Great Britain Without Scotland?

Yes, also in the self-appointed cradle of parliamentary democracy nationalism is increasing. The once mightiest empire in the world is not only reduced to “Comonwealth Games” and the Roayal Family’s occasional visits to more or less willing previous parts of the empire, but even at home aspects of autonomy seem to be getting the upper hand. Devolution of competences to Scotland, Northern Ireland and Wales for a time defused these tendencies, but maybe also fuelled the wish for more. In Scotland, First Minister Alex Salmond, has put his stake on independence. He has managed the largest group in the parliament, with Labour second and just one representative of the Tory party. His relentless, frequently populist drive for independence has resulted in Tory Chair, David Cameron, to agree to a referendum on Scottish independence on September 18. The referendum questions are digital, yes or no to independence, leaving no room for other solutions to Scottish demands.

The most recent polls indicate a strong lead for the “Union Campaign” propagating a no, but still nobody can yet be sure of the eventual outcome – let alone its consequences. This lead has been reinforced by the recent debate between the charismatic, often populist, Alex Salmond and the leader of the Union campaign, the former secretary of the treasury, dry technocrat Alistair Darling (a Scot), who prevailed. All three major parties in the British parliament, Tories, their coalition partners Liberal Democrats and the opposition Labour (which by the way command a 5 point lead over Tories for their own 2015 fall election), have voiced willingness to negotiate further devolution of powers to Scotland in case of a no vote: but this is not part of the referendum.

What are the major issues:

1) Emotionally
Scots evoke their 300-year “colonization” by Brits, the opportunity to erase the shame of Brannickburn. The film by reactionary mel Gibson “Braveheart” serves as the template. A potent populist force rallying a large part of the population, reminding one of the battle of Kosovo, the ancient “cradle of Serbian Statehood” of 800 years ago

2) Politically

a) Salmond claims that the England-dominated “neoliberal” agenda has no place in the more Socialdemoratic-minded Scotland, where university acess of free (as opposed to up to 9.000 GBP per year in England), where healthcare and prescription drugs are free and others benefits are more generous than in London. Thus a different social model based on solidarity could be established, different from greedy, self-centered England. Scotland would, because of its shrinking population, be open to immigrants in order to dynamise the economy. Thus, Scotland would be a paragon of “good” policital, promoting societal cohesion, in contrast to being dominated by neo-liberal England.

b) Another major political issue – completely unsolved as a precedence – would be independent Scotland’s EU status: While Salmond talks of an automatic EU membership, both EU functionaries (Barroso) and England have denied this, implying that Scotland would have to apply formally, get in line, and negotiate the whole of the acquis communotaire, a lengthy process with uncertain result.

c) And there is the intractable issue of the location of the nuclear “Trident” fleet, located in Scotland. Scotland would love to be “nuclear-free”, but so far England has no plans to relocate, Scotland would lose thousands of well-paid jobs, and would also lose further parts of especially maritime weapons factories for its shipbuilding industry.

d) Inhowfar and independent Scotland could safeguard its own external security has not seriously been calculated, so far the army is intermeshed across nations.

3) Economically

a) Yes-campaign activists estimate a 1.000 GBP “independent dividend” which could be used in a progressive, welfare-enhancing way. British estimates come to a negative dividend of -1.400 GBP as a result of independence.

b) Scotland feels that in case of independence, all North Sea oil found in their seabed would belong to them, instead of now receiving a bulk grant from London, which because of its oil is significantly higher than that allotted to Northern Ireland and Wales. However, London would still demand a significant part of these revenue and warns Scotland, that the declining oil production will produce ever smaller revenues, hampering the little-diversified Scottish economy.

c) A major debate has occurred around the question of a future Scottish currency: Scotland would like to retain a currency union, keeping the pound. All 3 major parliamentary parties in London have refused this. So far, Scotland has not been able to produce a Plan B, arguing that a currency union would in the interest of both Scotland and England. Remaining imaginable alternatives are one-sided adoption of the GBP, “Sterlingisation”, which however would still lose Scotland the benefits of a Central Bank, i.e the backstop for bailing out suffering banks, but also the management of their currency, and – much less discussed – the possibility to devise their own optimal macroeconomic policy mix between fiscal and monetary policy. De facto, this would amount to a currency board, where Scotland sheds itself of a major economic policy instrument. The third alternative – even more ludicrous – would be Scotland joining the Euro: with what currency, with which National Bank.

d) Salmond proposed to link the currency question to Scotland reneging on joint British debt obligations. While English politicians have stated that a new Scotland could ill afford to start its statehood defaulting on its debt, legally this is a faulty argument, since London claims to be the successor state, thus it would also be liable for virtual “Scottish” debt. This issue may remain one of the major negotiating cards for Salmond, if he wins.

e) Most of British businesses north and south of the border are wary or negative against separations. On the one hand, eventual status increases uncertainty, which they abhor. Second, many firms located in Scotland have their main customer base in England and might contemplate moving South. Third, banks fear another additional layer of oversight and compliance regulations – from which they claim to suffer extensively already. And fourth, depending on the relations between the two countries, firms might incur tariff barriers, quota and other restrictive burdens, which increase their cost base.

4) Author’s Assessment

While I have little sympathy for yet another midget state (5 million inhabitants, 7% of UK GDP) whose justification for separation, mainly for nationalistic reasonigs, seems en vogue, but nonetheless reprehensible, I do have sympathy for strengthening a more sober, less ideological free-market and solidaristic approach to economic policy, strengthening thus thinking in Europe. However, when I think of the Scot Gordon Brown’s performance in the EU Council of Finance Ministers – who steadfastly refused any move towards tax harmonization, towards a more balanced economic portfolio target, his refusal to join the Eurozone on trumped-up “economic tests”, and is successor Osborne’s refusal to contemplate a European fiscal compact (which I oppose), hopes for a stronger “progressive” voice by an independent Scotland can be buried. The economic case seems to be clearly on the side of the no campaign, especially also since the negatives of a separation would occur in the short to medium run, while any benefits of an independent Scotland might possibly come after long, acerbic negotiations with an unwilling partner, and long after Scotland and the world might have adjusted to this independence.

Many political pitfalls (nuclear, external security, expensive establishment of new institutions) loom – which in the present campaign seem not to have been addressed adequately.

There is a vigorous debate in British media about whether such a momentous decisions will be won by economic arguments, or rather by those “of the heart”. As matters stand, this is – once more – rather a project for ambitious politicians than for the population (remember the break-away of Slovenia from Yugoslavia!!). Certainly, Salmond’s political skills, his dedication to the cause, his convincing power and his optimistic outlook on the future are to be admired as important assets: The final question which politicians and every potential voter in this referendum must ask herself, however is: What is good for the people in the whole country. Ironically, English and Welsh, as well as the Northern Irish, who will also be strongly affected by the outcome of this referendum, cannot participate in it. Salmond’s (unspoken) motto seems to be: Scotland to the Scots, and to hell with the (other) Brits! I doubt that this will make the world better.



Filed under European Union, Fiscal Policy, Global Governance, Socio-Economic Development

2 responses to “Great Britain Without Scotland?

  1. Greig Aitken

    I am surprised by the short-sightedness and – it has to be said – the cravenness of this … I’m not sure if I can even call it an ‘analysis from afar’. I could take issue with just about every paragraph.

    But as time is short, I’ll just mention three things, before providing two important recent links (for ‘catch-up’ purposes).

    1/ Your first major issue – Emotion.

    Citing ‘Braveheart’ so soon in the analysis might be bad enough – but lumping it in with Kosovo is bizarre, even ludicrous. For one thing, the pro-independence campaign has not played to ‘Braveheartism’ in the slightest. If anyone’s been waving flags, it’s Westminster, eg Cameron waving the British flag at an Olympic cycling venue in early 2014, ‘lovebombing’ Scottish voters with pleas to ‘NOT GO’, backed up by a host of English celebrities. And, of course, fundamentally, there is no blood being spilt in this totally democratic process. No bullets fired either. And very few kilts being raised in the faces of THE ENGLISH. There was an agreement signed – between London and Edinburgh – called the Edinburgh Agreement, set out to govern the independence referendum process. This has nothing to do with ugly separation, and everything to do with people living in Scotland (whether they be English, Austrian, Polish, Ghanean, Mexican or Australian) considering one vital issue: should they be governed by an outdated, distant and increasingly unaccountable London administration, or should they be governed much more directly by an – as yet – mostly uncorrupted Edinburgh government?

    2/ Salmond and ‘nationalism’

    Like many commentators, your focus is almost exclusively – and rather manically – on the First Minister of Scotland. This is perhaps understandable – but if you had any knowledge of the overall YES campaign, you would better appreciate that it is not all about him, or his SNP party.

    You mention: “His relentless, frequently populist drive for independence has resulted in Tory Chair, David Cameron, to agree to a referendum on Scottish independence on September 18. The referendum questions are digital, yes or no to independence, leaving no room for other solutions to Scottish demands.”

    Are you aware, or able to concede, that his party won an almost unthinkable MAJORITY of seats at the last Scottish elections? This, under the explicit establishment of the devolved Scottish parliament, was not supposed to happen – but the people spoke, and gave the SNP an overall majority in 2011. The lack of an alternative option on the referendum ballot paper – so-called DEVO-MAX, that would have been totally grasped by the Scottish electorate – was denied as a possibility by … David Cameron. And one can easily speculate as to why.

    You also state:

    “While I have little sympathy for yet another midget state (5 million inhabitants, 7% of UK GDP) whose justification for separation, mainly for nationalistic reasonigs, seems en vogue, but nonetheless reprehensible,”

    You’ll really have to make clear what these ‘nationalistic reasonings’ are, in your understanding, and why they are somehow – automatically – ‘reprehensible’. For one thing, as you acknowledge, Salmond is calling for increased immigration in an independent Scotland. This while England is awash with anti-foreigner sentiment, of which you will be aware. The plan is to invite immigrants openly into the country – not chase them away.

    3/ Gordon Brown

    This man is Scottish. He was the prime minister of the UK. So far, so clear.

    But trying to conflate his Scottishness with what he did while serving as both finance minister (for many years) under Blair and then as PM as a warning about what this signals for future independent Scottish economic direction and bargaining within the EU is patently absurd.

    You do know that Gordon Brown is now part of the ‘No’ to independence campaign, an integral part of its so-called Project Fear? By the way, he was write about Euro adoption – he got something right, while at the same time letting financial services (the City) rip, and planting a huge bomb under the UK pensions system, and PFI etc etc!

    The stuff about the EU membership is also strange – it’s highly legalistic, but pragmatism is generally thought to be the main thing here, for the EU itself and Scotland too. Invoking Barroso here is ludicrous. He’s gone. And was only encouraged (back in February) to make ill-judged, inappropriate remarks by the British state broadcaster.

    Do have a look and a listen to these links, covering issues such as currency, the EU, history generally, and why people in Scotland might just be thinking – enough is enough:

    I look forward to Scottish state representation at the IFIs. It won’t change much in the short-term, but may – working with allies – have some longer term, positive impact on the general, ongoing, neoliberal madhouse.

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