Jim Gallagher: So, what about England?

WHAT about the English? The independence referendum will be decided in Scotland – by the people living here.

The rest of Britain will have no say in the matter. Not all countries would take such an relaxed attitude. Spain regards the unity of the state as a constitutional principle, and so a Catalan referendum is constitutionally forbidden. In Britain just under a century ago, there were plenty of voices for resisting Irish independence by force. Wiser heads prevailed.

Why is this? Has Britain become so post-imperial that it’s post-nation-state as well?

Are the English indifferent to the future of the country they belong to? Not quite, the English do have views, and want their interests looked after. We can expect to hear about both of them before this is all over.

England has always loomed large in the Scottish psyche. Not surprisingly: it’s the elephant sharing Scotland’s bed. As the historian Colin Kidd has pointed out, some sort of union as a strategy for dealing with England was first a 16th century Scottish idea. Inevitably, Scotland is not so significant in the English mind, or a looming reality in their political and economic lives.

The result has been in part ignorance – the infuriating habit of conflating England and Britain arises because many in England have no need to distinguish between them.

But it’s also produced a kind of tolerant neglect. Scotland can get on with its own business, and for the most part – the evidence shows – English opinion is quite relaxed about it.

This has been changing. Thirteen years of devolution, and five years of Nationalist government have changed English perceptions – a bit.

Recent work published by the think-tank IPPR in its report The Dog That Finally Barked showed English opinion shifting. People south of the Border are now more likely than formerly to see themselves as English, not just British, and a bit more likely to want an English political voice.

Views about Scotland have shifted, too. There is rather more resentment about public spending– nearly half the English think Scotland gets more than its fair share, up from a quarter 10 years ago.

Over the same period, Scots opinion has changed too: a majority have come to conclude they are not hard done by. The English are also a bit more concerned about the constitutional settlement.

Before 2007, majority English opinion supported a Scottish Parliament; in 2011 support had fallen to just over 40 per cent. Five years of nationalist administration in Edinburgh haven’t shifted Scottish opinion on independence, but have shifted English views a bit. A total of 22 per cent supported Scottish independence in 2011. But just as many favour having no Scottish Parliament at all.

This tells us quite a lot about the scope for more devolution. So far, the English have been pretty tolerant about the Scottish variation, but increasingly two issues concern them: money and representation. Does Scotland do unfairly well in the distribution of common resources, and do Scottish Westminster representatives have too much say on English questions?

The present devolution settlement offers some sort of answer to each of these questions. Even with the enhanced tax powers for Holyrood under the Scotland Act, the UK government plans to keep the Barnett formula to determine its contribution to Scottish spending. We’ll see whether it will do anything about “English votes for English laws” sometime next year.

It seems unlikely that any scheme of markedly greater devolution – let’s call it devo-plus since no-one knows what devo-max is – could be implemented without some answer to these English concerns. If Scotland were to have more tax powers, and so be more dependent on tax income arising here, it would have less call on shared UK taxes. If the principle is greater self-sufficiency, then there’s less equalisation according to need. If more taxes are decided in Holyrood, not Westminster, would England tolerate so much Scottish representation there?

Of course, answers can be devised to these questions, with ingenuity and goodwill. But they require careful consideration of the trade-offs, in what would have to be a negotiation between the Scottish and UK governments. Whether that happens depends on the referendum result.

By contrast, if Scotland votes for independence, the Barnett formula and the West Lothian question join the Schleswig-Holstein question in the history books. English views cease to be relevant. Or do they?

The Scottish Government rejected the two-referendum idea, the first to authorise negotiations and the second on the package achieved. So, one of the few things we know for sure about independence is that it would need some very complex negotiations first. Most will be with the government of the rest of the United Kingdom. The Scottish side will have to work in its country’s best interest, but so will the negotiators for England, Wales and Northern Ireland. So when they start being difficult about issues, it won’t be vindictiveness, just doing the job they were elected for.

It will be in the interests of the rest of the UK to have stable, prosperous Scotland. But that won’t extend to the kind of support offered by one part of a state to another, but more like the kind of solidarity we see inside the European Union just now. Scotland will never be as foreign to England as Greece is to Germany: but constitutionally it will be as separate a country.

The negotiations will have to cover the transition from a unified country into two new states. This means breaking up the institutions of the UK state, and creating Scottish ones. Whatever the formalities, in practice 90 per cent of the existing institutions will belong to the rest of the country. Inevitably, some kind of transitional arrangements under which Scotland shares UK services, such as tax collection or benefit payment, until it can set up its own, would be essential. But that is not something the rest of the UK will agree to unthinkingly, and certainly not permanently. The other parts of the UK will share services or institutions only if it’s in their interest. How else could their government justify it to the electorate?

The most obvious example is the currency. All the economic theory suggests the UK is pretty much an optimal currency area: goods and services, finance and labour move freely throughout the country with no legal barriers, and the economies of the different parts of the country move more or less in step. Independence would change that a bit, but it would probably still make sense for Scotland to share a currency with England. It will make sense for the rest of the UK only if, by doing so, they don’t import risks to the stability of their currency and financial system that they cannot manage. Hence you can expect an objective for their negotiators will be to ensure that monetary union, if it is to happen, gives the rest of the UK similar influence over Scottish fiscal policy to what the Treasury has today.

Similar points could arise with other services or institutions: if Scotland is to share them, it will be on terms acceptable to the rest of the UK. Other items in the balance sheet, notably defence, will give Scotland some negotiating leverage. But no one should pretend it will be easy or straightforward, and lead to some kind of pick-and-mix union under which, although notionally independent, Scotland gets to keep the bits of Britain it likes, and reject those it doesn’t.

What the English think matters, and their interests are important – to us as well as them.

l Jim Gallagher is Gwylim Gibbon Fellow at Nuffield College Oxford