THERE may well be many people in Scotland who are wondering what the fuss around the European football Super League was all about when it seemed very unlikely that any Scottish club was going to be invited to play in it. Most Scottish football fans will, I am sure, be relieved about that.
But, hidden within the furore on this issue is a really big concern when it comes to Scotland’s future as an independent country.
The reality is that the European Super League was about something that is a deeply sinister threat to every nation state, and therefore to Scotland. The threat comes from the power of companies with monopolies to disrupt local economies, local businesses, fair competition on which true prosperity is built, and also (of course) to avoid the true tax payments that they might otherwise owe.
Scotland will not be immune from such threats.
So, to minimise the risk that it faces it will need to have a very strong competition policy when independent to ensure that it will not be exploited by multinational companies. Such a policy is particularly important for Scotland.
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Unlike England, the Scottish economy does not host many multinational corporations of its own. Instead, much of what happens in Scotland looks more like what happens in countries like Denmark or Germany. Mid-sized companies dominate the economy, interspersed with the subsidiaries of multinational companies, many of which work comfortably alongside each other.
That can be a true foundation for prosperity, and I think it will be in an independent Scotland. There is no reason to fear the multinational company that wants to participate on a level playing field with Scottish-owned businesses. There are, however, a number of threats of real concern having said all that.
One is the threat from the already existing monopolies. We are already familiar with the companies that enjoy these. They are called Google, Facebook, Amazon, and the like.
Another threat comes from companies that we have never thought to be in the same category, but might be after independence. These are the England-based companies who might take a very different attitude towards their Scottish markets when they can be differentiated from those south of the Border, especially if they trade in a different currency. We have to be sure that these companies do not exploit this opportunity.
Third, there is the future threat. This is of the takeover of successful Scottish companies by companies from other countries after independence, when such processes of takeover have often proved to be so destructive of local value creation, as has been seen throughout the UK to date.
It is competition policy that manages the threats of these sorts.
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In part competition policy is about encouraging Scottish companies to prosper. A national investment bank will be key to this, ensuring that local companies have as much access to capital to invest as do overseas based entities.
A competent tax authority, which is something very close to my heart, is another essential component within effective competition policy, because it must make sure that there is a level playing field so that the profits earned in Scotland are taxed in Scotland.
But what is also necessary is a policy designed to ensure that Scottish consumers are not exploited by companies located outside the country by prejudicial pricing policy, or by excessive profit taking, usually associated with the closing down of local competition.
So, Scotland will need to have a policy that requires strong justification for the takeover of any Scottish company by a foreign entity. And, it will need to have a regulator willing to control prices if monopoly profit abuse is seen to arise, which looks to be the case in many of the tech markets.
There will also need to be a pro-Scottish procurement policy, so that there will be a bias towards Scottish companies when the government seeks to place contracts.
With varying degrees of enthusiasm, all these things exist within the current framework of European legislation, meaning that none should prevent Scotland returning to the EU if it wishes, while still having in place a policy that protects Scotland from abuse. And prevention of that abuse is essential. Fair competition and free markets in Scotland will depend upon it.
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Callum Baird, Editor of The National
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