Saturday 6 October 2012

Salmond wants independence in the UK

I’ve been trying to make sense of the ever changing models of independence put forward by the SNP and have come to the conclusion that what they want amounts to “Independence in the UK”. Of course they’re not using that slogan, but it pretty much equates to the vision they are putting forward of an independent Scotland.
The SNP want to maintain a currency union with the rest of the UK post independence. They want the Bank of England to act as Scotland’s central bank and lender of last resort. They want to maintain many of the UK national institutions, such as the DVLA, and they want to maintain a “Social union” of the the countries, which make up the UK. Most important of all they want to maintain the monarchy, the union of the crowns, which has existed since 1603. Logically this would mean they would maintain the Union Flag introduced by James VI. 

I’ve been trying to come up with an example of an analogous relationship between countries. The closest I can get is the relationship between Denmark and the Faeroe Islands, but that does not work as the Faeroe islands are autonomous, but are not independent.

Perhaps a model might be the relationship that Puerto Rico has to the United States. It too has autonomy, as an unincorporated part of the United States, but likewise it is not independent.
The more I think about it, the more I come to the conclusion that what Alex Salmond is offering the Scottish people is not independence at all, but rather autonomy within the UK. 

The condition for being in a currency union with the rest of the UK would certainly be that the rest of the UK’s chancellor would have a say and in the end a veto over the Scottish budget. Scotland would raise all of its own taxes, would receive a greater share of oil revenues, but would lose the money from the Barnett formula. It would be regulated both by London and by Brussels, assuming Scotland would remain an EU member, not least because London and Brussels are going to exact a price for cooperating so fully with Mr Salmond’s dream. 

For the life of me I can’t see the advantage. At the moment  we in Scotland have representation   both in Edinburgh and in London. Being “Independent in the UK” means we would only have representation in Edinburgh, but would still be regulated on financial matters by London.

Moreover we know that currency unions have a tendency  to bring their members into an ever closer fiscal and political union. Scotland would  still have elastic bands tying it to London, but would no longer  have the parliamentary representation to have its say there. 

Alternatively if Scotland strove  to maintain real independence in this currency union with the rest of the UK, the likelihood is that eventually the tensions would be so great that Scotland would be forced out, leading to a messy exist and devaluation on the lines that looks likely for Greece.

Salmond’s is offering a vision of independence, which is as close as is possible to remaining in the union so that he can gain as much support as possible from those Scots who otherwise would be scared of independence. But it is not clear that this model of independence is something he is really able to offer. The reason is that the relationship between Scotland and the rest of the UK post independence, would not be a matter solely for Mr Salmond, but would also be a matter for whoever at that time led the rest of the UK. What would they gain from having a semi-detached autonomous/independent Scotland? We know the difficulties in the Eurozone of having independent countries who are in a monetary, but not a fiscal, nor political union. Why would the rest of the UK put itself in the position of Germany in relation to Scotland’s Greece. What if the rest of the UK reacts to Scotland’s independence by saying goodbye, but don’t expect any cooperation from us. The trouble with “Social Unions” is that they require that both sides want to cooperate. I doubt there would be much goodwill towards Scotland if there really were a divorce. 

Independence within the UK is the latest  attempt by the SNP to kid the Scottish public that independence would only amount to nice things, like a UN seat and some extra flag waving, but we really need to hear from the leaders of the rest of the UK before we can be sure what a post independent Scotland, in a currency union with  the rest of the UK, would be like, for the nature of such a relationship would not  solely be up to Mr Salmond no matter how much he likes to dictate.
In the meantime might not supporters of independence reflect on what they are being offered. Does it not seem just a bit faint hearted. Even tiny Latvia and Lithuania set up their own currencies post independence. Can Scotland really not manage its own currency, set up its own central bank? Is the desire for independence so shallow, so lacking in courage that we can’t even emulate far away countries of which we know nothing. It all seems slightly humiliating when you put  it like that.