Financial Times: Is Scottish independence inevitable?

13 March 2020

By John Lloyd

Philip “Pip” Hills founded the Scotch Malt Whisky Society in 1983. One of its tasks was to exhume, from the cellars of distilleries, rare whiskies seldom put on the market: a small revolution in his world. He saw his creation as in tune with a new tide in the affairs of Scots. “There was a kind of revolution here from the 1960s on,” he says. “Before, people — including me — had accepted Scotland as a Harry Lauder kind of country, tied to England. Then there grew a sense of Scots identity, a sense of deep difference.”

Hills shared that sense. Still, he voted solidly Labour — the dominant political force in Scotland for much of the 20th century — until last year, when, disgusted by the prospect of Brexit being forced upon his country by England’s dominance, he turned to the Scottish National party. “And it’s not just Brexit and identity. The Tories could not have chosen anyone more disliked here than Boris Johnson — upper-class, condescending, absurd, undemocratic, as bad as Thatcher.”

In 2014, after a rancorous campaign, the nationalists were beaten quite comfortably in a referendum on independence. But the SNP did not lose heart and the wrangling over Brexit appears to have fuelled the sentiments aired by Hills. According to the pollster John Curtice, the proportion of those who would vote to end the 313-year-old union has shifted from 47-48 per cent to between 50 and around 52 per cent, largely because of Brexit. He cites three recent polls — from Survation, YouGov and Panelbase — which show 50, 51 and 52 per cent for an independent Scotland: there is now, he says, “a small majority in favour of independence — a growth evident for the past year”.

For long stretches in the last century this would have been unfathomable. But Scotland, and Wales and Ireland, north and south, put their emotional claws deep into their people. In the Celtic crescent to the west and north of elephantine England, they dance to the music of their differing cultures. This is a beguiling tune but one that threatens to lead my Scots homeland down a ruinous path. Secession would not just scar Britain but plunge Scotland into years of bitter argument over the terms of separation, then still more years of reduced circumstances as it sought to recover the living standards it has enjoyed while the Kingdom was United.

For now, the Nationalists are dominant in Scottish politics. In the December 2019 election they secured 47 seats at Westminster; the Scottish Conservatives hold six, the Liberal Democrats four and Labour just one. The SNP holds 61 seats in the Scottish Parliament, against the combined vote of the pro-Union Conservatives, Labour and Liberal Democrats of 59; in case of defections, they have a buffer in the six members of the Green party, a usually reliable ally. And none of the leaders of the anti-separatist parties commands anything like the popularity of Nicola Sturgeon, the Scottish first minister. Yet the SNP may face a more difficult year than of late. Alex Salmond, its former leader and longtime standard-bearer for independence, went on trial this week in the High Court in Edinburgh on 14 charges, including the attempted rape of a former official of the Scottish government in 2014 and sexual and indecent assaults against 10 other women. He denies all the charges.

Salmond’s is not the only trial for the SNP. It has already suffered (and may suffer further) from the public shaming of leading figures. Derek Mackay, once seen as a possible successor to Sturgeon, resigned as the Scots finance secretary in February after sending hundreds of tweets to a 16-year-old boy, commenting on his good looks and asking him to dinner. Later this year, Natalie McGarry, the former SNP MP for Glasgow East, faces a retrial on charges of embezzlement of £25,000 from funds created to support pro-independence groups.

Still, scandals tend to fade quickly in a culture saturated in social media and celebrity. It is facts on the ground that may prove more damaging to the SNP’s case for independence.

North Sea oil and gas extraction will continue its long-term fall. Investment for fields still unexploited depends on an oil price that this week fell to a low of around $30 a barrel, prompted by uncertainty over coronavirus and by aggressive extra supply by Saudi Arabia. The International Energy Agency had already warned, late last month, that “We certainly see the lowest oil demand growth in the last 10 years and we may need to revise it . . . downwards.”

Banking was once seen as a particular product of Scots entrepreneurship and intellect. In 1928, the Duke of Buccleuch, then chairman of Royal Bank of Scotland, told its bicentenary dinner that the banking system was “the greatest and most original work which the practical genius of the Scottish people [has] produced . . . an evidence of Scotland’s more settled outlook, because the principle behind it was faith and trust between man and man.”

That faith and trust was smashed in the late 2000s, when the Bank of Scotland (then the merged Halifax Bank of Scotland, or HBOS) was taken over by Lloyds and Royal Bank of Scotland, near collapse, was bailed out by the government, which still retains a 62.4 per cent stake. Last month, RBS’s new chief executive, Alison Rose, announced that the bank would be renamed the NatWest Group later this year — the name of the bank that RBS took over in 2000 when the latter was ballooning in size.

Education has also been a reservoir of pride in a country that cradled that burst of original thought, the late 18th-century Scottish Enlightenment. The old universities retain high reputations. But the schools have fallen. The 2018 Programme for International Student Assessment report showed Scotland lower than 18 OECD countries, including England, in mathematics, and lower than 13 in science.

Scots often think of themselves as more moral than the English, a self-image deriving partly from a Presbyterian view that saw in itself a purer, more democratic relationship with the Almighty than either Anglicanism or Catholicism. But that self-image has only a ghostly existence in polling. Curtice’s work supplies evidence that the Scots and the English are closer in political-moral attitudes than the former think. Working through the responses in the 2011 Social Attitudes Survey, he and Rachel Ormston found that “although Scotland is more social democratic in outlook than England, the differences are modest at best” — and that “like England, Scotland has become less — not more — social democratic since the start of devolution” in 1998. I asked Curtice if this had changed since 2011. He said it had not: “The differences are minor.” On immigration, often a test of liberal versus illiberal views, the independent social research agency NatCen (where Curtice is senior research fellow) found in a December 2018 survey that 46 per cent of Scots believed it was good for the British economy and 17 per cent that it was bad. The equivalent figures for England and Wales were 47 per cent and 16 per cent.

Politics may or may not be kind to the SNP this year; yet history will do it a favour. In early April, celebrations will mark the 700th anniversary of the 1320 Declaration of Arbroath, a document signed by 39 Scots aristocrats. It was a plea to the then Pope, John XXII, to rescind his support for the claim by Edward I of England for overlordship of Scotland, and to recognise its independence. It contains the ringing line: “as long as but a hundred of us remain alive, never will we on any conditions be brought under English rule. It is in truth not for glory, nor riches, nor honours that we are fighting, but for freedom.” Historians differ on whether this was a national call to arms or a claim of noble right. But the rhetorical flourishes of the Declaration still stir.

For nationalist Scots, that freedom has, for seven centuries, been defined as absence of English rule: the immensely popular Mel Gibson film Braveheart (1995) cemented that meaning into the nationalist lexicon as the battle cry of William Wallace’s forces charging the more numerous English in the battle of Stirling Bridge (1297). Patriotic emotion plays to the nationalists’ side: but the political strategy consultant Blair McDougall, director of the successful Better Together campaign against Scottish independence in the 2014 referendum, says that “people on the unionist side must agree that Brexit can be chaotic, but that leaving the union would be chaos piled on chaos. It is not an escape: it is to make things worse.” The economy of an independent Scotland remains the central battleground for the unionists, says McDougall. They must show that freedom, in the nationalists’ definition, is irresponsibility.

Kevin Hague, a 53-year-old English-born, Scots-raised entrepreneur, is a champion of this view. He has honed, over years, a presentation that he rolls out at meetings and conferences, on the consequences of independence — a narrative whose main purpose is to press the case that Scotland is lucky to exist within a strong UK fiscal union, with which membership of the EU cannot compare. The North Sea oil boom strongly supported British finances through the 1980s. But with the fall in the oil price, Scotland’s economy has depended ever more on an effective transfer from the rest of the UK, now running at between £10bn and £12bn annually. Over a period of four decades, Hague estimates, Scotland gave and Scotland got about the same amount. Presently, it is at a peak of getting.

His graphs and numbers show that tax revenues from London, the south- east and eastern regions of England are, after supporting their public services, used to support those of the less productive regions of England, Wales and Northern Ireland. Scotland’s revenue, still benefiting from oil and gas, albeit reduced, pays for a substantial part of its public spend — but the Treasury transfer produces extra public spending of between £1,700 and £2,000 per head. Some of this reflects geography; but a substantial surplus can be used to fund public services at a higher level than in England and Wales.

Ronald MacDonald, a professor at Glasgow University’s Adam Smith Business School, thinks that were the SNP to maintain a fixed exchange rate after independence, with a balance of payments deficit he believes to be around 10 per cent of GDP, it would rapidly exhaust what slender reserves the newly independent state would have, and force “brutal” cuts to Scots wages, and to public spending. Such forecasts are now familiar to the nationalists — who remain confident that an independent Scotland would prosper. A new economic forecast, produced by the Sustainable Growth Commission chaired by the former member of the Scottish Parliament Andrew Wilson and endorsed by the SNP’s conference in Edinburgh last year, promised that Scotland would, with a little belt-tightening, achieve an equivalent GDP to countries such as Denmark, Finland and New Zealand. It would join the EU and would be able to sustain, or better, the level of social and public service provision the country presently enjoys within the UK.

Nearly all economists point to the adverse effects of the loss of transfer payments from the UK Treasury, an uncontrolled currency and a likely hard border between Scotland and the rest of the UK. But Simon Wren-Lewis, professor of economic policy at Oxford, writing in a Daily Record symposium in April 2017, argued that it could be “short-term pain for long-term gain”, since Scotland, independent and within the EU, would have much better access to the large European market. In the same symposium, Richard Murphy, professor of international economics at City University, advises the creation of a new currency, the attraction of financial services and an industrial strategy tailored to its strengths — and thus foresees a country able, after early turbulence, to stand as an independent state.

Granting referendums remains in the power of the UK government, and Boris Johnson, with a large parliamentary majority and facing no pressure from opposition parties, seems inclined to continue to refuse. The flat “No” to a second referendum makes nationalists impatient. Alex Neil, a former SNP health secretary, has called for peaceful mass disobedience campaigns to press the Johnson government to concede a second referendum. Angus MacNeil, the nationalist MP for the Western Isles (now officially known by the Gaelic Na h-Eileanan an Iar) suggests that the SNP’s 47 MPs in the UK parliament at Westminster could all resign at once, triggering by-elections that he believes they would all win — a mandate for declaring independence. Joanna Cherry, the party’s home affairs spokeswoman at Westminster, argues that the Lord Advocate, Scotland’s senior law officer, should “proactively” refer the issue of a second referendum to the UK Supreme Court for a ruling on whether the Scottish Parliament was competent to make it legal.

Sturgeon, in a speech at the end of January, called for “patience”, warning nationalists that they should not “allow a sense of frustration . . . to take us down dead ends or weaken our sense of purpose”. She believes that the legality of Scotland holding a referendum without Westminster approval under current devolution legislation has not been established, and that any independence vote would have to be beyond legal doubt. The alternative would lose public support, and leave Scotland without international recognition as an independent country. Nationalists reassure both Scots and the rest of the UK’s citizens that independence would be a rapid, relatively painless affair, which would leave the two states as friendly neighbours. Yet if unravelling the ties that have bound the UK to Europe for 47 years has been and will be a vast and contested exercise, cutting the links between these neighbours after three centuries of common and thickening legal, political, social, business, civil society, educational, family and cultural activity will be hugely more complex, and much more emotionally charged. The SNP has worked hard at inculcating revulsion for Britain among its followers. It has been greatly assisted by Brexit, and by a Conservative government that it can, with Pip Hills, represent as “upper-class, condescending, absurd and undemocratic”.

The SNP’s name plays well in an identitarian age, and to a centuries-long Scots insistence on cultural separateness. In both Scots and British politics now, the stakes are clearer than they were six years ago, the momentousness of a decision to secede more to the fore. In these politics, and especially if another referendum is conceded, an even sharper conflict will take place — not just between those for and against independence, but within all Scots, weighing up how much pain they can stand for what gain. How, they must decide, is it best to be a Scot in the 21st century?

John Lloyd’s ‘Should Auld Acquaintance Be Forgot: The Great Mistake of Scottish Independence’ will be published next month by Polity

You can access the full article on the Financial Times website here.

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