Independence day: what if Yes had won the referendum?

THIS week Scotland could have been celebrating independence day, but would it have been master of its destiny or mired in compromise, asks Martyn McLaughlin

Had there been a Yes vote in the referendum on Scottish independence, the past 18 months would have been a fascinating and fraught chapter in the nation’s history. Instead of announcing his intention to step down, an ebullient First Minister Alex Salmond would have taken to Bute House the day after the vote to deliver the speech that never was – a rallying call declaring a “nation reborn” and a promise to work “constructively and positively” under the terms of the Edinburgh Agreement to “implement the will of the people” in time for the Scottish Government’s chosen date with destiny – 24 March, 2016, otherwise known as independence day.

Predicting how such a scenario might have played out is an inexact discipline, heavily dependent on a multitude of assumptions and informed assessments. But on the basis that a Yes vote would not have materially altered the outcome of last year’s general election, how would the negotiations between the Scottish Government and the UK’s Conservative majority government – in all probability led by Prime Minister George Osborne – paved the way for independence? Would the timescale have been met, and if so, would there have been resolution over the major political and constitutional dilemmas that dominated the referendum campaign?

Several experts in constitutional law believe that Scotland could well have marked independence within this timescale. Christine O’Neill, chairman of Brodies and an expert on public and constitutional law issues, says that as long as there remained popular support for the timetable, there would have been “no legal or constitutional reason why independence could not have been achieved” by Thursday.

“There have been examples of statehood being reached more quickly, for example on the dissolution of Czechoslovakia,” she adds. “The Scottish Government’s white paper envisaged an act of the Westminster parliament to formalise independence but even without that it would have been possible for a ‘declaration of independence’ to have been made.”

Nicholas Barber, associate professor of constitutional law at Trinity College, Oxford, believes the post-referendum negotiations would have seen powers transferred to the Scottish Parliament “very quickly”, potentially including the “constitutional right to declare independence”.

The extent of that autonomy, however, would have been debatable, with several major issues yet to be resolved, some of which might even have led to independence day being delayed. The question of Scotland’s place in the European Union is key.

“I suspect the timescale was too tight and that the principal problem would have been the European Union,” says Barber. “It was probably panic-mongering to suggest that process would take a decade or 15 years, but it’s probably not panic-mongering to say it would have been a five-year process of negotiation, which is actually speedy.”

Scotland’s independence, Barber suggests, would have been formalised once a legal structure was in place, one ratified by all EU member states. While the country could have become independent on Thursday before negotiating its re-entry, he dismisses such as a scenario as “crazy”.

O’Neill’s take is that EU membership would depend on the views of member states, but if there was a political will, any agreement could “be reached within the EU relatively quickly”. Without that agreement, would Scotland have struck out alone come Thursday? “The question of the date of independence would always remain within the control of the Scottish Government,” she replies. “It might have been delayed for a range of reasons.”

Others point to Europe’s shifting political priorities in the one-and-a-half years since the referendum, with the intensifying Eurozone and refugee crises the focus in Brussels. “I can see how the EU wouldn’t have regarded Scotland as a priority,” says Iain McLean, official fellow in politics at Nuffield College, Oxford. “They might have welcomed the country in on accelerated terms, although that agreement would have to have overlooked Scotland’s failure – and it would be that by quite some way – to meet the Maastricht debt and deficit criteria.”

Indeed, the financial circumstances in which Scotland would have claimed its independence are integral to this theoretical analysis, with the scale of the fiscal challenge laid bare by the latest Government Expenditure and Revenue Scotland (GERS) figures.

Such glum forecasts would have had significant repercussions for the Scottish Government’s negotiating power, and in particular its plan to create a short-term and long-term Scottish Energy Fund. The former proposed taking a proportion of tax receipts in order to insulate the budget and protect public service expenditure from fluctuating commodity prices; the latter, following the Norway model, aimed to establish a pool of wealth for long after the oil and gas had gone.

But the parlous state of oil prices, coupled with the widening gap between Scotland’s public spending and its tax revenues, would have raised grave questions over the creation of a market credible fiscal plan.

Though McLean believes the SNP make a “good point” in arguing the need for an oil fund, he says there would have been “zero prospect” of an independent Scotland creating such a reserve. The economic reality, he adds, would be preoccupied with hard truths.

“The oil revenues would also have had a major impact on public expenditure and borrowing,” he explains. “Scotland wouldn’t have a track record in the markets and the government would have to set a very, very tight fiscal policy, with huge cuts in public expenditure and substantial increases in taxation. And it would still have to pay a premium as a new borrower over the UK rates.”

Scotland’s currency, all three experts believe, would have been resolved in time for Thursday. They suggest the negotiations would have resulted in sterlingisation, whereby Scotland would use the pound, albeit not in a formal currency union.

“The rest of the UK wouldn’t be able to stop Scotland using the pound if it wanted to and I think that’s where we’d have arrived at,” Barber concludes.

O’Neill agrees. “Certainly there would have been a resolution of the question of currency, even if that involved an interim decision to use sterling, but outside of any formal currency union with the rest of the UK,” she says. “The decision to do that would not depend on the agreement of a negotiating partner.”

Depending on the Scottish Government’s appetite, McLean indicates that it could well have used its trump card – Trident – to try secure a formal currency union, its preferred option. That outcome, he points out, might have been possible under the negotiations with the former coalition government, but less so with the Tories in power, with agreements struck prior to May 2015 subsequently “unpicked”.

The likelier event, he adds, would have seen the Scottish Government renegotiate its proposed five-year timescale for Trident’s removal in return for a more modest share of the separation bill incurred as a result of disentangling Scotland from the Union, a figure McLean estimates as around £1.5 billion.

However, a senior SNP source dismisses the idea that any concessions would be made on its plans to rid the nation of Trident within the first term of an independent Scottish Parliament, explaining: “There is and would be, if there’s a second referendum, no room for manoeuvre on Trident. It’s not something that’s up for negotiation.”

That may be a guiding principle of the party, but McLean points out that the Trident dilemma would be one of the most difficult to resolve. A period of 18 months, he says, would not have resulted in a final agreement, given that in the medium-term at least, the Ministry of Defence has no alternative sites; the prospect of relocating Trident to King’s Bay in Georgia, though logistically feasible, would have been politically unconscionable to the Tories.

So how might the stalemate have been overcome? “I think what’s more likely is Faslane would have become a sovereign base like Guantanamo Bay,” McLean postulates. “That wouldn’t be popular in either Scotland or the rest of the UK but there would have to be some kind of long-term leasing agreement.”

The SNP source, however, has to stifle laughter when I relay this suggestion, before replying: “I think that plan would be politely described as political suicide.”

For her part, O’Neill says that under independence, the Scottish Government could – in legal terms – “decide unilaterally not to support Trident in Scotland.” But she adds: “Whether they would have done so is more difficult to say.”

Such dubiety is not the preserve of the Trident question. Revisiting the minutiae of the Scottish Government’s white paper, it is evident that, far from being a velvet divorce from the rest of the UK, the negotiations would have continued long after the proposed day of independence.

Take the nation’s new tax and welfare arrangements. The need to maintain key back office functions, IT systems and procurement processes would have left Scotland’s new welfare system reliant on the Department of Work and Pensions and HMRC, with the date for Scottish Revenue’s own IT system going live unlikely to arrive before 2020.

Some transitions would have taken even longer. It might not have been until 2022 that the Scottish Motor Services Agency took over from the DVLA. Granted, these are technical issues that did not – and would not – unduly concern the electorate at large, but they demonstrate how independence is a complex, laggard process. “There wasn’t any realistic expectation that all issues in relation to the division of UK assets would have been completed within 18 months,” says O’Neill.

Other work would have been going on behind the scenes, such as converting the existing 27 Scottish Development International offices as part of the drive to create a network of embassies and consulates; finalising plans for a Scottish security and intelligence agency; establishing a Scottish Defence Force; holding discussions with the BBC ahead of the Scottish Broadcasting Service commencing transmission on 1 January, 2017 – the to-do list would have been vast.

That is to say nothing of the reams of legislative paperwork required in order to facilitate Scotland’s transition from the UK to independence: a Scottish Independence Bill at Holyrood, a rewritten Scotland Act, and then a written constitution, ultimately the responsibility of a Constitutional Convention. Even then, Barber believes it is “plausible” that the constitution would have been taken to another referendum to be “ratified by the Scottish people”.

In the meantime, Westminster would have had its own work cut. Assuming any post-referendum attempts to legislate to remove Scotland’s MPs proved unsuccessful, would they have served for the entirety of the current parliamentary term? Would SNP MPs have sought election at Holyrood this May? Again, these are questions that encroach on the kind of uncharted constitutional territory that makes the West Lothian Question look like a minor muddle.

Had Scotland voted Yes, such matters would have been the subject of intense debate in the run-up to Thursday, with Salmond no doubt at their heart. But instead of preparing for the most significant event in Scotland’s history, he will mark the date at a campaign fundraiser for Joan McAlpine at Cairndale Hotel in Dumfries, described by the South of Scotland MSP as a “momentous day” on “what would have been Scotland’s independence day.”

It will come just a week after Salmond gave his final speech at Holyrood, telling the chamber: “It’s goodbye from me… for now.” The same could be said of the myriad questions posed above.

In the heat and bluster of the referendum campaign, many of these issues above went unanswered. With Salmond’s successor, First Minister Nicola Sturgeon, signalling the SNP’s intention to build a new case for independence, and the looming prospect of the UK voting to leave to the EU, they may not remain hypothetical for long.