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In less than two weeks, Scottish voters will head to the polls to decide whether to sever their 307-year relationship with the United Kingdom. The referendum is the culmination of decades of agitation by the Scottish National Party (SNP) and mirrors events taking place across the European continent by people who no longer associate with large, multicultural states. If Scotland decides to become independent on September 18 it could significantly weaken the defense posture of Great Britain, while simultaneously motivating other independence movements in continental Europe. An independent Scotland would face sizable economic problems, though, and concerns about those issues could help the “no” forces with the upcoming referendum.
This topic brief will examine the factors that created the Scottish independence referendum, the major arguments that are playing out concerning whether Scotland should become an independent nation, and then analyze the chances and consequences of Scotland choosing to become independent.
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The Road to Independence
Extempers who have viewed the Mel Gibson film Braveheart can attest to how there are historical tensions between Scotland and England that date back to the late thirteenth century. Scotland won some initial victories against English encroachment into their lands, but in 1707, Scotland became part of the United Kingdom via the Act of Union. Although tensions persisted between the two sides, the economic prosperity that accompanied the British Industrial Revolution in the mid-eighteenth century made those Scots advocating for independence a small minority. Der Spiegel on August 27 writes that between 1885-1939 the Scottish economy prospered as a result of industrialization as there was significant demand for coal, steel, and shipping. However, the British economy began to weaken in the 1960s and 1970s when the sun finally began to set on the British Empire. As a result, Scotland’s formerly prosperous mining and shipping industries entered decline. Prime Minister Margaret Thatcher’s confrontation with mining unions weakened the Scottish economy as well and, as the Der Spiegel article previously cited explains, turned Scotland into a Labour Party-dominated area.
The declining fortunes of the Conservative Party in Scotland as a result of the Thatcher government gave a boost to independence forces because Labour has always been more sympathetic to the policy of devolution. Devolution is the process where some governmental powers are passed into the hands of local officials, who can make legislation for a specific area. Great Britain has a unitary government model, where a great deal of power is concentrated on the national level, so devolving powers to other areas such as Scotland was a significant development. In the early twentieth century, the Labour Party championed devolution for Scotland, but it was not until the 1970s that giving more powers of home rule to Scotland became a serious idea. In 1997, Scottish voters passed a referendum that favored the creation of a Scottish parliament. Tony Blair’s Labour government passed the Scotland Act of 1998 that devolved some powers to a Scottish parliament. The head of the Scottish government is referred to as the Scottish First Minister.
The main agitators for independence have been the Scottish National Party (SNP), which became the largest party in the Scottish parliament in 2007. The SNP is led by Alex Salmond, a former member of the British House of Commons. Although the SNP hoped to hold an independence referendum in 2010, only 40% of the members of the Scottish parliament supported the necessary legislation legalizing an independence referendum. In 2011, the SNP increased its share of seats in the Scottish parliament. Since the SNP campaigned on the promise of holding a referendum, its electoral triumph gave it the necessary momentum to push through legislation authorizing an independence referendum in 2013. It is worth noting that Great Britain had to sign off on the referendum taking place, which it did in August 2013.
The referendum will take place on Thursday, September 18. The Christian Science Monitor points out on August 23 that for the first time in British history, sixteen and seventeen-year-olds will be allowed to vote (the SNP pushed this provision because younger voters are more keen on independence and it supports a younger franchise across the board). The campaign for and against independence is deemed by The Christian Science Monitor as “the biggest grassroots campaign” in Scottish history as town halls, coffee meetings in private homes, schools, town squares, and other public venues have been the site of serious discussions about whether the country should be independent. While the SNP is campaigning aggressively for independence with the Scottish Green Party and the Scottish Socialist Party under the heading of “Yes Scotland”, they are opposed by a coalition of British political parties – Conservative, Labour, Liberal Democrat, and United Kingdom Independence (UKIP) – that have unified under the banner of “Better Together.” When voters head to the polls, they will vote yes or no on the following question: “Should Scotland be an independent country?”
Major Issues of the Referendum
A major issue in the Scottish independence debate is how a vote in favor of independence would affect the Scottish economy. First Minister Salmond is arguing that if Scotland becomes independent that it should continue using the British pound sterling as a currency. The justification for this, according to the BBC on August 28, is that Scotland does twice as much trade with the rest of the United Kingdom as it does with the rest of the world. Retaining the pound sterling would avoid headaches and transition costs for businesses if Scotland was forced to create its own currency or adopt the euro. Keeping the pound sterling would help Scottish retirees as well, who are concerned about how a future currency may affect the level of pension payouts they receive under the British government. Although Scotland’s leadership wants to keep the pound, there is no guarantee that is going to take place. The UK Independent on August 20 reveals that 53% of British voters think that if Scotland becomes independent that it should not be able to use the pound sterling as a currency. If this level of support against allowing Scotland to keep the pound continues, British negotiators might feel emboldened after a “yes” vote to refuse Scottish entry into a currency zone with the British government. Even if the British refused Scottish entry into a common currency zone, Scotland could still use the pound. The BBC on August 26 writes that this arrangement, referred to as sterlingisation, would mirror the efforts of other countries to use currencies they did not control. For example, Panama uses the American dollar. The risk of using another nation’s currency, though, is that the country in question cannot influence monetary policy. So for example, if the Bank of England elected to raise interest rates, this might do significant damage to the Scottish economy if it was in a position where lower interest rates were ideal. The Guardian on August 27 reveals that more than 130 Scottish business leaders recently issued an open letter to Scottish voters warning against independence. These companies argue that independence would harm business by exposing the Scottish economy to higher interest rates and jeopardize the territory’s relationship with the European Union (EU). Another element of the currency debate is Salmond’s threat to refuse to take on Scotland’s share of the British national debt if it declares independence and the British refuse to let Scotland use the pound. The British government has signaled that if Scotland becomes independent that it expects the Scots to absorb their fair share of British expenses. Salmond thinks that the British government will not want to take on Scotland’s old debt since the British are in the midst of significant austerity measures at the moment. However, he might overplay his hand because, as The Business Insider writes on August 26, if Scotland refused to take on its share of the British debt then it would immediately default. This could cripple its economy by making it difficult for the new nation to acquire foreign investment and it would have to offer sizable interest rates to bondholders to cope with the perception that Scotland was a risky investment. The Better Together forces know that Salmond’s position on Scotland’s future currency is weak and The Christian Science Monitor on August 26 writes that in two television debates Alastair Darling, a former British Chancellor of the Exchequer from 2007-2010, hammered away at the economic consequences of Scotland becoming independent.
Another significant question is where Scotland would fit into the global economy as an independent nation and whether it has the resources necessary for long-term, sustainable economic growth. A graphic promoted by the Yes Scotland movement that was released on Twitter on August 24 concludes that if Scotland became independent that it would be richer than what remained of Great Britain and would be one of the world’s top twenty economies. Yes Scotland estimates that the country would bring in sizable revenue from whisky exports, tourism, historic sites, and its aerospace, chemical, and industrial industries. However, opponents of Scottish independence argue that Salmond and his supporters are overestimating the benefits Scotland would gain from natural gas and oil that is found off the Scottish coast. The UK Independent on August 24 writes that while Yes Scotland forces allege that there are more than twenty-four billion barrels of oil left in the North Sea, opponents of independence argue that there are really fifteen to sixteen billion barrels of oil left. If the estimates of the “no” forces are correct, this means that Scotland could be forced to enact a 30% income tax or cut public spending by 5% to avoid significant damage to its economy over the long-term. Additionally, as the Der Spiegel article cited earlier notes, when North Sea oil reserves dry up someone is going to have to pay the cost of removing pipelines and cables. This could cost up to £40 billion. The Economist on August 2 writes that the Yes Scotland movement is banking a lot of its arguments on economic benefits that may not exist. For example, shipbuilding and defense projects may dry up in some coastal areas as the British government redirects investment elsewhere and Salmond’s promises of a new industrial Scotland may not come to fruition.
Scotland faces an uncertain future in relation to the EU as well. As a member of the United Kingdom, Scotland currently has de facto influence within the body. If it became independent, though, it would have to go through the accession process. Scotland’s politicians are bullish about EU membership, but it is not yet clear whether they would be admitted. First, the EU may not allow Scottish entry if the Scots do not adopt the euro. EU leaders are disappointed that some member states, such as Great Britain, have opted out of the common currency and they might make adoption of the euro a requirement for Scottish membership. If so, that would complicate Salmond’s plan to enter a common currency area with Great Britain. However, the biggest concern about Scottish membership is that other EU members may reject it because of the precedent it might set for other provinces on the continent that wish to be independent. The UK Telegraph on August 25 argues that Spain and Belgium might veto Scottish entry into the EU. Spain faces secession movements by Catalonia and the Basque Country and Belgium faces a secession movement from Flanders. These nations may not want to inspire peoples in these areas from following Scotland’s example, and if they vetoed Scotland’s EU membership that could place Scotland in a position where it does not receive the economic benefits of being a eurozone member.
Educationally, some Scots are worried about what might happen if British funding for research and development projects in the area dries up. The Guardian on August 18 writes that Scotland has been a prime center of genetic research. After all, Dolly, the first cloned mammal from a human cell, was born in Scotland. The Guardian notes that Scotland has 11% of Great Britain’s university staff, 15% of its medical schools, and 14% of its life science companies. Those who opposed independence argue that a lack of funding by the British government may set back the gains that have been made, but those who favor independence counter that the British government spends less than 2% of its gross domestic product (GDP) on research and development. These forces also note that an independent Scotland would be allowed to engage in shared initiatives with other nations, which is a model that Scandinavian countries have used in recent years.
Odds of Independence and its Consequences
Polls currently show the “no” forces leading, but over the last month the “yes” forces have been closing the gap. The UK Telegraph on August 26 reports that 51% of Scottish voters say that they wish to remain a part of Great Britain, while 38% favor independence. The problem with following these polls is that pollsters disagree on how many voters are undecided. Estimates range from 11%, according to the Telegraph, to one-third, according to The Economist on August 6. The size of undecided voters is significant because if the number is closer to The Economist’s approximation the “yes” forces still have a fighting chance. Political experts allege that undecided voters will be more likely to vote for independence on the day of the referendum rather than sticking to the status quo (this follows modern political thought that a challenger typically does better among undecided voters late in campaigns than the incumbent). The Economist on August 2 writes that the wealthier a voter is the more likely they are to reject independence. Pro-independence forces are stronger in the country’s depressed industrial areas and are polling better among younger voters as well. Women are much more likely to reject independence than men, which The Economist argues fits the profile of women voters typically rejecting aggressive, “wide-eyed” policies such as independence or military ventures. One of the best clues about where the vote is heading might be found among currency traders. Bloomberg on August 27 reveals that the pound sterling has remained relatively stable over the last few weeks, which is an indication that currency traders think the referendum has very little chance of passing.
If Scottish voters reject independence, it will still have an impact on Great Britain. British Prime Minister David Cameron is promising to devolve more powers to Scotland if it wishes to remain a part of British territory. A BBC article from August 28, which was previously cited in this brief, says that these powers will concern more economic powers to assist in job creation. Salmond has rejected Cameron’s promises as a mere ploy to defeat the referendum and says that they will not go far enough. Salmond says that independence is the only way for Scotland to get the necessary job-creating powers it needs concerning control over its finances, trade policy, immigration, and business taxes. The defeat of the referendum would be painful for the SNP and its allies, though. The Economist on August 4 concludes that if Scottish independence is going to happen now is an ideal time. First, the current British government is led by the Conservative Party, who Scottish voters loathe and who offers fantastic propaganda to the Yes Scotland forces through its austerity policies. And second, North Sea oil and natural gas production is still highly profitable. It is possible another referendum could emerge in the aftermath of a defeat, but conditions have created a perfect storm for the SNP. There is also a historical parallel for why the SNP needs to hope for a victory. In 1995, the Parti Quebecois (PQ), which supports Quebec becoming an independent nation, barely lost a referendum 50.58% to 49.42%. Since that time, another Quebec independence referendum has not occurred and the Bloc’s political fortunes have nosedived.
On the other hand, if Scottish voters vote in favor of independence it will create an interesting political dynamic. Scotland will not become an independent nation in the immediate aftermath of the vote. Negotiations will be held between Scottish and British officials to set the terms of Scottish exit from the United Kingdom. These will concern defense arrangements, currency questions, and trade. Scotland may have to wait up to two years to achieve full independence and during that time the British government could change. Scottish secession could become a major issue in the 2015 British parliamentary elections and the party that emerges victorious might feel compelled to take a tough line toward the Scots. After all, the Conservative and Labour parties are both trying to pull voters away from the far-right United Kingdom Independence Party (UKIP). Taking a tough line might be encouraged by the uncertain future Britain’s nuclear arsenal might face in the event of Scottish independence. The Washington Post on August 24 writes that Britain currently houses fifty-eight Trident II D-5 missiles and 160 nuclear weapons in Scotland. Scotland is also the home for the bases of Britain’s Trident nuclear submarine fleet. Salmond has pledged that Scotland will become a nuclear-free zone within four years of independence and that means that in the event of Scottish independence that the Britain would be faced with the cost of constructing new submarine bases in English territory, which might be financially prohibitive. As a result, the British government might be forced to completely abandon its nuclear deterrent, thereby placing the North Atlantic Treaty Organization’s (NATO) nuclear strategy in jeopardy. The loss of its nuclear deterrent would also make Britain the only permanent member of the United Nations Security Council without nuclear weapons. As British forces leave Scotland, it will take time for the new independent state to build its own navy and this could invite adventurism from Russia. The Business Insider on August 26 reports that Russia sails naval vessels near Scottish waters on a continual basis and that interactions between Russian and British submarines have increased in recent years to their highest levels since the late 1980s. Without the Royal Navy offering a deterrent to Russian vessels, Scotland would be helpless to counteract illegal dumping or patrolling by the Russian Navy. A Scottish “yes” vote might also serve as inspiration to the Basques, Catalonians, Flemish, and other aggrieved groups on the European continent to stage their own referendums.
Thus, the campaign over Scottish independence will echo far beyond British shores. It could affect Western security arrangements, continental independence movements, and possibly provide the road to nuclear disarmament of a global power. As a result, extempers would be wise to incorporate the global consequences of Scotland’s referendum into their speeches to illustrate the significance of the vote.