Scotland’s decision: The Scotsman’s verdict

With exactly a week to go before our historic referendum on Scottish independence The Scotsman gives its verdict on the choice before us

By The Newsroom Friday, 12th September 2014, 8:58 am

Picture: TSPL

We have been given a historic opportunity. We have a say in a decision that will have a fundamental and far-reaching impact on all our lives, our country and its future. We will all make that decision on where we believe the best interests of Scotland and the Scottish people lie. We will make that decision from a position of pride in our country and belief in ourselves.

One of the questions at the heart of the referendum debate has been: “Could Scotland be a successful independent country?” There is only one answer to that: of course it could. We are a nation of innovative and hard-working people, with a culture of altruism and egalitarianism. We can stand alongside any country in the world, large or small, and hold our own.

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Scotland could be a successful independent country, but next week’s question is: “Should Scotland be an independent country?” What we then have to look at is whether this is where the greatest success will lie.

As we approach this pivotal moment in our history, there are issues to be weighed and measured. There are some areas where straight answers are not clear, and they are not only worthy of examination but it is absolutely crucial that examination takes place.

The debate has seen strong arguments on both sides and throughout we have endeavoured to air all arguments fairly and give a voice to as many shades of opinion as possible. That will continue regardless of the position we take on the referendum today.

Perhaps the first area to be examined is currency. The Scottish Government’s preferred option is a formal currency union between an independent Scotland and the rest of the UK (rUK). The Scottish Government has accepted that our best economic interests lie with the pound. The Governor of the Bank of England, Mark Carney, said in a speech in Edinburgh that, for a formal currency union to be possible, an independent Scotland would have to cede some sovereignty.

He said this week that a currency union between rUK and an independent Scotland would be “incompatible with sovereignty” and both statements probably amount to the same thing; that some political power over factors that would have an impact on the currency would have to sit with the remainder of the UK. We don’t know exactly how much sovereignty we would have to cede yet.

There are other problems with a formal currency union that would allow Scotland to continue operating under the UK economic mantle. The three main Westminster political parties have declared against it, saying they will not enter in to one. The First Minister has dismissed this as “bluff and bluster”, saying that position will change after a Yes vote. To add pressure to bring about that change, the First Minister has said that if rUK won’t share the Bank of England in a formal currency union then Scotland would not pay any share of the UK’s accumulated £1.6 trillion of debt. It is argued that Scotland would have no legal or moral obligation to pay that debt. What English politician would lay his people open to that financial cost, goes the argument.

And although this rejection of formal currency union may be political posturing, because that’s what politicians do, and of course pledges have been broken in the past, underlying a formal currency union is a political decision that would seem to be difficult to thole if you were an rUK politician.

You would be asking the people of your country, with their savings and assets and taxes, to be the ultimate backing for a foreign country. A foreign country that has just decided to leave a union with you and set out on its own. And all this when the very real banking collapse is still a vivid memory with the effects still being felt. Those taxpayers are already unwittingly large stakeholders in the Royal Bank of Scotland. That has to be a difficult ask. And it may well be right, under the law, following a Treasury statement to reassure money markets, that Scotland has no legal responsibility for the UK’s debts and the UK has taken full responsibility for them, but the assertion that Scotland has no moral obligation for part of that debt will sit awkwardly with a lot of Scots; Scotland had a part in running up that debt. Is it fair and right to walk away from that? Is it the best way to start a new relationship with a country that is still going to be your closest partner and ally?

Should the politicians all act as they have said they will, and refuse a formal currency union, the most likely fall-back position is sterlingisation – an informal currency union where we just keep the pound. But there are significant problems with an informal currency union without any political union. There are arguments over the effects of this and the cost of this, but regardless of them, political power over decisions that could affect Scotland’s currency would sit in London with no input from Scotland.

It is clear that any currency union would leave some power residing outside Scotland. But we don’t know how much. We also do not know what impact Scotland walking away from the UK debt would have – some say the markets would welcome a debt-free country which had the nous to get itself in to that position and it could then borrow at really good rates, others that we would be regarded as untrustworthy defaulters. We just don’t know. And in the event of Scotland going its own way on a new currency, that would also probably have an impact on borrowing costs and interest rates. What can we take from all that? It seems highly likely that there will be a cost implication here, but we don’t know what it is.

The issue with EU membership and what that brings is also a difficult one. It seems clear now that Scotland will not be automatically and immediately accepted as a member of the EU and that there will be some admission procedure to be gone through. We do currently fulfil many of the convergence criteria, but what we would have to do for membership is unclear. It may well be the case that common sense on the rest of Europe’s part would be to accept Scotland in, and that we would be welcomed as a valuable member, but there is no certainty of that. Possibly of greater consequence is doubt over some of the special agreements the UK has negotiated and enjoys over the euro, borders and rebates.

This whole issue is, of course, complicated by the doubt over the UK’s position in Europe, with the referendum on membership promised by David Cameron. But it is probably wise not to let that form a part in Scotland’s decision, given there are fairly fundamental questions, not least whether Mr Cameron will still be in power in 2017 to deliver on his promise.

So, in tick-list terms then: Europe is generally seen as a good thing for Scotland, but the future for an independent Scotland in Europe is unclear. We just don’t know what the terms of that would be.

Defence is another major issue. It is said that the primary responsibility of the state is the safety of its citizens. Some people will vote for independence just because it will come with a pledge to clear nuclear weapons from our country. Weapons of mass destruction are an emotive subject, there are deep and fundamental issues about their morality. There surely must be huge doubts about whether our society now would mandate their use in any circumstances, there are questions over their military value given the changing nature of the threats to our security, and there is the far more pragmatic question of their cost for their perceived benefit. But those issues should be separated from Scotland’s constitutional future. The proposal, as things stand, is that an independent Scotland would become nuclear-free but would still be a member of Nato. How we can take the principled stance to free ourselves of nuclear weapons and then shelter under Nato’s nuclear umbrella is difficult to reconcile. The bottom line is that, as a Nato member, we would be part of an organisation whose back-stop is nuclear strikes. All this assuming we were to be accepted as a Nato member on the terms we outline. Again, opinion is divided on the subject but we don’t know for certain. It stands to reason we would be more secure as a member of a larger alliance, especially when it comes to intelligence sharing.

There are many other unknowns in many other fields, not least the actual cost of creating a separate Scotland and how that Scotland would be represented around the world and what relationships it would have with other countries.

But unknowns are a part of all life, we all have to deal with them and plan for them as best we can.

The benefits for an independent Scotland are posited as bringing decision-making vital to our creation of the society we want to see to the people best-suited to make them – the Scots. And that by doing so we will improve social justice in our society, making us fairer and more equal and reflecting and retaining our cultural values and sense of identity.

But we are already holders of many of the levers that allow us to create a society that reflects our desires and values. And more are on the way in the Scotland Act 2012, including greater control over taxes.

And that’s without any more powers which have been promised as part of this referendum battle.

We are in complete control of education, which must be the surest way of shaping the future we want, we are in charge of health, which is the very practical delivery of how we care for people. The NHS has become an emotive topic in this debate, because it is close to us all for very practical reasons but also because it is the embodiment of the altruism and egalitarianism that forms a large part of our collective identity. But we can shape the NHS in Scotland as we choose.

We have our own unique legal system and we are predominantly in charge of the policing of our society.

All these policies are formulated by the people we Scots vote for, with the decisions taken by our parliament in Scotland.

We have already gone our own way and created a different country in many big areas, including no tuition fees, free care for the elderly and free prescriptions.

The biggest factor in creating a prosperous and equal nation is the economy, and an independent Scotland would, of course, be able to stand on its own two feet, but under current proposals some of the levers needed would lie elsewhere and stability is under threat and that could come at a cost.

Next week, for many people, it will be independence at any cost. Others will weigh cost against benefits, risks against potential gains and losses.

There are significant uncertainties with the proposals before us. There are some major parts of life that will be changed and we do not know what those changes are or what impact they will have, and at a cost we cannot calculate at present. It is clear there will be some constraints on what an independent Scotland can do.

The political Union has helped to provide security and stability. And over the centuries Scots have played a large part in shaping that Union. Many, many Scots have benefited from opportunities it has afforded. We are a part of the fabric of the United Kingdom. We are a significant part of its history.

Does the Union cast a dark shadow over us? It does not seem that way, Scotland is a prosperous, peaceful, successful country. We are confident in our national identity with our own distinctive society. We have our history and heritage.

So, with the choices before us, the conclusion is that we are better together, that Scotland’s best interests lie not in creating division but in continuing in the Union and using its strengths to help us continue in our success.

That is not a view taken because of fear, or lack of confidence, or lack of patriotism. It is the very opposite.

It is not a view that simply does not want to take risk. It is a measured view that assesses risk against possible benefit and loss. It is seeing where the best interests of the Scottish people lie, understanding the benefits of working with the people in these islands in collaboration and partnership and seeing the opportunity to shape the strongest, most secure, fair and just society that we all want.