxes and lifting people out of poverty,” she told the BBC’s Andrew Marr over the weekend. If he reckons this is what it takes to keep Scotland in the UK, Cameron may well decide to offer some or all of this.

All of which makes the contents of the SNP’s manifesto worth a closer look, because much of it may come to pass. The party has a range of plans to encourage businesses, including specific ones for the technology industry.

It wants to reduce employers' national insurance contributions and increase employment allowances from £2,000 to £6,000 per business per year by 2019-20, with 95 per cent of the support going to smaller firms. It supports a Creative Content Fund for the computer games industry, and wants to see video games tax relief retained. Scottish tech firms are likely to welcome all of this.

Money, money, money

But, as mentioned by Sturgeon, the SNP wants businesses to pay a higher minimum wage of £8.70 by 2020 – a third higher than the current UK rate of £6.50. While this is unlikely to affect those focused on IT development, it might give pause to some e-commerce firms with modestly-paid workforces. Amazon has two fulfilment centres in Scotland – Dunfermline, the firm’s largest in the UK, and Gourock – but with six others in England and Wales, it could decide to transfer work elsewhere.

The SNP’s Westminster manifesto included a pledge to roll out superfast broadband and 4G wireless across Scotland more quickly; it is already spending £15m on free provision of Wi-Fi in public buildings and plans for 95 per cent of premises to have fibre broadband access by the end of 2017. This isn’t controversial: the Conservative manifesto pledges to spend more than £100bn on infrastructure in the next parliament, including on “near-universal” superfast broadband across rural Britain.

The party also wants to see protection for Royal Mail’s universal service obligation to maintain standard delivery prices across the UK. This effectively subsidises the cost of posting from firms in Scotland – Amazon and others would be unlikely to use Scotland for UK-wide work otherwise – but it would be inflammatory for the Conservatives to suggest changing it. However, the SNP idea of a new universal service obligation for broadband services, equivalent to the one which obliges BT to connect anyone to a landline for a standard price, may be a harder sell.

Immigration, visas, nukes - and FREEEEEEDOOOOOOM

One of the SNP’s most distinctive policies, which would go down well with many in IT, is its support for economic immigration including the reintroduction of the post study work visa for new graduates. It is not impossible for Scotland to have a different immigration policy: Australia’s Regional Sponsored Migration Scheme gives a better chance to skilled immigrants willing to live in remote areas such as the Northern Territory.

But given the strength of feeling against immigration among many voters, and the Conservative ambition to keep net migration below 100,000 a year, a special Scottish immigration scheme looks unlikely. In practical terms, it would be rather easier to cheat such a scheme by commuting from Glasgow to Manchester than it would be to get from Darwin to Adelaide.

One non-starter SNP policy involving technology is its vehement opposition to a new generation of Trident nuclear submarines based on the Clyde. While the party may be able to question the plans with its new MPs, it is highly unlikely that it can defeat them, given new nukes are supported by both the second-placed Labour and winning Conservative parties.

All of this would be moot in the event of a second referendum on independence in which Scots voted “yes.” After last September’s rejection of independence, the SNP said it would not seek another referendum for a generation. However, during the election campaign Sturgeon said a change of circumstances could justify an early re-run – and one may be just around the corner.

Cameron has already confirmed that the new Conservative government will hold an in-out referendum on British membership of the European Union by the end of 2017, although the prime minister will first try to negotiate a new deal with Europe. Leaving the EU would be disruptive for tech firms as well as many other businesses, as it would be likely to affect access to European markets, including the promised European digital single market. It would also stop companies from employing staff from anywhere in the EU as at present.

Scotland is generally more pro-European than England, and the SNP’s manifesto proposes that each of the UK’s four nations should have to vote in favour of leaving the EU for this to happen. Westminster is highly unlikely to agree to this, paving the way for Sturgeon to claim that a pan-UK vote to leave the EU in which Scots voted to stay would be a change of circumstances justifying another Scottish referendum.

So the UK leaving the EU could lead to Scots leaving the UK – although depending on who you talk to, a newly-independent Scotland might then have to reapply to join the EU as a new entrant.

As The Register discussed last September, Scotland leaving the UK would have a significant impact on tech firms, as well as everyone else. The UK general election, which basically saw the Conservatives winning England and the SNP winning Scotland, has shortened the odds on this coming to pass. ®

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