Scotland will become independent by stealth

So what happens if there is a referendum and Scotland says yes? This question has been hanging over Scottish politics for the last year, but no one has seriously addressed it yet in any practical sense. How exactly do you become an independent country these days? There’s no text book for this kind of thing, and the last time a country left the UK was Ireland eighty years ago.

The independence question has gone unasked because until recently no one seriously thought it was ever going to happen. Even the SNP, which is this weekend celebrating its first year in office, hasn’t been spending a lot of time worrying about the process of disengagement from the UK, even though in our poll last week suggested a majority of Scots may now favour
it. They’ve got enough on their hands running their departments. There is a draft bill for a referendum on independence, but no majority in parliament to pass it.

However, events south of the border could perhaps provide a catalyst for independence. If a Conservative government takes over in Westminster by 2010, the stakes would certainly be raised. David Cameron would not want to be the prime minister who presided over the break up of Britain, but giving Scotland full political and economic autonomy, within the UK, might be the least worst option.

The Conservatives only have one seat in Scotland, so they haven’t a lot to lose politically. The presence of a lot of Scottish Labour MPs in Westminster isn’t going to endear the Conservative government to the Scottish connection. Indeed, by removing Scottish MPs from Westminster altogether, the Conservatives could expect to be in power more or less indefinitely.

After the next general election, English nationalist opinion will likely be up in arms about the Barnett Formula and the West Lothian Question. The Daily Telegraph repeats as fact the claim that Scotland is subsidised by English taxes and there is a growing clamour for “English votes for English laws”. As rows intensify between Holyrood and Westminster England may rapidly tire of trying to fix the union. You can imagine editorials in the Times and Telegraph saying it’s time for the Scots to decide whether they want to be in or out.

Moreover, in 2010 referendums may be happening all over the shop. The Tories are committed to holding a referendum on the Lisbon Treaty on European integration. There is also a referendum scheduled on Northern Ireland’s relations with the UK, and Wales will almost certainly be holding an election on extending the powers of Cardiff.. In these circumstances it might start to look rather odd excluding Scotland from this orgy of constitutional consultation.

But to return to the original question: if Scotland voted for independence, what would it actually mean? How would it happen? Well, there would have to be a bill passed in Westminster for a start, since it has authority over the constitution. I can’t see the Tories refusing to pass this legislation after being the ones who endorsed the referendum. A date would have to be set for Scottish MPs to withdraw from Westminster - though some might argue that a few should remain perhaps in a reformed upper chamber to address common issues.

Indeed, almost as soon as Scotland and England separated, they would almost immediately start coming together again to co-operate over matters like terrorism, contagion control, organised crime, defence, global warming... Cross border agencies would have to be set up even as the UK civil administration was being deconstructed. It would be in England's interest for the transition to be seamless, to avoid a stock market crash or a collapse of English prestige abroad. Independence is a two-way street.

Back in Scotland, things would go on much as before. The Scottish Parliament would continue to legislate on devolved areas,acquiring powers over taxation, broadcasting, drugs, welfare etc. Institutions like the NHS are already devolved. Indeed, during the process we might discover that the Scottish and English systems have already diverged so much - over trust hospitals and the like - that they are already functionally separate. Education and the law also.

The economic priority would be to establish a Scottish revenue and treasury, so that Scotland could raise its own taxes, create its own national debt and start issuing its own treasury bonds. The bureaucratic apparatus of the Revenue could probably be ‘nationalised’ more or less intact. The treasury would be more problematic because the SNP intend to retain the pound as Scotland’s currency, at least for the time being.

Much has been made of the fact that this would leave the Bank of England in charge of Scottish interest rates, but this might be no bad thing. It would create a ‘level playing field’ for business north and south of the border, and could ensure that the Scottish currency remained stable through the process of political independence. However, there would have to be a division of the existing national debt and complex negotiations about common assets and liabilities in bodies ranging from Network Rail to Northern Rock; from the armed forces to the National Trust.

The hardest nut would be oil revenues. Scotland will demand 95% of them, on the grounds that the oil fields are in Scottish waters. Westminster will dispute this and the negotiations would probably take years to complete. However, since oil is a declining resource, and given that England has bet the future on nuclear power, the negotiations might be easier than many believe. Similarly, the MoD might decide that it is safer to move Trident to a new site in England rather than argue for its retention in a country that didn’t want nuclear weapons.

The Queen would remain head of state and presumably head of the armed forces, though the deployment of the Scottish regiments - restored under the SNP - would be a matter for Holyrood. . There would no border posts. The SNP envisage free movement across the borders as is the case in Ireland between the Republic and Ulster.

Some have argued that Brussels would not look kindly on an independent Scotland; that countries such as France, worried about regional separatist movements, might block the (re)entry of an independent Scotland. This is possible, but unlikely. It would be absurd for the EU to be recognise the right of the people of Kosovo to self-determination and not recognise the right of Scots. I suspect Brussels would welcome Scotland with open arms. It might even engineer early membership of the euro for Scotland as a way of humiliating an increasingly eurosceptic Tory England.

Social and family ties would remain and there would be no reason for any flight of business because the economic infrastructure would be unchanged and SNP administration would cut corporation tax. Seen this way, independence might not be the apocalyptic event unionists fear, but a rather boring bureaucratic exercise in institutional disentanglement.

We might wake up and find that and independent Scotland looks pretty much as it does now. As to whether Scotland would prosper after leaving the UK, well, that’s another question entirely