Independence - it's whatever you want it to be.

Sunday Herald 3/2/13

    The Scottish Electoral Commissioner, John McCormick, caused a parliamentary row last week by suggesting that both the Unionists and Nationalists should get together and make a “joint statement” on what a yes vote would mean in practice. You might as well try to get the Professor Richard Dawkins and Cardinal Keith O'Brien to agree on what happens in the afterlife.

The SNP's Nicola Sturgeon called on the David Cameron, to convene pre-referendum talks on the handover, which the PM rejected at Prime Minister's Question time, saying he wasn't prepared to “prenegotiate Scotland's exit”.    Lip-readers in the twittersphere thought he also said a very rude word, now immortalised in the Guardian's Steve Bell cartoon. Though if he had he would've been expelled from the chamber.

Language aside, the Electoral Commission was only reflecting the views of Scots in their focus groups. Scotland has only very recently begun to contemplate the possibility leaving the UK. There has been no century of nationalist agitation here as there was in Ireland before its departure in the 1920s. And since that involved civil war, it's not a history anyone would want to repeat. There is of course no reason why the disintegration of a union should necessarily involve conflict. Exactly 20 years ago, the Czech Republic and Slovakia decided to go their separate ways peacefully in the Velvet Divorce. A whole raft of new states were formed after the disintegration of the Soviet Union without much fuss.

If Scotland decided to leave the UK, the Scottish Government insist the divorce would be similarly silky smooth. The Queen would remain as head of state and Scotland would retain the pound, so no one would notice the transition.   Of course,  the Queen could in theory refuse, though I don't believe she would. England could refuse to let Scotland use the pound after independence, but that also seems unlikely since it would cause needless trouble for banks and businesses that straddle the border.  But one or other of the governments could, despite their commitment in the Edinburgh Agreement, get nasty though there would be nothing really to gain from falling out.

This does not mean, however, that independence would be easy. 

There would have to be lengthy negotiations about matters like the division of the national debt – Scotland's share would be around £140bn, or one tenth of UK debt. Scotland would have to renegotiate its relations with the European Union, as would England or the Residual UK, at least as far as contribution to the EU budget is concerned. There would be negotiations too over Trident, which would almost certainly remain in Scottish waters before being decommissioned. The SNP used to say that they would continue to base welfare provision on the UK model in the so-called “social union” - but with benefits being withdrawn in England, that might need recalibration. Pensions are often cited as a problem because simply transferring to Scotland a share of National Insurance wouldn't necessary be enough to finance Scotland's pensions. And of course there would be oil revenues, which under international law, would mostly go to Scotland, but there would be intense negotiation over precisely how much. There might be further arguments about the ownership of public assets – army bases and suchlike - but again, only if people actually wanted to have a fight.

So - saying disengagement need not be a nightmare is not the same as saying that independence is a good idea.  I think one of the main problems with the Unionist campaign is that it is very one-dimensional - concentrating almost exclusively on threats and warnings:  Scotland being thrown out of the EU, being denied use of the pound, border posts being erected by England to keep out immigrants.  All this assumes that England would behave belligerently and punitively, like an old-fashioned colonial overlord. But I can't see why it would. The British state gave up most of its empire by agreement and there's no reason to suppose it would behave differently if Scotland decided to go it alone.

So, setting aside the problems disengagement, what would independence look like? Well, the problem here is that we don't know who would be in charge of it. Labour politicians like Anas Sarwar, in the recent parliamentary debate on the Referendum Bill and Section 30, seem to think that Alex Salmond is a “dictator” and would create an independent Scotland in his own image. That he would deny Scots a vote on Europe, would seize control of the universities, close nuclear power stations, cover the country with wind farms. But he could only do these if he was still in charge of the Scottish government which is not guaranteed. The Scottish parliament would be in charge of the transition and it is likely, given PR, that it would be a coalition in 2016 that actually handles the process of separation from the UK. It is even conceivable that Labour could win the first election to an independent Scotland  – which would be fascinating

No one can be sure what an independent Scotland would look like precisely because it would be up to the people of Scotland to decide themselves what kind of country they want to live in. My own view is that Scotland should become one of those small, social democratic countries like Denmark, Norway or Finland. But it wouldn't up to me.   Scots might vote for parties who want to leave Europe, and hold a referendum. They might want Scotland to become a more closed,  banking-led economy  like Switzerland.  

   One of the most difficult problems would would be how to prevent Scotland ending up like Ireland or Iceland, with a delinquent banking sector that effectively takes over the country. Scotland has two of the biggest banks in the world: RBS and HBOS/Lloyds which are both partially nationalised. A Scottish government would not have had to bail out these banks on its own had Scotland been independent in 2008,  for the simple reason that these are also England's biggest banks, with most of their operations south of the Border. The Bank of England would have had to coordinate a similar rescue operation to prevent the collapse of the entire financial system.

But the greater problem, it seems to me, is how a small country could prevent these huge banks, with assets many times Scottish GDP, from exerting too great an influence on the politics of a small country. The SNP became uncritical cheerleaders for RBS and HBOS before the crash, and there's no guarantee that a future government of Scotland would not similarly end up in the pockets of big business.

But that's what being independent means. It involves difficult decisions. To paraphrase Karl Marx, Scots would be making their own history but not under circumstances of their own choosing. My own view is that for any number of reasons, an independent Scotland would immediately find itself working with England on a whole range of common problems from transport links and immigration policy, to currency and banking regulation.   Indeed, an independent Scotland might not look all that different to the way it does now. The main change would be that most decisions on tax and spending would be taken in Holyrood. Scotland already has an elected parliament with primary legislative powers, and that is 80% of being independent means. The rest is up to us.