Home / Dave Brockington / Thoughts on the Scottish Independence Referendum III: Ramifications

Thoughts on the Scottish Independence Referendum III: Ramifications

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Unlike my previous two posts on today’s referendum in Scotland, on electoral ramifications for the remainder of the United Kingdom, and on interpreting polling data, this piece is more of a speculative nature. Here, I consider constitutional, political, and international ramifications of a yes vote, as well as the constitutional ramifications of a no vote.

A No result, which I consider likely, will have both constitutional and political ramifications throughout the United Kingdom.  Constitutionally, the devolved powers to the Scottish Parliament will be greatly enhanced.  This, of course, presents as many challenges to the constitutional order of the UK as problems it solves by retaining the union. The legendary unwritten British “constitution” encourages muddling through, and the implementation of devolution in 1997-99 makes for clearly delineated (and fair) distribution of powers as Heathrow makes for efficient air travel.  What the UK has at present is a vague form of ersatz federalism, and one that is asymmetrically distributed at that. Among its powers, Scotland’s parliament has control over health, education, and policing primary legislation, and it can vary its income tax by 3% (up or down) from the national baseline. Among things it can not touch are corporation tax. This is considerably greater power than the Welsh Assembly, and of course infinitely more than any English region.

Any increase of these powers (an excellent overview of the nature of these enhanced powers on offer and some of the pitfalls surrounding implantation was posted yesterday at the UK Constitutional Law Association) will cause resentment not only in Wales and Northern Ireland, witnessing yet more constitutional preferential treatment given to Scotland, but perhaps most of all, in England. Made famous by then MP Tam Dalyell, arguing in opposition to the devolution legislation under consideration in 1977 (which eventually went on to be referenda in both Scotland and Wales in 1979), perhaps the most stinging critique of the current implantation of devolution in the UK is known as the “West Lothian Question”, which identifies the bizarre situation: MPs representing Scottish constituencies get to vote on legislation that impacts England, while MPs representing England (as well as those MPs representing Scotland for that matter) can not vote on a range of devolved areas of policy.  This perhaps was most stark in 2004 when tuition for English and Welsh universities was raised to £3000 per year (from something around £1500 if I recall correctly, and I likely do not). Education, including higher education, is a devolved matter in Scotland and thus under the remit of the Scottish Parliament. Even to this day, Scottish universities are free for residents of Scotland. Yet, in the 2004 debate,  while Labour had a strong majority, the legislation passed by only five votes. Remove the Scottish Labour MPs from voting, the Act would have failed. Hence, Scottish MPs voted on legislation affecting only English universities (hence, students) while those same MPs can not act in that policy area for Scotland (nor can English MPs, for that matter).

With the promise of expanded devolution should No prevail, this asymmetry will only become more apparent, and English resentment is emerging:

Support in England for Scottish devolution has fallen from 57% in 1999 to 43% now; on the one hand a quarter now think Scotland should leave the Union, while on the other almost as many feel that Scotland should not have any kind of Scottish Parliament at all.  Meanwhile, although it remains the case that only a minority feel that Scotland gets more than its fair share of public spending, the proportion that do feel that way has more than doubled from 21% in 2000 to 44% now.

That was written a year ago. The current edition of The Economist has several articles on this subject (unsurprisingly), and brings more current public opinion data to bear. In one case, a poll in April suggests that by a four to one margin, the English believe that Scotland should receive a smaller share of public expenditure. This isn’t surprising, where north of the border universities are free (as mentioned above) and so too are prescriptions. As it stands, under the Barnett formula, Scotland receives a larger share of public expenditure per capita than England. Additionally, as reported in The Economist, the Future of England Survey identifies a growing desire for Scottish MPs to not be eligible to vote on England-only issues, from 18% in 2000 to 55% in 2012.

None of the proposed methods to circumnavigate the West Lothian Question are perfect, so long as the existing unitary parliamentary structure is retained. For example, if Labour were to win in 2015, but with a majority dependent on Scottish MPs, and England-only rules were in force such that English (or English and Welsh) MPs could vote on matters not impacting Scotland, the Government’s majority suddenly becomes a minority, and the Government can’t pass legislation meant to affect the largest nation in the UK. Assuming a No victory tonight, and the implantation of Devolution Max with the beginning of the next government following the May 2015 election, calls for some sort of representational fairness will grow louder in England, and to me it seems logistically only a true federal response will ensure equitable representation combined with a workable parliamentary system.

A Yes result brings up many issues of its own, of course. The Yes campaign assumes that the admittance of an independent Scotland into the European Union will be a mere formality.  However, it might not be that easy:

First it was claimed that Scotland would automatically remain in the EU, inheriting its UK membership. Highly unlikely. Then it was asserted that Scotland would be put on a fast-track to membership under a different article in the Lisbon treaty from the one dealing with accession and the only process that has been used so far to admit new members. This is also extremely improbable.

While admitting an independent Scotland to the EU would be a smoother process than, say, Turkey, it’s not going to be automatic. Furthermore, there are several countries with regional separatist problems (smile for the camera, Spain) which would not want to set this particular precedent. It’s not difficult to imagine Spain blocking Scotland’s admittance, or at least make it extremely cumbersome. Cyrpus as well. To a lesser extent, Italy, France, Belgium, and even Germany would not want to see a precent of automatic entry to the EU for break-away nations. Remember, every one of the 28 member states has to agree on membership. While the right to self-determination should result in virtually unanimous recognition of Scotland as an independent state, admitting it to the European Union is a different issue altogether.

This neatly segues into what currency Scotland would use upon independence. The Yes campaign insists it will be the Pound Sterling in a formal currency agreement with the remaining United Kingdom. There are only two problems with this. First, all three major party leaders in Westminster reject this idea, and the governor of the Bank of England (which would remain the central bank of a “Sterling zone”) recently stated that this would be “incompatible with sovereignty”. The rUK has no interest in a formal currency union with an independent Scotland while having no control over fiscal policy; the Eurozone crisis has taught them that much. The Scottish government has since threatened to not pay any share of the accrued public debt of the United Kingdom if it is not allowed a currency union, which is, well, bonkers.

Scotland could continue to use the Pound regardless, as several minor countries use the Euro or the US Dollar as their de facto currency, but this would leave Scotland at the mercy of the Bank of England’s monetary policy, which would not be responsible for Scotland. Furthermore, financial services in Scotland, which is a significant share of the Scottish economy (12.5% of Scottish GDP according to the Economist, 7.1% of Gross Value Added according to the BBC) would flee to London.

The second problem takes us back to the European Union. As it’s likely accession negotiations with an independent Scotland would be treated like any other new member application, Scotland would be required to adopt the Euro eventually as a condition of membership.

Finally, Scottish independence would also have far-reaching ramifications in the rUK. On Tuesday I suggested that an independent Scotland would make a Labour government in the rUK less likely, and if it does happen, more fragile. This would seem to, eventually at least, give the Conservatives an opportunity to form an outright majority. The Conservatives are on record as promising a referendum on continued EU membership in 2017 for the United Kingdom. Without Scotland, the rUK becomes even more Eurosceptic, thus increasing the probability of a “British” exit from the EU.  Again, The Guardian:

If Salmond wins his vote and Cameron wins his for a second term next year, the bizarre situation may arise where a new country called Scotland is clamouring to be let in to the EU after having forfeited 41 years of membership at the same time as a shrunken UK is heading for the EU door marked Brexit.

 

 

 

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