Wednesday, September 10, 2014

Don't Leave Me This Way: Thoughts on the Scottish Referendum

All of a sudden, the Scottish referendum looks like it could cause an earthquake in the British political system, and indeed in Europe as a whole. At the very least, it is shaking the foundations of the UK establishment in a way we haven't seen at least since the MPs expenses scandal in 2009. The sight of the English leaders of the three main British-wide parties hurrying up to Scotland to appeal for a No vote reveals a lot about how this country works.

First, it shows the remarkable complacency that characterised the 'No' 'campaign' until last week - no real attempt was made to cast the Union in a positive and forward-looking light - if anything the message was: we know the UK is lousy, but independence would be even worse. Don't get ideas above your station.

Second, if they seriously think that these three products of the English elite class can convince wavering Scots to stay in the Union, they surely are making a big mistake. Clegg, Cameron and Miliband in their different ways are as out of touch as they could be with the British population in general, never mind Scotland.

Third, we can see how rarely our politicians actually ever make the attempt to understand what people want and why. Most of the time political campaigning here is about negative messages about opponents, threats of the terrible things that might happen if some popular policies were ever enacted, and manoeuvring to get the largely foreign press barons to offer their support (which thankfully is less and less important is newspaper circulation declines). The UK is held together by fear and apathy and it takes a moment like this - produced by David Cameron's unique mix of short-term opportunism and total detachment from popular sentiment - to show that most of us really don't like the way the country is governed.

The referendum has given the Scots the chance to do what many of us in the rest of the Union would love to do: defect from this elitist, unrepresentative and often incompetent political system. Fortunately for the Scots, a distinct national identity and a separate territory make this possible. For the English, anti-Europeanism seems to do the same job - after all, apart from immigration, there is no real policy issue determined at the European level that registers in the popular consciousness. When politics falls short, national identity can provide a focus for discontent and desire for change.

Very often though, nationalism offers largely delusional answers to our problems. In the case of the UK and Europe, Brexit would effectively mean that we would get roughly the same EU policies we get now, but not be allowed to vote on them (a 'fax democracy', as the Norwegian Prime Minister once put it). For Scotland, independence would have similar consequences. Scotland is so obviously interdependent with the rest of the UK that exit is a fantasy: as an independent state, Scotland would have the pound, the Queen, an open border with England and probably still a large UK military presence as part of its NATO contribution. Whatever independence it would gain would be pretty similar to what it already has: the right to spend its allocation of UK government spending as it wants and legislate over most areas of domestic social and economic policy (within the framework of EU law).

The big difference would probably be fiscal, in that rather than cashing in the Barnett Formula bonus in Westminster's allocation of public funds, Scotland would take oil revenues in directly. Whether or not Scotland would be better off under this arrangement is very hard to tell: it depends on very uncertain estimates of future UK public spending and future oil production and prices. Whichever way it plays out, managing what would become in many ways an oil-producing economy (especially since banking, Scotland's other big productive sector, would be pretty likely to move South) is a complicated business when you lack your own currency. The advantages of the oil money being recycled through Westminster is that it smoothes out the very volatile behaviour of oil revenues. Provided a beneficial settlement with the rest of the UK could be reached, Scotland would probably be better off in a fiscal and monetary union with the rest of the existing state.

Rationally, a very narrow No vote could end up being best for Scotland. It would suddenly have significantly increased bargaining power, and could use it to secure a more substantial form of fiscal independence which could involve some kind of guarantee that it gains most of the benefits of North Sea oil whilst maintaining complete control over how the money is spent. A Yes vote would present Scotland with the tricky business of creating a new state with, almost certainly, a rather less benign attitude from the rUK, which essentially holds all of the chips. It could very quickly get quite nasty and the financial turbulence we're starting to see would be an awful lot worse. With a strong but not victorious Yes vote, UK politics suddenly has to sit up and take notice, and this has already happened, with Cameron and Miliband eschewing the pointless debating society antics of PMQ in order to actually leave the Westminster bubble and make the case for belonging to this country.

There is a broader message in all this for the rest of us. Sitting moaning on our sofas about how much we hate our politicians will make no difference at all. Threatening major political upheaval will. UK politics as become a kind of elite game which can only survive with current levels of disengagement and apathy. Unfortunately it seems to be easier to mobilise around divisive and visceral national identities, than around concepts like social justice, environmental protection and democratic participation. But in a democracy, organised political action will always make a difference, and the powerful expression of popular demands can't be ignored.