Daily Archives: August 8, 2014

If there is a Yes vote to Scottish independence, what is ‘the UK interest’?

A key feature of the currency debate has been the argument that the UK would reject a currency union because it ‘would not be in the UK’s interests’, which has prompted the argument that the Yes campaign (focused on Alex Salmond in particular) has no ‘plan B’. The argument seems to have a lot of traction, largely because we are considering each referendum issue individually. If we consider these issues collectively, as part of a post-referendum negotiation, the picture becomes less clear. As the representative of the rest of the UK, the UK Government has a huge number of interests to protect and, crucially, they may often be contradictory. A negotiation becomes complicated when each side decides which issues represent their priorities and which points they are willing to concede to secure those priorities. In that sense, it makes little sense to talk of the ‘UK interest’ as if it were an absolute. Rather, it is in the eyes of the negotiators and their perception of the views of the people they represent – and it could quite easily change during negotiations.

The debate, so far, operates on the assumption that the UK Government is so powerful that its interests and priorities will prevail, with the Scottish Government forced to accept anything that comes its way and rely on the UK’s benevolence for help with the EU. I just don’t see it working like that, for two main reasons:

1. The Scottish Government does have some cards, and the Yes campaign has chosen to accentuate some of them, including its share of the UK debt (and assets) and its influence on the future of Trident in Scotland. Whatever we think of the likelihood of a Scottish Government refusing to share the UK’s debt or insisting that Trident is removed from Scotland, we know that the issues are important enough to make the UK Government jumpy – particularly since it has not secured an agreement from the Scottish Government, on either point, before the vote.

2. As we have seen in the discussion of the Scottish currency, they key issue is a general sense of public and economic uncertainty: ‘the markets don’t like it’ and, crucially, governments don’t like to contribute to it (consider, for example, how jumpy people were during the very brief coalition government negotiations). So, it may be ‘in their interests’ to secure a compromise deal quickly than a long-drawn out victory. We assume that governments want to look strong and uncompromising, to satisfy their potential electorates, but they also want to appear to be competent.

Consequently, I’m surprised that so few people analyse critically the ‘UK interest’ sound bite whenever they hear it. There is no such thing.

UPDATE:

These tweets, one linking to two stories in the FT, suggests that a SG would have fewer cards because the UK Government has effectively given up on Scotland’s share of the UK debt. Wouldn’t it be nice if we knew it for sure?

and here is a small thread on likely rUK opposition to a currency union (click on the date for the link to the threads):

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