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The Bumpy Road Ahead Will Most Likely Lead To Scottish Independence

John Kay 29th April 2015

John Kay

John Kay

David Cameron anticipated that a referendum on independence for Scotland would produce a decisive No vote, damaging the Scottish National Party and burying the issue for a generation. And opinion polls suggested the odds favoured the gamble. But the UK prime minister’s judgment was mistaken, and the outcome of last September’s vote is likely to change permanently the face of British politics.

The No campaign emphasised the disadvantages of an independent Scotland rather than the advantages of a united Britain. If Scotland’s potential oil revenues had collapsed before the referendum rather than after, that argument might have been more compelling. In the event, the bullying of the later stages of the No campaign strengthened the resolve of those who wanted Yes.

To stabilise a rocky marriage, it is wiser to woo your partner with promises of shared happiness than to threaten the dire consequences of di­vorce. While the latter tactic may work for a bit, it is not a basis for a lasting relationship. Scotland is a case in point. The surge in SNP support after the referendum might have fallen back if the UK general election had been more than eight months away. As it is, every poll suggests that the SNP will win most of Scotland’s (largely Labour-held) Westminster seats in the May 7 vote.

The electoral arithmetic suggests that the opposition Labour party cannot obtain an overall majority without SNP support but might obtain one with. While a formal coalition is all but impossible, an understanding is feasible; the leftist MPs of the SNP will never vote to keep the Conservative Mr Cameron in power. So potential Labour voters in Scotland are offered the chance to elect a Labour government for the UK that is obliged to give special attention to Scotland. What is there for them not to like about that outcome?

Ed Miliband, Labour leader, says today that he would not rely on the SNP to govern the country. But on May 8 he may face a choice between becoming prime minister with their backing or rejecting their support and losing the Labour leadership. If he then opted to enter Downing Street with SNP support, he would probably ensure the marginalisation of the Labour party in Scotland, not just in this election but forever. Why would Labour do better in Scotland in 2020 than in 2015?

Perhaps a few months in office would dispel the widespread belief that Mr Miliband is not a credible prime minister, and Labour could capture sufficient Conservative seats in a swiftly called second election to gain an overall majority. But even that faint hope does not defuse the UK’s Scottish problem.

The UK government’s policy document on devolution after the referendum, ludicrously subtitled ‘An Enduring Settlement‘, is full of unanswered questions. The hodgepodge financing deal known as the Barnett formula has no objective justification. And while the principle of ‘English votes for English laws’, recognised as a consequence of the referendum, has irresistible logic, the abstruse Barnett arithmetic ensures that every UK fiscal measure has implications for Scottish finances.

It is — just — possible to visualise a UK in which the SNP is one of several power brokers in a more fragmented party system, perhaps enjoying a relationship with Labour similar to that the Bavarian Christian Social Union has long held with Chancellor Angela Merkel’s Christian Democratic Union. But such an outcome requires imagination and co-operation beyond the capacity of most of the politicians who fill our screens. The more likely outcome for UK politics, whether Mr Cameron or Mr Miliband becomes prime minister, is progress down a bumpy road whose destination is Scottish independence. Such an outcome might by that time evoke cries of relief all round.

This column was first published in the Financial Times today and on John Kay’s blog.

John Kay

John Kay is Visiting Professor of Economics at the London School of Economics and a regular columnist for the Financial Times.

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