By Sureyya Yigit
The result of the Scottish Referendum has been a clear victory for the “No” campaign. According to provisional results, the “No” side received more than two million votes and over 55% of the total vote, with those in favour of independence numbering 1.6 million. Despite the fact that very many voters wanted independence, almost half a million more desired the union to remain intact.
The referendum campaign ultimately focused on what kind of a relationship Scotland should have with the rest of the Kingdom. In this respect, it is important to look back at the historical relationship. A vital moment that springs to mind is the enactment of the Act of Union of 1707, after which Scotland became incorporated into the United Kingdom and has maintained that status ever since.
Almost two centuries later in 1885 a reorganisation of the government took place whereby a Scottish Office was established. This governmental department was created to look into matters that concerned Scotland. Another century later, the Labour government of the 1970s proposed a devolved Scotland which would have some independence from Westminster. This was not achieved, but the Labour Party continued this pursuit and when it regained power in the 1990s it implemented this proposal, and therewith the Scottish Parliament was established in 1999.
It was precisely these developments that were used by the “Yes” campaign to support their cause. If the British government had accepted a particularly distinct Scottish dimension to policies and politics, thus providing the opportunity for Scotland to diverge from public policy which was advocated and implemented in Westminster, then that distinctiveness also ought to be implemented in the form of a separate polity.
In other words, the different policies formulated and implemented by the Scottish Office should be accountable to their electorate. That electorate was not the whole of the United Kingdom but of Scotland. Therefore, policies for Scotland should be the responsibility of the Scots and the Scottish Parliament rather than the whole of the United Kingdom and the House of Commons.
It was through such an argument that the “Yes” campaign raised the important issue of democratic legitimacy. This quite naturally was a vital aspect of the referendum. The result of the referendum, however, has made one thing very clear. Change will inevitably take place and it will certainly centre on negotiations for a Scottish Parliament with extended powers. Therefore, the United Kingdom will be embarking on a constitutional journey, though the destination is unclear.
The “Yes” campaign stressed the wealth of Scotland. Whilst nobody would deny that possessing natural resources is an advantage, equally, it is foolhardy to wholeheartedly, or chiefly, depend purely on natural resources. The ultimate reason for this being that no one can foresee precisely what the world price for oil will be in a decade or two’s time. To base public spending priorities to a great extent on how much expected tax revenue would come from natural resources would be a high-risk strategy. Certainly tax revenue from North Sea oil would help Scotland but there were also offsetting measures too.
The leader of the “No” campaign, former finance minister Alistair Darling, had highlighted this issue when referring to the prospects of an independent Scotland borrowing on the international money markets. The primary benefit the UK possessed concerned its economic strength which is supplied together by England, Wales and Northern Ireland as well as Scotland. Combining all four of these entities presented a highly viable entity on the global stage, whether expressed in the military dimension, or the political order or in the financial sphere.
London has an impact in international affairs. It has a voice that is heard in many places. Its economic weight is recognised by international markets. Due to these attributes and characteristics it is able to borrow at credible rates of interest. An independent Scotland devoid of these collective attributes that stem from unity with the United Kingdom would be hard pushed to borrow on the international financial and capital markets. This issue highlighted the significance of finance when taking the ultimate decision concerning independence.
The most important financial matter that was highlighted throughout the whole campaign was clearly the issue of currency. The “Yes” campaign had pledged throughout to keep the pound sterling. The “No” campaign had reiterated the policy voiced by the UK government that a currency union would be rejected. It was this issue that was the greatest obstacle to the “Yes” campaign. At times, they stated that, by way of negotiations, Scotland would be able to continue using the pound sterling. Furthermore, they threatened to refuse their share of the collective national debt if a currency union was not agreed to.
This line of argument ultimately proved to be unsuccessful. There is no reason why a territory seceding from a union would automatically have a right to currency union. Such an arrangement would be a voluntary agreement arrived at with the acceptance of both parties. Another alternative was voiced that Scotland could continue to use the pound sterling even if London objected.
While this sounded practically feasible, it would have meant that an independent state would have been entirely dependent on a neighbouring state in terms of monetary policy. If this were the case, one could even question to what extent such a state possessed economic sovereignty. The currency issue was the one topic that the “Yes” campaign was unable to successfully and confidently address or provide a satisfactory response to.
The three major parties of British politics offered their perspectives concerning Scotland’s future. The proposals made by them all shared one thing in particular: granting greater rights and responsibilities to Scotland. It was interesting to note that in this respect, the Conservatives were more generous than Labour. Given the fact that the subject of devolution was put forward by Labour in the 1970s and had been consistently either rejected or held at arm’s length by the Conservatives, this approach was quite the political revelation.
Labour proposed greater devolution in terms of income tax as well as other minor taxes. The Conservatives took matters one step further than Labour, though still to a lesser extent than the Liberal Democrats. They proposed that the Scottish Parliament should become responsible for setting the rates and bands of income tax throughout Scotland.
As for their junior coalition partners, they not surprisingly led from the front in terms of what they were willing to offer to Scotland. They offered full devolution in terms of income tax also mentioning that revenues from certain taxes could be directed to the Scottish budget. They foresaw a structure which resembled a federal state which has also been labelled as “devolution max” – the maximum scale that devolution can reach within a unified state. Taken a step further, what the Liberal Democrats offered to Scotland is tantamount to promising a status similar to that of individual states in the United States. Under this scheme, Scotland would have powers in the UK equitable to those held by Florida or California in the USA.
Finally, viewed from the perspective of the Coalition government, an outcome that confirmed independence would have meant a near certain expectation from several nationalist parties in different territories of the United Kingdom to receive the same treatment. People in Northern Ireland and Wales, and even in many parts of England, could also have viewed such an occurrence as a political precedent. This was not lost on the decision-makers in London, which is why they are very pleased with the result.
Despite the vote against independence, all other regions of the UK will closely observe which new powers will be granted to Scotland with the expectation that they will be replicated for themselves.