Thursday, 18 September 2014

Scottish independence referendum: background, arguments, consequences

Today, Scotland decides: to leave or stay in the union that is the United Kingdom (UK). The union comprises four countries: England, Scotland, Wales and Northern Ireland. Although Scotland is the second most populous in the quartet, its population of 5,3 million is but a tenth of Englands. 

Parties and personalities
The leader of the pro-independence campaign is Alex Salmond from the social democratic Scottish National Party (SNP). The leader of the pro-union campaign is Alistair Darling from the social democratic Labour party

Salmond comes with a jovial appearance and a rotundity as imposing as his charm  or arrogance, depending on where you stand. Nonetheless, be it friend or foe, they all agree that Salmond is a consummate politician, astute, abound with wit, oratory skills, all underpinned by a pragmatic toughness. Darling on the other hand is considered as charming as a plank of wood (“an early beneficiary of charisma bypass surgery”, according to one columnist). But his dullness exudes an equanimity that makes him come across as decent and reliable.

Tis no coincidence that the leaders of both campaigns are from social democratic parties. Modern Scottish politics is conducted on the centre-left. The main parties are Darlings Labour and Salmonds SNP, while the social liberal Liberal Democrats have been a significant third force. Meanwhile, the Conservative party (also called the Tory party) has led a marginal life in Scotland the last couple of decades. “There are more pandas in Scotland than Tory MPs”  a phrase bandied about after Edinburgh zoo received two pandas 2011 while only one Conservative member of parliament (MP) was elected in Scotland in the last UK election 2010.

Alex Salmond and Alistair Darling
Of these four parties, only SNP supports independence. The other three are pro-union and have put party bickering aside to throw their full weight behind Darlings campaign. Darling is thus supported by the UK government in London  a coalition since 2010 between the Conservatives and Liberal Democrats  as well as the governments main opposition, the Labour party. A solid backing, to say the least. However, enjoying support from the Conservatives can in the context of Scottish politics be more of a poisoned chalice.

History: from birth of union to referendum
The union was forged over 300 years ago, borne more out of realpolitik and financial convenience than any neighbourly love. Scotland had gone bankrupt after a failed colonial adventure at the end of the 17th century. England, amongst other things fearing Jacobite tendencies in its backyard, made Edinburgh an offer it couldnt refuse: Give up your independence and do full political union under a single parliament in London. If you do, we will bail you out and you can take part in our expanding, enriching empire. If you dont, we will (at least) wage economic war on you.

And thus the Scottish parliament dissolved itself and Great Britain was born 1707. Despite some initial reservations  and some Jacobite uprisings  the Scots soon became integral and heavily involved in union and empire.

Under the following centuries, Scottish nationalism was always around but never to seriously challenge the union. Shortly before the second world war it did however take a party political form that would decades later have a transformative impact. The SNP was established in 1934. Although initially marginal, by the 1960s-1970s it had became a force to reckon with. The finding and extraction of North sea oil during the same era provided a boost for nationalism, increasing Scotlands confidence in itself.

And then came 1979-1997, the eighteen years of Conservative rule from London. The Scots voted consistently for centre-left parties but found themselves consistently stuck with Conservative UK governments, the first headed by Margaret Thatcher.

Whereas the Iron Lady was otherwise divisive, in Scotland she would come to have the opposite effect. Arguably no one has boosted the case for independence more than Scotlands unifying hate figure. Her neo-liberal restructuring of society and economy hit the country hard, generating an animosity that climaxed 1989 when she introduced a flat tax in Scotland  a year before England  that became so hated it led to riots and ultimately forced Thatcher to resign 1990.

The Scots had nonetheless to endure seven more years of Conservative rule they hadnt voted for. The calls grew for increased devolved powers from London to Scotland, as did calls for outright independence.

In 1997 Tony Blairs Labour finally ousted the Conservatives from power in London. The Blair government accommodated the calls for devolution by setting up a Scottish parliament in Edinburgh 1999. Although the parliament was invested with significant independence, many fundamental tools of government  including the power to set and collect taxes  were largely kept in London.

Blairs devolution intended to silence the calls for independence. But just for safetys sake, the election system to the Edinburgh parliament was fashioned so that any one party (viz the SNP) could not gain an overall majority. This guaranteed that the most Salmond could get was what he got following SNPs successful 2007 elections  the possibility to form a minority government.

But there are no guarantees in politics. After four years of successfully heading his minority government, at the time of the next Scottish election (2011), a perfect storm had gathered for Salmond. Many Scots were tired with Labour who had just ended thirteen years in power down in London (1997-2010); an era during which they were increasingly perceived as running a Conservative light government; a disillusionment compounded by Blairs having dragged Scotland into the Iraq war.

In such a situation, Labour leaning Scots would normally have turned to SNP and the Liberal Democrats. But since the Liberal Democrats had 2010 formed the UK coalition government with the Conservatives, they had made themselves toxic among the Scottish electorate. The rest is history. SNP won a massive landslide in the 2011 Scottish election; a landslide which enabled them to do the voodoo they shouldn’t been able to do: form a majority government with an indisputable democratic mandate to hold a referendum on independence. The UK coalition government could thus do nothing but authorise it.

Accordingly, in late 2012, after some pretty tough negotiations between Edinburgh and London, it was finally proclaimed: a referendum on Scottish independence would be held in the autumn 2014.

The campaigns: character and margins

“Should Scotland be an independent country?”
Thus goes the question to which the voter will be answering yes or no today. A No campaign tends to take on a pessimistic tone, prone to emphasise the risks and downsides of voting Yes. Are you prepared to throw yourselves into a terra incognita? Campaign leader Darling warns that a Yes vote would be like buying “a one-way ticket to send our children to a deeply uncertain destination”.

In contrast, a Yes campaign tends to have a more positive and visionary ring to it, intent on downplaying the risks and emphasising the possibilities. Still, however much panglossian paint applied, bread-and-butter sceptics are usually less willing to take visionary leaps into the unknown.

In the final weeks before the referendum, it has seemed as if the momentum is with the Yes campaign. Up till then, the No side had consistently been ahead in the polls, at times comfortably so (as late as last month there was a 22% margin in favour of No). But the latest polls show the two sides running neck to neck.

There is of course only one poll that counts. And here the Yes side enjoys a comparative advantage since it only needs to win. The margin in its favour might be 0,1% today, it doesn’t matter  there will be independence and no going back. But for the No side it’s not only a matter of winning, it’s a matter of winning with as wide a margin as possible if the question of independence is to go away for at least a generation. True, the union will remain if the No side wins, but Darling’s campaign fears that the narrower the winning marginal, the more weakened the legitimacy for the union  which could in turn open up for a new referendum in the not so distant future.

Currency and comparable countries
If the national context in 2011 formed a perfect storm for Salmond, the international context in which the referendum is being held has formed somewhat of a perfect storm against him in his endeavour to convince the Scots that they can  and should  go it alone.

Before the global financial crash 2008-2009, Salmond could boast of how an independent Scotland with its flourishing financial sector could become a new Ireland  a small booming tiger with the euro as its currency. Then came the crash, the euro crisis, the Irish collapse. The euro became an electoral pariah. The harsh austerity packages that Brussels/Berlin forced on Ireland and other euro countries horrified. The economic meltdown swept with it Scotlands big banks who had to be bailed out by the UK taxpayer.

While a large economy like the UKs could withstand bailouts on such a scale  albeit with severe strains  a small nation like Scotland would have probably had to cave in and go the same way as Ireland. Or as Iceland, the Nordic banking miracle that Salmond also used as bait for independence pre-crash. As Reykjavik practically declared bankruptcy in late 2008, with tumultous consequences which the country’s still reeling from, here was arguably proof that also a small banking country with its own currency  not the euro  was as steadfast as a weather vane in the midst of raging global whirlwinds.

Hence, to advocate introducing the euro or a Scottish currency would be risking electoral seppuku. Salmond has therefore abandoned his euro ambitions and proposes instead to keep the pound in a currency union with England. He has also abandoned Ireland and Iceland as baits to dangle in front of the Scots. Nonetheless, due to Scotlands oil Salmond is still holding up Norway as a paragon. To which Darling’s campaign counters that Scotland’s oil resources are decreasing and are comparatively small, that the cost to extract the resources will increase, that it would take decades for Scotland to build a Norwegian-esque wealth fund; decades during which Scotland would be a petro-economy  with all its volatile drawbacks.

Devo max: independence lite versus union lite
Salmond wouldve preferred a third option on the ballot paper: no to independence but yes to a maximal devolution of powers from London to Scotland (“devo max”). That is, still part of the union but independent from London in all areas apart from currency, defence, foreign policy. A crucial aspect of this federalist option wouldve been that the parliament in Edinburgh be given practically full tax powers.

Devo max is also in line with the gradualist school in the nationalist camp. The gradualists preferred strategy is to via a succession of devolved powers gradually gain and consolidate independence, gradually making the Scots accustomed to and convinced that Scotland can go it alone. But in their negotiations, the UK government refused to allow a devo max option on the ballot paper. Salmond had to settle with a black and white ballot  yes or no  with no grey in between.

Devo max would probably have won the day. People are generally reluctant to throw themselves into the unknown. With devo max, the Scots could to a considerable extent have had the cake whilst eating it: A significantly empowered Scotland where the big’, familiar, safety-inducing institutions wouldve stayed in place  the pound, the BBC, membership of EU and Nato, and the Queen of course.

Salmond has nonetheless been trying to convince the Scots that all of this will remain, that if they vote Yes it will be like it used to be  only better. He professes that Scotland will after negotiations remain in the EU and Nato, that the Scots will keep the pound, the BBC, the Queen. Hence, to a large extent hes promising devo max. Keeping the pound for instance means keeping a currency union with England, which means relinquishing a considerable amount of sovereignty. So what Salmonds basically saying is: vote for independence and I guarantee you a reduced degree of independence – an independence lite, so to speak.

Darling retorts that none of this will happen, at least not without a lot of pain for the Scots. In this he can draw support from top officials in the EU and Nato whove warned that it will not be a walk in the park for an independent Scotland to become a member of their respective organisations. EU is wary of independence as it amongst other things would embolden separatist tendencies in other member countries, especially Belgium and Spain. Nato is wary of independence as it would amongst other things force the British fleet of nuclear missile submarines from its strategically important base in Scottish Faslane (SNP are pro-Nato membership but opposed to nuclear weapons on its territory  similar to Norway). Even Barack Obama and Bill Clinton have waded into the debate, expressing their support for Scotland staying in the union.

So Darling enjoys robust support from EU, Nato and the UK government. His campaign is furthermore backed by several of Scotland’s largest companies, of which several have threatened to leave if Scotland secedes from the union.

As for the pound, Darlings campaign has made it clear that it will not countenance a currency union with an independent Scotland. Salmond has in turned implied that if thats the case, Scotland might not take its share of the UK national debt.

But although the No side is marked by a risk stressing negativity, Darlings campaign does also do positive pledges. It promises increased devolved powers if Scotland votes No, including significant tax powers. If you stay, you can have the “best of both worlds”, according to Darling says: An empowered and highly independent Scotland, with increased powers over tax and welfare policies, but still enjoying the stability and security of being part of the union  retaining all the big, familiar, safety-inducing institutions.

So to a considerable extent Darling too is promising devo max, basically telling the Scots to: vote for the union and I guarantee you a reduced degree of the union  a union lite, so to speak.

A tale of two futures
Even before the 1999 devolution, Scotland enjoyed a considerable degree of independence in areas like education and law. Furthermore, the Scottish part of the National Health Service (NHS) has always been separate from the English part. In these areas there are consequently some conspicuous differences between England and Scotland; differences that have increased with devolution and with the modern Scottish political landscape.

Salmond has emphasised such differences and sought to portray the referendum as a choice between two futures: one in an independent centre-left Scotland, the other in a neo-liberal Tory union. In this regard he is currently aided, as it were, by the Conservative-led UK government who is implementing severe welfare cuts as well as privatising parts of the English NHS and the English education sector.

On a concrete level Salmond can for instance point to the fact that  unlike its English counterpart  the Scottish NHS has no fees for prescriptions. Or that in contrast to England there are no student fees in Scotland. Nor has Scotland introduced the privatised free schools recently introduced in England.

In this regard it’s obviously a burden for Darling to enjoy the support of the Conservatives; a support that Salmond rarely forgets to remind the electorate of. “[T]he frontman for a Tory-led campaign”, just one example of Salmond’s many vivid descriptions of Darling with campaign.
Post-referendum: consequences
Whichever way the vote goes today, one thing is certain: the current order will never return, status quo is off the table.

A No vote might lead to Salmond resigning the SNP leadership. But although labelled a loser in the short term, he might very well be labelled the enabler in the long run. By simply holding a referendum, Salmond has achieved something remarkable. People have been put in motion, the genie is out of the bottle, the lamps have been lit and will not go out in our life time.

The devolution pledges from the No campaign are testament to its belief that the only way to avoid losing the union is by loosening the union. Assuming that the pledges are fulfilled, a No vote will subsequently bring about an increasingly federalised UK (wherein lie seeds for future loosening). The net beneficiary of such devolution will not only be Scotland, but Wales and Nothern Ireland are also expected to benefit. While these countries have their own parliamentary assemblies, there is nothing equivalent for England. It is the UK parliament in London that decides on matters pertaining to England; matters which the parliament’s Scottish, Welsh and Northern Irish MPs can consequently vote on. Thus, an increased federalisation will probably increase the calls in England for either setting up an English parliament  or banning the non-English MPs from voting on English affairs.

If Scotland votes Yes, David Cameron has vowed not to resign as PM. Negotiations between Edinburgh and London will commence; extremely complicated negotiations that Salmond has scheduled to culminate in an independent Scotland 2016.

A Yes will have far-reaching consequences for UK and Europe. It will apart from breaking up the British union also increase the risk for a future break-up of the Belgian, the Spanish and the European union. The separatist tendencies in Belgium and Scotland will be bolstered. Catalonia’s regional government has already announced that it will hold a referendum on self-determination in November. The Spanish government has so far refused to give its blessing, but a Scottish Yes would increase the pressure and by precedent confer legitimacy to a potential Catalan Yes vote.

With Scotland gone the UK centre-left forces would lose an extremely important power base, one which can arguably serve as a progressive beacon to the rest of the union. The balance of power in what is left of the UK would shift decisively in favour of the Conservatives. The Labour party would be deprived of scores of MPs – it currently has 40 Scottish MPs  compared to the Conservatives losing just one. This will in turn be hugely important for the UK election next year; an election which with Scotland in the union looks to be a close call  where every MP will count  but with Scotland gone could very well give the Conservatives an outright majority.

Which takes us to the potential break-up of the EU. The Conservatives are namely heavily imbued with EU-scepticism. Cameron has therefore promised that if he wins an outright majority next year, a referendum will be held 2017 on whether the UK should stay or leave the EU.

Tonight, a new order will begin. The question is which. UK and Europe holds breath.