Bill Jamieson: Is independence really on offer?

It is becoming increasingly difficult to tell what the Yes campaign is asking us to vote for, writes Bill Jamieson

Business tycoon and Yes campaigner Jim McColl speaking at The Scotsman conference on Tuesday. Picture: Julie Bull

Two years after the SNP’s historic election victory and mandate to hold an independence referendum, how goes the battle? According to William Hill, the odds being quoted yesterday of a victory for the Yes campaign in September next year, were “10/3”.

Not being familiar with the betting business, I asked my man at William Hill what this meant.

Now I would be the first to defer to First Minister Alex Salmond for an interpretation of these figures. He’s a betting guru. He knows the form. He’s quick with figures. And he’s known to like a flutter.

But according to my contact, the figures mean that if you place a bet on the basis of these odds, you would win a handsome £10 for a £3 bet on Mr Salmond winning the independence vote.

That seems a hefty return and would indicate that the bookies don’t see much prospect of him winning. And this after two years of a colossal and unrelenting war of words waged by the SNP.

Barely a day has gone by without a shoal of SNP press releases, speeches, documents, rallies and campaigns, assertions and rebuttals. But after all this huffing and puffing, there is little sign yet of “traction”, or “surge”, or “Big Mo”. The needle on the public opinion dial, setting aside the occasional tic and twitch, has barely moved.

The independence campaign seems to be treading water. And treading and re-treading. The Yes campaign can hardly protest that voters are uninformed. In fact, we are so well informed that our lips now move before the Yes campaigners have uttered.

Weary though voters may be growing with the daily rammy of constitution politics, there are still 15 months to go. Now is no time for engaged citizens to buckle. There’s more, much more, to come.

It’s a great life in Scotland if you don’t weaken. All you need is stamina, a bottle of Lucozade and a box of pills marked “hope”. Anything might happen. The tide may yet turn. The gap could close. But this, I suspect, is not where independence campaigners reckoned they would be at this stage of the battle.

Why might this be?

Let me offer an explanation. It is that midway through this constitutional marathon, the public is becoming more, not less, confused as to what “independence” is going to mean.

For the past two years the SNP has campaigned on the need to win control of the levers of tax and borrowing powers to effect an economic transformation and betterment.

This would herald massive change. No more oppressive dominance from the unionists and suffocation at the hands of the complacent and neglectful “London-based parties”. North Sea oil revenues would spark a transformation of opportunity.

But at the same time we are told that everything else will remain the same: the Queen will still be Queen of Scotland. We will still use the pound as the currency. We will still be in the EU. We will still be in Nato. Pension and social security benefits will continue as now.

There were gasps of surprise at The Scotsman conference on Tuesday when Yes campaigner and business tycoon Jim McColl declared that a Yes vote would not at all mean the break-up of Britain, and that the Scottish Parliament would remain within the United Kingdom. He said he would have preferred the “third option” of “max dev” had this been allowed on the ballot.

But is this “independence”? What definition of the word is on offer? The economists David Bell and Angus Armstrong went to the heart of this ambiguity when they presented papers on the currency union proposals.

Professor Bell made clear that in any negotiation with the rest of the UK following a Yes vote, the terms and conditions of an independent Scotland’s membership of the UK currency – assuming any agreement is reached – would circumscribe those extra powers, with tight controls on spending and borrowing.

Monetary policy would still be firmly in the hands of the Bank of England, and any change in its constitution would need to be agreed with HM Treasury. That looks unlikely. Firm sanctions would also need to be agreed to discourage a breach of the fiscal rules – ones tough enough to prevent a repeat of the eurozone experience.

There is little doubt that the shared currency proposal has now emerged as the Achilles’ heel of the independence campaign. The more one looks at it, the more daunting any such agreement looks. And if the aim is greater flexibility and discretion, there is a growing suspicion that it may have been better achieved by going down the “max dev” route.

Little wonder there are increasing signs of restiveness among core SNP supporters at the prospect of being bound hand and foot by an apprehensive rUK Treasury. Many now say they would prefer a separate currency, as advocated in the past week by the redoubtable Margaret Cuthbert. The economist John Kay also argues that this would be the more logical option if “independence” is the aim.

It was then left to Dr Armstrong to spell out what a separate Scottish unit of exchange would involve. To fund the £140 billion of inherited debt – our share of the UK debt pile that is heading to £1.5 trillion and over, and money that’s already been spent – it would need to be a hard currency and require a hard regime to match. This would mean a higher debt interest rate, firm arrangements that the debt would be honoured, with even tighter controls on public spending to gain and sustain market confidence. It would also mean capital controls.

The markets would not take volatile tax revenues from North Sea oil as a sufficient assurance, given the profile of long-term decline.

It was a grim presentation for a country that has grown used to big government and high public spending. And it cannot be dismissed as scaremongering. It drew from international experience and was informed and all too real.

Unfortunately, there are now such strong doubts about the arrangements over a shared currency that the prospect of a separate currency cannot be dismissed.

The silence of the SNP on its strategy in this event risks fuelling voter concern. Which small business, which company with significant sales to rUK, would want the hassle of a separate currency and all its implications? Which savers would hang around and risk having their pension nest-egg redenominated in a Scottish currency during this transition period?

This would not just be a game-changer for the Yes campaign, it would be a most serious challenge for the financial sector and Scots business generally.

So which “independence” is on offer? The “independence light” favoured by Jim McColl and others? Or a slide towards the full monty? So long as this uncertainty persists at the heart of the independence campaign, the bookies’ odds are unlikely to change much in Mr Salmond’s favour. Quite the contrary, I suspect.