When Nicola Sturgeon addressed the SNP conference last week, she spoke with the sangfroid of a leader who knows she has the total confidence of her party. “They are utterly terrified by the prospect,” she said, “that when we look outwards, we see all around us evidence right there in front of our eyes… independence works.”
Never mind that comparisons to other small Northern European countries are well worn. Nor that her predecessor as first minister, just the day before, referred to the lack of progress on Scottish independence as “Groundhog Day”. Sturgeon has a plan and a strong pandemic track record. She has a mandate and a willing coalition partner in the Scottish Greens. Her chief internal opponent, Alex Salmond, has done her a favour by siphoning off the radical element from her party to form a new one, leaving a rump of SNP members to hang on her every word.
What she needs now is evidence – evidence that independence works in practice. It’s for that reason that last week’s SNP conference was accompanied by the intriguing announcement that Holyrood would be soon setting Scottish civil servants to work on a new “prospectus” for independence.
So what does that mean exactly? The last time the workings of an independent Scotland were fully considered was in 2013, in a white paper proclaimed by Salmond as “the most comprehensive blueprint for an independent country ever published.”
Across 670 pages it proposed, in exhaustive detail, a vision for Scotland’s economy and society outside of the United Kingdom. The electorate ordered over 100,000 copies. It’s probably one of the most widely read political documents in recent British history.
And yet, despite the demand, it did not serve the cause of independence quite as well as Salmond had hoped.
Hastily put together in the six months after Westminster passed a Section 30 order, Scotland’s Future was quickly turned over by the Better Together campaign: Alistair Darling denounced it as “thick with false promises and meaningless assertions”. Statistics on Scotland’s economy were picked out and trampled on. The polls for “No” surged.
In 2021 there is, once again, an appetite for precise detail about what independence might mean in practice. One poll in May found that on issues such as the English border, Scotland’s security arrangements, tax, currency, EU membership, and UK negotiations, fewer than a third of Scots felt confident about knowing what would happen.
Calls have steadily grown louder for the SNP to “open the books”. Sturgeon is now taking the gamble to invite scrutiny once more. But how precise will this document be?
“I think it’ll be a very different kind of white paper,” says James Mitchell, professor of Public Policy at Edinburgh, “I don’t think it will have the detail we saw in 2013. And I think the campaign will be a lot more emotional and populist – on both sides.”
That would certainly be in keeping with the times. Let’s imagine, though, that Westminster submits to a referendum (or the SNP takes the issue to court and wins) and that a similar paper is eventually produced.
How will it reframe the key questions of Scotland’s future? Since 2014, seismic changes including coronavirus, Brexit, and the climate crisis have rendered parts of the previous plan obsolete – and in need of attention. Here we examine five key issues.
“Following a vote for independence the Scottish Government will immediately seek discussions with the Westminster Government, with member states and with the institutions of the EU to agree the process whereby a smooth transition to independent EU membership can take place on the day Scotland becomes an independent country.”
– Scotland’s Future: Your Guide to an Independent Scotland, p.220
The 62 per cent of Scots who voted to remain in the EU may feel an acute sense of missed opportunity reading this. Post-Brexit, a “smooth transition” will be anything but. According to Kirsty Hughes, Director of the Scottish Centre on European Relations, “even on day one, you’re already thinking about some cross-country agreements that will need to be negotiated.”
Would Scotland linger for a few years within the EU-UK Trade and Cooperation Agreement? For that, it would need the approval of both Brussels and Westminster (something unlikely to be forthcoming during a referendum campaigning period).
In the event of a “no deal” exit from the TCA, Scotland might seek to acquire an Association Agreement with the EU. But there are issues there, too: while informal talks may precede independence day, such an agreement could only be formally negotiated once Scotland is a third country.
And in the interim? “I suppose it’s a WTO border in either direction, UK and EU, just for a few months,” suggests Hughes, “unless you’ve negotiated some temporary customs union with the UK.”
There’s a familiar sense of intractability to it all. For instance, what happens if EU markets open up to Scotland? Would that necessitate a Hadrian’s wall of customs and regulatory checks across the middle of Britain? It’s a pressing question given that 60 per cent of Scotland’s exports* go to the south. It needs an answer.
“Scotland is rich in energy with around 25 per cent of Europe’s offshore wind and tidal energy potential, and 10 per cent of Europe’s wave potential. It is estimated that there could be up to 24 billion barrels of recoverable oil and gas remaining in the North Sea with the potential for production to continue for decades to come.”
– Scotland’s Future: Your Guide to an Independent Scotland, p.88
The 1980s oil boom in Aberdeen is a distant memory. Scotland’s share of North Sea oil and gas tax receipts fell by around half in 2019/20 to just £724 million. Further exploration of the North Sea hasn’t paid off and is politically, not to mention environmentally, hazardous. Tensions over granting an exploration permit for the Cambo oilfield off Scotland’s north coast could yet derail the newly formed SNP-Greens coalition, with the Scottish Conservatives forcing a vote on the matter this week.
Those issues aside, Scotland is well placed to go cold turkey on its oil habit: in 2020, more than 97 per cent of Scotland’s electricity demand was met by renewable resources. Any future prospectus would surely make hay of Scotland’s potential to become the world’s pre-eminent zero-carbon country.
How does Scotland’s renewable revolution affect the balance sheet? According to the calculations of energy expert Chris Goodall, the maximum size of the offshore wind opportunity suggested by the Scottish government would be worth approximately £25bn, or around 17% of current Scottish GDP.
For comparison, the total value of North Sea oil and gas to Scotland today is about £9bn or 6-7 per cent of GDP.
“By independence in 2016/17, Scotland’s fiscal deficit is forecast to have fallen to between 2.5 per cent and 3.2 per cent of GDP, assuming that we take on a population share of UK public sector debt; with a historic share of UK debt, our deficit is forecast to be lower still, at between 1.6 per cent and 2.4 per cent of GDP. By contrast, the UK is forecast to run a deficit of 3.4 per cent of GDP in the same year.”
– Scotland’s Future: Your Guide to an Independent Scotland, p.55
Scotland’s budget deficit in 2020–21 was a staggering 22 per cent of national income. Even in the context of a global spending spree, that’s a challenging figure.
As the effects of the Covid-19 crisis recede, it will shrink. But Scotland’s deficit is still predicted to remain around 6 per cent higher than the UK as a whole.
There’s a faction within the SNP that openly acknowledges that a deficit in the double digits cannot be sustained long-term, and that some kind of fiscal consolidation will be required down the road – not least if Scotland wants a shot at rejoining the EU.
A report in 2018 by the party’s Sustainable Growth Commission is described by the Institute of Fiscal Studies as being “admirably upfront” on how that deficit might be reduced, although it shied from using the word “austerity”.
But the winds of fiscal policy have changed since then. This year, the party’s Social Justice and Fairness Commission released its recommendations for a Scandinavian-style, high-spend “wellbeing” economy.
Although the report’s co-author Neil Murray MSP insists it’s “not an economic report,” it nevertheless makes suggestions that point to more public spending, not less: Universal Basic Income, a not-for-profit social care system, and the decriminalisation of drugs all feature.
“It wouldn’t surprise me if they push both narratives to different parts of the electorate,” says David Phillips, Associate Director at the IFS, “We saw how that worked with Brexit – it meant different things to different people.”
“While the Scottish Government recognises the political and economic objectives of the Eurozone, an independent Scotland will not seek, nor will we qualify for, membership of the Eurozone. Scotland’s participation in the Sterling Area will not conflict with wider obligations under the EU treaties.”
– Scotland’s Future: Your Guide to an Independent Scotland, p.222
Does Sterling still have its shine? In 2013, there was a confident assertion that Scotland would continue to exist in a monetary union with the rest of the UK and use the pound. The Bank of England would still be the central bank but Scotland would have a say in monetary policy.
Parts of the independence movement now argue against being subject to the whims of another central bank. They say that Scotland would fare better with a currency of its own.
“The key risk of that proposition is that the currency will potentially fluctuate in value and is very likely to depreciate against the pound sterling,” says Professor Alan Sutherland, a currency expert at the University of St Andrews, “but you could also argue that’s just part of the natural adjustment process of becoming an independent country.”
If true independence means monetary independence, perhaps it’s a risk worth taking. There is no reason a government assessment of the merits and flaws of an independent Scottish currency couldn’t start today. And yet, it hasn’t.
“One of the major gains from independence for Scotland will be responsibility for our own immigration policy. Currently immigration is a reserved matter, and the Westminster Government’s policy for the whole of the UK is heavily influenced by conditions in the south east of England… Scotland’s differing demographic and migration needs mean that the current UK immigration system has not supported Scotland’s migration priorities.”
– Scotland’s Future: Your Guide to an Independent Scotland, p.267
If anything, Scotland’s demographic challenge has worsened since 2014. Last year, the country recorded the fewest annual births since records began. Even before the pandemic, statistics showed an average of 10,000 more deaths than births per year.
All – yes all – of the country’s population growth over the next 20 years is projected to come from inward migration. If current trends continue, migrants to Scotland will tend to be young, skilled, and crucially employed in Scotland’s seasonal industries.
But, as the Scottish government has already observed, the UK’s exit from the EU presents a grave danger. It estimates that the impact of the UK’s new immigration system would be an overall reduction in overseas net migration to Scotland of 30-50 per cent. And Covid isn’t helping either.
The dissonance between Scotland’s need for migrants and Westminster’s policies is not lost on Scots. Earlier this year, Glaswegians rejoiced as two men detained by UK Immigration Enforcement were released back into their community after a day of protest by hundreds of locals.
The subtext of that scene was that Scotland’s people not only recognise its migrant population as neighbours – they see them as integral to the country’s future, whether independent or not.
The SNP has confirmed plans to hold a second referendum by the end of 2023, with the caveat that the Covid crisis is under control by then. Draft legislation has yet to make its way through Holyrood but with the support of pro-indy coalition partners the Greens, a bill would likely pass. As for when and whether a formal request to Boris Johnson to hold a referendum will be made – that’s another question. The sound bet is it would likely be refused, opening up the possibility that the matter is taken to the courts.
Sturgeon has vowed that the choice for Scottish voters, when it comes, will be a fully informed one. This time around, she has the time and backing to build a thorough, facts-based case for Scotland to go it alone. She has rallied the trust of her party, now it is her ambition to do the same for a safe majority of the Scottish electorate. A new prospectus is a welcome first step.
Photograph by Matthew Lloyd/Bloomberg