Unionist politicians like to give the impression that should Scotland vote Yes, the UK would be an angry, hostile negotiator seeking to punish Scots for their ingratitude. In November 2013, for example, the “Better Together” campaign director Blair McDougall told a debate audience in Dundee that:
“UK ministers are not going to fall into the trap of acting against Scotland until Scotland decides to leave the United Kingdom”
The claims that the rUK would refuse a currency union, impose border controls and decline to order naval vessels from Scottish shipyards are all part of this tactic. But if you’re trying to stop someone from doing something, you don’t tell them that you’ll be reasonable and sensible if they do it. You try to frighten them by telling them all the terrible things you’ll do to them unless they do what you want.
Threats, however, are meaningless after the bluff is called. What matters when it comes to negotiations is who holds the best cards, and Scotland has a very strong hand indeed. Let’s take a look at each side’s bargaining chips.
The main weapon in the rUK’s armoury would be to veto Scotland’s membership of the EU. Yet such a threat would have no credibility. Scotland being out of the EU would certainly hurt Scotland, but it would massively damage the rUK too in several very obvious ways.
The rUK refusing to support Scotland’s international recognition by other countries would go directly against the terms of the Edinburgh Agreement, and therefore also against Article 1 Clause 2 of the UN Charter regarding “the self-determination of peoples”.
It would be disastrous for rUK businesses, but more to the point it would cause bureaucratic chaos the likes of which has never been seen on these islands, as 400,000 English, Welsh and Northern Irish people suddenly lost the automatic right to live in Scotland and a similar number of Scots risked expulsion from the rest of the UK. (See Chapter 4(i) and 4(iii) for more detail.)
It’s barely an exaggeration to say that the whole of Britain would grind to a halt. People wouldn’t know who they could do business with and who might be deported the next day. Both countries’ immigration and emigration agencies would be swamped with a backlog that could take decades to clear.
And that’s before you even consider the rest of the EU’s (and the world’s) reaction, the legal challenges and the catalogue of other absurd impossibilities that would arise.
The threat to veto Scotland’s membership of the EU (and other international organisations) is a bit like the Trident nuclear missile system - it’s all for show, because actually using it would mean mutually assured destruction for everyone. It won’t happen.
And the same applies to almost any threat of non-cooperative measures from the rUK, eg over trade or citizenship. All of them would damage Scotland, but in doing so would also hurt the rUK, and the rUK’s economy is simply far too fragile to survive any self-inflicted wounds.
Scotland, on the other hand, has some rather more credible firepower in its arsenal. In 2012 the Daily Telegraph reported the views of a senior Ministry of Defence source on Trident:
“MoD insiders believe that, after an independence vote, ministers in London would have no choice but to strike a deal with Scottish leaders allowing the Navy to go on using Coulport and Faslane until an alternative was ready.
That would give Scotland’s new government bargaining power over other issues like their share of the UK national debt and other financial liabilities.
‘Maintaining the deterrent is the first priority for any UK government, so ministers in London would have to pay Salmond any price to ensure we kept access to [the Clyde bases],’ said a source. ‘It would be an unbelievable nightmare.”
Forcing the rUK to remove Trident within weeks of independence rather than years wouldn’t hurt Scotland, but the rUK has nowhere else to put it, which means that that one card alone trumps most of the rUK’s hand.
While the Scottish Government has said it wants to take on a fair share of the UK’s debt burden, in hostile negotiations it could also walk away from accepting any, which would be disastrous for the rUK economy. The UK government has already accepted that it is solely responsible for the debt, and only goodwill compels Scotland to accept a share at all.
Scotland’s third big bargaining chip is pensions. As noted in Chapter 3(iii), the UK government has admitted that it’s obliged to keep paying the pensions of anyone who’s already qualified for the UK state pension, even if they no longer live in the UK. Scottish pensioners would be in the same situation as anyone who retires to Spain or France.
The White Paper says the Scottish Government wants to take over that responsibility, but in hostile negotiations it could abandon that policy - Scottish pensioners paid their National Insurance to the UK government and are entitled to be paid by it - and leave the rUK carrying the can.
That’s worth more than £6 billion a year, and in conjunction with rejecting a share of UK debt would mean the Scottish economy would definitely be in a very comfortable surplus of billions of pounds every year - even on the most pessimistic estimates of oil revenue.
That means that even if international lenders wanted to set interest rates higher because Scotland was deemed to have “reneged” on its debt share (even though it wouldn’t have), it wouldn’t matter because Scotland wouldn’t NEED any borrowing, or very little.
The reason the Scottish Government doesn’t want to do those things is that damaging the rUK’s economy would of course also hurt Scotland’s, because a large percentage of Scotland’s trade is done with the rest of the UK. But if it came down to it, Scotland’s big budget surplus would protect it from a lot of that damage, as Professor Gavin McCrone suggested way back in 1975.
Make no mistake - one of the reasons the UK government is so frantic to prevent a Yes vote is that it knows Scotland would hold the whip hand when it came to horse-trading and haggling over the terms of the divorce.
Q: “But the Scottish Government uses the removal of Trident as an argument for independence. Doesn’t that take out Scotland’s main trump card instantly?”
A: The Scottish Government’s policy is for Trident to be removed as soon as “safely” possible. In good-faith negotiations, that term is flexible enough to allow a few years for the UK government to come to alternative arrangements for the system. If the negotiations are hostile, it can be defined as the time taken to deactivate and transport the warheads, which is a matter of weeks.
And of course, either way Scotland would stop PAYING for Trident immediately, and could redirect hundreds of millions of pounds to other things.
Q: “But if Scotland didn’t accept any of the UK’s national debt, wouldn’t it be punished by the international markets? Why would anyone lend Scotland money?”
A: Because it’s not Scotland’s debt. Scotland had no say over it being taken out - it’s the UK government’s debt, the UK decided where to spend it and the UK has already accepted full liability for it. If you’re living in a rented flat and the landlord defaults on his mortgage, YOU don’t get a bad credit rating.
Lenders don’t care in the least about the UK’s internal political wrangles - they lend based on whether they think they’ll get paid back or not, and Scotland is a wealthy country with plenty of security for any debt it took out. It would be a very low risk for any lender.
But as we explored in Chapter 2, an independent Scotland would be likely to need far less lending anyway, so even if it had to pay slightly higher interest on its borrowing it could afford to do so.
