Monday, 17 February 2014

Scottish independence: it might need two votes

The last few days seem likely to be decisive for the Scottish independence campaign, and the moments ahead to seal its fate - one way or the other. Not only has the Westminster government decisively ruled out a formal currency union with any new state, but the outgoing President of the European Commission, Jose Manuel Barroso, has voiced the truth that dare not speak its name until now: Scotland might not be able to join the European Union.

These are not insurmountable problems for the pro-independence case. They might argue that this is all just a bluff, and that the damage to the UK's economy would be such that they would have to be allowed to use the pound. But the point is the fatal uncertainty that has been created, and the effect on the bond and debt markets that will cause. Let's just suppose that a new UK government did accept the case for a currency union: there is absolutely no way they would do that without a fiscal union alongside it - the lack of which nearly killed the Euro, and without which the increased potential transaction costs of changing your notes at Carlisle and Berwick pale into insignificance. That's called, well, a United Kingdom in all but name. Scotland would not be independent anyway.

And the EU? Well, frankly, the Scottish Government's timetable looks absurdly optimistic - eighteen months? Really? While negotiating with London on the terms of independence? EU officials have been briefing that the Netherlands alone will take eighteen months just to ratify any new treaty, and that from the moment the ink is dry after the negotiations close, not before. And you know what we learnt today, from the Scottish constitutional expert Professor Sir David Edward? The European Union may well only recognise the Westminster government as a negotiating partner, so it'll be David Cameron or Ed Miliband who'll have to shuttle round Europe drawing up the deal as the representative of the only actual state that'll be involved until the day of secession. And what interest would they possibly have in doing a good deal? You're right - zero.

This looks more like a three or four year project - at least - and one that might see a UK Prime Minister dump Edinburgh with some pretty rum terms. Remember that it took twelve years for the UK to get in the first time - after two Gallic 'nons'. Now, that might have the benefit of pushing Scottish independence within the EU back towards the date of the next UK General Election but one - 2019 or 2020 - but it'll again be a funny sort of indepdendence.

Let's be clear: Scotland is a dynamic, relatively successful and innovative economy that could do pretty well on its own. But two leaps in the dark at once is likely to break one of the economy's legs - at least.

More important politically, no-one now knows what they're voting for or about. The whole thing's a shadowy stairwell tussle in the dark. Would Scotland be inside or outside a currency union? Much more seriously, could she hope to join the European Union on anything like decent terms? If she can't, then independence would be a much, much harder road. With neither London nor Brussels to guarantee her enormously out-of-kilter banking system, border checks possible, and the potential for visa requirements among Scots working in England, it'd be a reckless gambler indeed that took Edinburgh towards the fate of an Iceland rather than a Norway. We don't say it couldn't be done. But 'Public Policy and the Past' thinks that such a route would be risky, foolhardy, potentially catastrophic - and just downright wrong.

It's a mess - one that the Scottish Government, which has been thinking about this vote for many a year, should have anticipated.

None of this was a problem when the last fundamental breach occurred in these islands, of course - an assembly in the South of Ireland, elected by the great majority of what became the Free State's citizens, simply negotiated a treaty with 'the British' themselves. The constitution of the state that emerged was then eventually accepted by the Dáil, sitting as a constituent assembly. That was that. Things are much more complicated today. The views of voters have to be taken into account; the web of laws and regulations are much more complex, much denser and much more difficult to disentangle. Above all, the public have to be listened to, and demand a vote. Their mood now? Well, as far as one can tell, in general minded to vote 'no', but increasingly frustrated at what they perceived to be the obfuscations and scare stories spouted by both 'yes' and 'no' campaigns.

It is becoming clear that there is only one answer to this Gordian knot: a second referendum, as proposed by Sunder Katwala yesterday, in which the actual terms of any final settlements in London and Brussels are endorsed by Scottish voters. Only then can Scots say that they actually know what they're voting for; only then can all the uncertainties about the pound, the EU, borders, ballots and taxes be cleared up.

Two plebiscites? You read it here first.