Scotland is to vote over its independence next year. In case of 'yes' vote the centuries-long union with England will be broken. What are the benefits and the drawbacks of such a move? Sophie Shevardnadze travels to the astonishingly beautiful Shetland Islands to meet with the Scottish First Minister Alex Salmond, the flagman of the independence policy.

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Sophie Shevardnadze:We are talking to Alexander Salmond, the First Scottish Minister, here in the Shetland Islands of Scotland. We’re talking about why Scotland should get independence.

You have said recently and this is a quote: “The political union doesn’t work for Scotland anymore. It holds Scotland back and imperils our future.” What is so wrong with remaining in the UK?

Alexander Salmond: The first argument is a democratic one. I am 58 years old, and for two thirds of my life Scotland hasn’t had the governments we vote for. For two thirds of my entire lifetime, Scotland has voted in one direction, England has voted in a different direction. And because England is so much larger than Scotland, we end up with a government in Westminster, which isn’t chosen by the Scottish people. The first argument is essentially a democratic one – that nations and Scotland is a nation have the right of self-determination.

And the second argument is about what you do with that democracy. I think a pretty universal law – anytime, anywhere, anyplace that the best people to govern the country, the best people to choose how a country should be governed are the people, who live and work in that country. I think that applies everywhere and I think it, certainly, applies to Scotland.

SS:You’re only 14 months away from the referendum. Does it worry you a little bit that the majority of Scots don’t want independence from the UK and for the last five years the polls haven’t changed much?

AS: If it comes to opinion polls, I was reelected two years ago by an absolute majority in a proportional system as First Minister of Scotland. About three months before that election, I was 20 per cent almost behind in the opinion polls. I ended up almost 20 percent in front in the opinion polls. So, I think polls change and usually they change in our favor. What will change the polls? As people get more information about this – about the concept and about the opportunity of independence – than they’ll vote ‘yes’. How do we know this? Because if you poll the people, who say we have enough information, we already understand the issues, than by majority these people are voting ‘yes’. As we get more information out to the public of Scotland, then the trend will be in a ‘yes’ direction. And would I love to be 20 per cent in front? Yes, I probably would. Do I think we’re going to win the referendum? Yes, we will.

SS:You think so?

AS: Absolutely, we’ll win it.

SS: Talking about the positive sides, in case Scotland gets independence it would actually hold 95 per cent of UK’s current oil and gas reserves – that’s, of course, if that’s divided geometrically by meridian from the British-Scottish line. Will the powers that be in London, the old guard ever allow that to happen?

AS: I don’t think that’s seriously contested. There’s no choice, basically, because the rest of the North Sea is divided on equidistance – the principle that you outlined. If you were to divide it incidentally by the current jurisdiction, the legal jurisdiction – because Scotland has its own legal system – then even more would be in Scottish waters. There’ll be 99 per cent as opposed to 98 per cent. The medium line has been the line for the rest of the countries around the North Sea – for Norway, for Denmark, for Ireland and etc. There’s no choice, but to do it on that basis. And that point is no longer seriously contested. Now of course there are difficulties because that’s a great asset for Scotland, an enormous asset. In wholesale terms, a value worth 1.5 thousand, thousand million pounds over the next century or so. But of course there are liabilities within the United Kingdom. The UK’s enormous national debt, they’ve accumulated. So we would have to accept provided of course that we have a share of assets, our share of the debt. So there are pros and cons but the balance of advantage is overwhelming on the independence side.

SS: I’ve been travelling a lot around Europe recently and especially the central part of Western Europe and people their feel on the back of the euro crisis that they would be so much better alone without these EU regulations and restrictions, does independence really make much difference to Scotland if it’s with the EU, with or without the UK?

AS: I think it certainly does, I’m in favor of being part of the European Union. I think independence is about being in control of your finances in control of your resources. In the case of oil and gas and renewable resources in Scotland, but also in control of your revenue and therefore control of your spending and how to distribute that across the nation, then you are a genuinely independent country. With independence within the European Union, Scotland would control 100% of its entire revenue base and it could decide how to spend its finances, currently we are allowed control of less than 10% of our revenue base in the Scottish parliament. 10% is not 100%, even independence within Europe is independence.

SS: You want an independent Scotland to retain pound sterling right, but if you continue to use the currency with the UK authority, would Scotland have a lender of last resort?

AS: Our proposal is to have a joint agreement, an agreed currency union. Sterling is as much our currency as it is England’s. The Bank of England was founded by a scot.

SS: So was the BBC

AS: Indeed, well there are lots and lots of things in the world that have been founded by Scots, but the point I’m making is that the shared currency at the current moment, it doesn’t belong to England, it doesn’t belong to George Osborne the Chancellor, it’s one of the assets of the United Kingdom. Now the point is quite simple, we are prepared to take a share of assets and a share of liabilities, and the liabilities are huge but if, of course, he was to argue, as he suggested he might, we can’t have a share of the assets of the current currency, then by definition we don’t have a share of the liabilities and the liabilities bill for the United Kingdom are huge. There are many international precedents, for example the breakup of the Soviet Union where the newly independent countries did not by negotiation end up paying the national debt of the Soviet Union. So the national debt belongs to London at the present moment, but they’re to persuade us to accept a share, which we’re willing to do, then the only basis on which we’ll do it, is if we have a share of the assets as well. You can’t have one without the other, you can’t have the bun without the penny, and that is why incidentally, they’ll be no difficulty from London about sharing a common currency.

SS: Edinburgh is the UK’s second largest city financially, in case it becomes independent, could you see it challenge London? Id that something you’d like to see?

AS: I think that would be a very real possibility if England were to leave the European Union, that is a live possibility that England will leave the European Union. I think the effect of England leaving the European Union after Scottish independence would be that many headquarter companies would move to Scotland. I think it would be very unwise for England to leave the EU, but that’s a choice for the people of England to make, that’s their choice, that’s their legitimate choice. So you could see a circumstance where the Scottish financial sector would get more HQs under these circumstances, but I should say that the Scottish financial sector is very strong and fairly able and particularly in the things it does best. Asset management, pension funds, the long term investment of people’s money or corporate money as opposed to the much more frenetic, market driven financial dealings of the City of London. So to a greater extent, I think Scotland should continue to do what we do best, and that is to continue to manage people’s money carefully in long term investments and build up that specialism and asset management, which is proving so enormously successful. We’ve companies that are merging and growing like Aberdeen Asset Management for example.

SS: But a major political transformation, independence from the UK in your case, how much will that cost Scotland to be independent, how much would it cost one Scot to be become independent of the UK?

AS: There will be benefits of Scotland becoming independent. Let’s take the last 5 years, just for example, in the last five years Scotland has contributed more by eight thousand million pounds sterling relative to London than we’ve received back again, that’s the relative surplus between Scotland and London. Eight thousand million pounds, that’s about £1,600 for every Scot, so if Scotland had been independent over the past 5 years, then every Scot would be £1,600 richer. It’s not just about finance of course. The reason for Scotland to become independent is Scotland’s a nation and nations should be self-governing. They govern their own affairs better than allowing someone else to do it for them. But if it was balance sheet calculation, then it’s very much in favor of Scottish independence.

SS: But can you tell exactly what the difference is between the devomax and the independence that you’re proposing, as far as I’m concerned most of the scots are saying we’re fine as long as we’re in the UK, plus we need control of education and welfare, why go through so much trouble for much the same outcome?

AS: Because Westminster won’t cede control over our economy and our own welfare. They’ve said no to that, they’ve rejected that. They say this far and no further. They will not cede control over Scottish oil and gas, or major natural resources or how to pursue the licensing for renewable energy. We’ve got a quarter of the potential of renewable energy of the whole continent of Europe in Scotland and we don’t have the control over licensing provisions for that amazing natural resource. London will not concede that. That’s why we’ve got a democratic opportunity to refashion our relationship with London. Many things we’re going to keep. We want to control our economy; we want to decide on our own government. They we’re perfectly happy with the union of the crowns for example, we want to keep the Royal Family, her Majesty the Queen as head of state. Her Majesty the Queen is head of state of 16 countries at the present moment, when Scotland’s independent she’ll be head of 17 countries. If we think about the history of Scotland and when Scotland and England shared the same monarch and the Scottish king became the King of England for 100 years while Scotland and England we’re independent countries. For all of the 17th century Scotland and England were independent countries that shared the same monarch, so that’s a perfectly easy thing to do in a modern world. Australia and New Zealand have her majesty the Queen as head of state, as will an independent Scotland so we will continue to share what is valuable and important. The social union between Scotland and England, so people can visit their friends and families that people from London can come and work in Shetland and people from Scotland can go and work in Newcastle. All of that should stay and remain as it should, but we’ll have control over who elects our government and we’ll have control over our finances and spending, these things are essential.

SS:Talking about traveling freely – if you become independent, as integral part of EU, you would actually have to open your university doors to every British student, who are now paying 9,000 pounds (US$13,800) a year. Does this worry you? It could be costly for Scotland.

AS: We believe we can manage the current arrangements, and we were legally advised to that effect. But I don’t understand why more students coming to Scotland is a bad thing. This year, due to the policies of the Scottish government, we have a record number of Scottish students studying in Scottish higher education, a record number of English students fleeing the high fees and studying in Scottish higher education, and a record number of international students, studying in Scottish colleges and universities. So we’ve got three records all in one year. That’s a great thing for Scotland and for the Scottish reputation, it’s a great thing for the Scottish economy. I’m not worrying about having more students studying in Scotland, but we can maintain the current arrangements, which are apparently fair, that’s the advice we’ve got.

SS: What do you make of the recent claims that the UK Defence Ministry may simply designate their nuclear naval base in Faslane as a sovereign UK territory in case of the ‘yes’ vote?

AS: Of all of the exercises and Project Fear of the scaremongering campaign, that was probably the least successful, and it only lasted for two hours. So the Ministry of Defence briefed the Guardian newspaper, and then Downing Street denied it in two hours after the paper being printed. That was the scare story which lived for two hours only, and of all the scare stories and ridiculous nonsense that the Project Fear has produced, that was one of the least successful, indeed probably one of the most spectacularly unsuccessful pieces of nonsense. Why would they then drop it in two hours? Of course, they know the reaction of Scotland to the suggestion that they would try to annex part of Scotland to make it part of England…even the most fervent NO-voter in Scotland – if there’s such a thing – will find it objectionable, the idea that you could annex part of the land of Scotland. That’s why its lifecycle was only two hours as a scare story.

SS: Well, then what you are going to do with it – you don’t want nuclear weapons, and even if you wanted it, it’s not yours to use, so – what are you going to do with that part?

AS: We will ask for it to be removed, and as quickly and safely as possible. And the emphasis is on both - we want it to be moved, we want the timetable to be quick, but we want to do it safely. We don’t want to have any risk to anyone by doing so. There are plenty of berths incidentally and English ports in the south of England for Vanguard submarines. The difficulty is not berthing the submarines, the difficulty is to resupply them with the nuclear missiles, but of course that resupply capability is in North America and France.

I think it is extremely unwise instead; extremely ridiculous for the country of five-and-a-quarter million people to have nuclear weapons. I think it would be unhelpful for the world community. It’s not going to be the case that Scotland would host someone else’s nuclear weapons, very few countries do that and it’s also unwise to do that. Trident will have to be removed; it’s up to the people of England, the people of Westminster, to decide if they want to continue with the nuclear deterrent. In my view that would be very unwise to do so, I think it is the most phenomenal waste of money, but I agree if that’s their decision.

Of course if they make that decision, then of course they will have to accept the consequences, which is to find somewhere to put it. It is well known that we want Trident submarines as far as you could think of from the centers of population. Scotland is a peace-loving country, we want to cooperate with our neighbors, and we’re in favor of NATO membership, because our neighbors are in NATO, but 25 or 28 countries in NATO are non-nuclear countries. And so we’ll be a non-nuclear country within NATO.

SS:Most countries actually strive for nuclear status – that’s why I’m asking. If you become a world leader in case of independence, then you will have to face countries like Iran or North Korea who may tomorrow have the nuclear weapon – and Scotland not.

AS: I have to say I don’t think Iran or North Korea have ambitions to try to threaten or attack Scotland. The world has 200 countries almost in it. One hundred and ninety of them DO NOT have nuclear weapons. And depending on how you calculate these things, almost 10 probably have – some openly, some secretly. I think I’d rather be one of the 190 without nuclear weapons than one of the handful with nuclear weapons. And there is absolutely no reason on Earth that a country of 5 million people should possess nuclear weapons. That would not be a good thing for proliferation, for the safety of the planet. Nobody seriously argues for that position.

I don’t really want to enter the debate about England and nuclear weapons, all I want to say is this: if you are actually justifying a nuclear deterrent on the basis of an Iranian missile to come, they you wouldn’t want a Trident system. The Trident is a Rolls Royce nuclear system that was designed by the British government to penetrate the defenses of Moscow. That’s what it was designed for. It’s not a deterrent against a rogue state like Iran or, for that matter, it is no deterrent against a terrorist organization. If you want to persuade it in England on the argument of having a deterrent against Iran, then what you would choose is a deterrent of that sort of scale, go back to an old Vulcan bomber or some sort of that. You certainly wouldn’t have a nuclear weapon system that would cost 100,000 million pounds ($153 billion) over its lifecycle. That would not be the deterrent that you would choose. And certainly Scotland doesn’t want to engage in that sort of nuclear politics.

SS: So the UK recently placed top of the global soft power survey – do you worry that you are going to be left out because you won’t be part of these UK institutions that are actually tributing to that.

AS: I think we’ll do far better projecting our own image of Scotland, we already do this in the investment, and we top the lead table, not just the UK but for the Europe, as far as people coming in to invest in our country, and we promote ourselves as Scotland. In terms of soft power, well, we don’t claim to have hard power; we don’t have a vast army, or navy or bombs, or whatever. That’s not where we are. But in terms of soft power, in terms of influence, Scotland is incredibly well-placed. We’re a country of five-and-a-quarter million people, but there are not far off a hundred million people across this planet which either are of Scottish descent or have an affinity with Scotland, or have a connection with Scotland.

In terms of influence on this planet, Scotland has a great deal of influence, which hopefully will be used for good, for promoting positively the case of Scotland, but also for doing what we can in the way that some of the Scandinavian countries have done, like Norway for example, in terms of being an honest broker, to help solve difficult situations. We’d like to do that, we are willing to do that, and of course to restart the obligations towards those on planet who actually have nothing.

We already have built up an international development portfolio in Scotland, and, in modest proportions now, something that we would like to do more of, specializing, perhaps, in renewable energy, which we have such expertise in, and water, which we have a lot of in Scotland. Therefore, we look to be welcomed into the community of nations as a responsible world citizen, and that world citizen will have a great deal of influence, but in terms of hard power – not very much.

If I was offered the choice between the country with great influence or great military power, than I would choose being a country with a great influence.

SS: What do you make of the BBC coverage of your campaign? Them having two places: the BBC Scotland and a London-based operation?

AS: I think the chairman of the BBC trust, Lord Patten, recently said he thought covering the referendum was the biggest challenge the BBC had ever faced. I think it was a difficult challenge, not sure they are getting through it right at the present moment. Broadcasters by their nature are usually more balanced than newspapers – newspapers don’t have to be balanced, nor should be. But broadcasters have to be very careful and balanced. But the BBC finds Scotland a challenge because so much of what they report, for example in the network news, it goes across the UK and is broadcasted internationally. They report, for example, scandals in the health service in England as if they were the Scottish health services, which are run quite separately, education difficulties in England as if they were in Scottish education system which is run separately too. So they find it very difficult, and really feel the challenge to date of trying to differentiate the debate and the position of Scotland from the position of England. Maybe that is understandable, because they are covering a country where more than 85 percent of the people stay in one country, and the other 15 percent stay in another. Perhaps they find that too difficult for challenge. So Lord Patten, it was a challenge that’s not repeating each year.

SS:Finally, have you considered and thought about what your position would be in case of the ‘no’ vote? Would you resign? Would you stay? Continue fighting for freedom?

AS: I’ve been in politics for 25 years or so. And although I won personal elections, I never won national elections, until I realized that I was doing it wrong – maybe that’s a secret for politicians everywhere. When you are in opposition and when I became a member of parliament of Westminster we had three MPs – three! – out of the parliament of 650, that is very easy to be a member of the opposition, to jump up and down to be noticed, because if you didn’t jump up and down, nobody will pay any attention to you whatsoever. But you have to learn, when you want to lead a country, you have to learn to be positive, to talk about the future, to say what you’re going to do, not what the others haven’t done. You have to put the accent on the positive, and you have to absolutely believe it with the every fiber of your being.

Since I learned that lesson – well, before I learned that lesson, I never won a national election – since I learned that lesson, I have won every national election. And that way of thinking, they of looking at the world, of approaching the people, I’ll take into the referendum campaign. And one of the things you have to believe, you have to believe you’re going to win. And you have to believe it with every fiber of your being, because if you are to persuade the people, to have a conversation about the future, you have to do it from the basis – to believe you’re going to win this referendum, and Scotland will become an independent country.

SS: Alexander Salmond, thank you very much for this great talk.

AS: Great pleasure.