Italy blocks shipment of Oxford/AstraZeneca vaccine to Australia

Italy has blocked a shipment of the Oxford/AstraZeneca Covid-19 vaccine that was destined for Australia, in the first such intervention since the EU introduced new rules governing the shipment of vaccines outside the bloc. 

Rome decided to prevent the export of 250,000 doses of the vaccine, officials said, as it moves to keep doses inside the union. 

Italy notified Brussels of its proposed decision at the end of last week under the EU’s vaccine export transparency regime. The commission had the power to object to the Italian decision and did not, officials said.

The move threatens to heighten global tensions over vaccine procurement after EU allies objected to the introduction of its export regime. Under the controversial system announced by the European Commission at the end of January, EU-based vaccine manufacturers must seek authorisation from their national government where their Covid-19 vaccine is produced before exporting it out of the EU.

The scheme was part of Brussels’ response to an admission by AstraZeneca that it would miss targets for vaccine delivery to the EU, stoking EU suspicions that production had been shipped elsewhere.

Mario Draghi, the new Italian prime minister, questioned why the EU was not imposing stricter vaccine export controls at a summit of EU leaders last month.

AstraZeneca declined to comment, as did the commission.

The Italian government declined to comment. One Italian official said that decisions on permitting or blocking exports of vaccines were not made unilaterally and that the commission was involved.

Draghi has said that speeding up Italy’s vaccination drive will be the focal point of the first months of his premiership.

Earlier this week, the Italian government announced new vaccination targets. As of March 2, the country had vaccinated 4.6m people.

As part of this drive, Draghi has also replaced the two top figures in charge of the programme under the country’s previous government.

This week, he appointed Italian army general Francesco Paolo Figliuolo as the country’s new Covid-19 emergency commissioner, replacing Domenico Arcuri. The prime minister also appointed a new head of Italy’s civil protection agency.

New US jobless claims bump higher to 745,000

New claims for unemployment benefits rose to 745,000 last week as the pandemic continued to weigh on the US labour market even while some coronavirus restrictions were eased.

The number of jobless claims filed for regular state programmes increased by 9,000 in the week ending February 27, from 736,000 the previous week, the US labour department said on Thursday. Economists had expected claims to rise to 750,000.

The small increase came after last week’s jobless claims fell to their lowest level in three months. Economists expected the previous week’s report had overstated the decline, however, since Texas, the second-most populous American state, and much of the central US were hit with a severe winter storm that affected new filings.

The report also showed a rise of 9,246 in claims for federal pandemic unemployment assistance — which includes gig workers and the self-employed — to 436,696 on an unadjusted basis.

The uneven nature of the labour market recovery has provided an impetus for President Joe Biden’s $1.9tn fiscal stimulus package. Biden and Democratic leaders have reached a compromise that would limit eligibility for $1,400 stimulus cheques ahead of a Senate vote on the legislation.

Economists hope that the US economic rebound will speed up as vaccines are distributed more widely. The Biden administration has accelerated its vaccine timeline and now expects there to be enough doses to inoculate every adult in the country by the end of May — two months earlier than previously announced — as it hopes to turn the corner on the fight against the pandemic, which has killed more than 508,000 Americans. 

The vaccine rollout and the recent decline in coronavirus cases and hospitalisations continue to support the gradual reopening of the US economy. Texas and Mississippi this week threw open the doors for businesses, ending all capacity curbs for companies to bolster their economies.

That has alarmed some public health officials, however, who are concerned that the decline in new infections is starting to stall. Biden slammed the reopenings as a “big mistake”. 

The new claims figures come ahead of Friday’s non-farm payroll report, which is expected to show the US economy added 182,000 jobs and the unemployment rate held steady at 6.3 per cent in February. 

More than 18m Americans continue to seek jobless benefits almost a year after the pandemic led to widespread lockdowns and a steep economic contraction.

Financial bubbles also lead to golden ages of productive growth

Sir Alastair Morton had a volcanic temper. I know this because a story I wrote in the early 1990s questioning whether Eurotunnel’s shares were worth anything triggered an eruption from the company’s then boss. Calls were made, voices raised, resignations demanded. 

Thankfully, I kept my job. Eurotunnel’s equity was also soon crushed under a mountain of debt. Nevertheless, the company was refinanced and the project completed. I raised a glass to Morton’s ferocious determination on a Eurostar train to Paris a decade later.

With hindsight, Eurotunnel was a classic example of a productive bubble in miniature. Amid great euphoria about the wonders of sub-Channel travel, capital was sucked into financing a great enterprise of unknown worth.

Sadly, Eurotunnel’s earliest backers were not among its financial beneficiaries. But the infrastructure was built and, pandemics aside, it provides a wonderful service and makes a return. It was a lesson on how markets habitually guess the right direction of travel, even if they misjudge the speed and scale of value creation.

That is worth thinking about as we worry whether our overinflated markets are about to burst. Will something productive emerge from this bubble? Or will it just be a question of apportioning losses? “All productive bubbles generate a lot of waste. The question is what they leave behind,” says Bill Janeway, the veteran investor.

Fuelled by cheap money and fevered imaginations, funds have been pouring into exotic investments typical of a late-stage bull market. Many commentators have drawn comparisons between the tech bubble of 2000 and the environmental, social and governance frenzy of today. Some $347bn flowed into ESG investment funds last year and a record $490bn of ESG bonds were issued. 

Last month, Nicolai Tangen, the head of Norway’s $1.3tn sovereign wealth fund, said that investors had been right to back tech companies in the late 1990s — even if valuations went too high — just as they were right to back ESG stocks today. “What is happening in the green shift is extremely important and real,” Tangen said. “But to what extent stock prices reflect it correctly is another question.”

If the past is any guide to the future, we can hope that this proves to be a productive bubble, whatever short-term financial carnage may ensue.

In her book Technological Revolutions and Financial Capital, the economist Carlota Perez argues that financial excesses and productivity explosions are “interrelated and interdependent”. In fact, past market bubbles were often the mechanisms by which unproven technologies were funded and diffused — even if “brilliant successes and innovations” shared the stage with “great manias and outrageous swindles”.

In Perez’s reckoning, this cycle has occurred five times in the past 250 years: during the Industrial Revolution beginning in the 1770s, the steam and railway revolution in the 1820s, the electricity revolution in the 1870s, the oil, car and mass production revolution in the 1900s and the information technology revolution in the 1970s. 

Each of these revolutions was accompanied by bursts of wild financial speculation and followed by a golden age of productivity increases: the Victorian boom in Britain, the Roaring Twenties in the US, les trente glorieuses in postwar France, for example.

When I spoke with Perez, she guessed we were about halfway through our latest technological revolution, moving from a phase of narrow installation of new technologies such as artificial intelligence, electric vehicles, 3D printing and vertical farms to one of mass deployment.

Whether we will subsequently enter a golden age of productivity, however, will depend on creating new institutions to manage this technological transformation and green transition, and pursuing the right economic policies.

To achieve “smart, green, fair and global” economic growth, Perez argues the top priority should be to transform our taxation system, cutting the burden on labour and long-term investment returns, and further shifting it on to materials, transport and dirty energy.

“We need economic growth but we need to change the nature of economic growth,” she says. “We have to radically change relative cost structures to make it more expensive to do the wrong thing and cheaper to do the right thing.”

Albeit with excessive enthusiasm, financial markets have bet on a greener future and begun funding the technologies needed to bring it to life. But, just as in previous technological revolutions, politicians must now play their part in shaping a productive result.

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Square to buy majority stake in Jay-Z’s Tidal streaming platform

Mobile payments company Square has agreed to acquire a majority stake in Tidal, the streaming platform owned by Jay-Z, for $297m.

Square will pay for Tidal in a mix of cash and stock and said it would name Jay-Z to its board of directors. The deal will allow the financial services company to expand its portfolio into music streaming as competition among platforms such as Spotify and Apple has grown.

Tidal describes itself as a music service “built by artists, for artists.” A group of musicians led by Jay-Z bought the company in 2015 for $56m.

“It comes down to one simple idea: finding new ways for artists to support their work,” said Jack Dorsey, co-founder and chief executive of Square. “New ideas are found at intersections, and we believe there’s a compelling one between music and the economy.”

Square’s share price has risen by nearly 500 per cent since the lows of last March, making it one of the biggest corporate winners of the pandemic. Its meteoric share rise was driven by businesses being forced to set up ecommerce operations during worldwide lockdowns, and more customers paying digitally rather than in cash over the past year.

Tesla to become adviser on nickel project in bid to secure key metal

Tesla has agreed to buy nickel from a mine in New Caledonia in a move to secure its supply of the battery metal, which its chief executive Elon Musk has called the group’s “biggest concern.”

The electric-car maker will become a technical adviser at the Goro mine on the Pacific island and also get long-term supplies of nickel from the project as part of an agreement with the New Caledonian government, according to a person directly familiar with the matter.

The move comes amid growing concerns about future supplies of nickel, following a 26 per cent rally in prices of the metal over the past year and growing investment by Chinese companies in Indonesia. Nickel is needed for the most powerful lithium-ion batteries used in electric vehicles.

“Nickel is our biggest concern for scaling lithium-ion cell production,” Musk said on Twitter last month.

New Caledonia is one of the largest nickel producers, but protests in the French territory have delayed the sale of the lossmaking Goro mine and refinery by Vale to a consortium called Prony Resources.

The agreement reached in New Caledonia on Thursday will allow the sale to go through and give 51 per cent of the project to state entities based in the territory, according to a Reuters report citing the text of the agreement released by New Caledonia’s political parties. Commodity trader Trafigura will have a 19 per cent share, according to the Switzerland-based company.

While Tesla will not have an equity stake, its close involvement in the mine signals its efforts to have greater control over its entire supply chain, from mine to battery, as it ramps up production. A Tesla spokesperson in the UK declined to comment on the news. Vale could not immediately be reached for comment.

Last year Tesla agreed to buy cobalt, another battery metal, from the Swiss miner Glencore.

Nickel, which is mined mostly in Russia, Canada, New Caledonia and Indonesia, is primarily used to make stainless steel. But growth in electric vehicles is adding a new source of demand for the metal.

While Chinese companies have invested heavily in new nickel projects in Indonesia over the past few years, the process to extract and process the nickel uses energy from coal-fired power.

“The only incremental nickel tonnage is coming from Indonesia but the problem with Indonesia from an ESG perspective is it may not meet the criteria of Tesla,” Jim Lennon, an analyst at Macquarie, said. “Tesla is way behind in securing units and the Chinese have wrapped it up.”

On Tuesday, Chinese stainless steel producer Tsingshan said that it had signed an agreement to sell 100,000 tonnes of nickel to two Chinese battery materials companies, Huayou Cobalt and CNGR Advanced Material.

The Chinese company said it had begun producing higher purity nickel at its plant in Indonesia since last July, a form suitable for electric vehicle batteries, according to a statement on its official WeChat account.

Following the news, nickel prices fell by 8 per cent on Thursday, as traders bet that Indonesian nickel would alleviate any shortage in the market.

Nickel last traded at $16,225 a tonne, down 13 per cent this week.

Flash rally in Bank of Japan shares leaves brokers perplexed

Shares in the Bank of Japan surged on Thursday for a fourth consecutive session, putting them more than 90 per cent up for the week and leaving brokers struggling to explain the rally.

The bull run is all the more remarkable given that the stock is notoriously illiquid, offers no dividend, is worth less than a tenth of its peak value and is synonymous with a two decades-long failure to combat falling prices.

In its new role as Japan’s least likely “meme stock”, the BoJ has risen by a total of 93 per cent from the close at the end of last week. Despite numerous theories, nobody, say veteran traders, can be quite sure who is doing the buying.

Some brokers have suggested that the BoJ’s shares have become an unexpected bellwether of what Oki Matsumoto, chief executive of the brokerage Monex, described as a “negative bubble” in cash — referring to the flood of asset purchases by central banks around the world since the Covid-19 crisis began that has fed investor appetite for any asset deemed in tight supply. 

But that is just one of a range of theories. Another centres on the idea that some investors are giving the BoJ stock a higher valuation because recent gains in Japanese stocks have generated huge unrealised profits on the bank’s policy-swollen portfolio of exchange traded funds.

Some have even suggested that BoJ shares purchased in 2021 might represent a macabre keepsake by which to remember the era of negative interest rates, yield curve control and other unorthodox policies introduced by the central bank. 

The central bank has been listed on the Jasdaq market for small companies since 2004 but first became a publicly traded company in 1949. The stock is 55 per cent held by the government, cannot be traded on an electronic exchange and provides retail shareholders with no voting rights. 

The most recent 15 per cent gain on Thursday — on a trading volume of just 11,600 shares — propelled BoJ shares to their highest level since 2015.

It is just the latest wild swing in a stock that has a history of eye-catching volatility and long-term value destruction. Owners of the stock since its most recent surge in mid-2007 have lost almost 70 per cent. Those that bought the BoJ on the over-the-counter market at its peak in 1988 have seen their paper loss spiral to more than 90 per cent.

In a note to clients this week, the veteran Japan equities analyst Pelham Smithers said that the experience of BoJ shares in the 1980s had provided a useful warning of the meme stock concept. For those that got in and out early, there was a chance of some profit. But liquidity — as with many modern-day hot stocks such as US retailer GameStop — is the challenge.

“If you didn’t get out in time, then you had a problem: there was absolutely no reason for anyone else to buy the shares. There’s no dividend and no chance of a takeover, so no income stream and no exit. Owning shares in Bank of Japan was like owning a zero-coupon perpetual bond,” wrote Smithers. 

Making a small amount of money on BoJ shares might be possible, said Smithers, “but to make a lot of money in them is both difficult and, based on past evidence, fraught with risk of a large and lengthy loss”.

FC Barcelona and Real Madrid will be forced to pay back illegal state aid

FC Barcelona and Real Madrid will be forced to pay back millions of euros in illegal state aid after the EU’s highest court ruled Brussels was right to declare that beneficial tax arrangements they enjoyed for a quarter of a century were illegal.

The decision by the European Court of Justice upholds previous rulings by the European Commission and comes as Barcelona, the world’s highest-earning football club, is enduring one of the biggest crises in its history. 

This week police arrested the club’s former president, its current chief executive and its general counsel, in connection with a separate legal case ahead of a vote on Sunday to decide its next president. Barcelona, which recorded a loss of €100m last year, also has to contend with a debt pile of more than €1bn.

In 2016 Margrethe Vestager, the EU’s competition chief supremo, ordered four Spanish football clubs to pay back tens of millions of euros received since the 1990s in the form of sweetheart property deals, tax breaks and soft loans.

FC Barcelona subsequently contested the decision before the General Court, the EU’s second-highest tribunal, which annulled the commission’s judgment. However, after a final appeal from Brussels the ECJ ruled in favour of the EU.

In its decision on Thursday — which is final — the ECJ deemed the tax scheme “liable to favour clubs operating as non-profit entities over clubs operating in the form of public limited sports companies”, holding that it could therefore qualify as illegal state aid under EU rules.

The General Court had previously annulled Brussels’ decision over what it said was lack of sufficient evidence that the tax arrangements offered to the four football clubs, which also include CA Osasuna and Athletic Bilbao, were illegal.

But the commission had questioned the court’s “heavy burden of proof” on regulators in its appeal, arguing that a lower tax rate was obviously more favourable than a higher one.

The ECJ argued that the difficulty in assessing the extent of state aid — because of the complexity of tax deductions — did not preclude the commission from banning government practices that it considered gave sports clubs unfair advantages. 

It said: “The impossibility of determining, at the time of the adoption of an aid scheme, the exact amount, per tax year, of the advantage actually conferred on each of its beneficiaries, cannot prevent the commission from finding that scheme was capable, from that moment, of conferring an advantage on those beneficiaries.”

The Spanish government said on Thursday it had “absolute respect” for the court’s decision. FC Barcelona and Real Madrid did not immediately respond to requests for comment.

The judgment will be seen as a big win for regulators in Brussels who have for years been trying to stop highly successful commercial clubs from freeriding on the back of taxpayers.

The European Commission said on Thursday it noted “the judgment by the Court of Justice to follow the Commission’s arguments”.

Thursday’s ruling is the second time Brussels has won an appeal of its state aid decisions in recent weeks. Last month judges at the General Court rejected a legal challenge by budget airline Ryanair to state aid given to rivals on discriminatory grounds.

At present Barcelona is dealing with the fallout of what the Spanish media dubs Barçagate — allegations, denied by the club, that it corruptly hired outside groups to defame former president Josep Maria Bartomeu’s adversaries on Facebook.

Bartomeu was temporarily detained by the Catalan police earlier this week. He, the club, and other individuals in the case, which is being investigated by a Barcelona court, have all denied any wrongdoing.

UK competition regulator launches antitrust probe into Apple

The UK competition watchdog has opened a probe into Apple over claims it imposes unfair terms and conditions on app developers, in the latest regulatory assault on the tech giant’s dominance. 

The Competition and Markets Authority will investigate whether Apple maintains a stranglehold over the app market through its App Store and whether it abuses its position as a gatekeeper for mobile services on the iPhone. 

Apple takes a 30 per cent commission on most digital purchases through the App Store, falling to 15 per cent for some subscriptions. Developers told the CMA that Apple was imposing unfair terms and conditions on them in return for selling their apps to customers through the App Store, which remains the only marketplace for iPhone and iPad apps.

The watchdog said it would consider whether Apple’s control of the market resulted in “less choice” for customers, or in users paying “higher prices for apps and add-ons”.

The probe, which is in its earliest stages, is the second large antitrust investigation the CMA has launched into a technology company in just two months, following its probe into Google’s web browser changes in January. 

CMA chief executive Andrea Coscelli said: “Millions of us use apps every day to check the weather, play a game or order a takeaway. So, complaints that Apple is using its market position to set terms which are unfair or may restrict competition and choice — potentially causing customers to lose out when buying and using apps — warrant careful scrutiny.”

The investigation follows complaints around the world from companies including music service Spotify and Epic Games, the games developer behind Fortnite, that Apple’s rules constrain their ability to run their businesses on iPhones and iPads. The CMA said it had received complaints from “several developers” but did not name them. 

In February, Coscelli also pledged to mount a series of antitrust investigations into internet companies such as Google and Facebook, even as the CMA awaits new powers to run a technology regulator, which is due to be launched later this year. 

As it faces mounting investigations in the US and Europe, Apple has always insisted that its App Store controls are designed to ensure ease of use and security for its customers.

“The App Store has been an engine of success for app developers, in part because of the rigorous standards we have in place . . . to protect customers from malware and to prevent rampant data collection without their consent,” Apple said. “We look forward to working with the UK Competition and Markets Authority to explain how our guidelines for privacy, security and content have made the App Store a trusted marketplace.”

The investigation comes after Brussels opened four antitrust probes into Apple. The European Commission is investigating whether Apple’s rules undermine rivals in gaming and cloud services.

Regulators in the EU also launched a competition probe into Apple Pay last summer. The Dutch competition authority began a similar examination of Apple’s app store rules in 2019 and is expected to report its conclusions soon. Meanwhile, the US Department of Justice has also been asking app makers about their dealings with Apple, though no case has been brought so far.

Apple in October warned investors for the first time that it faced a “material” financial risk from the regulatory pressure on its App Store. 

Government bond sell-off pauses ahead of Powell remarks

A global sell-off in government bonds paused on Thursday as investors awaited remarks by Federal Reserve chairman Jay Powell that could signal how the central bank will react to ructions in the sovereign debt markets.

Following a fresh bout of selling in US Treasuries on Wednesday, which spread to debt issued by other nations from Canada to Italy, the yield on the 10-year US government bond was broadly flat in early trading on Thursday at 1.47 per cent.

Germany’s 10-year bond yield fell 0.02 percentage points, as people bought the debt, to minus 0.3 per cent, while Italy’s slipped 0.01 percentage points to 0.74 per cent.

The yield on the 10-year Treasury, which acts as a benchmark for borrowing costs and asset prices worldwide, has risen rapidly from about 0.9 per cent at the start of the year.

Investors have offloaded the debt as President Joe Biden pushes his $1.9tn coronavirus relief package through the US legislature, raising expectations that the heavy stimulus spending will create strong economic growth and feed inflation.

The Fed continues to buy at least $120bn of financial assets each month to add liquidity to financial markets, as part of its emergency response to the pandemic that has helped drive global stock markets to a series of record highs.

Powell, who speaks at a Wall Street Journal summit at around 5pm UK time, is under growing pressure to respond to the bond sell-off. But economists at Morgan Stanley said he was unlikely to discuss using measures that would “combat an undesired tightening of financial conditions”.

“Policymakers will probably continue to hold the view that the rise in longer-term rates is commensurate with an improving economic outlook,” they added.

Stock markets were weak on Thursday as equity investors remained cautious about higher bond yields, which determine the discount rate used to value companies’ future cash flows. Europe’s Stoxx 600 equity index dropped 0.9 per cent, the UK’s FTSE 100 fell 1 per cent and Germany’s Xetra Dax lost 0.6 per cent, following a sell-off in the US overnight.

Hong Kong’s Hang Seng index closed 2.2 per cent lower, while mainland China’s CSI 300 dropped 3.2 per cent.

Futures markets signalled the US S&P 500 equity index would open 0.5 per cent lower and the top 100 stocks on the technology-focused Nasdaq Composite would fall 0.7 per cent.

Catherine Doyle, investment specialist at Newton Investment Management, said equity investors would probably continue to avoid shares in technology and other growth companies whose high valuations have been underpinned by low interest rates — and were a focus of Wednesday’s sell-off.

Doyle said she expected companies whose fortunes were linked to an economic recovery, such as banks and oil producers, to continue to do well. “For an equity investor, the main themes are reflation and economies reopening,” she said.

The dollar, as measured against a basket of currencies, strengthened 0.3 per cent. Brent crude, the international oil benchmark, fell 0.6 per cent to just under $64 a barrel as the Opec+ group of oil producers began their latest meeting.

What independence movements teach us about belonging

Anyone who has experienced Brexit in Britain or Trumpism in the US knows what a divided society feels like. Spending time in Barcelona last year, I recognised that atmosphere. Catalonia has been split down the middle by the region’s quest for independence from Spain. The resulting quarrels break up Sunday family lunches, or end life-long friendships.

No new state has emerged in western Europe since Malta became independent from the UK in 1964, but now there are three candidates. Scotland’s parliamentary elections on May 6 are effectively a referendum on independence, with the secessionist Scottish National Party expected to win a majority. That same month, Northern Ireland marks its centenary amid a Brexit-inspired push towards Irish unification.

None of these new states is likely to emerge anytime soon, if ever. London and Madrid can block Scottish and Catalan independence. Very few people in either part of Ireland are keen to hurry unification. Instead, these issues will probably stagnate into frozen conflicts, allowing polarisation to seep into everyday life.

Identity issues are the most emotive in politics. Few people stalk out of Christmas dinner because they disagree about the nuances of the Green New Deal. But introduce binary choices like “Should we live in Catalonia or Spain?” or “Scotland or Britain?” and some will get overexcited. In Northern Ireland, of course, unionists and nationalists generally wouldn’t be having Christmas dinner together in the first place.

The best way to keep a society united, argues the philosopher Amartya Sen, is to encourage everyone to hold multiple identities. People can feel simultaneously Catalan and Spanish, Scottish and British, even Irish and British, as long as they are left in peace to muddy their identities. Some are happiest living outside all ethnic clubs. The numbers in Northern Ireland who identified as neither unionist nor nationalist rose in the years before Brexit, notes Katy Hayward of Queen’s University Belfast.

But independence movements push people to choose a single identity. From 2006 through 2019, the segment of Catalonia’s population that considers itself “only Catalan” jumped 15 percentage points, reports José Oller of the University of Barcelona and colleagues.

Worse, these national identities pile on top of other polarising identities. In Catalonia, most indepes, as they are called, are well-off, native-born people who grew up speaking Catalan. In some of their workplaces and social settings, speaking Spanish is now frowned upon. Dissidents risk being informally boycotted in their professional lives.

Meanwhile, people in Catalonia of migrant origin — whether from Spain or abroad — mostly oppose independence. This social divide was pre-existing, but has recently become politically toxic.

In Scotland, supporters of independence are likely to be relatively young, well educated and anti-Brexit, says David McCrone of Edinburgh University. In Northern Ireland, Protestant unionists are more likely than nationalists to be older.

They are also worried about the survival of their identity. This year’s census may show Northern Irish Catholics outnumbering Protestants for the first time ever. And the trade border that Brexit has placed in the sea dividing Northern Ireland from the British mainland is probably here to stay, much as unionists loathe it.

The risk isn’t so much that some of them will try terrorism as that they will lose faith in democracy, says Hayward.

So far, Scotland is the least polarised of these regions. The independence referendum of 2014 — won by unionists — was relatively good-humoured. Even so, in focus groups afterwards, the pollster Lord Ashcroft recorded comments such as, “On my building site now no one talks about football, it’s all politics,” and, “It was testing for us, because we were a divided household. We stayed in different houses on the day of the referendum because he was very strongly Yes.”

Many Scots in recent years have found firm political identities online, with “rants emanating from all sides”, recounts Elizabeth Anne Bailey in her book Political Participation on Social Media. When a YouGov poll last year found that only 16 per cent of Scots believed Scotland was united, Gordon Brown, the former British prime minister and a vocal unionist, said Scotland looked like “two nations”. He warned, “These divisions could dominate our lives for many decades to come.” “Divisive referendum” may be a unionist mantra, but it’s an accurate one.

I completely understand why most Scots (according to polls) now back independence. They have been governed from Westminster by a party they didn’t elect for nearly 80 per cent of the period since 1945, points out McCrone. Brexit was done to them. Meanwhile, a small plurality of people in England either has no opinion on Scottish independence or actively supports it, reported YouGov last September.

But dividing people into identity groups and then letting the biggest group decide rarely works brilliantly. Better to let sleeping identities lie, and to argue instead about boring issues like carbon offsets and street lights.

Simon and author Leïla Slimani will discuss “The future of the Fifth Republic: writing and thinking about modern France” at the FT Weekend Digital Festival, March 18-20. For more information and tickets visit ftweekendfestival.com

Follow Simon on Twitter @KuperSimon and email him at [email protected]

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