In just over a week’s time, Scottish voters will choose whether Scotland should become an independent country outside the United Kingdom, or remain a devolved part of the UK. It’s a big decision, but they should not think that the referendum vote is the end of the matter. In reality, it is only the beginning. The pro-union parties have long made it clear that a No vote will start the process of delivering a form of enhanced devolution; a Yes vote will trigger a process leading to independence, about which there are few other certainties.
Much of the campaign in the last few weeks has been about creating a different sort of politics, and a different approach to social policy, within Scotland. But at least as important for Scotland as an independent state is the nature of its relations with the remaining part of the United Kingdom (rUK) – its much larger southerly neighbour, its main economic and trading partner, with which the Scottish Government aspires to share a currency, ‘social union’ and much more. All those plans are predicated on a close and amicable relationship with rUK, with Scotland able to enjoy the continuing benefit of a number of services that the UK presently offers to all its citizens. The question is: can that vision actually be delivered? Even if that model t is the interests of an independent Scotland, why is it in the interests of rUK, if Scotland chooses a future outside it? If it is not, why should rUK comply with independent Scottish wishes – why is it in rUK’s interests to do so? And, given the differences in interest in securing that outcome, how might an independent Scotland make it happen?
If there is a Yes vote, there will be a complex and messy set of negotiations between referendum day and independence day. Before those negotiations can start, and certainly before the Scottish Government can talk to any entity outside the United Kingdom, a paving bill permitting it to do so would need to be passed by Westminster. At the end, following those negotiations, both UK and Scottish Parliaments will need to approve the resulting deal. Not all the issues that need to be resolved between rUK and an independent Scotland (iScotland) will be resolved by independence day. Indeed, if the Czech-Slovak parallels are anything to go by (and that was a much simpler case), they will not be fully resolved for at least two decades. That does not mean Scotland cannot become ‘independent’, but that independence will indeed be a process not an event, with many issues falling to be resolved only months or years later. However, for an independent Scotland to start functioning as an independent state, some key top-order issues have to be resolved. Prominent among these are:
- the currency the new state will use, and who bears the risks associated with that
- the borders of the new state – particularly its maritime borders, which will affect oil and gas reserves unless a distinct arrangement is made for these.
- the arrangements for movement of persons between rUK and the new state, both at the border and more generally
- whether, when and on what terms the new state will be or become a member of the European Union
- the division of the UK’s current National Debt
- the division of other UK assets and liabilities – ranging from defence infrastructure to museum and gallery collections
- what happens to the existing UK nuclear bases on the Clyde
- if rUK is to continue to administer welfare and pensions payments in Scotland for some transitional period, the basis on which it will do so
- the means by which outstanding issues are resolved, and what happens if the parties cannot reach agreement by negotiation.
A good deal could be said (and has been) about the merits of each individual issue, and many others besides. (For example, how will benefits or pensions be paid to Scottish claimants or recipients the month after independence? If, as is proposed, rUK continues to provide that service to Scottish citizens, why should it do so?) But resolving each of them, and the relationship between them, which will shape the overall nature of an independent Scottish state, will largely depend on the negotiations with rUK. That is key to the ‘velvet divorce’ the Yes side has suggested would be part of independence. However, successful negotiations depend on each side being able to reach agreement, because each has something the other wants. So how likely is an independent Scotland to secure what it wants from those negotiations? What does it have that rUK would be likely to want? And what does an independent Scotland have that rUK wants?
The common response from the Yes side is to talk about a Scottish ‘mandate’ for independence. But that is largely irrelevant here, at least on the rUK side. So is referring to Article 30 of the 2012 Edinburgh Agreement which has led to the referendum, and commits the two governments ‘to continue to work together constructively in the light of the outcome, whatever it is, in the best interests of the people of Scotland and of the rest of the United Kingdom.’ A mandate authorises the iScottish side to negotiate; Article 30 means holding negotiations about independence in good faith, and ensuring independence happens – not the terms on which it does so.
If the parties get to a negotiating table, the list of what iScotland has that rUK wants is short. One is continued membership of the United Kingdom – but that is lost if there is a Yes vote. The legitimacy of a UK including Scotland is ended, with no way back. The obligations of the UK Government toward its citizens living in Scotland are not ended immediately, but they are attenuated, and as Scottish voters will no longer elect MPs, there is no political advantage in being helpful to them. The act of having a mandate to negotiate means one key potential negotiating point is completely exhausted from the outset. That card cannot be played again.
A second is that rUK would not want iScotland becoming a failed state. A failed state on the northern border would pose an unacceptable level of risk, in security and other terms. But even if an independent Scotland were significantly less prosperous, inclusive or happy than it is within the UK, that is a far cry from being a failed state. Indeed, the threshold of failing in the way that Afghanistan or Somalia failed is so high that it is almost impossible to imagine what would undermine iScotland so gravely as to make it a failed state. That is therefore not a strong negotiating point.
Third, there is Trident, while the UK/rUK remains committed to nuclear weapons. The thinking until now has been that the Clyde bases were crucial to that, and that might be a strong card. But it is a weaker card if there is a realistic prospect of relocating them elsewhere, as Hugh Chalmers and Malcolm Chalmers of RUSI have recently suggested. In any case, the commitment of the SNP and the wider pro-independence coalition to a Scotland free of nuclear weapons means the Scottish Government has little or no scope to make an offer to rUK for nuclear weapons bases – whether by lease, some sort of carve-out to mean they would not strictly speaking be on Scottish soil, or some other means. The pro-independence side has little room for manoeuvre here, given the commitments of its supporters. All that might be for discussion is the length of the ‘withdrawal period’, suggested in the Scottish Government’s independence white paper as four years (by the 2020 Scottish Parliament elections). There have been suggestions that this might be stretched (and Chalmers and Chalmers suggest removal before 2028 would be very difficult technically). However, any lease less than about 50 years is of limited value if rUK wishes to commission a successor to Trident based in Scotland – with a shorter arrangement, the bases would need to be moved mid-term at considerable cost and with operational implications. So that negotiating point is worth little too, even if rUK is determined to remain a top-tier nuclear power (and is worthless if rUK gives up on that aspiration).
As for other issues like a common travel zone, these are much more marginal to rUK – and much more important to iScotland. The desire to have an arrangement that minimises the border and its impact is much stronger for iScotland than rUK.
On the other hand, what does Scotland want or need? Its desire to ‘share the pound’ has been clearly ruled out by the UK Government. What is important for Scottish voters to realise is that a currency union transfers a disproportionate degree of risk to rUK. It is very hard for rUK politicians to justify taking on those risks for what would be another country. There might be a huge advantage to iScotland from a currency union – but what does it offer rUK? The convenience factor of lower transaction costs is of very limited importance for rUK and its citizens and businesses. The January announcement means there will be no negotiation about this – but even if there were, what does iScotland have to offer to compensate rUK for the potentially huge risks it would incur?
Similarly, free movement across the border, a ‘social union’ or access to the BBC may have strong attractions for iScotland, but what do they offer rUK? An open border needs to be structured in such a way that it does not cause any security threat to rUK – which means at least some control over iScotland’s immigration policy. A key element to making an open border work would also be the nature of citizenship of UK citizens living in Scotland or with Scottish connections – something on which the white paper is strikingly silent. A further issue, given English concerns about immigration, it would also have to include limits on the rights of people immigrating to Scotland to move to rUK – so it would not be as open as the UK-Irish border is, or the UK is to people from other EU member states. Similarly, why should Scotland get access to the services of the BBC? If it wishes to have the BBC (and the white paper makes a set of detailed criticisms of it), it will need to pay rUK for doing so – and why should rUK offer the full range of BBC services to Scottish listeners and viewers for less than those in rUK? And Scottish residents would also have to fund the proposed Scottish Broadcasting Service as well. Deals may be done, but on what terms? The question in such cases is what does iScotland have to offer rUK for making a concession which matters a great deal to iScotland but just not very much to rUK?
The problem with all these issues is the asymmetry. They simply matter much more to iScotland, and its citizens, than they do to rUK. No amount of wishful thinking can change that. Something has to be put into the balance to switch the way rUK calculates its benefit and disadvantage from making such concessions to iScotland. This is aggravated by the way almost all ‘default options’ will be to rUK’s benefit and iScotland’s disbenefit. By seceding from the UK, iScotland has to make a case to change the loss of much of what it presently enjoys through the UK which appeals to more than emotion.
One negotiating point iScotland would not have – or which can only be used at hugely disproportionate cost – is not taking a share of the UK’s current National Debt. There is scope for negotiations about the size of that share, how it is calculated and how it is offset against other UK assets. But threatening to repudiate a share of the UK National Debt – as various pro-independence hot-heads, and more recently John Swinney – have threatened is about as counter-productive as one can imagine. If iScotland acts unilaterally, it will make itself an international pariah. If it is able to borrow on the global markets at all, repudiation of debt will mean it incurs a very hefty premium on its interest rates. An ongoing dispute with rUK will impede or completely block negotiations about membership of the European Union, as well as international organisations like NATO. There will be sour, damaging relations with rUK for bilateral matters as well.
By contrast, rUK could be a valuable ally for iScotland in securing membership of such bodies as the EU and NATO. There would be three options for rUK; actively to assist and persuade, to remain impartial and do nothing, or actively to obstruct iScotland. It can be helpful, unhelpful, or sit on its hands. Each of those positions would have a material impact – active assistance and a ‘velvet divorce’ would make iScotland’s passage to statehood hugely easier, active opposition would make it much harder (but without triggering the real threat to rUK of a failed state).
About the only card left for Scotland is to string out the negotiating process so that rUK makes concessions out of exhaustion and frustration. But this would mean abandoning the May 2016 target for independence (problematic though that is in any case), souring relations with rUK, and undermining democracy in both rUK and iScotland. If Scots want to be in a different state, that wish should be implemented as swiftly as practicable – not postponed to suit the convenience of the Scottish Government.
It may be a bitter truth for advocates of independence, but an independent Scotland would remain heavily dependent on rUK in a large number of ways. These ways are important for iScotland, but not particularly so for its much larger neighbour. To secure an advantageous ongoing arrangement, it has to be able to make convincing proposals to rUK that deliver things rUK wants or needs – and the list of those, once there has been a Yes vote, is small. The upsides of a velvet divorce for Scotland are huge, and the downsides of the opposite – a grinding-wheel divorce? – even larger. But once a divorce is happening, its nature simply does not matter much to rUK. If there are independence negotiations, iScotland will essentially be a supplicant to rUK, so weak that it largely has to accept what rUK offers. Scottish voters need to bear that in mind when they head to the poll.
UPDATE, 13 September: There is a relationship between what is discussed in this post and the discussion in my Belfast Lecture and post above about the impact of a Yes vote on rUK, and the framework for any negotiations. The fact of the Yes vote will have a considerable, adverse impact on rUK – disrupting a variety of institutions and other arrangements. So in addition to there being little reason to be accommodating to iScotland at rUK’s expense, there will be positive reasons not to. This is not simply petulance, but an understandable reaction to the damaging effects of a Yes vote on England, Wales and Northern Ireland. A rupture of that scale has inevitable consequences.