Guan’s blog


Scotland will not be an independent country

19 Sep 2014

The final result is in: with 55.3% of Scots voting no, Scotland will not be an independent country. As someone who supported independence, I am of course sad. Scotland will be worse off politically and worse off economically.

At this point, it is hard to judge whether the result will be interpreted as a mandate for the status quo, or whether Scottish voters relied on the promises made by the major UK parties or the more extensive promises of a written constitution made by Gordon Brown, who has been given an adjournment debate in the House of Commons on October 16. David Cameron has already promised that nothing will happen before the next UK general election in May 2015.

Even before the final result had been declared, we started to see expectations of more devolution scaled back, as we did before polls opened. My own prediction is that a few years from now, Scotland will still be left with fewer political powers than Nova Scotia and fewer fiscal powers than, say, the Danish municipality of Læsø, population 1,808. There will be no written constitution that protects the existence of the Scottish parliament.

But let’s say something like devomax or home rule and a written constitution is actually delivered. The Scottish government would be responsible for most domestic policy and would raise the revenue for that with its own taxes, which could be different from English taxes (though absurdly, Labour appears to want to allow Scotland to have higher, but not lower, tax rates. EU membership means that there are some limits to how fiscally independent Scotland can be; for example there can only be a single VAT rate for all of the UK.) The relationship would be something like Austria–Hungary from 1867 to 1914, which had joint ministers for foreign affairs, defense and defense-related aspects of finance, but nothing else.

This degree of fiscal independence means that Scotland would still have to be economically sustainable on its own. If Scottish taxes pay for Scottish public spending, England would not want to cover Scottish deficits or help Scotland in the event of an economic crisis, which is the kind of risk sharing that pro-union activists see as one of the main economic arguments for rejecting independence. (The author of that piece was against independence, by the way.)

What happens when the oil runs out? That’s something that Scotland will still have to figure out within the UK. And there would be no flexibility on currency arrangements, while even an independent Scotland in a currency union could have eventually abandoned sterling. There’s a reason that David Cameron called increased powers inconsistent with staying in the union in 2012. If the UK political elite keeps its promises, they could create a much larger economic mess than independence would ever have been.

No to independence combined with more devolution means that the West Lothian question may have to be addressed. A separate English parliament could work, but David Cameron seems to want separate votes by English MPs for England-only legislation. This could happen with an English grand committee. It would still be the same UK parliament, so UK governments would need to form majorities in it. After a close election, we could see a UK government that cannot pass legislation for England, or that can pass English laws but not UK-wide ones.

What’s next? The general election for the Scottish parliament is in May 2016. The white paper on devolution is expected in November with draft legislation in January. And I predict another referendum in 2032.