Making sense of Scottish Independence

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Originally published by Contributoria in September 2014.

Every once in a while, a political situation comes around that seems to leave even the most politically assured, stubbornly single-minded and furiously opinionated scratching their heads. On September 18, Scotland will go to the polls to decide whether or not to end its 307-year union with England and Wales. As ever in politics, it’s a fiercely contested and highly polarised debate. But what’s so unusual about this particular debate is it’s not simply and neatly divided along the lines of left and right. Your opinion on Scottish independence will also massively depend on whether you’re north or south of the border, whether you’re a political pragmatist or an idealist, and – especially for the Scots themselves – whether you’re risk averse or willing to gamble. Indeed, the whole debate seems to be divided among more lines than the Union Jack, which itself could soon become a thing of the past.

It’s testament to how unusual a political situation the Scottish independence debate really is that so many different groups find themselves with particularly uncomfortable bedfellows, or the type of adversaries that would result in a lot of “friendly fire”. The English and Scottish left are seemingly at odds over the issue: the former petrified by the prospect of a generation of Tory rule, the latter buoyed by the potential of never having to suffer it again. Labour and the Tories find themselves in the sort of unanimous agreement between the two parties usually only reserved for times of war, publicly at least. Behind closed doors some Tories must be secretly rubbing their hands together at the thought of removing Labour’s Scottish seats from the electoral equation. Scottish independence, then, is a political hot potato in a minefield covered in banana skins.

Few dispute the Scots’ right to self-determination – regardless of geography, political persuasion and selfish self-interest – it is something all should acknowledge. The likes of George Osborne do so grudgingly, treating Scotland like a petulant teenager who has to earn the privilege of making its own decisions, rather than it being an innate right. But beyond this acceptance (if not wholehearted endorsement) of the Scottish right to choose their own destiny there is little consensus. How then can we make sense of the differing arguments and which side is right and for what reasons?

The economic argument

Putting aside the rather thorny issue of currency for a moment, the arguments surrounding the economic impact of Scottish independence really centre around whether Great Britain is better off together financially than it is apart. This issue is of greater concern for those north of the border, because while the rest of Britain might be weaker without the economic output of Scotland (i.e. its oil reserves), the consequences for the Scottish economy of independence could be far more profound. Treasury chief secretary, Danny Alexander claimed the Scottish would be £1,400 per head better off if they stayed in the Union, describing it as a “UK Dividend”. It should be noted that these calculations included the cost of setting up new institutions, which would obviously only be a short-term cost.

GDP per head in Scotland is, however, 15% higher than the UK as a whole – £26,424 compared to £22,336. This is quite a surprising statistic given the consistent rhetoric that Scotland doesn’t pull its weight economically. Similarly, unemployment in Scotland is actually lower than the UK as a whole – 7.5% compared to 7.8%. Scotland also punches well above its weight in terms of renewable energy, producing nearly half the electricity it needs from renewable sources, although these are currently subsidised by Westminster. The Yes campaign has made much of Scotland’s oil reserves – indeed, without it the GDP per capita figure quoted above would fall in line with the rest of the UK – but an over-reliance on oil is definitely a short-term solution. Investment in renewables would therefore surely be a smart way to promote growth and jobs in an independent Scotland. Sir Tom Devine, Scotland’s foremost historian and one of its most esteemed academics, has this week come out in favour of independence, citing Scotland’s economic diversity and potential, saying Scotland is “disproportionately endowed compared to almost all other European countries”.

However, most of these statistics seem fairly academic for two reasons. Firstly, there is no telling what the economic impact will be on Scotland if it becomes independent. The GDP per capita could perceivably plummet without the global clout of the rest of the UK and Scotland would find itself in direct competition with a much bigger neighbour for most of its goods and services.

Secondly, and perhaps most importantly of all, is the issue of currency. Scottish First Minister Alex Salmond has insisted that Scotland will stick with the pound, while the Treasury has been at pains to refute this at all costs. George Osborne said: “The Scottish government are proposing to divorce the rest of the UK but want to keep the joint bank account and credit card.” He has insisted that the rest of the UK will not act as underwriter of last resort for Scotland if it decides to leave the Union. Even if Scotland could engineer a currency union post-independence it would really raise questions about just how independent Scotland would be if its fiscal policy were to be dictated by the Bank of England. In the event of a currency union, Scotland would be ceding control over taxation, mortgage rates and even public spending – all things it would need to have a firm grip over, if it were to enact the kind of radical positive change many are hoping for.

There seems to be little appetite for joining the euro and the pitfalls of setting up a new currency altogether are manifold. An independent Scotland it seems, would be hamstrung on the issue of currency and until a credible currency plan can be put forward it does seem the argument against independence is stronger on economic terms regardless of political persuasion or geography.

The political argument

In political terms, those north of the border with a left-wing leaning would benefit massively from Scottish independence. Ever since the dark days of Margaret Thatcher’s rapid de-industrialisation policy, the Tories have been a political no-mark in Scotland. There is currently only one Tory MP at Westminster from Scotland and at Holyrood (the Scottish parliament) they hold just 15 of the 139 seats. Despite this, the Scottish people have had to endure an austerity coalition government, which at the last budget announced an 11% real-terms cut to the Scottish government’s discretionary budget. Small wonder then that the Scottish Socialist Party and the Green Party have thrown their support behind the Yes campaign. Scottish Labour is less in favour, but that might not stop 20% of its members voting for independence. The prospect of devolving power from Westminster to administer a government for a population of just over five million should also excite those in favour of localism and more direct democracy – both generally more popular among voters of a left-wing persuasion.

South of the border is where things get really messy. One could analyse the independence vote as a win-win situation for the Tories. A Yes would decimate Labour’s safe seats at the next general election, and possibly for many more to come, handing the Tories a comfortable majority and the security of knowing they will have several parliaments to enact change. A No vote looks like a vote of confidence in Westminster and a serious blow to the SNP, potentially giving a mandate to repeal the powers of the Scottish Parliament. Those on the left reeling from a parliament term typified by deep spending cuts and attacks on public services and benefits will surely be petrified at what a Tory government might do if it had a strong majority and guarantee of a couple of decades in power. The remainder of the UK would also likely become even more London-centric if Scotland is removed from the equation, which could spell even greater doom for the already blighted communities in the North East and Wales in particular. Such are the pragmatic realities for the left south of the border, even if in theory an independent Scotland might be something they would like to support.

However, there is another way to view Scottish independence, especially if it was successful in establishing a more democratic and progressive neighbour to the rest of the UK. It could lead to Wales pushing for independence and a demand for greater localism in other regions of England, inspired by a strong Scottish example. If nothing else, Scottish independence would be a major break from the political status quo for the whole of the UK. Given the general apathy and stagnation in British politics, this in itself has a certain appeal, even if in the short term the political consequences are dire south of the border, and the economic ones disastrous north of it.

Encouraging a No vote primarily to keep the Tories out south of the border seems ideologically wrong. Equally, encouraging a Yes vote based on an antagonistic history and slight cultural differences without a credible economic plan going forward seems irresponsible. Whatever the outcome of the vote, it is of course only for the people of Scotland to decide. If the last chance for genuine change – the referendum on the Alternative Vote – is anything to go by, I’d say never underestimate people’s fear of the unknown and apprehension towards change even in bad circumstances. Which is a shame, because sometimes change is necessary.

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