In the first of two blogs on the Scottish referendum, Nigel Biggar makes the case for staying together. Next week, Doug Gay will lay out the argument for independence
What keeps you on the fence, undecided referendum voter? Since you aren’t already in the No camp, there’s something about the Yes camp that attracts you. What might that be?
Perhaps as a proud Scottish patriot, you feel that, when all is said and done, the Scots should govern themselves. The issue, however, is not whether Scotland should be independent, but how independent it should be. In the Union, of course, the Scots have always been somewhat self-governing – with their own Kirk, law, and education system – and with the establishment of the Scottish Parliament in 1999 their autonomy expanded dramatically to include control, for example, of the Scottish NHS.
In June you heard all three main UK political parties publicly committing themselves to strengthen Scottish self-government further. If you’re sceptical, remember that it was only two years ago that the Westminster parliament overcame S.N.P. opposition to pass the 2012 Scotland Act, which increased the tax-raising and borrowing powers of Holyrood. These will arrive next year and the year after. ‘Devo-max’ is already coming down the line.
So the real question is this: Would self-government beyond ‘devo-max’ enhance the Scottish people’s power to shape their own future? The irony is that, in one basic matter, the kind of independence that Alex Salmond wants you to sign up to would actually diminish Scotland’s power, not increase it.
Salmond is quite correct to say that the Scottish people have the right to exercise their sovereign will in choosing to keep the pound. What he glosses over is that the Scots’ sovereign will has neither the right nor the power to dictate how the remainder of the UK would respond. He argues that it would be in everyone’s interests to enter into a formal currency union. Maybe, but there are two problems with this: first, it would require Scotland to compromise its independence by suffering constraints on its tax and spending policies. Second, all the main UK party leaders have said that it would not be in the remainder of the UK’s interests to enter into such a union with an independent Scotland, and that they would not consent to it. Salmond says they’re bluffing. Perhaps, but note that Mark Carney, the Canadian Governor of the Bank of England, who has no obvious political dog in this fight, agrees with them.
Without a formal currency union, the Bank of England would set interest rates to suit the remainder of the UK’s economy, not Scotland’s. Sooner or later the situation would arise, therefore, where Scotland needs higher rates, say, to calm a property boom, but the remainder of the UK needs lower rates, say, to stimulate a sluggish economy. In that case, the Bank of England would look to the remainder of the UK’s needs, not Scotland’s. This is exactly what happened in the Republic of Ireland in the run-up to the financial crisis. The value of property there was rocketing unsustainably, because the European Central Bank, with its eye fixed mainly on Germany, kept interest rates low at 2%. The result: the Irish property bubble burst, with values tumbling by up to 50%.
As long as it remains part of the UK, Scotland has a seat at the table of the Bank of England’s deliberations, in which its needs will continue to figure. But when it leaves, they won’t. Thus an independent Scotland could keep the pound unilaterally, but only at the price of losing all control over its own interest rates. Hence the irony: more of this kind of independence actually amounts to less self-determination.
Nevertheless, perhaps you still find yourself drawn to the Yes camp, because you’re disturbed by rising social inequality and you want higher public spending and a more generous welfare state. Good. The question is how to achieve it. One way is to have everyone, especially the middle classes, pay higher taxes. The Danes, for example, pay 46-61% in income tax and are reckoned the happiest people in the world. So the Scots should certainly have the power to follow suit, if that’s what they want. Except it’s not clear they do. Since devolution, the Scottish Government has been able to increase the rate of income tax by 3%, and it will soon be able to raise it even further. So far it has declined to exercise this power, presumably because it doubts that the electorate would wear it. Still, if you want better public services, one avenue already lies wide open: lobby the Scottish Government to exercise the tax-raising powers lying asleep in its hands.
But perhaps you’re not so keen on that, preferring to believe that the Yes camp have (uniquely) figured out how to combine high public spending with low taxes. This brings us to the main field of contention in the debate: the economic prospects of a fully independent Scotland. Predictably the Yes camp is optimistic and the No camp pessimistic. Each side has been able to call down reams of statistics in its favour, and each side has been caught out making false claims.
But the reason why you might be uncertain about the economic results of independence is not only because the airwaves have been filled with various authorities making contradictory claims. It’s also because the outcome would be determined by negotiations between a separating Scotland and the remainder of the UK, which have yet to begin. In other words, plausible certainty now really isn’t possible. The contours of uncertainty, on the other hand, are clear: there’s no good reason to be confident that independence would make the Scots better off economically; there’s less good reason to be confident it would make them dramatically wealthier; and there’s some good reason to fear it would actually make them poorer. So the issue reduces to this question: Are you prepared to trust Alex Salmond’s optimism, or not?
Maybe that’s the sticking point. Your heart wants to trust him, but your head tells you not to. Yet you feel ashamed of bending the knee to ‘Project Fear’. And you wonder whether you shouldn’t just have more faith and take the brave, bold step. But let’s face it: not all faith is rational and boldness can be folly. Some things deserve to be feared. And there is more about independence that a rational voter ought to fear than the Yes camp admits.
Again, while the Scots alone could choose separation, they alone could not dictate its terms. Another party would be involved, with its own interests to look after. And it is stretching optimism beyond credibility to pretend that the interests of a separating Scotland and the remainder of the UK would always coincide. Therefore, it is a practical certainty that an independent Scotland would not get all that it wanted in the negotiations after the vote, that it would be frustrated, and that its traditional resentment of England would deepen. At the same time, most English would feel spurned by a Yes vote, find their own national identity hardening against the Scots, and be seriously disinclined to play patsy. How far the ‘social union’ between the Scots and the English would survive the post-vote wrangling is anyone’s guess. But no one with their eyes open can presume that the high degree of trust we now take for granted will survive intact.
In sum, undecided voter, you have good reason to be unsure about ‘independence’. You also have good reason to be anxious about the economic prospects of Scotland outside the Union. At the same time, you’re right to want the Scots to be able to try and engineer a happier balance between private enterprise and public goods. But that opportunity already exists within the Union, where the Scottish Government now has the freedom to raise taxes, borrow money, and increase public spending. What’s more, some form of ‘devo-max’ is coming down the road anyway. So voting No to ‘independence’ needn’t mean you’re just plain fearful. Voting No could mean that you’re canny with Scotland’ s future.
Nigel Biggar, a native of Castle-Douglas, Kirkcudbrightshire, is Regius Professor of Moral and Pastoral Theology at the University of Oxford.
Image from wikimedia available in the public domain.
