Financial Times

Last updated: February 4, 2013 12:37 am

UK path unclear if Scotland breaks away

By Mure Dickie in Edinburgh

When Scots enter the voting booths in late 2014 to decide the future of their nation’s three-century-old union with England, the question on their ballot papers will be a model of clarity: “Should Scotland be an independent country?”

But while the Scottish government last week accepted the straightforward referendum question proposed by an independent electoral watchdog, the full implications of the choice for Scotland and the rest of the UK are far less clear.

Pro-independence and pro-union politicians differ widely on the likely terms of any separation. And with Britain facing a possible vote on whether to leave the EU, the stage is set for a period of unprecedented constitutional uncertainty with potentially far-reaching effects on its place in the world.

Even as David Cameron, prime minister, declares he will renegotiate Britain’s relationship with the EU, Scotland’s ruling Scottish National party is struggling to reassure voters there that independence would not threaten their membership of the European club.

The SNP’s claims that Scotland would automatically stay in the EU in the event of a Yes vote have been undermined by revelations that the Scottish government had not taken legal advice on the issue and by statements from European leaders suggesting anindependent nation would have to reapply for entry.

Scottish leaders now accept that negotiations would be needed to ensure EU membership. Analysts say such talks could be tough.

Other EU states may be unwilling to extend to a “new” member the budget rebates and policy opt-outs enjoyed by the UK. And Spain has signalled concern that Scottish independence could encourage separatism sentiment in Catalonia.

“Governments facing their own breakaway regional or national movements might be tempted to demonstrate that secession isn’t easy, and has costs,” wrote Lord Kerr, former UK ambassador to the EU, in the journal Prospect.

Yet as the SNP argues, Scotland’s path would be smoothed by its relative wealth, hefty oil reserves, its laws already being EU-compliant and its political classes less sceptical of European integration than their English counterparts.

“Is anybody really credibly arguing that other parts of the European Union would not welcome Scotland with all these assets and resources and perhaps relative enthusiasm?” Nicola Sturgeon, Scotland’s deputy first minister, told the UK parliament’s foreign affairs committee last week.

Meanwhile, pro-union parties’ ability to seize on EU uncertainty as an anti-independence argument has been crippled by Mr Cameron’s pledge to hold an “in-out” referendum on Europe in 2016.

With Mr Cameron refusing to lay out his terms for Britain’s relationship with the bloc, the UK’s status in Europe appears set to be in question for years.

David Lonsdale, assistant director of business lobby group CBI Scotland, said companies want more productive political debate that will make clear what is at stake in the UK and Scottish votes.

“The EU single market is of fundamental importance to Britain’s future economic success, just as access to the UK’s large and unfettered single market is fundamental to the future economic success of Scottish business,” said Mr Lonsdale.

“Far greater clarity and certainty over the details and implications of what is being proposed will be needed well in advance of either referendum,” he said.

Those opposing constitutional change for Scotland have been heartened by polls suggesting core support for independence has fallen to less than a fifth of voters. An annual Scottish Social Attitudes survey released last month found only 23 per cent wanted Scotland to leave the UK.

Yet the polls hardly endorse the status quo. Clear majorities say Edinburgh should have the biggest say over taxes and welfare benefits, areas that will still mainly fall under London’s control after a further devolution of authority agreed last year.

Indeed, one of the costs of the clarity of the 2014 referendum vote question is that it does not offer voters the third choice of a more powerful Scottish government within the UK – an option that polls suggest would draw most votes.

Even Ruth Davidson, head of the Conservative party in Scotland and a former fierce opponent of devolution, is now open to the idea of greater powers for Edinburgh.

In a speech last month, Ms Davidson said her party needed to reflect Scotland’s “new sense of confidence” if it hoped to play a role in shaping its future.

“Scotland is on a journey,” she said. “I do not believe that the end destination should, or will, be independence, but we need to climb on board.”

This article has been amended after initial publication to correct the name of the Scottish National party.