Tuesday 22 September 2020

Would separation make us responsible for everything?


Someone pointed out the other day that Scottish separation would mean that the Scottish Government was responsible for everything. Scottish nationalists replied in large numbers that this was precisely the point. But is it?

In 2014 the SNP emphasised what would continue just as much as what would change. Salmond argued that there would be a “social union” with the former UK. He argued that there would be a currency union too. He thought that institutions like the BBC would continue to broadcast in Scotland. That the British Army would still be responsible for Scotland’s defence. Many independence supporters were keen to emphasise that the only thing that would change would be that Scotland would no longer have MPs at Westminster, but instead would run everything from Edinburgh. Otherwise we would hardly notice the difference.

Whenever people like me tried to point out something that would be lost in the event of Scotland leaving the UK, we were accused of misinformation, scaremongering or being negative about Scotland.

But if Scottish independence meant there was virtually no change in the relationship between Scotland and the other parts of the former UK how could it really be described as independence at all? It would be like leaving home and staying at the same time.

There was an element of doublethink in the SNP argument. Independence was this marvellous thing that would make life wonderful for all of us, but we wouldn’t notice the difference. Independence supporters wanted it both ways.

Time has moved on and so have the circumstances. Britain has left the EU and the SNP plans to join. It is hard now to argue that independence would not involve a big change.

SNP policy is to use the pound unofficially for the foreseeable future. I’ve never quite understood how this could be compatible with EU membership. The condition for joining the EU is to promise to use the Euro and the condition for promising to use the Euro is that you have your own currency. How then could Scotland join the EU while using the currency of a non-EU member?

But let’s imagine that Scotland could somehow be given a dispensation by the EU to join the EU while using the pound. This would mean that Scotland’s monetary policy was being determined by the Bank of England while its trade policy and much else besides was controlled by Brussels. But what if monetary policy and trade policy were incompatible with each other because the former UK and the EU were going in different policy directions? Poor Scotland would resemble a child in a tug of war after a divorce. It would require the wisdom of Solomon to divide us. Perhaps he would cut us in half.

More importantly if the point of independence is for the Scottish Government to control everything, it would have failed rather spectacularly. The two most important things that a country can control are monetary policy and trade. Control of these are the key to controlling everything else because decisions on monetary policy and trade influence a country’s prosperity. But if you can’t influence your own country’s prosperity, what can you do? Fiddle until Scotland burns?

Scotland would then gain very little power and influence over the issues that matter. But what would we lose?

Scottish nationalists take their ideal of independence so seriously that they frequently maintain that after independence Scotland would have to accept not one penny of the UK’s national debt, but even so the British Government would have to continue to pay our pensions because we would be British citizens.

At present we pay National Insurance and in theory because of this we get various benefits including access to health care and a state pension. But National Insurance is just another name for tax. It doesn’t go into a big pot from which benefits are paid. These are paid from present day taxation.

If former UK taxpayers paid the pensions of British citizens living there it follows that Scottish taxpayers must pay the pensions of Scottish citizens living in Scotland. It could not be that a Scottish citizen could get one pension from the former UK Government and another from the Scottish Government. It is going to be necessary to choose.

Former UK taxpayers could not be expected to pay for Scottish citizens after independence. To suppose that they would is to want to be independent and not independent. For this reason, the former UK Government would have to have a means of preventing Scottish citizens attempting to have the benefits of both Scottish and British citizenship. The logic of Scotland being independent is that Scottish citizens would have to give up their British citizenship.

It would be untenable for all Scottish citizens to be British citizens anyway. The population of an independent state cannot be citizens of another state without the distinction between these two states dissolving. If every Portuguese citizen was a Spanish citizen, there would be only Spain, because all of the Iberian citizens would belong to Spain. That is what citizenship is. It means belonging to a state.

The idea that Scotland could leave the UK while refusing to accept a proportional share of the national debt is a prime example of Scottish nationalists failing to think through the logic of their argument. If Scotland could do this, then so could Texas, Bavaria and anywhere else that liked the idea of a debt free life. In order to avoid debt repayments, parts of nation states could secede from each other and then re-join magically debt free a year later. Markets would quickly see through this and would accurately describe such actions as a default.

If it were possible to avoid a share of debt in this way, then the only logical response that UK could take would be to join the USA and Germany in forbidding secession.

Scottish nationalists do not in fact want the Scottish Government to control everything. In supporting SNP policy to use the pound unofficially while joining the EU, they in fact want the Scottish Government to control nothing of importance. But the cost of this would be high indeed. We would lose much and gain little.

We have a currency union which works because there are fiscal transfers across the UK. This would cease to exist damaging the whole British economy leaving Scotland’s use of the pound tenuous at best. We would have exchanged unreliability and uncertainty for three-hundred-year-old currency that is as “safe as the Bank of England”.

We have a system of benefits and a National Health service that every British citizen has a right to access no matter where we live. This would cease to exist. Scots could not be allowed to access benefits as we do at present across the UK. We cannot expect to retain the rights of British citizens when becoming citizens of somewhere else. That isn’t independence.  

EU membership would mean Scotland’s trade policy would be both set by the EU and would be different from the former UK’s. This would inevitably mean a regulatory border between England and Scotland that would damage Scotland’ trade with our greatest trading partner at present and given that we would be citizens of a different state we would have no more rights to live and work in the other parts of the UK than someone from Japan.

Scottish independence would be theoretical and limited in terms of independence, but practical and very noticeable in terms of the changes to our daily lives.

Independence supporters like to think of their fellow British citizens as mugs. We’ll just walk away without paying a penny, and they’ll keep paying our pensions and treating us as dear friends and cousins with the same rights we enjoy right now. This isn’t how the world works.