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100 days of Brexit: lessons for Scottish independence?

IT is generally agreed, three months on from “B-Day”, that Brexit has made Scottish independence much more likely by pulling a reluctant Scotland out of the EU. But the chaotic early months of what some are calling “UK independence” could also be seen as an intriguing dry run for Scottish independence – a kind of mirror image of what might have happened had Scotland voted Yes in 2014.

There would have been similar confusion, and hard negotiations, as Scotland tried to remain in a single currency with a reluctant rUK. There would have been border issues to figure out too. Like today, big companies and banks would have either been relocating or asking for assurances. There would also have been intense negotiations, post a Yes vote, about whether and how Scotland remained in the European Union.

I suspect, however, that the economic disruption of Scottish independence would have been much less than the Project Fear people claimed. As with Brexit, there might even have been a modest post-independence boomlet as companies set up shop in Scotland and the country geared up for a new future. There would be longer-term issues to do with public spending, not least because of the collapse of the oil industry. There will also be long-term problems for the UK leaving the single market. But in the months immediately after Scottish independence, the press would probably be remarking on how the economy seemed to be thriving instead of collapsing in a heap.

But history may judge, nevertheless, that Scotland was wise to avoid becoming independent, prematurely, in 2014 – and not just because of the crisis in the oil industry. Many Scottish voters, especially older ones, would have been profoundly shocked by a Yes result – even more than people have been shocked by the result of the EU referendum. Like the Spanish Inquisition, no-one really expected Brexit, and relatively few really expected Yes to win in 2014 – except of course Alex Salmond.

You can be sure that the First Minister, Nicola Sturgeon, is watching the post-Brexit chaos with great interest and learning shrewd lessons about what not to do when Scotland votes, as she believes it will, for independence next time. Brexit-watch is also one of the main reasons that there is clearly not going to be an early independence referendum. The independence movement finally got the message last week that indyref 2 is not going to happen next year. The word from key figures like the SNP MSP, Joan McAlpine, and the former Scottish Justice Secretary Kenny MacAskill was clear: independence is firmly on the “back-burner”.

What’s on the front burner is Brexit, and that is the First Minister’s predominant focus as she tries to prevent Scotland’s interests from being completely sidelined by the Brexit bunch in Westminster. In fairness, she has made this abundantly clear since her visit to Brussels in the immediate aftermath of the EU referendum. Sturgeon has repeatedly said that her priority was trying to keep Scotland in the single market, even though she wasn’t ruling out another referendum. It has been largely the press and opposition leaders like Ruth Davidson who have been banging on about an early independence referendum, not the First Minister.

But the fact that independence has been postponed doesn’t mean that Sturgeon has given up on it. Far from it. The disruption of Brexit has clarified the constitutional issue in Scotland, disrupted the Unionist status quo and bankrupted the much of the anti-independence case. But Sturgeon is not going to make the mistake of forcing a referendum on a Scottish electorate that is still in a state of anxious confusion about the implications of Britain leaving the European Union. No – she’ll bide her time – just as she did for all those long years when she played second fiddle to Alex Salmond.

So what are the lessons Nicola Sturgeon is learning from Brexit that might help smooth the path to Scottish independence? Well clearly, the future currency needs to be sorted out – are we in or out of sterling? Scottish voters will need clarity, at least on the process by which Scotland achieves financial autonomy. Mind you, Brexit could make this easier. With Britain out of Europe, and out of the single market, the Bank of England and the UK Treasury might be reluctant to lose Scotland from the sterling zone.

George Osborne’s threats of currency exclusion looked daft last time – why would England want to impede trade with Scotland by imposing arbitrary transaction costs? But after indyref 2, the UK will likely be much more favourably disposed to currency union with an independent Scotland, if only to keep Scotland’s hydrocarbon and renewable revenues in the UK balance of payments. An independent Scotland will ultimately need its own currency or to join the euro, but the early years could be much smoother without threats of financial scorched earth from an aggrieved UK Treasury.

Nor need there be any “hard border”, as some academics were claiming only last week at a conference organised by the Centre for Constitutional Change. If there is to be a hard border with Europe, then I suspect Westminster would be much less keen on a hard border with Scotland. The precedent for an open border already exists with Northern Ireland, where there is free movement with the Republic. If the rUK went ahead and placed border guards at Gretna Green after indyref2, it would be the most extraordinary lapse of goodwill and irresponsible provocation. We all know why there is no hard border in Ireland and no-one surely wants that kind of trouble here.
Similarly, Better Together’s threats of businesses and banks all leaving Scotland after independence will seem much less credible next time. Japanese firms are certainly worried about Britain leaving the EU because they come here to do business in the single market zone – but they haven’t left yet. UK banks face exclusion from their lucrative Euro-business because they will have their “passport” impounded if the UK leaves the single market. But it hasn’t led to an exodus. After Scottish independence, if the plan is coherent and thought-through, some of these companies might even be relocating to Scotland, attracted by the prospect of an independent Scotland rejoining the EU.

And of course it is now abundantly clear to everyone that the Better Together forecasts of Scotland being black-balled by Europe were baseless. The EU would love to have Scotland remain in the single market, not least because of Scotland’s fisheries, tourism and oil revenues. It’s not going to happen because Scotland is not at the negotiating table. Come indyref 2, if Better Together 2 repeat claims that an independent Scotland will be excluded by the EU, they will be laughed off the stage.

So, Brexit helps remove some of the negatives about independence – or at least shows them to be surmountable. What it does not resolve is the problem of timing. I don’t think we’ll see another Scottish referendum until well into the 2020s because the implications of Brexit will take many years to sort out. Article 50 hasn’t been declared yet and isn’t going to be for some time. It will take more than two years to disentangle Britain from the EU, and the years immediately after formal departure will be as chaotic, if not more chaotic, than now.

It might even be the case, if the SNP continues to dominate elections, that a future UK government will try to pre-empt an independence referendum by granting Scotland independence within the UK. Westminster might be so desperate to avoid the break-up of Britain that it voluntarily grants Scotland political autonomy. It did this in the 1931 Statute of Westminster, which simply stated that acts of the Westminster parliament would no longer apply to Canada and Australia. They remained part of the Queen’s Commonwealth.

It’s a fascinating prospect: Scotland becoming independent without another referendum. You read it here first.

 

Herald 20/9/16

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About iain2macwhirter

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