A United Kingdom Divided: Scottish Independence & Its Repercussions

April 4, 2012United Kingdomby David Smith

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A United Kingdom Divided: Scottish Independence & Its Repercussions

A Scottish vote in favour of independence in a referendum would end the country’s 307-year intermarriage with England. But it would also have huge economic, political and psychological repercussions for the whole of the UK.

Scotland has always been the most autonomous of the UK’s three Celtic nations – with its own legal and education systems. But despite a 305-year-old political relationship with the U.K., a trend towards a different vision of Scottish politics has accelerated in recent years.

Following a yes-vote in the referendum on devolution in 1998, the Parliament of Scotland was formed in 1999 with devolved powers. Since 1707, Scotland’s affairs had been run from Westminster; but the Scottish Parliament now had powers over crucial aspects of the local economy, including transport, tourism, education, the environment, the law, the fire service, the police and business development. This was a huge step towards independence – a path that could soon be taken following recent political calls.

Glasgow University’s Professor Murray Pittock, author of The Road to Independence?, said: 

“Scotland was already quite different to England, but since it was given a fully fledged parliamentary structure, the pace of divergence has increased.

“And that divergence will increase over time even if the Scots vote no in the 2014 referendum because opponents of independence will feel under considerable pressure to offer extra powers to the Scottish Parliament to head off a yes-vote.”

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This political empowerment has ran alongside psychological changes in the Scottish psyche. The growing belief that Scotland has the economic capacity to go it alone has been bolstered by the forceful arguments of Alex Salmond, the leader of the Scottish National Party and First Minister of Scotland.  

One of Salmond’s key arguments, which taps into Scottish resentment at being ruled from Westminster, is that the British Government has squandered the tax revenues from Scottish oil in the North Sea. Salmond, a trained economist, claims that an independent Scotland could raise £54 billion in oil revenues over the next five years. The oil money is a critical part of the debate about Scotland’s future because it would underwrite the country’s ability to pay off debt and rebuild the local economy.

Another seductive Salmond claim is that an independent Scotland would become the OECD’s sixth-wealthiest nation. The rest of the UK, he says, would lag behind in 15th place. He bases his calculations on the oil industry having an “asset base” of £1 trillion, including reserves, and Scotland’s huge offshore wind and tidal energy capacity, which he envisages creating 100 per cent of electricity by 2020.  The whisky industry, which is worth £4 billion a year, would also play a vital role.

Professor Pittock agrees that Scotland has many lucrative assets, but he says that independence would still bring enormous economic challenges.

“It would be a shock to the system as a lot of Scottish business is not set up for independence yet. For example, research and development is very low in Scotland and has been deteriorating as a percentage of the UK’s research for years.

“There’s also a lot of branch economy activity, such as service activity for multi-nationals. There are fewer and fewer large companies and there’s a lot of weak business formation, especially in central Scotland, although there’s also some strong growth on the East Coast.”

Salmond, of course, would argue that a free Scotland would be more capable of looking after its own affairs. In his vision, Norway would provide an economic model because the Scandinavian nation also has a small population of 5 million, but has used its oil revenues to build a national pension fund worth more than £360 billion.

The Case For Independence

Defence spending is another point of contention in Scotland. Nationalists oppose the presence of Trident nuclear weapons on the river Clyde and the wars in Iraq and Afghanistan are deeply unpopular. For Salmond’s opponents, the greater security of the UK’s armed forces is a strong reason to preserve the alliance.

Professor Malcolm Chalmers, the director of UK Defence Policy Studies at the Royal United Services Institute, has worked out a notional cost of what Scottish defence spending would be based on the defence spending in two Scandinavian countries of similar size – Denmark and Norway.

The Scandinavian countries spent 1.4 percent and 1.5 percent of its GDP on defence in 2010 respectively. If Scotland had spent 1.45 per cent, it would have had a 2010 defence budget of £1.7 billion. This is far less than the £3.3 billion which the SNP says Scottish taxpayers contribute to defence spending. 

The assertion that Scotland would benefit financially from independence also gains support from the research of Professor Hughes-Hallett of St. Andrews University, who has worked for the World Bank and the IMF. Hughes-Hallett estimated that an independent Scotland would produce a surplus of £219 million, or 0.3 per cent of GDP, compared with a UK deficit of 2.8 per cent.  

Professor Hallett’s figures are predicated on North Sea oil revenues being devolved to Scotland. Without the “black gold”, Scotland would have a 13.5 per cent deficit. 

England, of course, would be reluctant to part with the majority of oil revenue, which accounts for 1.5 percent of UK’s GDP and about 2 per cent of UK tax revenue. But the Geneva Agreement on natural resources under the sea determines that they are divided by median lines. Drawing a median line across the North Sea from the Scottish border gives 91 per cent of oil to Scotland.

“There is Scottish resentment that places like Alberta in Canada – although not a sovereign state – has its own oil fund,” said Professor Pittock.  “The resentment is tied up with anti-Thatcherite feeling.”

“There’s a perception that in the 1980s Mrs Thatcher spent the UK’s oil revenues paying large welfare bills and reducing the UK’s national debt. Scotland saw no benefits and a lot of Scots ask - where did all our money go?

The anti-Thatcherite feelings have never gone away. When she came into power in 1979, Mrs Thatcher thought her brand of conservatism would sit well with the stereotypically thrifty Scots. But the Conservatives left a trail of devastation in working-class Scottish communities.

In an interview with The Guardian newspaper, Scottish novelist Iain Banks explained how the neo-liberal Thatcherite politics of England caused him to renounce his “British” identity in favour of a Scottish one.

“Margaret Thatcher swung the Tory Party to the right. Out went one-nation Conservatism; in came deep cuts, privatisation, the glorification of greed and globalisation.

“The thing is, the Scots never fell for Thatcherism. We were always sceptical. When she announced that there was no such thing as society, most of us were, frankly, incredulous.”

Thatcherism, and the enthusiasm with which it was embraced by so many in England, made a lot of Scots begin to realise that we were, after all, meaningfully different en masse from the English; more communitarian, less convinced of the primacy of competition over co-operation. There was no one-nation,” he said.

Salmond’s SNP politics, to Banks, represented a more egalitarian vision for Scottish society.

“SNP policies were more progressive, more left-wing, fairer, in the end, compared to any other party with a realistic chance of achieving power. Labour stopped being Labour, so I became a pragmatic voter for the SNP.”

His views were echoed by the Scottish playwright David Greig in the same article:

“Britain has been torn up by successive Westminster governments that have pandered with increasing desperation to a middle England that seems determined to live in a low-tax, high-inequality, American-style future.

“I don’t want to live in America. I don’t want to live in Thatcherland... The Union is an unhappy marriage. I think it’s time we both sat down and said it out loud – it’s over.”

Will The UK Move Towards A Federal Structure?

Scottish antipathy to the economic and political dominance of London and the South East is closely tied up with Scottish resentment towards the Conservative Party. Whereas, the South East of England has 74 Conservative MPs out of 83 available seats, there is only one Conservative MP in Scotland’s 59 constituencies. The recent Tory budget, which cut rates of income tax for high earners, was widely perceived in Scotland as a budget designed for the rich South East.

The feeling of marginalisation and resentment in Scotland is gaining political momentum,” according to Mark Ballard, a former Member of the Scottish Parliament and now assistant director of Barnardo’s in Scotland. “Many Scots are turned off when they hear the Tory administration talking about privatising the road networks, taking a different course on welfare reform, and adopting an incredibly isolationist position in Europe.

“There’s a fear that Cameron will take the UK out of Europe. Most Scots would choose Scotland in Europe rather than the UK out of it.”

To date, Scotland’s Parliament has able to resist the changes taking place in England. It renounced the so-called “privatisation by stealth” of the National Health Service and has refused to follow England’s lead in imposing Europe’s highest university tuition fees. Whereas in England, students must now pay up to £9,000 to attend a top university, natives of Scotland get a free university education. Other attractive policies unique to Scotland include free prescriptions and free nursing homes for the elderly.

“Salmond’s pitch on social policy is a more egalitarian, redistributive one,” said Ballard. “And the SNP have pointed out that last summer’s UK riots took place at major cities in England, not Scotland. They argue that to avoid riots and social disorder, we need a more centrist, consensual, egalitarian SNP vision rather than England’s ‘capitalism red in tooth and claw’.”

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Salmond rarely makes a clichéd, nationalistic call to Scots’ pride in their history. Rather, his vision is forward-looking and aspirational. This is in utter contrast to the approach taken in a recent pro-unionist speed by the coalition’s deputy party leader, Nick Clegg.

Clegg spoke all about the historical achievements of the union, but he fundamentally misunderstood what’s going on politically. There’s also a powerful class narrative at work in that Nick Clegg and David Cameron are privately educated Oxbridge multi-millionaires from the South East, whereas Salmond says he is an ordinary Scot and speaks for all Scots,” said Ballard.

But despite ill feeling towards Westminster, and the resurgence of Scottish national pride, Ballard says that Scotland is unlikely to vote for full independence. Instead, he thought they would opt for a form of semi-independence known as devolution-max, or devo-max for short.

“This would mean Scotland would share its military, monarchy, foreign policy, and currency with the UK. But everything else would be Scottish, including oil revenues and decisions about taxation,” he said.

Devo-max, Ballard says, would put pressure on the rest of the UK to move towards a federal structure.

“If Scotland can stay within the UK on a few things, but be autonomous for everything else, other parts of the UK will be tempted to follow. Wales, which already has its own National Assembly, would want similar powers, and so would Northern Ireland. It’s likely that England would have an English Parliament, too.”

Will The U.K. Break Apart?

The most radical effect of Scottish independence would be felt in the marginalised English regions.

Once the Celtic nations break away, the economic dominance of London and the South East would be more complete and obvious. It would put pressure on the North of England, and also the Midlands, where manufacturing industries have been starved of capital investment, to move towards a federal structure. “

“Scotland, for example, would be able to set its own corporation taxes. If you are Nissan, why would you continue to build cars in Sunderland, in the North East, when you can get a cheaper deal 100 miles north from the Scottish Government?” 

There are already signs that the North of England is being influenced by developments north of the border.  Andrew Sugden, director of membership and policy at the North East Chambers of Commerce (NECC), said Scottish independence, or devo-max, was making people in the North East nervous. Sugden’s fear was that Scotland’s increasing ability to tailor policy to local circumstances could further disadvantage the North.

Many people in the North of England – an area of 14.5 million people, roughly three times the population of Scotland - share the Scottish feeling of political and economic marginalisation. About 98,000 jobs were lost in the North in 2011, according to the think-tank IPPR North. This was an 18 per cent increase on the previous year and dwarfed the 4.5 per cent rise in the rest of England.

The unemployment figures, allied to the increasing envy of Scotland’s growing autonomy, have bolstered the movement calling for a “voice for the north” through an elected assembly. In The Observer newspaper, a recent letter from six northern Labour MPs, said the debate over Scottish independence should not “ignore the growing political marginalisation of the North of England, with a cabinet dominated by southern politicians who seem to know little, and care even less, of the economic and social problems of the North”.

In 2004, the North East voted resoundingly against an elected assembly for their region. Only 22 percent wanted devolution. But, there is a possible parallel with Scotland. In 1979, the Scots voted against devolution, whereas in 1997, they voted in favour. And, Professor Pittock believes a Scottish breakaway would change the attitudes of Northerners and Midlanders to devolution.

“I think it would have a huge psychological effect,” said Professor Pittock. “At the moment, the English regions don’t resist the power of London in the same way as the Scottish. The Scots talk a lot about that. They are conscious of the problems in the North and they are often frustrated that more people in the North don’t actively criticise non-identifiable spend in the South East.”

“They say - why are we the only ones pointing out the bias? London totally dominates non-identifiable spend on research installations, the British library, the new Jubilee line, the London Olympics, and so on.”

Ballard says the North, and Midlands, have not been as capable of resisting the economic hegemony of London because of a lack of representation in the media.

“In Scotland, we have national papers which address Scottish political issues so there is a great deal of political awareness. The English national media is based in London and does not take the issues of the North of England seriously,” he said.

 

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But Ballard agrees with Professor Pittock that Scottish independence could awaken a latent regional English political identity.

“Alex Salmond would say that Scotland punches its weight, whereas the North of England punches nowhere near its weight. But the Scottish image of itself as a more egalitarian, fair-minded place than England is quite a new self-image.”

Identities can develop very quickly. If you look at pictures of graduation ceremonies in Edinburgh in the 1950s no one wore a kilt. But now the majority of male graduates wear one. Scottish people are Scottish now in a way they weren’t two generations ago. The political developments in Scotland have the potential to radically change the mentalities and political structures of the other parts of the UK.”