A UK without Scotland

If Scotland votes Yes…

At the time of writing it seems possible that the Scots will vote to leave the UK in the referendum on September 18th. The consequences of a Yes to independence are unfathomable but would stretch far beyond the British Isles. A Yes would not only shake up British politics but also increase the likelihood of Residual UK (RUK) leaving the EU, boost separatism elsewhere in Europe and diminish the global standing of what was left of Britain.

A Scottish exit would create problems for the Conservative Party. This would be the second time that it had been responsible for the departure of part of the British Isles from the United Kingdom. Ireland became independent in 1922, but it is often forgotten that when the Irish asked for Home Rule in the late 19th and early 20th centuries, most of them did not want independence. On several occasions Liberal governments tried to give Ireland Home Rule but were blocked by Conservatives in the House of Lords. This went on for decades, eventually driving the Irish (excepting the Protestants in Northern Ireland) to seek independence.

The Conservative prime minister, David Cameron, will take some of the blame if the Scots leave. He agreed to the timetable of Scotland’s first minister, Alex Salmond (a vote in 2014 rather than 2013 allowed the Scottish National Party more time to build support); to a ballot paper question which, though modified by the Electoral Commission, is favourable to the SNP (‘Should Scotland be an independent country’); and to the exclusion of further devolution as a third option on the ballot (which would have reduced the numbers voting Yes).

The austerity policies of the Cameron government must also bear some responsibility for the Conservatives’ appalling image in Scotland. One of the most potent arguments for independence is that Britain is an increasingly right-wing, Thatcherite and inegalitarian country. Much of that is hyperbole, but the nationalists have been able to argue that if Scotland wants to emulate modern, high-principled and social-democratic Nordic countries, it must break free of Tory Britain.

Cameron would come under pressure to resign, but he might limp on as a lame duck prime minister, even less capable of controlling his party’s powerful eurosceptic forces. If Cameron resigned his replacement would probably need to take a more anti-EU stance in order to be elected party leader. The party could move towards making radical demands for EU reform that other EU governments would not or could not grant; the upshot would be the Conservatives recommending a No in a referendum on maintaining EU membership.

Ed Miliband, the Labour leader, would also be damaged by a Yes. He is scarcely more popular in Scotland than Cameron. The recent surge in support for the Yes campaign has come mainly from Labour voters in working class areas. They do not regard the prospect of another Labour government at Westminster, with Miliband as prime minister, as exciting. The referendum is only happening because Labour – traditionally, the dominant force in Scotland – became so grey and uninspiring that the SNP was able to win office in 2007.

But whatever the failings of Cameron and Miliband, the Scottish campaign reflects larger, pan-European trends. In many parts of Europe, populism, much of it nationalist, is on the rise. In Britain, in the recent European elections, Nigel Farage’s UK Independence Party won more votes than the Conservative or Labour parties. Salmond’s SNP is different from UKIP in important ways: it lacks the latter’s hostility to the EU and immigration. But they both tap the same hostility to Westminster, elites and established political parties (Farage and Salmond have also both expressed qualified praise for Vladimir Putin). And though many of those working for a Yes are young and idealistic, in favour of a new sort of politics, their campaign, like UKIP, is gaining strong support from those who are less educated and fearful for their futures.

RUK would be more right-wing and eurosceptic than the full United Kingdom and thus more likely to leave the EU. The Conservative Party has long described itself as a unionist party but has only one Scottish MP, eight in Wales and does not contest elections in Northern Ireland. A party that was more centred on England, seeing UKIP as a key foe, would probably become more unashamedly for English nationalism.

Even if Ed Miliband won the general election in May 2015 his government would have little legitimacy, if his majority depended on Scottish MPs, as it almost certainly would. There would probably have to be another general election when Scotland left the UK, which SNP claims would happen in March 2016.  Labour would find it much harder to win a parliamentary majority without Scottish seats in Parliament. So a Scottish Yes would increase the chances of a Conservative government, and thus an EU referendum (Labour, like the Liberal Democrats, opposes a referendum unless more powers are transferred to the EU). And without five million relatively pro-European Scots, it would be harder for pro-EU voters in RUK to defeat the sceptics in a referendum.

British pro-Europeans who hope to win such a referendum will learn some lessons from the Scottish campaign. When middle-aged men in suits tell voters that departure will lead to less foreign direct investment and economic instability, many of them are unimpressed. Advice from the establishment can often seem patronising. The No campaign in Scotland has focused on economics and attempted to make people fear the unknown. Only belatedly has it tried to tell a positive story of how all parts of the union benefit from it.

The obvious lesson for an EU referendum is that pro-Europeans should not focus only on economics and negativity. However, it is much harder to create a positive narrative about the EU than about Great Britain. The English and Scots share a common history and have achieved a great deal together; they have not fought since the battle of Culloden in 1746. But it is only 70 years since Britain was fighting other Europeans, and the achievements of the EU – such as peace and prosperity – appear not to touch many British hearts.

A Scottish Yes would cause shockwaves elsewhere in the EU, particularly in countries with separatist movements. Catalan separatists already treat the Scottish referendum – whatever its result – as a victory, since Scotland is being allowed to vote. The Catalan government, led by Artur Mas and his moderate Convergencia i Unio party, wants a referendum in November 2014, but the Partido Popular government in Madrid has refused to allow it. This obstinacy is pushing more and more Catalans to favour independence.

If the Madrid government and the constitutional court continue to block the referendum, Mas may try to hold one anyway or simply call Catalan elections. Financial scandals have weakened Convergencia i Unio, so the more extreme Esquerra Republicana de Catalunya would stand a good chance of forming a government. This party has promised to declare independence if a referendum is not allowed. A Scottish Yes would surely embolden the Catalans, encourage more of them to insist on independence, and make Spain’s constitutional crisis more intractable. What happens in Scotland and Catalonia will make its mark on the Basque country, Flanders and other parts of the EU.

A Scotland that leaves the UK would have to apply for EU membership. The accession of an independent Scotland would be much more complicated, and take much longer, than the SNP imagines. As John Kerr has pointed out, Scotland could not accede until it had agreed terms with each of the 28 member-states, all of which would have to ratify the accession treaty. It would be technically very difficult, though hopefully not impossible, to ensure that Scottish citizens and companies did not lose the benefits of membership during the period between Scotland’s quitting the UK and joining the EU.

Many issues between the EU and Scotland could not be sorted out until RUK and Scotland had agreed the terms of their separation. The currency question would be a problem in both sets of negotiations. Scotland could not join the EU without committing to join the euro. But if it wished to regard that as a long-term goal and in the interim to have its own currency or use the pound, EU member-states might indulge it. London, however, would not agree to Scotland using the pound and having the Bank of England as its lender of last resort unless Edinburgh ceded substantial powers over economic policy.

Like any country applying to join the club, Scotland would find that it had to accept the terms imposed on it by the other member-states and EU institutions. For example, Scotland would not get a share of the UK’s rebate on its contribution to the EU budget. Spain would be one member in no hurry to allow Scotland to show that independence can be won easily and quickly (and it might extract a price in fishing rights).

At the same time as the difficult RUK-Scotland and EU-Scotland talks were under way, a Tory-led RUK could be trying to negotiate a new deal with the EU and, following a referendum in 2017, perhaps an exit. The EU could put the Scots on hold while it sorted out the (for most governments) much bigger problem of RUK’s departure.

Whether or not RUK stayed in the EU, a Scottish exit would diminish its international standing. In the past few years that standing has suffered.  The Conservative-led government has been less assertive in international affairs than its Labour predecessors, partly because public opinion has become sceptical of an activist foreign policy (after Tony Blair’s wars in Afghanistan and Iraq), and partly because of the Conservatives’ reluctance to pursue international goals through the EU. Britain has been relatively passive during the Ukraine/Russia crisis (at least its early phases) and the rise of Islamic State in the Middle East.

But the departure of the Scots would cause much greater damage. Other countries would react with a mixture of pity and derision.  RUK’s armed forces and diplomatic service – already under pressure from government budget cuts – would have to shrink further, hampering its ability to play a leading role in NATO and the EU. As the details of independence were negotiated – including the need to divide up all common assets – the RUK government could find it hard to focus on foreign policy crises at the same time.

The SNP is committed to getting rid of the Trident submarines that are based at Faslane on the Clyde. But the cost of constructing a new submarine base in England would be enormous – and perhaps tilt the argument in London, where the political class is increasingly divided on the wisdom of retaining a nuclear deterrent, towards scrapping it. Any decision to abandon or diminish the deterrent would lower the US’s estimation of RUK. All these shifts would make it harder for Britain to argue that it should maintain its place on the UN Security Council (though it cannot be forced to cede it). The UK’s permanent seat and veto already appear to be an anachronism, when the likes of India, Brazil, Germany and Japan have neither.

Even if – as the CER hopes – Scotland votes No, there will still be huge consequences. A No is unlikely to be the end of the matter, especially if the vote is close, as is likely. Although 60 per cent of the Québecois voted to stay in Canada in 1980, another referendum was held 15 years later, which the separatists lost by only a whisker.

The Conservative, Labour and Liberal Democrat parties have promised that a No vote will trigger the devolution of tax-raising and other powers to the Scottish Parliament. That, in turn, is likely to provoke rising resentment among the English. If the Scots get special deals, why should they not? Further devolution would increase the urgency of answering the ‘Lothian Question’: why should Scottish MPs at Westminster vote on subjects that are devolved to Edinburgh, when English MPs cannot vote on those issues in Scotland? Meanwhile the Welsh and perhaps some other regions would ask for more powers to be devolved. UKIP would do its best to profit from a sense of grievance among the English.

The rise of populism and nationalism will continue to destabilise Britain and the rest of Europe – unless traditional elites do a better job of solving economic problems and practising the kind of politics that inspires voters.

Charles Grant is director of the Centre for European Reform.