Guest post by Michael Keating. Mr. Keating is Professor of Political Science at Aberdeen and Edinburgh Universities and Director of the ESRS Scottish Centre on Constitutional Change.

The Question

On 18 September 2014 Scotland will vote on whether to become independent. Those eligible to vote include all British, Commonwealth and EU citizens resident in Scotland on the date in question. The question, in contrast to others that have been proposed in other places, is straightforward:

Should Scotland be an independent country?

  • Yes
  • No

Why is it that the parties in the United Kingdom have agreed on a procedure and a question, matters that have been impossible to resolve in Spain? It is tempting to put it down to the stereotypical common sense and moderation of the British political culture, but that would be misleading. One hundred years ago, on the eve of the First World War, the British Conservative Party was threatening armed resistance, including mutiny in the military to oppose not independence but merely Home Rule (autonomy) in Ireland. For decades, British Conservatives and many in the Labour Party refused autonomy for Scotland in the face of evident demand, giving way only in 1997. One reason for the different response this time may be precisely the experience of Ireland, the larger part of which eventually separated altogether in 1922. In 1972 and again in 1998, British governments explicitly recognized that Northern Ireland could leave the UK to join the Republic of Ireland. By the 1990s, even Conservative prime ministers Margaret Thatcher and John Major, while fiercely opposed to Scottish independence, accepted that, if this really were the will of the Scots, they could not oppose it. Their reason was that the United Kingdom is not a homogeneous unitary state, but a union and that its component parts cannot be held together against their will.

Unionism is a particular version of state nationalism which was never a homogenizing doctrine and practice like French Jacobinism or Spanish unitarism. Rather it was a political practice that recognized fully the national diversity of the country, just so long as ultimate power was retained at the centre. Unionists did not recognized just one culture and practice of union but many, tailored to the different parts of the kingdom. It failed in Ireland, except among Protestants, but flourished in Scotland. Now it is failing there too. The Conservative Party, as it has retreated in Scotland over the last fifty years, has become more of an English party. While the leadership is firmly determined to save the union, there is a section of Convervative opinion that would not be unhappy if Scotland left, which would leave a more right-leaning and Eurosceptival United Kingdom (or rUK as it is referred to). Surveys have shown that support for Scottish independence is as high in Enlang as it is in Scotland itself. So there is not much political advantage to be gained in England by making an issue of Scotland. The English, who used constantly to confuse England by making an issue of Scotland. The English, who used constantly to confuse England with Great Britain and the United Kingdom, now see themselves as a distinct nation, which could carry on even without Scotland.

The main reason for accepting the referendum, however, is the fact that the Scottish National Party has gained an absolute majorityat the Scottish elections of 2011. The UK parties, which had fiercely opposed a referendum between 2007 and 2011 when the SNP had a minority government, calculated that oppose it would leave them on the wrong side of the argumentm while conceding it would bring them a great victory, since opinion polls suggested that it would lose.

What does Scotland want?

If the wording of the referendum question is a model of clarity, the meaning of it is not. In a world of ‘post-sovereignty’, independence is a difficult concept. One might argue that no country within the European Union is truly sovereign, and that some formally sovereign states have less real power than some autonomous regions. The wording of the Edinburgh Agreement, however, was intended precisely to exclude intermediate options, notably a ‘devolution-max’ option being canvassed in civil society, which would give Scotland control over most domestic policy, with external affairs remaining with the UK. The Scottish Government, while making clear that devolution-max was not its policy, had favoured putting it on the ballot, confident that it would be either the first or the second choice almost everyone.

Much of the debate has therefore hinged on what independence means in practice and what Scotland’s relations would be to the remaining United Kingdom (rUK), the European Union, NATO and other transnational bodies. The Scottish National Party proposes independence within the European Union on much the same terms as the UK currently has; a currency union with rUK; and a raft of agreements on sharing services from the research councils to the vehicle licensing agency. Scotland’s First Minister Alex Salmond has even spoken of six unions (political; monarchical; monetary; defence; social; and European) of which he wishes to end only the first. This strategy has been dubbed ‘independence-lite’.

As the debate has proceeded, the options of independence-lite and devolution-max have almost begun to merge. This is hardly surprising. Surveys have regularly shown that, given a threefold choice of options – the status quo; more devolution with the UK; and independence – the largest group usually supports the middle option. This could be a mere statistical artefact, where people go for the most moderate option available, but there is more to it than that. Most electors do not support a separate Scottish foreign and defence policy, but do want Scotland to control most taxes and welfare payments. In other words, they support maximum domestic autonomy or ‘devolution-max’. The two sides have been working hard to reach this middle point, the nationalists by presenting their attenuated version of independence and the unionists by promising more devolution. The Liberal Democrats promise federalism, although it is not well defined. The Labour Party, which is deeply divided on the question, managed to agree on some modest extension of fiscal autonomy. The Conservatives talk of further tax powers.

Support for Independence

The very difficulty of defining independence makes if difficult to track support for it across time. Various questions have been used and, as in other countries, a ‘softer’ question, which avoids words like ‘separate’, gains more support than a ‘harder’ one. Support for independence has also traditionally been lower when it is explicitly compared with forms of autonomy, even the autonomy that, since 1999, represents the status quo. That said, support for independence from the late 1960s, when regular polls started to be taken, was around 20 per cent. During the 1980s and 1990s, when Scotland was governed by a radical Conservative government for which it had not voted, support for independence rose to about 30 per cent. It remained at that level in spite of the subsequent devolution settlement and even the victory of the SNP at the Scottish elections of 2007 (as a minority government) and 2011 (as a majority). These SNP victories are to be explained by the unpopularity of the Labour Party and the perception that the SNP are better managers of the devolution settlement rather than rising nationalism.

Since 2012, we have the official question for the referendum and this is the one used in opinion polls. Again, support for devolution has remained around 30 per cent but, if the ‘don’t knows’ are eliminated, it rises to 40 per cent. In the early months of 2014 there appeared to be a slight rise in support for independence but at the time of writing (April 2014) it is impossible to say whether this will be sustained. Support for independence is spread across the social spectrum but there is more support among men than among women and more support in the lower than the upper socio-economic groups. SNP voters tend towards Yes but there is a substantial number of people who would vote SNP at an election and vote No in the referendum. Conservative and Liberal Democrat voters overwhelmingly support No, while Labour voters are evenly divided. A relatively new factor is the presence of non-Labour left-wing groups who are in favour of independence. This includes the Scottish Greens, the Scottish Socialists (a leftist populist party that at one time had members in the Scottish Parliament) and some unaffiliated individuals. This is consistent with the support for independence among working class voters and a segment of the Labour electorate.

Civil society groups have been divided on the independence issue. The business community tends to be unionist and the Confederation of British Industry (Scotland), the main employers’ group, is strongly against independence. Some companies have threatened to relocate in the event of independence but most have sought to avoid making pronouncements, not wanting to end up on the wrong side whatever the outcome. There is more sympathy for independence, or at least maximum devolution, among small business, and their federation has remained neutral. Multinational corporations seem relatively relaxed, in the belief that it would make little difference to them. Trades unions have been divided. Most have remained neutral but in some cases the UK leadership has imposed a No line. Within the trade union movement, there is some support for independence and devolution-max. Similarly, in the voluntary sector there is some support for independence or for the devolution of welfare policy so as to allow Scotland to shape its own welfare settlement.

Economic and Social Issues

The Scottish independence debate has not been dominated by questions of identity. This is not because Scottish identity is unimportant but because the vast majority of citizens, whether nationalists or unionists, already feel strongly Scottish. So feeling Scottish is a poor predictor of support for independence. Feeling strongly British is a predictor of opposition to independence, but this applies only to a minority of the population. There is not much debate on who is a Scot or about the franchise for the referendum, based on, as it is, on inclusive principles. In consequence, the referendum debate has centred on issues of economic and social policy.

The economy is a central concern. Scotland is neither a wealthy nor a poor part of the United Kingdom. In recent years, its GDP per capita has been around 96 per cent of the UK average, below south-east England but above most other English regions, Wales and Northern Ireland. Scottish nationalism is therefore neither a ‘revolt of the poor’ in a disadvantaged region, nor a ‘revolt of the rich’ in a region wishing to keep its own wealth and avoid territorial redistribution. Scottish public expenditure levels are somewhat higher than the UK average, for historic reasons. Scotland does raise its own taxes and, until a new formula comes into effect in 2016, derives almost all is funding from the central government. The level of funding for the autonomous government is set by the ‘Barnett Formula’, in which there is a block transfer of funding in each spending round which takes the last spending round as the base and adjusts it upwards or downwards according to a population-based fraction of spending in England on the range of services that are devolved to Scotland. Barnett has been in operation for over thirty years and should, over time, have led to a convergence of per capita spending in England and Scotland as the historic base becomes smaller and the population-based element important. This has happened only partly, as governments, for political reasons, have found ways to slow down the convergence. It also happens that, if oil revenues are included, taxes raised in Scotland more or less cover expenditure to the same degree as in England. In other words, the fiscal deficit of an independent Scotland would not vary greatly from that of the United Kingdom in either direction. These figures, of course, are disputed by both sides, with nationalists pointing to an oil bounty for an independent Scotland and unionists insisting that Scotland could not pay its own way. The arguments, however, are very technical and the differences are at the margin, so that many voters are unable to judge.

There is also disagreement about the broader economic implications of independence. Unionists argue that fragmenting the United Kingdom will be bad for business, that investors will flee and that the new border will disrupt the single UK market. Nationalists point to small, successful economies in northern Europe and promise pro-business policies, including a reduction of corporation tax of at least three pence in the pound below whatever level the UK government sets.

There has been a fierce argument about the currency of an independent Scotland. The SNP (but not their pro-independence partners like the Greens) propose a to keep the Pound Sterling in a monetary union. This would include a fiscal pact on European lines, to be agreed between the two parties. Critics argue that this would seriously reduce the macro-economic power of an independent Scotland and is incompatible with their pledge to give Scotland the macro-economic levers to make its economy grow. The UK parties responded in February 2014, breaking their normal rule of not speculating on what would happen after independence, to say that a currency union would be out of the question. The SNP response was they were bluffing since a currency union would also be in the interest of rUK. The matter is in fact rather complicated. Nobody could stop Scotland continuing to use the pound; adopting it unilaterally is known as ‘sterlingization’. Were this to happen, the rUK government might try and make this difficult or easy. It is unlikely that it would agree to a currency union on the lines suggested by the SNP, which would give Scotland a real input into monetary policy and fiscal limits for England, but it might agree some form of pact to ensure that Scotland would not destabilize the currency. This, however, would give rUK the upper hand.

An issue that has come into the centre of the debate has been that of welfare. The present UK coalition government of Conservatives and Liberal Democrats has embarked on an ambitious programme of reform of the welfare system, designed to reduce its costs and simplify it. For a while, it looked as though the SNP would stay silent, perhaps hoping to inherit a less expensive welfare state. They have now, however, engaged themselves as defenders of the post-1945 welfare state against neo-liberal efforts to dismantle it. So independence is presented as the way to save welfare, especially against a possible return of a majority Conservative government at Westminster in the elections of 2015. This has united the social democratic wing of the SNP with elements of the trade union movement and the voluntary sector, as well as independent leftists and bodies such as the Jimmy Reid Foundation, a left-wing think tank, which has developed a programme known as Common Weal for an independent, social democratic Scotland.

The independence prospectus now makes reference not so much to small states in general as to the Nordic social democracies, presented as role models for Scotland. The Scottish Government’s White Paper on independence invokes the idea of social investment and growth through high quality public services and investment in education, research and infrastructure. The weakness of the argument is that it co-exists with a low-tax strategy associated with the SNP’s market-liberal wing. So there is the pledge to cut corporation tax, a promise to half and then abolish the tax of air travel, and a commitment to keep overall levels of taxation in line with those in rUK. In government, the SNP has frozen the property taxes that used to be the main autonomous source of revenue for municipal governments.

The response to the SNP’s welfare message has been led by the Labour Party, which insists that social solidarity necessarily lies at the UK level. This is consistent with classical federalist arguments to the affect that redistributive services should be at the higher level in order to avoid tax competition and a race to the bottom and to cope with asymmetrical shocks. The weakness of this position in the Scottish case, however, is that it is the UK level that has questioned the welfare state while the Scottish Government has sought to maintain universalism in service provision. The distinction between redistributive and other services is also looking out-dated as all services can be redistributive and the whole field of welfare is being reconstructed and rescaled. It is this that has prevented Labour making any convincing moves towards welfare devolution.

Europe

Since the 1980s, the SNP has placed the issue of Scottish independence within a European context. Independence-in-Europe has been promoted as a way of keeping a wider economic and social union while securing sovereignty. There are small but significant differences in English and Scottish public opinion on Europe, with Scotland being consistently less Eurosceptic. More important, the permissive consensus in favour of Europe, which has been broken in England, survives in Scotland so that there is no political penalty for the SNP (and Labour in Scotland) being overtly pro-European. The European question has now become a central issue in the referendum campaign, as people on the No side have consistently questioned whether Scotland could actually become a member state.

Initially, the nationalist position was that Scotland would simply remain in Europe, succeeding, along with the rest of the United Kingdom, to the present UK membership. Some nationalists have long argued that, if the Union is dissolved, two new states are created and both have to renegotiate their international obligations, although this has never become a serious proposition. The current SNP position is that Scotland would not simply remain in the EU but would have to enter, but that this would be more or less automatic. Two roads have been suggested: there could be a treaty change to recognize Scotland as the 29th member state; or Scotland could apply as an accession state and get accelerated membership since it already meets the criteria.

In response, unionists have consistently suggested that Scotland would not be admitted; that another member state could veto Scottish accession; that accession could be very lengthy; and that Scotland would have to accept onerous terms including forced entry in to the Euro and the Schengen travel zone, and loss of its share of the UK rebate. In a BBC television interview in February 2014, European Commission President Jose Manuel Barroso, declared that Scottish membership would be ‘difficult if not impossible’ and compared it with the case of Kosovo. On other occasions, referring both to Scotland and Catalonia, he has said that a territory seceding from a member state would remain outside the European Union, including the single market. This seems implausible.

Under the terms of the Edinburgh Agreement, Scotland would be recognized by the United Kingdom. This is in contrast to Kosovo, which is not recognized by some EU states because it is not recognized by Serbia. It is also in contrast to a hypothetical independent Catalonia, which would not be recognized by Spain. If Scotland is recognized by the UK here is no reason for any of the other EU members to refuse recognition. There is no precedent for a seceding state, recognized by the host state, not being recognized by others. Incidentally, Barroso has got himself tied in knots with his repeated argument that an independent Catalonia would be outside the EU. The real point about the Spanish constitution is that an independent Catalonia is impossible altogether, so Catalonia could not be outside the EU. By suggesting that it would be outside the EU, Barroso has fallen into the trap of accepting that Catalonia could be independent.

EU membership is open to any recognized European democracy that meets the Copenhagen criteria and adopts the acquis communautaire. This is not defined in the treaties as an absolute right but there is a clear understanding that such states must be allowed in, otherwise the EU is betraying its founding principles and become a club rather than a union. Scotland has been within the EU/ EC for over forty years and does meet the criteria as well as most states. It certainly looks a lot better than some recent members.

It is in nobody’s interest to throw Scotland out of the single market. The EU has major problems on its hands just now and it is highly unlikely that the Commission and member states would commit the time, expense and general bother of unpicking Scotland’s links with the EU, including trade measures, product standards, movement of goods, people and services, and impose trade barriers. It is still less likely if they intend to let Scotland back into the Union in due course. Business interests would also oppose creating a hole in the internal market and the costs that this would impose on them. No government has threatened itself to veto Scottish membership, although the Spanish government has repeatedly been invited to do so. They have shrewdly made the argument that Scotland does not set a precedent for Catalonia, ensuring that they do not end up on the losing side of the argument. They also know that threatening to veto Scottish membership, even if Scottish independence were negotiated legally and constitutionally, would be a further provocation to even the most moderate of Catalan and Basque nationalists.

Scottish membership would not take a long time to negotiate. Contrary to what Barroso and others have suggested, there is no ‘queue’ to get into the EU. Applicants are admitted as and when they are ready. As the UK Government noted in one of its papers, the Nordic states completed negotiations in 1-2 years. Were Iceland or Norway to change their minds and apply now, they would be in very quickly. If Scotland does meet the requirements, Barroso (or his successor) would actually be obliged to make a favourable recommendation to the European Council and not to invent new political criteria.

It is unlikely that Scotland would be forced to join the Euro. Indeed it is odd that unionists, who think that it would be difficult for Scotland to join the EU, seem to think that getting into the Euro would be more straightforward. Joining the Euro is an arduous process that does not follow automatically from EU membership. Sweden does not have an opt-out from the Euro, but shows no sign of joining and would require a referendum to do so. The Czech Republic and Hungary are similarly in no hurry. As for the longer term, it might be wise for an independent Scotland not to rule out Euro membership and the nationalists have left future currency options to future Scottish governments.

Getting into the Schengen zone is also a step beyond EU membership, although it is also required in principle. Since most states are trying to get in rather than stay out, we do not know how much pressure could really be brought to bear, but keeping the common travel area with the UK and Ireland would be enough to disqualify Scotland from Schengen in any case.

As for the rebate, it seems unlikely that the other member states would be happy to allow the UK to keep the whole of it during the present 2014-20 budget period and they certainly would not want to reopen budget negotiations. The most likely outcome would be division on a per capita basis. In the negotiations for the post-2020 budget, the UK is going to be under immense pressure, especially if it is making trouble and losing friends by trying to re-negotiate its position. It could only keep its rebate by making a case based on hard data about contributions and receipts. Such an argument would extend equally to Scotland, and possibly the UK’s only way of avoiding isolation on the issue would be to enlist the Scots as friends.

On the other hand, there are critical weaknesses in the nationalists’ case. The Scottish Governments’ White Paper on independence proposes to keep all the existing UK opt-outs. In 2014 the United Kingdom must decide whether to opt out or opt in completely to the treaty provisions on Justice and Home affairs, on which it has a time-limited derogation. The UK has decided to opt out and then opt back in selectively. The Scottish Government, which has most of these competences under the devolution settlement, opposed this, preferring to opt in completely. Now it says that even an independent Scotland will follow the UK line on this. As the UK is now proposing loosening its ties with Europe across other policy fields, Scotland risks being dragged along with it. If Europe moves in its own direction on financial regulation, a Scotland that keeps the Pound, as the SNP proposes, will be drawn back into the UK orbit. If the UK does move to a semi-detached relation with the EU, Scotland will be further pressured. So instead of positioning itself at the heart of Europe, using its influence as small state to set the agenda, Scotland could end up at the periphery of Europe.

Risks and Uncertainties

There are many uncertainties involved both in independence and in remaining within the United Kingdom and the evidence we have suggests that this, and the attendant risks, are the most important factors influencing voters. Differences in risk-aversion may also explain the differences between men and women and between social classes who have more or less to lose. Both sides have therefore sought to present the other side as risky and their own option as safe. Unionists have an inherent advantage here as they are defending the status quo, but they risk being perceived as negative and as threatening the Scots. Indeed, voices within the unionist camp regularly warn against the negativity but to little effect. The nationalists point to the UK as a risky option, citing welfare reform and the likelihood of a Conservative government from which Scotland will be excluded. Since 1997, the Conservatives have held at most a single Westminster seat in Scotland and at one point had none at all. Nationalists also play up the risk that Scotland may be taken out of the European Union against its will if there is a referendum in 2017. Even Spanish foreign minister José Manuel Garcia-Margallo, no friend of Scottish independence, has remarked that if England were to vote No in that referendum, Scotland could have another referendum to secede from the UK and remain in the EU (Política, 06/03/2013).

The Scottish debate has come, therefore, to centre not on separatism but on the choice of unions. The UK is offering a continuing British union with, at least on the Conservative side, a looser European Union. Scottish nationalists are proposing a looser UK union with a stronger European dimension. We are reminded that independence is not what it used to be in the old world of independent nation states.

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