The Case in Summary

"For too long, the referendum debate has been presented as one side representing Scotland and the other side representing Britain.  In fact, the real debate is between two Scottish visions of Scotland's future – the nationalist one based on the breaking of all political links with the UK and our vision based on a strong Scottish parliament backed up by a system of pooling and sharing risks and resources across the UK."
Gordon Brown, 21/04/2014

There will be many detailed posts to come so to help keep a logical thread in place I will attempt to maintain a simple summary of the arguments as I understand them here. I'll try and edit on an ongoing basis, amending as necessary, responding to comment where appropriate, altering my view if persuaded. This is a work in progress, not a completed thesis!


1. We Should Decide who Governs Us (summarises We Should Decide who Governs Us)

"The people of Scotland will always get governments we vote for"
SNP White Paper, part 1 (first bullet point)

This seems to be the most often cited reason for voting for Independence; on the surface hard to argue with but if you scratch the surface of that argument (which I do in some detail, here) you might conclude;

• Making a country smaller does not make it in some way "more democratic", it just makes it smaller. That might be better or worse for a variety of reasons, but being "more democratic" will not be one of them.
• "We" (the people of the UK) do decide who governs us: it's a representative democracy
• In a representative democracy, no constituency always gets the government they vote for
• Of course Scotland is more than "just a constituency": that's why we have a devolved Scottish Parliament
• We make a trade-off between the scale of our democratic State and the extent to which we get what "we" want all the time: otherwise why not "Independence for Shetland"?
• It is naive in the extreme to point at every political failing in the last 50 years and blame it on "Westminster politics". In 13 of the last 17 years the UK has been governed by the party Scotland voted for; we can't pretend failings in that time would not have happened if only the Scottish vote had counted

A point that needs clarifying: This is not a vote for self-determination. The vote is self determination, we - the people of Scotland - are exercising that right, not voting for it. We are voting to decide if we'd rather be separated from the Union ("free to pursue 'our' own path") or remain within the Union ("continuing to benefit from pooling and sharing risks &  resources across the UK").

There is a sensible argument that Scotland is so consistently Left-leaning that we could form an Independent State that would stand as a beacon for social justice around the world (and get involved in fewer wars). It's a good argument if;

• If it is believed with a strength of conviction that justifies the case despite the loss of the benefits of Union, not in denial of them
• If you believe that the politics of an Independent Scotland will be immune from the failings of the Politics of Westminster (they'll still be politicians after all)
• If your aspirations for a more socially just society stop on this side of Hadrian's wall
• If you believe the the aspirational vision presented in the White Paper is actually achievable in any meaningful sense
• There are posts here on Scotland & the EU, Trade with rUK and more to come covering specific areas where the White Paper simply fails to recognise (let alone address) the issues
• Look in the White Paper and see if anywhere the economic implications of the promises made are actually added up. I've looked, I can't find it anywhere. That is an extraordinary failing on the part of those trying to make the case for breaking the Union.

2. We want our fair share of Oil Money (Summarising  Oil & Gas (Part I): For Richer, For Poorer and Oil & Gas (Part II): The Oil Fund)

This one is surprisingly straight-forward when you look at the figures dispassionately.  The numbers used by both sides of the argument are the same, and they show;

• Scotland receives a higher level of public expenditure per head than rUK which almost exactly compensates for the higher tax revenues generated per head even if you give Scotland her geographic share of oil tax revenue
• An independent Scotland (with our geographic share of oil tax revenue and making the same levels of public expenditure as we have been) would be running a higher per capita deficit that the UK
• Comparing *percentage* of tax revenue versus *percentage* of public expenditure is simply not the right way to look at it (they are percentages of different numbers). It's the *absolute* per capita numbers that count as any economist (or honest politician) knows.
• It is demonstrably incorrect to claim that Scotland has not had its "fair share" of the oil revenues generated

All of the above is based on the premise that to show Scotland has been treated fairly within the Union requires us to show that Scotland effectively got to keep its oil revenues in the form of greater public spending. I argue that's not an appropriate way to consider the analysis historically as a part of the Union with the commitments to pooling and sharing that implies.  For me it's like saying "If I'd known I had that winning lottery ticket in my pocket I'd never have married you".

Questions about the strategy of what reserves to exploit when and whether a (UK) oil fund should have been established are separate from this. One of the arguments put forward by the Scottish Government is that we should have had an oil fund, that if we had we'd now be as wealthy as Norway.  That's all well and good but - at the risk of stating the obvious -  to have created an Oil Fund we'd have needed to not spend the money.  I cover this in detail here: Oil & Gas (Part II): The Oil Fund

Norway founded their "Petroleum Fund" in 1990 and have made some tough choices to be able to fund it: the cost of living in Norway is 40% higher than the UK and (for example) the healthcare system is not free at point of use and compares very poorly to the NHS.  Now don't get me wrong - the OECD better life index shows Norway comfortably out-performing the UK on most measures.  My point is not that Norway made bad choices but rather they made tough and at times unpopular choices to get to where they are.  It's all very well - with the benefit of 20:20 hindsight - to say "we could have had an oil fund". The question is not who is saying that now but who was saying that then; can we really assume that an independent Scotland would have made different choices?

So to see if we might have done I checked through the SNP manifestos back as far as 1997 (there is a limit to the suffering I am willing to go through for this blog and that was it).

I found one mention of the possibility of a Scottish oil fund in the 2005 manifesto; nothing before and nothing after. Norway is mentioned once in the 1997 manifesto and only reappears in 2007 (when it is mentioned 5 times). The first mention in Hansard is an early day motion in January 2002.  To put the level of noise made about an oil fund into context: my Hansard searches turned up 68 results relating to "Oil Fund" compared to 674 results relating to "Scottish Gaelic".

I think we can conclude that the Oil Fund about which the SNP are so keen to talk now wasn't very near the top of their priority list when it could have actually made a difference in the 1990s.

So it's hard to argue that an independent Scotland would have had the political vision and conviction to make the sacrifices required to build an oil fund; we can't credibly say "we'd have had an oil fund if only it hadn't been for pesky Westminster". We didn't make the sacrifices at the time, we spent our share of the money. Should've, would've, could've.

Of course all of this is of academic interest only. The past is the past; Time's arrow flies and we can only change what's in front of us.

So what relevance is the Oil Fund debate to the future? Vote for independence and we will have an oil fund, right? Well, not quite.  The relevant passage from the White Paper is extracted below

Let's just pick out the key words: "will be started once Scotland's overall budget deficit is reduced to below the level of long-run economic growth and when debt is on a downward trajectory". That hasn't been the case for any of the last 10 years and it's hard to seeing it being the case for an independent Scotland any time soon.  If there is an opportunity to build an oil fund in the future then that opportunity will exist for the UK as much as it would for an independent Scotland. It's not an independence issues, its a broader question of political will and vision, of whether "we" would be willing to sacrifice "jam today" if we face the choice again.  For reasons outlined elsewhere in this blog, the economic capacity to build an Oil Fund in the future is more likely to exist for Scotland as part of the United Kingdom than for an independent Scotland no longer enjoying the economic benefits of Union.

3. Trading with rUK (Summarising  Independence & Scotland's Trade with rUK.)

Two-thirds of Scotland's exports go to rUK ("rest of UK); as a direct consequence many jobs in Scotland are contingent on seamless trading between Scotland and the UK. In fact (as elaborated in my post Business for Scotland: Who are they?) current best available estimates are that 37% of jobs in Scotland depend on links to the rest of the UK.  That independence will impact that trading relationship is undeniable, the only question is how much and in return for what upside.

One of the underpinning drivers for the Independence case is to allow divergent approaches to the EU; this inevitably creates risks for those trading between an iScotland and rUK and therefore for employment in Scotland.

• It becomes likely (it can be argued as inevitable) that we will have separate currencies within a few years because Sterling-zone participation is incompatible with the conditions likely to be imposed for an iScotland to negotiate continued (constructive) EU membership.
• This point is important: the White Paper asserts that an iScotland can negotiate to remain in the EU without making any concessions on Euro or Schengen Area participation, while retaining the UK Rebate and other opt-outs and simultaneously improving our share of CAP payments, extending fishing rights etc. This is plainly unrealistic; if you disagree please read my detailed analysis here: Independent Scotland and the EU.
• Independence creates the conditions where it is possible for one of iScotland or rUK to be in the EU whilst the other is out; where sales from a Scottish businesses to rUK could become cross-border from an EU perspective. That this "one in, the other out" scenario would make trade with rUK more difficult than it is today is obvious. To be clear; it's not inevitable, but it is a significant risk that only a pro-independence vote exposes us to.
• The line that "the biggest risk to Scotland with respect to the EU is an in/out referendum" is often used in this context. Let's think this through;
• Independence doesn't protect Scotland from the major downside of a possible "out" vote. Excluding Oil & Gas, Scotland exports four time as much to rUK as it does to the rest of the EU [Scotland's Global Connections Survey 2012]
• If one was to pursue a purely rational self-interest argument on this point alone: surely better to be "in the UK outside the EU" than "inside the EU outside the UK"?  
• I want my vote to be able to keep the whole of the UK in the EU (by voting against the parties pushing for a referendum and/or by exercising my vote in such a referendum if it ever takes place). At the risk of stating the obvious; the Scottish electorate lose any say in that matter if we vote Yes on September 18th
• Assuming both iScotland and rUK remain in the EU (IMHO the likely end-game under an independence scenario) the concessions an iScotland will have had to make (nobody credibly argues concessions won't be required) can only create complications to trade with the UK. 

Continuing to physically ship goods "across the border" is vital to our economic success; a Yes vote would fundamentally change the risk profile of many Scottish businesses. This is not a marginal issue; this is about employment in and the wider economic success of an independent Scotland.

To be absolutely clear: there are other arguments for and against (I will try and cover many of them) but for me this issue is the one which seems least well understood in the debates I have participated in and witnessed.  I am NOT saying that an independent Scotland couldn't continue to trade with rUK and EU, I'm NOT saying an independent Scotland couldn't succeed on the global stage: all I am saying is that I am convinced that Scotland as part of the Union will be more successful than Scotland outside of it because of our seamless trading links with rUK.

Any credible argument for Independence must be made despite these risks, not in denial of them.

If you're not convinced, please read the full post here: Independence & Scotland's Trade with rUK.


4. Scotland and the EU (summarising Independent Scotland and the EU)

The following are Verbatim quotes from the White Paper (the emphases are my own)

• "While the Scottish Government recognises the political and economic objectives of the Eurozone, an independent Scotland will not seek membership"
• "Will Scotland be forced to join the Euro? No"
• "Nor will we seek membership of the Schengen area."
• "Would an independent Scotland be forced to join the Schengen Agreement? No."
• "the Scottish Government will not seek to re-open budget discussions until the next funding cycle ... the UK rebate will be a matter for agreement between the Scottish and Westminster Governments"
• "We will seek to negotiate an uplift in CAP Pillar 2 funding"
• "will give Scotland the opportunity to take a leadership role in reforming the Common Fisheries Policy"
• "the Scottish Government will seek to retain the current flexibility to opt into new measures on Justice and Home Affairs."

You will notice a lot of "seeking to" and "not Seeking to". Nobody should (or reasonably could) believe that all of the benefits and concessions "sought" will be achieved. Similarly nobody is arguing that an independent Scotland could be "forced" into anything either. It's a negotiation, Scotland can decide if the conditions placed on it to remain in the EU are too onerous, can choose not to remain in the EU, can decide to trade-off various elements of the wish-list in return for the benefit of remaining in the EU. It's a negotiation.

To understand the context of this negotiation let's accept the most favourable scenario, the one the SNP base their case on: the written evidence provided to the Scottish parliament by Graham Avery. Verbatim quotes (again emphases my own):

• "In accession negotiations with non-member countries the EU has always strongly resisted other changes or opt-outs from the basic Treaties; at this stage it remains to be seen what might be requested by Scottish representatives concerning the euro or the Schengen area of free movement of persons."
• "it remains to be seen whether Scottish representatives would request changes in the application of EU rules and policies, for example the fisheries policy or payments into the EU budget"

If you read the White Paper and listen to the rhetoric used in debate, these issues don't "remain to be seen". It appears Mr Avery's case is not predicated on the same assumptions as the White Paper; or at least he has been careful to distance himself from those assumptions when making his case for a possible negotiated remaining in the EU. I personally think those statements are a tacit admission on his part that the conditions "sought" in the White Paper are clearly unachievable, but maybe I'm reaching a little there. Form your own view.

The SNP often adopts the line "we couldn't be made to join [Eurozone or Schengen]  because we don't meet the conditions".  Yet. We don't meet the conditions yet. Given all new member states have to join, it seems pretty much inevitable that legally binding commitments will be sought from an Independent Scotland to join these arrangements within a set period of becoming a new Member State.  As I have mentioned elsewhere on this blog, Chic Brodie (SNP MSP) offered, during a public debate, that in his opinion commitments to join the Euro would indeed inevitably be required. 

Let's move on to the the specific process required, again to quote Mr Avery's paper:

• "a modification of the EU Treaties would be necessary"
• "[Scotland] could indicate its wish for Scotland to remain in the EU, and this would lead to negotiations in an appropriate framework to prepare the necessary modification of the Treaties. Proposals would be submitted for approval to the EU institutions and the Parliaments of 28 member states".

This means every one of the 28 member states has to agree to any Treaty amendments "in accordance with their own constitutional requirements" -- as I understand it that means in some cases even requiring a referendum on the issue in their own country, that it may be necessary for a referendum in France to be held to ratify the Treaty changes required.  To quote Alex Barker of the FT on "how do you revise EU treaties": "The conference of member states will have to agree each and every tweak to the treaty by unanimity. All 27 [28 with Croatia] member states hold a veto and could stop the process in its tracks."

In my detailed post I elaborate on the broader context, the stances of those we would be negotiating with. There is an excellent summary of the Member states' summarised positions (or lack of position) on the BBC website (here) or read my full post on the topic here: Independent Scotland & the EU.  I think we can achieve consensus around this point: an independent Scotland would face an almighty challenge to achieve unanimous agreement from all 28 Member states given the clear (and understandable) resistance from some.

So how is an independent Scotland being positioned for this negotiation?  As recently as April 28th Alex Salmond was grabbing headlines [Alex Salmond's fisheries threat to EU alarms industry] by claimed that 12 European nations could be barred from Scottish and Norwegian waters if an independent Scotland was refused EU membership.

How about the timing of all this? Let me quote again from the White Paper: "The 18 month period between the referendum and the planned date of formal independence provides sufficient time for discussions settling an independent Scotland’s terms of EU membership."

So there we have it. A requirement for unanimous agreement from 28 Member states, clear resistance from many, antagonistic posturing from Alex Salmond, a wish-list that even the most optimistic separatists would appear to accept is unachievable and 18 months to negotiate it. What could possibly go wrong?

As I've said elsewhere; the SNP position on this is akin to asking you to jump with them out of a plane without a parachute on the basis that you will be able to negotiate a parachute on the way down. And you'll be able to keep hold of your Gin and Tonic. We'll probably be able to get some of those nice nibbles too ...

Lets be clear: an Independent Scotland could play an important role in the EU, could 'hold its own' as an independent country.  But a thoughtful voter should, I submit, ask themselves these questions;

• Understanding the nature of the context outlined here, would we be in a better position with respect to the EU following the discontinuity and renegotiation that separation from the UK would require?
• Is it realistic to assume that an independent Scotland could both remain in the EU and achieve even half of the White Paper wish-list?
• Is it realistic that full and productive participation in the EU can be achieved without making commitments to join the Euro?

5. The Benefits of Union (summarising The Positive Case for No)

You Don't Know What You've Got. Till it's Gone

"Our two economies benefit from a flow of people, goods, investment, capital and ideas on a scale that is rare even in this era of global economic integration"
Scotland's Future: Your Guide to an Independent Scotland p.248

The quote above (from a joint statement made by David Cameron and Enda Kenny relating to British/Irish relations) is taken directly from the White Paper; my natural reaction is:

• If that statement accurately describes British/Irish relations, how much more accurately does it describing existing rUK/Scottish relations?

In addition to the economic and social benefits of this "free flow" within the Union we need to consider the "pooling & sharing" benefits most pithily summed up by the Better Together campaign:

"...our vision based on a strong Scottish parliament backed up by a system of pooling and sharing risks and resources across the UK."
Gordon Brown, 21/04/2014


Context

The pro-Independence camp often ask the pro-Union camp to be more positive; the context does make this difficult (but not impossible)

• The question has been formed as a Yes / No question; those arguing to maintain the Union are seeking the answer "No". It's quite hard to argue that case without sounding - um - negative.
• If you're arguing to change something that has worked for 300+ years then the burden of proof is yours; you are obliged to make the case for change. Pointing out that the burden of proof has not been met by the arguments presented - that the arguments simply lack logical sense, appear based on irrational resentment, involve sums that don't add up or are based on wildly optimistic assumptions - may be negative, but it's hardly inappropriate.
• Given we start with the benefits of Union, it's pretty hard to argue against separation without pointing out what will be lost, the downsides of separation. If that's being negative well - again - it's hardly inappropriate
• There's a wider, relevant point here: it's always going to be harder to get people exercised and engaged by the positive arguments in defence of the Status Quo
• What do we want?
• The Status Quo!
• When do we want it?
• errr... we've already got it
• It's possible to look at any success achieved within the Union and blithely assert "we could have achieved that without being in the Union"  (in the same way some point at any political failings in the past 300 years - there have been plenty - and say "that's the sort of thing that wouldn't have happened if we were independent").  I believe that all of the positives listed here have been at the very least helped by the existence of the Union and in some cases are achievements that would be unimaginable without it
• The benefits of Union listed here flow both ways.  How the benefits are shared is a different and wider question, touched on by this post >  Oil & Gas (Part I): For Richer For Poorer
• It can be argued that these benefits could - at least in part - be maintained through negotiation and agreement.  Where that is the case it simply reinforces the fact that these are benefits of Union; we achieve those benefits without the "arm's length" contractual negotiations that would be required between iScotland and rUK.  Anyone who believes that those contractual negotiations will be straight forward has - I would suggest - not been paying attention.

The Benefits of Union

Ironically perhaps the White Paper is a great place to look if you want to find some of the benefits of Union. If the White Paper talks of the need to negotiate agreements, divide assets, create on-going asset sharing agreements or invest in new infrastructure you will probably be looking at a benefit of the Union behind it all. The detailed post this summarises includes lengthy quote from the White Paper which I have removed here for brevity

• A single currency
• This has been such a contentious issue exactly because it is such a great example of a benefit of Union.
• There has been plenty written on this topic and I think the jury is in: at best there will be a significant economic cost to an iScotland of any agreement to "keep" the pound (or to pursue "dollarisation" whereby Scotland pegs to the pound).
• There are plenty of self-explanatory links on this topic in the Who Can We Trust section of this blog
• EU membership and opt-outs
• The EU opt-outs currently enjoyed by Scotland as part of the UK are an asset, a benefit of Union  
• I've covered this topic at great length under Independent Scotland and the EU; given the real politik of the negotiations triggered by a Yes vote it is hard not to conclude that Scotland's relationship with the EU has benefited from being part of the Union.
• Borderless Trade
• If you doubt the scale of this benefit I 'm guessing you have not been involved in making high volumes of shipments outside of the EU. For most of this debate I'm a curious observer, learning as I go; but on this topic I will claim a significant level of experiential knowledge, some of which is covered in my post Independence and Scotland's Trade with rUK .
• I cite borderless trade as a benefit distinct from EU membership itself because a "benefit of Union" is that we can't end up with a "one of us in, one of us out" scenario.
• Inward investment
• All of the above adds up to make Scotland an attractive location for inward investment.  It would be hard to dispute that sharing a currency and EU membership with the rest of the UK adds to our attractiveness as an inward investment location.
• Royal Mail
• Given Scotland's relatively lower population density (not to mention number of islands) - and therefore higher cost-to-serve - in this case there can be no debate about "who gets the benefit"; Scotland benefits from the Royal Mail's Universal Service Obligation (one price goes anywhere, meeting specified minimum service levels)
• The controversial privatisation of the Royal Mail is a separate issue (I don't like it); the USO is still protected so the privatisation issue is relevant only to the wider political arguments about independence and I'm sticking with the task in hand here: the Royal Mail Universal Service Obligation is a benefit that Scotland achieves within the Union
• A Single Energy Market
• This is a huge issue and worthy of a post all on its own. I think we can chalk the existence of the single energy market, integrated transmission networks and shared support for renewables up as a benefit of the Union.
• Global Diplomatic and Trade Network
• Scotland benefits from the UK's Embassies & High Commissions and diplomatic infrastructure. 
• The White Paper recognises the need to replicate this but suggests doing so only partially
• The BBC
• The White Paper implicitly recognises the value of this asset (although some of the more paranoid pro-independence campaigners don't) even going so far as to - hilariously - name check specific programmes that will still be available in an iScotland
• Shared Assets & Government Agencies
• At the time of writing this is a very hot topic because of disagreements about the costs required to recreate these assets and agencies in Scotland. Neither side comes out of the debate well. I expand here > Lies, Damn Lies & Cost Estimates
• Further interventions from Professor Dunleavy have left him looking somewhat - how can i put this? - less that impartial.  See Dunleavy & The Costs of Independence; its clear the one-off costs are in fact well over £1bn
• Assets and resources relevant to this include: security & intelligence, border & migration service, Motor services Agency, the BBC and its archives, systems for administering welfare & taxation, Jobcentre Plus, DWP and HMRC offices, the Crown Estate and the defence estate. It will also include assets outside Scotland in which Scotland nevertheless has an interest as part of the UK, such as the overseas missions of the Foreign and Commonwealth Office.
• Defence Alliances
• I'm too tired to work out if I think these are a benefit of Union or not. You decide
• Issues include membership of the United Nations, NATO, the Organisation for Security and Co-operation in Europe
• NATO membership for iScotland is no gimme - it's worth noting that former Secretary General of the NATO Lord Robertson of Port Ellen stated "He's taking the Scottish people for fools by claiming that [the SNP] would want Scotland to be in Nato but laying down conditions that would make it impossible. It's a confidence trick both on their membership and the Scottish people." He may have over-cooked his case in some of his statements but on this specific issue he has a point; he's been quoted elsewhere as saying "while the alliance had no issue with non-nuclear members, it had no room for anti-nuclear ones"
• Other International Organisation Memberships
• International Monetary Fund, the World Bank Group and the World Trade Organisation.
• Distinct Cultural Identity
• The Union structure has allowed Scotland to retain a distinct National identity and for our unique culture to not only survive but thrive. That we share the benefits above whilst maintaining this identity is a benefit of Union in it's own right