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Short CutsPeter Geoghegan
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Vol. 38 No. 21 · 3 November 2016
Short Cuts

Brexit and the SNP

Peter Geoghegan

1185 words

In​ his recent book, The Question of Scotland: Devolution and After (Birlinn, £9.99) Tam Dalyell, for many years the Labour MP for West Lothian, identifies several points at which the march of Scottish nationalism could have been halted. His list is typically eccentric: had Willie Whitelaw succeeded Ted Heath, Scotland’s industrial base would have been saved from Thatcherism; had Geoffrey Crowther, chair of the Royal Commission on the Constitution, not died of a heart attack at Heathrow in 1972, the commission would never have recommended setting up a Scottish parliament.

For a fervent anti-devolutionist like Dalyell, the establishment of Holyrood was the British state’s big mistake and made inevitable the success of the Scottish National Party. But this is to neglect the seemingly less important developments that enabled the rise of the SNP. In 2003, for example, Labour grudgingly conceded the Lib Dems’ price for renewing their coalition in the Scottish Parliament: the introduction of the single transferable vote in Scottish council elections. Overnight, the Nationalists had, for the first time, a feasible route to local power in parts of the country, particularly urban areas, where they’d never had any success. Four years later, the SNP formed a minority government in Edinburgh. Even then Labour could have reasserted control. In 2008, its then leader, Wendy Alexander, tried to push the SNP into calling an independence referendum – ‘Bring it on,’ she said – but she was slapped down by Gordon Brown, under the advice of Alexander’s brother Douglas. Within months she was out of office, forced to resign after failing to declare a £950 donation from a Jersey-based businessman. For the SNP, even defeat has turned out to be a blessing: within weeks of losing the 2014 referendum party membership quadrupled to 100,000, heralding victory in the 2015 general election and this May’s Scottish elections.

The SNP won a third term in office on a manifesto that pledged to revisit independence if there was a ‘material change’ in Scotland’s circumstances. The following month, 62 per cent of Scots voted to stay in the European Union. The Brexit vote led many to conclude that independence is now inevitable. Nicola Sturgeon is more cautious. Her speech at the SNP Party Conference in Glasgow last month was carefully judged. A second referendum was, she said, ‘highly likely’ – the same words she’d used straight after the Brexit result. She announced a 12-month consultation on a new referendum, but that is no guarantee that one will be held: three similar consultations were held between 2007 and 2011 without a referendum being called.

The SNP’s demands have softened since late June. Days after the party conference, Angus Robertson, newly chosen as deputy leader and widely seen as a spokesman for the SNP establishment, said a deal that includes ‘safeguards’ for Scotland in Europe would stave off a second referendum. Access to the single market is likely to be the Nationalists’ main demand. But compromise seems unlikely. Theresa May entered office in July affirming her commitment to the ‘special’ Anglo-Scottish union; by October’s Conservative Party Conference, she was describing the SNP as ‘divisive nationalists’ who would be given ‘no opt-out’ from Brexit.

If there is another independence vote, the pitch will be straightforward: progressive Scotland v. reactionary Tory Westminster. The message has obvious surface appeal. The first motion at SNP conference welcomed all international citizens, a sharp jab at May’s ‘citizen of nowhere’. Scottish Conservatives, who would probably lead the unionist cause in a second referendum, look increasingly uncomfortable. The prime minister’s lurch to the right threatens their minor renaissance under the telegenic Ruth Davidson. Better Together is dead in the water. Though victorious in 2014, that coalition proved disastrous for Scottish Labour. The last thing it needs is another referendum. Many party activists say they would still vote No, but they would not, as they did in 2014, canvas hard for the union.

This might seem the time for the Nationalists to be bold, but the SNP hierarchy is divided. Some, including the former first minister Alex Salmond, predict a second poll before March 2019 – when the Article 50 process is meant to conclude – but others aren’t convinced. The expected post-Brexit spike in support for independence has yet to materialise. What’s more, a clear majority oppose a second referendum. Fatigue has set in: after decades of political stasis, Scotland has had more than half a dozen significant elections in as many years. There is another problem for nationalism: the independence prospectus of 2014 is no longer plausible. It envisaged using oil revenues to cover the expenditure involved in constructing a new state, but in 2015-16 the tax take from the North Sea collapsed to £60 million, a casualty of Saudi Arabian attempts to smother US shale gas at birth (around 100,000 jobs in the oil industry have been lost). The SNP argument that leaving the UK is the only way to protect Scotland from the chaos of Brexit is much harder to sustain when the country’s deficit is almost 10 per cent of GDP. So far, the middle classes that Sturgeon needs to sway remain unconvinced. If Britain would be crazy to cut itself off from its biggest trading partner, they ask, why would it make sense for Scotland to leave the union it does 64 per cent of its business with? It might be a mistake for the SNP to align itself too closely to Europe. Polls suggest that only around a tenth of No voters in 2014 have switched sides and almost as many have gone in the opposite direction. Around a third of SNP voters voted for Brexit, how many of them are likely to support ‘independence in Europe’?

After almost a decade in government, the SNP is a wealthy, well-organised political machine. Seizing control of Glasgow City Council in next year’s local elections is a realistic prospect, and would confirm the party’s dominance. Its conferences are no longer held in small seaside towns but in city centre auditoriums. The corporate hand was evident this year, especially in the VIP ‘lounge’ sponsored by Heathrow, the expansion of which the SNP enthusiastically backs. The tartan and tweed brigade have been replaced by slick twenty-somethings straight out of New Labour central casting. But there’s little evidence of fresh thinking. Despite some honest assessments of the party’s failings in 2014 – especially on the question of which currency an independent Scotland should use – there is no sign that changed conditions have had much effect on the SNP’s thinking on independence. The deputy first minister, John Swinney, has said that an independent Scotland would keep the pound, even if it remained within the EU.

Legally a second referendum could prove tricky, if not impossible. One alternative may be for Scotland to leave the EU with the rest of the UK, repatriate powers from Brussels to Holyrood and push for independence in the 2020s. This approach is favoured by some in the SNP, but all decisions rest with the inscrutable Sturgeon, and her husband, the SNP chief executive Peter Murrell. Tam Dalyell called devolution ‘a motorway to independence with no U-turns and no exits’. That may still be true.

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Letters

Vol. 38 No. 22 · 17 November 2016

Peter Geoghegan is rather too generous in his account of the economic failings of the Yes campaign in the 2014 Scottish referendum when he writes: ‘It envisaged using oil revenues to cover the expenditure involved in constructing a new state, but in 2015-16 the tax take from the North Sea collapsed to £60 million, a casualty of Saudi Arabian attempts to smother US shale gas at birth’ (LRB, 3 November).

First, oil revenues were required to cover not just the new state’s start-up costs but, far more important, the ongoing (and longstanding) gap between Scottish public expenditure and onshore tax revenues (over and above Scotland’s share of the UK deficit). Second, while it is true that the tax raised from North Sea oil fell dramatically in 2015 as a result of a decline in the oil price, this development merely made a bad situation worse. There was already a large shortfall between projected revenue and expenditure in an independent Scotland, based on the oil price in 2014.

The independence prospectus was fundamentally flawed in 2014 because it used a very short and atypically benign sample period (2008-13) that concealed the long-term picture, downplayed the risks of basing economic plans on a highly volatile asset, made optimistic assumptions about future oil prices, and conveniently ignored the long-run decline in the profitability of North Sea oil (and thus of any tax revenues) as a result of rising exploration and extraction costs.

All of this was pointed out repeatedly during the campaign but was generally dismissed as the scaremongering of Project Fear. In so far as the problem was acknowledged at all by the Yes campaign, it was airily assumed that any additional deficit could be covered by borrowing. While that might have been fine in principle (at least as a temporary measure to cover a temporary downturn in revenue), it was never explained in practice how an independent Scotland that was in a currency union with the rest of the UK could expect to obtain the Bank of England’s backing for taking on vast quantities of additional debt. Advocates of alternative currency arrangements, such as the unofficial adoption of sterling, euro membership or issuing a new Scottish pound, were conspicuously silent about the fact that their solution of choice would be incompatible with running a 10 per cent deficit for the foreseeable future.

In short, Geoghegan is right that a second referendum campaign will require fresh thinking in a challenging economic environment, but he is wrong to imply that this dilemma is primarily the product of changed circumstances.

Tim Gutteridge
Edinburgh

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