In its recently published report on evidence submitted during its enquiries – The Referendum on Separation for Scotland: no doubt – no currency union – the Scottish Affairs Committee of the House of Commons ignored two issues, each of which For Argyll sees as being substantially influential in the negotiations over any currency union and over all other negotiations in any independence settlement:
- the influence of the people of the continuing United Kingdom;
- the influence of the 2015 United Kingdom General Election.
In teasing out the impact of these two matters, we are following the Committee’s lead in putting in pole position the everyday commonsensical reality. We are looking first at the responses and role of the general public of what would be the continuing United Kingdom.
The influence of the people
Awareness of the depth and complexity of the cost to the continuing United Kingdom of a fracture forced by Scotland in taking independence is increasingly detailed and widespread.
The beginnings of popular anger are already identifiable in letters and statements to the media. For those in what would be the continuing United Kingdom, they did not initiate or choose a fracturing of the union, nor have they any role in preventing it. All they can do is wait for Scotland to decide their fate as well as its own.
Living with that impotence and that awareness of helpless vulnerability cannot be easy and must be frustrating.
If Scotland were to choose a route to the future which would be perfectly survivable but would see hard and chaotic times to get there – and inflict, as it would do, difficult and expensive readjustments for the rest of the United Kingdom as well, that anger would consolidate and take voice.
Representatives of the United Kingdom negotiating with representatives of the Scotland then committed to independence would be heavily constrained by the will of the people – which could not realistically be wholly removed from the retributive.
Just as too many Scots cannot see the trees of the individuals south of the border for the wood of the mythically alien ‘England’, so would our peers south of that border become unable to weigh the individuals they know here against the mass of a nationalist Scotland that had wilfully brought them pain and trouble they had not deserved.
Once retribution enters into the mix, you can forget about reason – just as the some of the grievances today’s Scottish nationalists seek to visit upon the ‘English’ date from centuries ago and from situations as much fiction as fact – ‘history’ being the mongrel discipline it is.
So we would find the personal shackling of the United Kingdom leadership to a pre-declared position on a currency union allied to a growing interest amongst the public at large ‘down south’ in hitting us back, in ‘socking it to us’.
We could hardly complain about that since a hefty enough proportion of the vocal nationalist sector is looking forward with unfettered glee at the difficulties ‘England’ would face in the wake of a departing Scotland.
The current United Kingdom government would be conducting the independence settlement negotiations until the May 2015 General Election, in the first instance at any rate. With the very tight 18 month deadline set by Alex Salmond – to a proposed Independence Day on 24th March 2016, the negotiation period to the General Election would have a lot of ground to cover – and would have to start with the most contentious issues, likely to take the longest negotiating time.
With this being done against the background of the General Election campaign, the current United Kingdom government would, of course, negotiate to the tune of its audience of angry and worried people. It could and would give nothing away – and would electorally have everything to gain in such a stance.
The ignored issue: the impact of the 2015 UK General Election
The Committee did not take account of the impact on the currency union issue of the conduct of the United Kingdom General Election campaign, following a putative Scottish vote for independence. We feel that this will be a major factor in any negotiations over the detail of Scottish independence, should Scotland vote to go.
The fact that the engine of the campaign for the UK General Election in May 2015, will come after the result of the referendum vote and not much over half way to Alex Salmond’s proposed Independence Day on 24th March 2016, will mean the current United Kingdom government setting early boundaries on key issues, in time to impact on that election.
If Scotland has already chosen independence, the parties fighting for dominance in that parliament will look only to their constituencies in the continuing United Kingdom. Except, possibly, Labour. Why?
Look at the situation faced by the three current major Westminster parties on 19th September if Scotland had voted for independence.
The Liberal Democrats – who cares?
The Liberal Democrats currently have 44 Westminster seats south of the border; and 11 -12 in Scotland [one is in Berwick-on-Tweed]. The prediction is for the party to take a heavy pounding in the 2015 General Election – and there is no evidence that this will not be the case.
The party has virtually no presence in Scotland – with 5 MSPs, only two of which are constituency MSPs – and they are from the farthest constituencies of Orkney and Shetland; and with none of the five holding adjacent territories.
As an also-ran in the pro-union campaign, the party has virtually no public profile in Scotland.
The picture here is that the Liberal Democrats would have nothing whatsoever to lose – apart from Chief Treasury Secretary, Danny Alexander’s Westminster seat, in sticking to the determination to sanction no currency union with an independent Scotland. Since the greater part of this headless party’s continuing political presence would be south of the border, in the interests of its own survival it would sacrifice Alexander and any other Scottish casualties without a backward glance.
The Conservatives – a clear road ahead
The Tories may have been used as a scarecrow by the SNP but would not fundamentally be blamed by the electorate for losing Scotland. They have had little influence and little representation here for some time. In the uncertain situation of a departing member of the union, the party might even gain in the public need for proven competence in fiscal and monetary policy making and implementation – with George Osborne’s performance having confounded the IMF’s pessimism on his strategies.
Moreover, in the way political games are played, they could credibly claim that Labour had lost Scotland.
Labour is the party with the greatest historic traction here. It is also the party whose ‘regulation with a light touch’ [from a Scottish Chancellor] brought the entire UK into financial crisis in 2008; and made necessary Conservative Chancellor Osborne’s austerity measures – that have demonstrably restored the UK economy faster than the IMF’s predictions.
It was arguably the 2008 financial crisis and its consequences that fed the SNP’s unprecedented majority in the Scottish parliament in 2011.
While the Conservatives would not be happy going into the history books as the government in power when Scotland broke away from the union, the consequent loss of all those pesky Labour seats north of the border would leave them looking at a greater certainty of being the party in government in the future of the continuing United Kingdom.
After a ‘Yes’ vote on 18th September, Scotland would effectively have left the building. The continuing United Kingdom would owe it nothing beyond the bare observance of any undisputed rights. The Conservatives would play the negotiations to their electoral audience.
With the popular anger abroad about the economic and lifestyle damage Scotland was inflicting on its former partners, there would be few votes to be lost and many to be gained in playing hardball in independence negotiations.
While their ideal outcome is for Scotland to remain in the union, the electoral and political impacts on the Conservative party of its separation are of a lesser order than those faced by the Labour party; and while the break up of the union would be bad news all round, it could produce political advantage for the Conservative party.
The Labour party – a conflicted situation
The danger to the protection of the continuing United Kingdom’s interests in independence negotiations might come from Labour, since the party would not, for the foreseeable future, take power in the United Kingdom in the absence of its power base of Scotland.
Labour has, in comparison with other parties, by far the most to lose in the event of Scottish independence. It is looking at the possible loss of United Kingdom national power; although it can look to being the default party of power in Scotland.
At this moment, 21st July 2014, the Labour party has realised that its own future is inextricably linked to the future of Scotland. It has taken the reins of the pro-union campaign and is at last fighting to keep the union together.
If Scotland votes as Labour is urging it to do – to hold fast to the union and the best of both worlds - the divided future the party faces will fade.
But if it does not?
With Scotland formally declared for independence, Labour would be looking at a future where, while it would have constituencies in England and Wales, it would be unlikely to be the party of government in the continuing United Kingdom for the foreseeable future.
It is not impossible that, following a putative vote for independence, the Labour party could agree an internal pact to try to win the General Election as a last hurrah, pending a split into a continuing UK Labour party and a Scottish Labour Party, each aligning to future operations in separate states.
In this scenario, what would obstruct the ambition of the party for a last grasp of United Kingdom national power would be the understanding south of the border that the party’s core interests would lie not in protecting the interests of the continuing United Kingdom – but those of Scotland. With the polls not looking particularly reassuring for Labour’s chances of taking the 2015 election, it is not impossible that the party’s internal pact would see it hedge its bets in that campaign between 19th September and May 2015.
It could offer a nuanced hope to a Scotland already on the way to independence that, if elected to Westminster, it might look again at the viability of a currency union, presenting this, in an attempted catch-all, as of possible benefit to the continuing United Kingdom.
The game would be to try not only to win the General Election but to protect Labour’s future position in Scotland, where it is the party of a generally settled choice and where it is manifestly resurgent.
The party – and certainly its 40-strong Scottish wing, would see shoring up its Scottish power base as its only serious political future, with Scotland – and its own United Kingdom authority, together vanishing like the Cheshire Cat.
From the United Kingdom’s perspective, Labour is therefore the weak link in the cross-party determination against a currency union. If Scotland voted for separation, Labour would politically have no choice in its subsequent General Election campaign than to signal its willingness to revisit a currency union – and deny that it was doing any such thing.
And the ‘personal credibility’ issue could be neutralised by reshuffling Ed Balls, who committed to this on behalf of Labour. The move would be transparently pragmatic but people expect no integrity from politicians these days and the sacrifice of Balls would cause the party no great political damage in the polls.
The SNP problem
The problem for the SNP is that the party that is, in Scotland, their greatest rival [and, whichever way the independence referendum goes, the one that will unseat them in the future] is the party which, if it was in power at Westminster during any independence settlement negotiations, would have the greatest vested interest in looking after Scotland.
There is no love lost between the two but mutual self-interest would coincide if Scotland voted for independence and the historic United Kingdom, in its last General Election, voted in a Labour government, probably for the last time for a substantial period.
Interesting times – and the game, in every way, is with Labour.
Note: the companion article to this is our response to the Scottish Affairs Committee report, identified above: Scottish Affairs Committee reports credibility as key issue on opposition to currency union.
