The Scottish independence referendum: unanswered questions
Civitas, 3 December 2013
By Robert Henderson
The vote on Scottish independence is in 2014. The next UK general election is scheduled for 2015. The date for Scotland to leave the Union is 2016. Assuming Scotland votes for independence there are these unanswered questions:
1. When will existing MPs sitting in Scottish seats be expelled from the Commons? Will they be allowed to continue sitting in the Commons until the 2015 general election?
2. Will Scottish Westminster seats which fall vacant before the Independence referendum be filled in the normal way with a bye-election?
3. What will happen to Scottish Westminster seats which fall vacant after a vote in 2014 to leave the Union but before the 2016 formal departure date? Will there be a bye-election to fill the seat until the formal departure or will the seat be left vacant?
4. What will happen to peers who have hereditary Scottish titles or are Scottish life peers?
Unless they are excluded from the Lords they would continue to have a say in UK2’s politics after Scottish independence (NB UK2 stands for the UK containing England, Wales and Northern Ireland.) The cleanest solution would be to insist on peers residing in England, Wales or Northern Ireland and make any peer wishing to sit in the Lords divest themselves of any formal nationality other than British. That would mean peers were in a different position to the rest of the population with regard to legal nationality, including MPs, who can at present hold more than one nationality. The answer would be to make illegal the holding of anything other than British nationality by anyone sitting in the Lords or Commons.
5. What will happen to those holding British passports who find themselves in an independent Scotland or wish to have Scottish nationality whilst living elsewhere? This would be a good time to deny dual nationality to British citizens generally.
6. What will be the position of Scotland and the rest of the UK (UK2) respectively with regard to the EU? There is no precedent for an EU member splitting into separate sovereign states and the component parts of the original EU state being taking back into the EU. Both logically and legally it is difficult to see how the EU could allow either or both of Scotland and UK2 back in without a further Treaty agreed by the other 27 states. Several of those states would require referenda before such a Treaty could be approved.
7. What if Scotland or UK2 were refused admission to the EU or decided they did not want to join the EU? If one country was outside the EU it would have to apply the barriers to trade that the EU states apply generally to those outside the European Economic Area (EEA).
8. What would happen to immigration between UK2 and Scotland? The danger is of Scotland allowing large numbers of people to enter Scotland knowing that these people would almost all head straight for England. Whether or not Scotland was a member of the EU, there would have to be strict immigration controls on those coming from outside the EEA and if either Scotland or UK2 was outside the EU, there would be a strong case for imposing border controls.
9.What currency will Scotland use? The position with the Pound Sterling is beautifully simple: Scotland was allowed to use the English currency after they signed the Treaty of Union in 1707, having discarded their Scottish Pound, which was only worth a few English shillings. If they leave the Union they break the Treaty of Union and consequently no longer have any legal right to use the Pound. It would be a disaster for England if Scotland was allowed to use the Pound because in practice England would be the lender of last resort for Scottish financial institutions through the Bank of England and even without a financial catastrophe Scottish fiscal recklessness could generally weaken the Pound. Scotland should have to choose between the Euro or a new Scottish currency. If Scotland has to reapply for EU membership she would probably be forced to take the Euro as all new state are obligated to do so.
10. How will the oil and gas revenues be divided? Even if this was left simply to a matter of what is in whose territorial waters Scotland could get much less than they estimate (around 90%+) if the territorial waters are determined by lines drawn at the angle of the coast at the English/Scottish border. Moreover, a good deal of the oil is around the Scottish islands, who have been making noises about not wishing to be part of an independent Scotland. Shale oil and gas also comes into the picture. Most of the likely UK shale deposits are in England. It would be a grand irony if Scotland cut herself off from a share of the revenues from these by opting for independence.
11. From what date will Scotland’s proportionate share of the UK national debt be calculated? It would be significantly lower if calculated at the time of the 2014 referendum rather than the formal date of leaving in 2016.
12. How will Scotland finance the servicing of her proportionate share of the UK national debt?
If she retains the Pound this could be done simply by paying to the British Treasury the sum needed to service it. Scotland would be able to reduce the servicing charge by making payments to the British Treasury to reduce the debt.
If Scotland does not retain the Pound she would either have to join the Euro or establish a new Scottish currency. Either could be a very dodgy proposition. To safeguard UK2’s interests, Scotland should be forced to raise the money, if she can, through issuing her own bonds, converting these into a safe currency and then passing the money to UK2. Alternatively she could buy safe currency and pass that to UK2.
13. Since the Union in 1707, Scotland has taken far more from the Westminster Treasury than she has raised in tax. What payment is Scotland to make to the rest of the UK to repay this subsidy from the rest of the UK (in effect from England)?
14. What will happen to the state holdings in the banks RBS and Lloyds? At the moment these are both net liabilities not assets because the share value of both means the £45 billion put into them by the UK taxpayer could not be recouped if the shares were sold.
15. How are the assets of the UK to be divided between Scotland and UK2? For the material assets which are physically fixed the only practical way would be for Scotland to retain what is in Scotland and UK2 to retain what is in UK2. The moveable assets such as military ones could be divided, but there would be little point in giving Scotland equipment they could not afford to use, for example, the larger surface ships or submarines. The Trident deterrent must be removed to an English base together with any other ships allocated to UK2 which are currently based in Scotland and warship building retained in Portsmouth. The only substantial overseas assets would be the diplomatic operations in embassies and consulates. However, these have been scaled back over the past thirty years. An agreement would probably have to be made whereby the UK2 kept the properties and offset some of the Scottish share of the UK national debt against their notional share.
16. If an independent Scotland cannot or will not maintain armed forces equivalent to those now stationed in Scotland, what will happen to the men and equipment? Will the British Army absorb them?
17. There are many public sector jobs in Scotland which service the rest of the UK. How long after the vote for independence will they be removed to the part of the UK which they actually serve?
18. Who will be responsible for paying the pensions of civil servants working in Scotland but servicing another part of the UK?
19. What proportion of the overall UK public sector pension entitlement at the time of independence will Scotland be responsible for? This pension entitlement will include those paid to the armed forces, British Eurocrats and the diplomatic service.
20. At what date will the accumulated public sector pensions of the UK be calculated? Immediately after the vote for independence, the date of formal independence or what? The later the date the larger the Scottish liability.
21. Will those with Scottish nationality have to have work permits to work in UK2?
22. What will happen to the BBC? At the moment Scotland gets a very good deal because she pays in proportion to her population, but gets the benefit of the entire BBC output, the vast majority of which is paid for by English TV licence payers. There is no reason why an independent Scotland should continue to do so. They should form their own public service broadcaster (if that is what they want) and purchase BBC programmes on the same basis as any other foreign country.
The terms on which Scotland could secede from the Union should be agreed before any Scottish vote on independence. Agreement to the terms should be through a referendum of voters in England, Wales and Northern Ireland. Only if accepted by those voters should the independence question be put to the Scottish electorate. That question should be Do you wish to have independence on the terms offered by the rest of UK?