Peter Jones: Referendum now a game of two polls

David Cameron may have created a rod for his own back with pledge to hold referendum on EU, writes Peter Jones

Politics, thanks to the fact we now have two looming referendums, increasingly looks like an advanced and extremely tortuous form of the prisoners’ dilemma game. Some of the choices faced by people, depending on their political perspective – for example, that it is now in the interest of Conservative Eurosceptics that Alex Salmond should win his Scottish independence referendum – are bizarre. But Scotland could also wind up in a place that hardly anybody wants.

The prisoners’ dilemma is a part of game theory applicable to strategy in business and politics. It is intended to show whether it is best to co-operate or compete in a given situation. You see variants of it in a lot of TV crime shows.

The classic example devised by American social scientists in the 1950s is of two people suspected of a serious crime and who are being separately interrogated by the police. Both are told that if they confess and implicate the other, then they will get a lighter sentence while the other will be behind bars for years. But they cannot communicate with each other.

There are three possible outcomes. Both can sit shtum and reckon that the police have not got enough other evidence, so they will go free. Or one can confess and get a two-year sentence, while the other gets four years – provided, that is, that the other has not also confessed, in which case they will both get three years in the pokey.

Confession, or competition against the other suspect, is the obvious strategy because that will avoid the longest jail term. But co-operation in not confessing is the best strategy for both prisoners.

The theory is applied in business strategy where you have two companies each with dominant position in a market – Coca-Cola and Pepsi, for example – contemplating a price war against each other or in political strategy where, say, two countries are threatening an arms race against each other. In each case, co-operation is the best strategy, though in the first case ordinary people lose out (prices stay higher than they ought to be), but in the second case they are the winners (taxes are not spent on weaponry that probably won’t be used).

This looks applicable to the political games ahead because we have two governments, Scottish and UK, each trying to beat the other. But then the complication is that there are two games being played, the first over Scottish independence and the second over the degree of independence that each seeks within the European Union.

This leads the political players into some strange places. The morning that Prime Minister David Cameron delivered his speech promising a referendum on renegotiated British membership terms of the EU, I spent some time with First Minister Alex Salmond as he toured a factory.

I listened carefully as he did various radio and TV interviews about Mr Cameron’s speech. He was keen to depict it as muddled and confused and to suggest it played into SNP hands. What he didn’t give was the short answer: that it would be completely irrelevant to Scotland because the SNP believe that, by 2017, Scotland will be a year into its new life as an independent country.

Interesting, I thought. Maybe, especially as the authoritative Social Attitudes Survey was out that morning showing support for independence at a near all-time low of 23 per cent, he knows he is going to lose. Then I dismissed that thought, reckoning that he had worked out that the best strategy is simply, meantime at least, to argue that the UK government is all at sea and doesn’t know where it is going.

Well, if that is the case, isn’t Mr Cameron creating uncertainty, which will be bad for business and the economy, I asked him. Politicians normally love to attack opponents on this ground because it portrays them as mishandling the economy, which is voters’ prime concern, especially in these grim times. Mr Salmond thought about it for two nanoseconds and then dismissed it, arguing that an EU referendum would not stop other Europeans from buying Scotch whisky or the sophisticated communications components made by the factory we were in.

Obviously, if he accused Mr Cameron of causing uncertainty with his referendum, he would be pretty much admitting that his own plebiscite would create disruption.

So, there you are Mr Cameron, you have Mr Salmond’s support when claiming that referendums don’t cause uncertainty. Who would have thought that?

Many variations can be played with this referendums dilemma game. Suppose you are an English Tory Eurosceptic, suspicious that what your leader is offering is a bit of a con. One way you could try to make sure that there has to be a serious renegotiation of EU terms of membership would be to urge people to vote yes to Scottish independence.

Then, just as Scotland will have to negotiate the terms of its EU membership, so will the terms of the rest of the UK’s membership have to be changed. At the very least, the rest of the UK’s (rUK) population will not justify the votes the UK currently has in the European Council. And as these votes are defined by EU treaty, the treaty change will have to be ratified by all other member states. What better opportunity to renegotiate a lot of other things as well?

Or suppose you are a Scottish unionist who is pro-Europe. Would you be best advised, as the SNP is now delightedly suggesting, to vote Yes to independence?

Such swings, however, also have their roundabouts. A nationalist who abhors the EU and regards independence-in-Europe as a worse form of subjugation may think it better to vote No to independence and then No to Europe.

That’s not the end of the complexity. Suppose that independence, as the polls now indicate is likely, is defeated in 2014. Suppose also that the UK as a whole votes to leave the EU in 2017, but a detailed breakdown by country (which was available in the 1975 European Commission referendum) reveals that Scotland voted to stay in. The SNP would surely be out of the starting blocks demanding a re-run of the 2014 vote faster than Usain Bolt.

Mr Cameron, in signing the “Edinburgh Agreement” handing legal power to the Scottish Parliament for the independence referendum, did so believing it would be a decisive vote that he would win. He might still win it, but now it might not be so decisive.