Friday, 11 May 2012

FAQ, the spin and the reality.

What would Scottish independence mean for the monarchy?

The Union Perspective: Under the Scottish Government’s current plans, Scotland would retain Queen Elizabeth as head of state and remain within the Commonwealth.

The Reality: Any future king or queen would likely be required to undergo a Scottish coronation instead of simply swearing an oath in a back room in London. The option for Scotland to become a republic would always remain open and would happen if it was the settled will of the people. Independence may be the best option for the Monarchy in Scotland, each new head could be voted in preferably by referendum. Election by popular acclaim followed by due crowning in Edinburgh or other Scots location with public swearing of the oaths of office could not only help to revive the Monarchy north of Tweed, but it would also ensure the monarch worked for the people.

Would an independent Scotland keep the pound?

The Union Perspective: Yes, until it chooses the Euro. But keeping Sterling would mean it loses control over monetary policy to the Bank of England, and ideally need Scotland to strike a currency union deal with the remainder of the UK.

The Reality: Yes, that is current policy. The Bank of England is part of the Treaty of Union [article 16] so would be an intrinsic part of untying that treaty. In theory Scotland is an equal partner in the Bank of England, but with the bank’s semi autonomous position there’s a lot to be negotiated. It is in Scotland’s interest to retain Sterling to prevent the possibility of a run on the currency which will inevitably be weakened if/when Scotland leaves. It is entirely possible a future Scotland will join another currency union or set her own coinage, that will be a choice of Scots in days to come. Currently, under the Union, Scotland has no say on monetary policy.

Who would get North Sea oil revenues if Scotland declared independence?

The Union Perspective: The Scottish government believes Scotland is entitled to a 90% geographical share of the North Sea's oil and gas fields, giving it 81% of all the oil and gas produced in 2010. This has not been tested and the UK government refuses to confirm this.

The Reality: International law is clear; Scotland gets over 90% of presently identified reserves. The maritime boundaries on the East also revert to historical norm/international agreement bringing more territory back to Scotland, and as yet unidentified resources in the West as far as Rockall’s boundaries will also fall under Holyrood. Berwick upon Tweed would return to Scotland, become independent, or remain with England. Berwick is legally a Scots town but will likely be given a choice due to its unique treaty history.

Could an independent Scotland have bailed out RBS and HBOS?

The Union Perspective: Not without great difficulty. The UK government spent £45bn bailing out RBS and £20bn on Lloyds, which took over Halifax Bank of Scotland to avoid its collapse. That exceeds Scotland's annual tax receipts. But most significantly, at its peak, the Treasury had £465bn at risk in cash and guarantees, well over three times Scotland's total GDP, even if a full geographical share of North Sea oil is included.

The Reality: Absolutely. International accord [but not international law, as Iceland showed no nation needs to bail out private industry] is clear; nations are expected to be responsible for debts accruing within their boundaries. When a European bank recently failed the Dutch, French and Belgians all bailed it out, proportionate to the business share in each nation. With only around 5% of the UK banking business being in Scotland Holyrood would have been responsible for somewhere around £4 billion in direct funds and less than £25 billion in guarantees.

This assumes that Holyrood would put private debt onto the public account which it could quite simply have refused to do. The real answer in hard cash is therefore anywhere between £0.00 and £4 billion would have been required. That £4 billion wouldn’t have just been “gifted”, it would have bought shares which could later be sold. An already independent Scotland could have been expected to have reserves’ like Norway [McCrone] and simply underwritten such a sum, unlike London which had to borrow it. The Union perspective also operates under an assumption that Scotland would have permitted its banks to “run riot”, it is equally likely that Scots banks would have operated under a system as secure as Canada’s or Norway’s.

Would an independent Scotland have its own armed forces?

The Union perspective: Certainly but it remains unclear how large it would be or what alliances it would forge. The Scottish government believes it will be based around the UK mobile armoured brigade being moved to Scotland, and could spend about £2.1bn, similar to defence budgets in Norway and Denmark.

The Reality: Scotland contributes £3.3 billion to UK defense. Defense spending in Scotland is now less than £1.5 billion and falling. Scotland can increase defense spending to a Nordic level by adding some £600 million in internal expenditure and still pocket over $1 billion, which currently goes to London, for future investment in her own people. The UK government is presently completing the process of disbanding almost all the Scots regiments.

What would happen to Royal Navy and RAF bases in Scotland, including Trident?

The Union perspective and Reality coincide: Alex Salmond's government believes it needs one principle airbase and one principle naval base, in addition to an army. It may take over Faslane on the Clyde as its naval base but wants the Trident submarines based there to leave. It would use the last remaining RAF base in Scotland at Lossiemouth in Moray. The exact details are fluid, but the proposals are expected to leave a stronger, better equipped, better funded military in Scotland than presently exists under the UK.

If Salmond wins a referendum can Scotland simply declare independence?

The Union Perspective: Not immediately. All the key issues, like Scotland's share of UK debt, dividing up North Sea oil fields, a possible currency union, taking over military bases and UK government offices, would need to be negotiated. Some argue the final deal should also be ratified in a referendum: Salmond has suggested it will be approved by the results of the Scottish parliament election in May 2016. It is unclear how the UK parliament would approve any deal. There would also be a transition period before that process was complete which could take several years.

The reality: Yes. Negotiations would then take place between two sovereign nation states rather than a unitary state representing three nations and one who is then of indeterminate status. The legality and political reality are even different here; Holyrood could declare independence tomorrow if it chose, legally, because it’s the representative government of Scots, but the political reality is everyone accepts a referendum is needed to make it “clean”. There is nothing to prevent a declaration on the day of a positive result, just like moving out and waiting for formal distribution of obligations. The reality is time will be required to set up taxation and social funding structures, but this should have been done before the vote if all parties are cooperating.

What do the opinion polls say?

The Union Perspective: The latest polls show a rise in support for independence and a decline in support for the UK, but the findings vary dramatically depending on what question is asked.

On 31 January 2012, Ipsos-MORI asked voters to choose based on that question, and found: 37% said yes, and 50% no. Firming up those answers to focus on only those who were certain to vote, and the proportion preferring independence rose to 39%.

However, in early February, a Panelbase poll for the Sunday Times and Real Radio Scotland, had a more startling finding – that 47% would vote yes to the question "Do you agree that Scotland should be an independent country?", against 53% saying no.

The Reality: The polls are now running almost neck and neck, but often include weighting or wording which can skew the outcome if not applied correctly. Scots have not yet had the debate and it’s even. There has been little to no balance in reporting and many true facts about the state of their nation remain hidden from the average Scot.

It’s reasonable to expect that with full and honest debate, absent deception, and with the parties campaigning on the platform strengths alone the result should surpass that of the 1997 referendum which showed an average between the two ballots of a “yes” vote in the high 60’s.

Can Salmond hold a multi-option referendum?

The Union perspective: Probably, but it would involve a major political gamble. Salmond wants the freedom to give voters an extra option of voting on devo plus or devo max, to give Scotland greater autonomy within the UK. His opponents say this is technically difficult and would confuse voters. Lib Dem leader Willie Rennie has posed a question known as Rennie's riddle: if independence won 51% support but devo plus 99%, would Salmond still opt for independence? Salmond also needs someone else to campaign for devo plus in a referendum; so far no-one has offered to do so.

The Reality: Yes. It would be held just like the 1997 referendum, there would be two ballot questions, on two separate ballots. Do you want Independence, do you want Devo Max. The devo max option, like the tax question in 1997 would only come into play dependent upon the result of the other ballot. There’s no ambiguity, there’s no confusion, there’s no obfuscation.

Holyrood would need to define “Devo-Max” very precisely, and there would need to be a time limit for Westminster to agree, or that agreement would require being in place before the poll. Failure to secure the terms of “Devo-Max” would of necessity require creating a default condition of either votes for Independence or triggering a second referendum after say, twelve months, if Westminster failed to act honourably over “Devo-Max”.

Devo-Max is essentially Scots saying they will offer an opportunity to Westminster to renegotiate the 1707 treaty. Westminster can then either accept or refuse. The reality of the situation is that Westminster is strongly against significant constitutional change, it perceives Devo-Max as forcing this upon it and simply hopes it can win a “yes/no” independence vote as it did with Clegg’s PR referendum and avoid any change to the way it does business.

What does it mean for me, my life, my future citizenship?

The Union Perspective: Someone born or resident in Scotland: it should mean a greater direct say over one's government and more political freedom, but also greater economic risks, less security and more differences with England.

The Reality: A vote in an election is no longer diluted 11 to 1. There will typically be easier access to needed services, more nimble government which is closer to the people and an overall a climb of about 10 places in the world wealth table. This should signal an end to Austerity, an ability to invest inwardly and a potential which does not presently exist to protect the welfare state and social services. Scots could also realistically expect lower taxes, or equivalent taxes with better support and infrastructure. It appears the Union considers everyone should be just like England?

The Union Perspective: Non-Scottish UK citizen: not a great deal, but the UK economy will be smaller, oil and whisky might be more expensive, British identity would be diluted and Britain's status overseas could be weaker.

The Reality: There will be no UK economy. Scotland and England will become equal free trading neighbours on the world stage with fair competition, not London’s lopsided rules. There will be a period of potential constitutional upheaval as Wales and Northern Ireland figure out their future. The pound will track closely to present values until Scotland decides to leave Sterling, at that time based upon present indicators there’s a strong potential of sudden and substantial devaluation. There could be significant positives after the adjustment period with improvements in the Scots economy, democracy and accountability, or it could be simply “business as usual” at Westminster. Scotland will have a voice at the top tables which far exceeds her size and is proportionate to her wealth. British identity is something of little to no value with only a minute percentage seeing themselves as “primarily British”.

Someone outside UK: Pro and anti-Union supporters now largely agree, Scotland is expected to remain in the EU, so there will be few major changes for tourists or investors. Future EU choices would be for Scots themselves to make which will permit Scotland a direct voice at Europe’s top table on fisheries and agriculture, to name but two. With 50% of Europe’s fossil fuel supplies and 30% of its green energy potential, Scotland is expected to “punch well above her weight” and be one of the principles in future policy formulation. Most importantly Scotland will now have direct representation for her interests at every significant level.

1 comment:

  1. Great piece Hazel, a balanced and fair view I think. More pieces like this are needed as the debate gets underway in earnest from today. I think there will be a lot of scaremongering from the unionist camp, but if those in favour of independence regardless of political affiliation can keep their heads and give fair and accurate information, then the vast majority will see through their lies and deception and win the day. Alba gu brath.