The Common Weal Raise $40bn but are out by a factor of 10

Before I begin a big vote of thanks

In this post I’m very grateful to Sam Taylor, Sam is an professional fund manager with 17 years experience in financial markets. Sam helped me by providing some substantive crib notes, which you can view here (in some cases I’ve just lifted them straight from Sam’s analysis - why tamper with perfection). Over the past week we’ve debated (and not always agreed) to delve deep into the Common Weal paper and I think it has improved both our thinking about this subject.

What follows is my analysis of the main claims within the Common Weal paper.

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The Common Weal papers have in the past come in for much criticism from this blog, whether on GERS, Pensions or Currency they have not tended to stand up to detailed analysis. Sadly this pattern continues with their latest paper. This purports to identify $40bn of readily realisable reserves available for the Scottish Central Bank (SCB) to defend a new Scottish Currency, as we’ll show here I believe that this is out by a factor of up to ten.

As argued in this blog in the past, the Common Weal is an organisation that unlike the SNP is  freed from trying to secure the support of 50% of the population. With this they could confront the reality of independence from a radical socialist and left wing perspective. It’s sad therefore to see so many hard questions ducked in this paper. I would therefore, respectfully, suggest that the Common Weal goes back to the drawing board on both its currency and currency defence proposals.

The Common Weal author

Before starting this analysis it is worth commenting on the author Peter Ryan. The Common Weal present Peter as a financial expert and to be fair he absolutely is an expert in financial services IT implementation. To be clear that doesn't for a minute suggest that Peter cannot be qualified or knowledgeable enough to write a paper of this nature, and there is no doubting his dedication and sincerity given the considerable amount of work that has clearly gone into this publication. However it also means there is no certainty that Peter does have the appropriate expertise to do so and sadly from my perspective having reviewed his work he does not.

The Common Weal Paper

The Common Weal paper basically argues that a newly independent Scottish Central Bank (SCB) could easily and inexpensively generate $40bn of foreign exchange (FX) reserves which would be available to defend the value of a new Scottish currency by intervening in FX markets.

The paper assumes that the new Scottish currency would initially be pegged one to one against sterling (GBP) with the peg at some point being loosened, presumably with a view to eventually allowing the Scottish currency to float freely (ie the exchange rate would then be set by financial markets).

This is important because a pegged currency means the SCB would subordinate monetary policy (setting interest rates and controlling the money supply) to the Bank of England (BoE). That might be an acceptable transitional arrangement, but if independence is to be meaningful the SCB would ultimately need the freedom to diverge from the BoE on monetary policy.

Furthermore given the type of arrangements that the paper is arguing for below (such as a swap with the BoE) it's highly likely that arrangement would contain severe conditionality on Scotland such as the requirement to run a surplus. This shouldn’t come as a shock to anyone on the nationalist side as George Kerevan and Nicholas Macpherson have already set out this out in some detail.

$40bn or $4bn?

The Common Weal paper lays out four distinct sources that would contribute to the $40bn. Here are the four sources, along with a very brief explanation of what makes them suspect (more detailed explanations follow):

1. Scotland's $16bn share of the UK's FX reserves. This is more like $4bn once you net out the corresponding liabilities which have been ignored or simply left out of the Common Weal analysis.

2.  $2.9bn worth of GBP notes and coins that would be exchanged for notes and coins in the new Scottish currency. This number is plausible in itself, for as long as the peg is in place the $2.9bn is real and critical to maintenance of the peg. The issue arises if and when the peg is relaxed or abandoned, at that point the $2.9bn has probably mostly been exhausted with nervous Scots deciding it's better to have "hard" GBP currency. Therefore in my view whilst the peg is in place, it is not money available to the SCB to intervene in the FX market and therefore would not count under the terms that the Common Weal have set out for themselves.  

3. $13bn from swap lines between the SCB and the BoE. This assumes the BoE would implement up front the type of measures used only in times of financial distress. These emergency mechanism are not designed to raise money but to stabilise economies in an crisis. Indeed taking the example of the US Federal Reserve (which as far as I can make out is the model the Common Weal paper is basing its model on) the arrangements with Canada have never been used and the Mexican swap line was only used during The Tequila Crisis of 1995.

In practice the paper is noting a Scottish Government would go cap in hand to the cUK government to ask for an emergency bailout at the point of independence.

4. $9bn of borrowing is just a plug number to get across the $40bn line. And it's borrowing! Why not borrow the whole $40bn if it's that easy.

So how much did the Common Weal paper actually find?

If we exclude borrowing, which is basically cheating, only $4bn of the Common Weal's $40bn is genuinely likely to be available to defend the value of a new Scottish currency. Whist the $2.9bn would technically be backing a new currency it is not actually available for defence purposes and when you need it most it wouldn’t be there.

The trouble is that the Common Weal need that $40bn money to defend their currency peg policy, without it their hard currency peg is clearly in doubt.

Borrowing on the open market to defend your currency from speculators is like applying going to a loan shark that knows you are all out of options. The markets know full well that the sums you are looking to raise are but a rounding error in comparison to the size of most hedge funds. Speculators from these funds would would be looking to make a profit betting against a Scots£ peg to Sterling, and frankly it would be easy pickings with this proposed set up.

Few people in the market would believe that a Scottish Government would have the credit line available to it to beat off a speculative attack, therefore they will either not lend Scotland the money or they would demand punitive interest rates. For Scotland to have sufficient credibility in the market it would need to have a far more aggressively austere public sector than the cUK and in all probability would need to run a surplus to give itself the credibility that it can indeed pay back its debts.

That's all possible, and a highly credible economic policy, it just doesn't sound like one that the Common Weal would want to sign up to. I’d therefore strongly recommend that the Common Weal attempt to create a more credible currency and currency defence policy.

In my view that means confronting a free floating Scottish Pound and accepting the devaluation may well be likely. That’s hard, and it has significant consequences from a policy perspective but it’s the sort of thinking that a truly radical organisation like the Common Weal should be doing if anyone is going to rebuild the independence movement from its current state of denial.

Robin McAlpine said that the Common Weal was “ready to begin”. You’re not Robin, you’re really not. You need to go right back to first principles and drop the fairy dust approach that has hitherto been the consistent feature of your White Paper project.

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Further details

1. $16bn share of liquid financial assets

$16bn figure comes from a straight misunderstanding of the value of the UK’s foreign exchange reserves and the difference between net and gross. The current gross UK foreign exchange reserves are £175bn (the Common Weal uses out of date March data which is lower) and uses a rough 10% figure to calculate a Scottish share. Well firstly 10% is wrong but you can at least see where the $16bn figure comes from.

The trouble is that the figure is gross, and we’re not sure that the author attempted to work out the difference between gross and net as his Common Weal comrade made the same mistake.

Many of the UK's reserves are tied up in derivative contracts which an independent Scotland would not be a party to. Scotland would not therefore be entitled to a share of those gross assets (as Scotland is not standing behind any international UK debt, just debt between cUK and Scotland). Scotland would however get a share of the £40bn in net UK assets.

So taking a population share (8.3%) of that £40bn we get $4.2bn, so in this case we're about $12bn out.

2. $2.9bn of GBP notes and coins

Provided the population of a newly independent Scotland was convinced that its new currency and central bank were credible, there is every reason to suppose they would willingly exchange GBP notes and coins for notes and coins in the new Scottish currency, and $2.9bn is not an unreasonable number.

As the Common Weal paper acknowledges, the SCB would probably need to establish its credibility by initially pegging the currency one to one against GBP. Every newly issued unit of Scottish currency would be backed by one GBP held in reserve by the SCB, and people would be free to exchange back and forth between the two currencies on a one to one basis.

If the peg were ultimately abandoned and the currency allowed to float freely, the ring-fence would no longer be necessary. However, it would be foolish to assume that the $2.9bn would then be available to intervene in FX markets should the new Scottish currency look vulnerable to a devaluation.

People would see such an event coming, and there would be a rush to exchange notes and coins in the vulnerable Scottish currency for GBP notes and coins. The moment the SCB needed it most, the $2.9bn would be likely to have evaporated before its eyes. In other words this is  “shutting the stable door” money that couldn’t support and defend a Scottish Currency.

3. $13bn of swap lines with the BoE

Central bank swap lines are an esoteric subject. For readers interested in some details, the Federal Reserve (the US central bank) has a useful page explaining the principles.

Broadly speaking there are two kinds of swap line: The first is designed to ease global liquidity at times of financial stress, and the second is “for the purpose of promoting orderly currency exchange markets”, typically with key trading partners (Canada and Mexico in the case of the US).

The Common Weal paper appears to conflate the two approaches, and thinks that what are effectively emergency standby mechanisms would be immediately triggered by the BoE in the event of Scottish independence.

The Federal Reserve's liquidity swap lines were a response to the financial crisis of 2007-2009, and are now hardly used at all.

The swap lines envisioned in the Common Weal paper have exchange rate stabilisation in mind, and therefore appear to be of the second type above, and to be modelled on the North American Framework Arrangement (NAFA) swap lines established in 1994 between the Federal Reserve and Canada ($2bn) and the Federal Reserve and Mexico ($3bn).

The Canadian facility has never been used, and the Mexican one was last used in 1995 when Mexico was suffering the effects of a full blown currency crisis ("The Tequila Crisis").

The BoE and SCB might well come up with a similar arrangement to the NAFA swap lines, but it would be a standby measure for use in an emergency, and could not credibly be used as an up front way to generate FX reserves.

4. The €8BN

Ryan at this stage just abandons all pretence about what he's doing. He simply argues that the SCB issue bonds denominated in Euros. Fair enough, but that's just borrowing on the open market.

Just denominating them in another currency doesn't change the nature of the fact that it's borrowing. Euro denominated bonds would probably attract a lower rate of interest for a Scottish Government simply because they could not be paid by printing money and the market would reward that heavy constraint on the Scottish Government. That's all fine but it's exactly the problem that countries like Greece have (debt in a currency they don't control and can't print) so it would need to be considered carefully.

However make no mistake about it this is just debt plain and simple.

50p rate, the SNP are at it

I've been doing a few FOIs lately, following some requests from friends on Twitter. I was asked to dig into a few subjects on tax and pensions and you can follow my FOI requests here  on the brilliant www.whatdotheyknow.com website. 

My most recent one has been on the SNP's analysis on the impact of the 50p rate and why they can't implement it in Scotland. Whilst my FOI is only halfway I've enough so far to call this one: the SNP are at it!

The idea that the SNP can't introduce a 50p rate in Scotland without losing money but can at a UK level is just plainly wrong and this post sets out why. 

50p worth of advice

Let's start with Nicola Sturgeon's own words on the advice she received on this. 

"we were given advice that if you just did that (introduce a 50p tax rate) without the Scottish Parliament having the power to tackle tax avoidance, to set the rules in stopping income tax into capital gains then we would potentially lose money from that"

BBC TV Leaders Debate. 

Thanks to the FOI  we know that this was the advice Sturgeon refers to which was published at the time the SNP set out why they were reluctant to introduce a 50p rate in Scotland only.

Firstly the paper does indeed warn that a 50p rate could potentially lose money, however any tax could potentially lose money, there is nothing new in that. Secondly a Scottish 50p tax only reduces revenue under one of the scenarios illustrated the "High" behavioural impact. The idea that this paper was giving stark advice not to go ahead with the 50p rate is laughable, it simply sets out that if you introduce the 50p rate in Scotland there is potential for people to avoid that rate, which is rather obvious. 

Squaring the 50p coin

However "alert readers" will have noticed something peculiar about Sturgeon's choice of words. It certainly struck a chord with me when I heard it, that's because I poured over the Scottish Government advice when it was published and I know there is no reference to income turning into capital gains tax in it. 

My FOI therefore was designed to establish if there was other advice provided to Ministers, advice which covered the issue of CGT. We now know that there isn't any other advice and that presents a big problem for the SNP as they try to square  this circle. 

The reason that there isn't any advice on the issue of CGT is that it's not a risk to Scotland's relative tax revenue. 

Just to highlight I said relative tax revenue there, that's important because that's the point at issue here. It's our relative revenue that matters because that's why the SNP seem happy to tax at 50p at a UK level but not at a Scottish only level. 

For example if we look at the position where, as the SNP propose, the UK introduced a 50p additional rate of income tax. According to the SNP that would not lose Scotland money, in fact it would increase Scottish tax revenue. (Let's just leave to one side the fact that's not the case, in Sturgeon's own words it could "potentially" lose the UK and Scottish Government revenue). 

The introduction of a 50p rate at the UK level could certainly result in Scottish and rUK taxpayers trying to avoid tax by switching their income into capital gains (or making pension contributions etc). So at a UK level (which obviously includes Scotland) that risk certainly does exist, however that doesn't seem to worry the SNP at all, that avoidance potential is clearly not enough for them to consider it a risk to tax revenue. So by their policy actions we know the SNP do not consider an income to CGT tax avoidance measure to be a risk to tax revenue.

However when it comes to a Scottish only 50p rate the SNP are suddenly worried about tax avoidance of some description. We've already established they aren't worried about income to CGT tax avoidance (despite what Sturgeon said) so what avoidance are we talking about. 

What powers do the SNP think they need?

The note from the Scottish Government actually tells us what the issue is "artificially shifting income to or from rUK or migrating into or from Scotland". So the avoidance measures that Sturgeon thinks she needs before she can introduce a Scottish only 50p rate are powers that would stop the movement of income and people. Just to be clear here "artificially" moving income would be illegal tax evasion under the terms of the Scotland Act so the power over artificially moving already exists. So all we are left with is the need for a power that would involve restricting people's right to move to rUK or financially penalising them in some way if they did. 

Frankly it's nonsense and illegal in the EU if not under Human Rights legislation and, crucially, that risk of wealthy people moving or moving their income out to Scotland would apply under independence as well, unless an independent Scotland were some Stalinist state. 

No wonder then that Sturgeon, under questioning, is literally making up the advice she received to cover her own inaction on the 50p rate. 

What's really going on?

The truth is that the SNP dont want to introduce a 50p rate because of economics and politics. Economically they think it will lose them money in the long run and further brand Scotland as a high taxation area of the UK. That will eventually feed through into lower tax revenue and damage the Scottish economy. 

More importantly, politically, it will also damage the SNP's delicate coalition of wealthy supporters in the North East combined with their radical progressive supporters in the central belt. 

That's the real bind for the SNP, talking left and acting right is fine as long as you dont have to make choices. The trouble is the Scotland Act 2016 puts that choice squarely at the feet of the SNP, their solution though was to duck it by making up advice that doesn't exist and to hope no one notices. 

Sorry Nicola, you are just at it. 

 

2017- What kind of day has it been

What a night!

In yet another election I was stunned by the exit poll and the eventual result. At least this time I was prepared for it and cleared my mind of any preconceptions of the results. However I could never have imagined this.

Having had a few hours sleep in the end I've concluded that overall this is a good result and I thought I'd set out why.

Indyref 2 is finished
I pointed out the poor state of the yes campaign yesterday, but I also noted that I wasn't sure if the polls were still over estimating the nationalist vote. The results confirms that they are. Pre election (and in the case of Ashcroft's post election poll) the polls had the SNP in the low 40% mark, that's still a comfortable and systematic bias over the actual 37%.

On that basis it's logical to assume that the Yes vote is also being exaggerated in the polls

Consequently when you look at the polling trends it realty does look like the bottom has fallen out of the independence campaign.



Look at it another way and view the trend of actual SNP (plus greens where appropriate) votes and it's not looking good for the nationalists.




With the tide turning against them, a serious setback in losing seats that even the SNP's expectation management team hadn't contemplated, then you just can't see the SNP having the strength to have another go. 

Furthermore to achieve a legal referendum they would need to get something through the UK Parliament and I just don't see how that is possible unless the Scottish Tories do one or the most spectacular U-turns in the history of politics.

Finally I think that the SNP's 'mandate' to hold an indyref has also gone up in smoke overnight. I argued here that under Brexit the SNP have a mandate to call a independence referendum (but the Scottish Greens do not). However as I'll argue below I think that Brexit (or any meaningful definition of it) is over in the short term and with that the SNP mandate goes up in a puff of smoke. 

So the SNP can't call an independence referendum legally, politically and they probably dont have the strength to call and win one anyway. It's over. For now.

The SNP coalition will fracture
The end of any indyref on the horizon has significant ramifications for the SNP coalition of support that took them to 45% in the indyref and 50% in 2015. This bizarre coalition of right wingers from the traditional heartlands (Fergus Ewing) through to the socialist wing (Mhairi Black) are held together by a glue called independence. If a Scexit is not longer on the horizon then their differing politics will start to conflict. As I said here:

"The cracks in that coalition are finally beginning to show, how much longer its got I've honestly no idea, but I do know this; when it does crack the spite and hate that will engulf the nationalist movement will be a sight to behold."
With the Scottish Parliament controlling public services, income tax and effectively all of welfare how much longer can the progressive socialist wing of the SNP be expected to sit on their hands as the SNP Government continues to bide its time doing next to nothing waiting for the independence tide to turn. In a few weeks time I suspect we'll look back at this day as the day the coalition cracked.


Brexit means EFTA

Brexit means Brexit? May's soundbite no longer has any chance of holding given her lack of majority. Effectively there is no mandate in the House of Commons to leave the Customs Union and possibly even the Single Market (as the Labour manifesto is loose on actual commitment). 

Similarly the DUP have a rather lukewarm Brexit policy and have a serious commitment to maintain free and open trade with Eire (and by extension the EU). 

It's therefore very difficult to see a UK government getting any kind of "Hard Brexit" deal and having any chance of surviving a "no deal" option. 

The EU know all this. They know we're weakened and the government is hamstrung so something will have to change. 

My own view is that we're therefore likely to end up with an EFTA type deal. This comes at the cost of paying into the EU and having no say over policy and having free movement (albeit with an emergency brake). There will be a lot of spinning and repackaging of the outcome, a lot of talk of transitional arrangements etc, but in effect this is where I think we're going to end up in two years time.

I underestimated Corbyn
I fundamentally underestimated Corbyn. He ran a great campaign and enthused young people to actually vote, something no UK level campaign has been able to do for a generation. He deserves a steady and patient level of support from the Labour Party for the foreseeable future. 

He also has a huge opportunity ahead of him. He's so close to power and has already shown that he's prepared to be pragmatic in at least the presentation of his politics (witness him enabling the renewal of Trident in the manifesto), how much further is he prepared to go? There is a huge opportunity for a "big tent" Labour approach led by Corbyn and his moves over the next few days will show if he has the real desire for office or is he's still playing student politics. 

I underestimated him before, hopefully he'll continue to defy my low expectations.

I don't think there will be another election soon

The Fixed Term Parliament Act will make it very difficult for there to be another election. The DUP will back the Conservatives (or at least will never work with Corbyn) so that means a minority Tory government. 

However to have a new election we need a super majority of Labour and the Conservatives - that's highly unlikely to happen as why would either call another election unless they both thought they could win. 

The alternative is a vote of no confidence in the government AND no alternative government being available. That means the Conservatives handing over to the Labour party to govern (if only for a short period of time), I cant see any circumstances in which that would be enabled by the DUP. 

Therefore I think we're in this for the long haul, a weak government scrapping around from day to day to get majorities for its votes and budgets. That doesn't necessarily mean bad government but it does mean a very weak hand for the UK in Brexit negotiations, which further underlines my view that Brexit means EFTA. 

What kind of day has it been 

All in all, as someone who believes in unions, that is the Union of the UK and the EU. I think this was a good result. It stops the threat of independence, in the short term, to the UK and blunts the aspirations of those that want a hard Brexit. 

Like the last few elections this result was a hell of a shock, but unlike so many it was a positive one for me. Time will tell but 8 June 2017 could be a very significant day in the history of the United Kingdom and the European Union. 

How can Nicola Sturgeon sleep at night?

Nicola Sturgeon and the SNP were just too clever by half last night at the STV Leaders Debate. 

Sturgeon openly admitted that the Scottish Government were pocketing the cash from welfare cuts, which include the family cap and rape clause that they are so actively campaigning against. 

It's exposing a level of hypocrisy on a grand scale and demonstrates just how complacent the SNP have become in that they believe they can get away with this sort of thing.  

Anyone with a bit of patience can string the budgets, powers of the Scottish Parliament and policy decisions of the Scottish Government to prove this case. But it's a difficult process to simplify. 

Fortunately Sturgeon did the job for me when she let it slip in a planned debate soundbite that they really should have thought twice about. 

I can just imagine the pre debate prep:

Sturgeon: OK so we’ll skew Dugdale with the leak of a vague private conversation and the spinners in the room can be there with detailed circumstantial evidence to follow it up. With a bit of luck that will stick. But what about Davidson she’ll batter me on independence? We need a strong soundbite against her.

Adviser : What about the rape clause again?

Sturgeon: Maybe... it didn’t cut through in the local elections though?

Adviser: Yes you’re right. But what about linking it to the tax cuts, something like stealing from the poorest and most vulnerable to fund tax cuts. After all we know that IDS resigned over the cuts funding the higher rate tax cuts

Sturgeon: Hmm that might work, and we can throw in some moral outrage line on the night to help it stick. Yes! That should do it.

And so it came to pass. At the STV Scottish Leaders Debate last night Sturgeon went for it:


“The money you are saving (on the subject of the rape clause and welfare cuts), is money taken from the poorest in society, is then being spent by your party on tax cuts for the richest. How do the Tories sleep at night.”

There we have it. 

Sturgeon has absolutely accepted that the benefit cuts are funding the Tory tax cuts for the rich. That of course means the increases the the higher rate band that the SNP opposed in Holyrood as we can see from their 2016 manifesto. 

So the SNP have decided to generate £1.2 billion in additional spending by forgoing the 'Tory tax cuts'. But we know categorically that this money has been "taken from the poorest in society" via cuts like the family cap and rape clause.

Well this is awkward! 

The SNP are openly admitting that they are pocketing the cash from the welfare cuts (for public spending rather than tax cuts) but leaving the welfare cuts in place. 

Let's be clear there is nothing to stop the SNP changing welfare levels upwards in Scotland, that decision is fully devolved to Holyrood. 

They could end the family cap and the rape clause tomorrow, and we know they have all the resources they need to do it because they pocketed £1.2bn in Tory benefit cuts. 

But government is about priorities. 

The SNP have made a decision to accept, and benefit from, the rape clause in Scotland. They have decided to use the money from it to benefit public services in Scotland. That includes such policies as free tuition for middle class students from Scotland and the EU (but not England, Wales or Northern Ireland), free prescriptions for the wealthy, and a cut to income tax for everyone earning under £100,000. 

Or let me put it another way:

The money you are saving (on the subject of the rape clause and welfare cuts), is money taken from the poorest in society, is then being spent by your party on free benefits and tax cuts for the richest. 

How do the SNP sleep at night?

Polling update - UPDATED AGAIN

I had hope to offer some of wisdom from the odds market in respect of the General Election, however the markets seems to be literally hedging their bets on this one with the possibility of a hung parliament now moving into territory that cant be dismissed. So I'll sit this one out. 




Given that everything depends on the turnout model, the polls are also useless when it comes to giving us a useful prediction for a UK general election. So we are looking at the next election as a real unknown. That's useful in one regard in that it should stop anyone getting a huge shock on the day, but only because no one really has expectations to be dashed! 

However fortunately amongst all the polling we've had a crop of independence referendum polls which do tell us something quite interesting. Firstly the turnout model for the independence referendum should not suffer from the issues we've seen in the General Election. That's due to the high level of turnout that we experienced during the referendum and can expect again. Also, as I've shown before, polls on independence tend to favour the Yes movement and overestimate support for the SNP. 

However I'm beginning to wonder if that effect is waning, and that might be what we are seeing in the polls now. We'll know soon enough when we compare the polling for the SNP versus the actual votes they achieve on Thursday. 

An SNP win whilst losing the battle?
I expect a resounding "win" for the SNP on Thursday as the split unionist vote to enables them to save quite a few high profile SNP names (such as Angus Robertson) I still think they will lose some ground in votes and seats. The big issue for the SNP however is even with a General Election "win" in Scotland (it will still be a loss at UK level because that is mathematically inevitable for the SNP) their flagship policy continues to decay in support. 


I usually leave this chart to the end but I think it's probably the best place to start. When you just look at the Yes vote alone, i.e. exclude the No votes and Don't Knows, something remarkable has been happening of late. 

In the past I liked this chart as it helped to give us a better understanding of the true Yes vote. That was based on the evidence that "shy no voters" were "dont know" in the pre independence referendum polls. 

The trouble with the chart however is different polling methods would render different Dont Know levels, PanelBase for instance would tend to have few don't knows. Therefore the only way to look at this chart was through a poly line of best fit, this would help to smooth out the different methods and let us see the underlying strength of the Yes vote. 

You don't need an explanation of what's going on to see that the Yes vote is in retreat. Lots of flag waving Yes supporters marching through Glasgow continues to demonstrate the lessons the Yes side (and perhaps UK Labour's big crowds) should have learned from the referendum. The enthusiasm of the minority does not make a majority.  



This point is made obvious in the standard charts with the linear line of best fit (splitting don't knows equally amongst the Yes and No votes) showing that No continues to rise with time. 

 
The 5 factor poly trend also shows and even more dramatic trend of late with the case for independence in serious decline. Some of this may be due to No voters becoming more confident in their position (that would certainly line up with the rise in the Tory vote and the reported strong support for Labour amongst young voters in recent polls). 

So it may be a reduction of the shy no effect (we should be able to establish that on Friday) but is almost certainly also a waning of the case for independence. No wonder that it's number 10 on the SNP manifesto. 


ELECTION DAY UPDATE
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We've had a new Survation phone poll on election day so I thought it would be worth updating the trends. The poll is potentially an outlier or is just a further crystallisation of the effects I was discussing above. 

We'll be able to tell much more when the election results come in, but right now this looks really bad news for the SNP.