Martin Hutchison PhotographMartin Hutchison proposes a blunt and unyeilding approach to Section 30 negotiations for a second independence referendum, in order to force Scottish nationalism to confront the reality of its demands.

 

So a second independence referendum is likely to be upon us at some point in the next several years. Confound it by:

  • making the Section 30 order conditional on the final settlement between Scotland and the UK;
  • making Scotland instantly fully fiscally autonomous upon a pro-independence vote;
  • making the Scottish Government put the borrowing, tax increases, benefit cuts and service reductions in place now for the day after a pro-independence vote, and report to the satisfaction of the UK Government before the Section 30 is published;
  • allowing the 750,000 Scots-born people in the UK a vote since they are now going to be asked to show a passport when visiting their Aunt May in Dunfermline.

Labour members need to step aside from the justified anger with our two hard-line nationalist governments and their economically mutilating referendums – Scottish growth, driven by uncertainty is at a third of the UK level, and Brexit we now know means the extension of austerity by two years and £100 billion more of debt.  Both nationalisms appear happy to indulge in an assault on the general welfare of the people in terms of their living standards, their levels of employment and their joint and radical neglect of public services in the name of national self-assertion against their neighbours, their friends and our trading partners. Consequently they have never been more popular and more assured of victory in their forthcoming electoral tests.

Consequently?  Yes, consequently. It’s identity politics folks. Have a look

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English and Scottish identifiers are now the driving force of British politics. Those “Scottish, Not British” and “More Scottish than British” are the bulk of ‘the 45’ from 2014, along with a small of number of hard left voters.  They are going to vote for independence again unless and only unless their sense of virtue associated with their elemental love of Scotland can be confounded.  It can only be confounded by the Scottish Government telling the truth about the implications of independence and the interregnum between a pro-independence vote and independence.

They will only listen to the Scottish Government and no one else, so the UK Government must use its power and the moral authority granted by the 2014 55% to force the economic consequences of an independence vote upon the Scottish Government and its supporters instantly, which means it has to prepare and publish its budget and put the borrowing in place before the Section 30 powers are granted.  That point about preparing the borrowing ahead of the Section 30 is what will keep the Scottish Government honest about the economics and social welfare.  International bankers will take a view of the immediate prospects for a newly independent Scotland and charge interest as appropriate. This interest charge will need to be funded from tax increases in Scotland.

There can be an independent Scotland because of the new mood of radical defiance of personal economic interests that identity politics begets. Consider the second mutilating referendum where Com Res found:

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That’s right, only 3% of Leave voters thought the economy would improve after the UK left the EU.  They were frighteningly correct about that but what did they vote for?  To be poorer, to have fewer Latvians and likely more Englishness. And ‘the 45’ will vote for less Britishness and less economy unless that “less economy” is going to arrive instantly and fiercely upon their doorstep. Note their doorstep, not the doorstep of their neighbours, about impoverishing whom identity voters are especially sanguine.

Sanguine because ‘the 45’ are bathed in virtue, projecting that virtue onto the new Scotland which will go to heaven – Scandinavian Social Welfare and Singaporean levels of economic growth.  It is this virtue which is rooted in the moral sense of in-group loyalty which drives the emotions which underpin nationalism/patriotism and love of country.  Protecting those valiant emotions is strategic reasoning – ignore some facts, remember others, believe things which are false, believe things which used to be true but are no longer, believe in partial truths, discount all information from those who suspect your moral intuitions about in-group loyalty being virtuous as being daft.

It is this psychological kerfuffle that allows Sturgeon, shaking with emotion (see above), to admit that is absolutely critical for Scotland’s welfare that it leaves the single UK market to re-join a single EU market four times smaller in economic importance and whose membership is ten years away.  No cognitive dissonance at all, only righteous fury, protected by strategic reasoning as the monstrous harm of British nationalism swims into view.

But the monstrous harm of Scottish nationalism is invisible.  Like Sturgeon ‘the 45’ are unreachable in their identity-based virtue politics by any pro-UK campaign, by the Tories, the British Government or the international community.  For them everyone not wrapped in a Saltire is a purveyor of propaganda, false news and fake news, and they will vote to economically harm themselves but perhaps not catastrophically and not instantly.  They will only listen to the Scottish Government so the UK Government must use its power to make the Scottish government honest and not in a position to harm the remaining UK in the interregnum between an independence vote and actual independence.

The UK Government can, and should (55% in 2014), manoeuvre the Scottish Government into a position which is probably intolerable and unsustainable in rational terms (but we are not dealing with a rational thing we are dealing with emotion) and expect the Scottish Government to crawl across any minefield the UK Government presents.

Sturgeon wants to hold indyref2 when the shape of Brexit becomes clear.  Neat trick. The UK Government should pull it as well. Make indyref2 on the final settlement between an independent Scotland and the UK, negotiated in public and streamed on the internet. If not possible the UK should present a white paper of the final settlement with all the costs identified and parcelled out, the ownership of the IT systems, the future of the 50,000 jobs supported by the UK in Scotland decided and indicated – 800 jobs at the Overseas Development Administration, the Glasgow Shipyards, Rosyth, the status of the defence bases.    The bankers from whom the Scottish government would need to borrow from would take view of Scotland’s credit risk from this white paper to factor into their borrowing requirements.

Before the Section 30 is granted the UK government should state that upon a pro-independence vote the Scottish Government would be granted the SNP policy of full fiscal autonomy for Scotland. This year that is a £15 billion deficit or 10% of GDP and it will not be an improved position at the time of any indyref2 given the absence of oil revenue.  Make this full fiscal autonomy budgeting start the day after a pro-independence vote.

In the interregnum between an independence vote and full independence (which Patrick Harvie thinks is ten years long) the UK Government is entitled to protect the UK from the adverse circumstances that will prevail in Scotland, so the Scottish Government must budget before the Section 30 order to its satisfaction to raise the taxes, cut the benefits and reduce the public services in Scotland to both the satisfaction of the UK Government and the bankers who will supply the borrowing.  The UK Government should facilitate the necessary cuts as directed by the Scottish Government if its substantial powers prove insufficient to the convulsive change required.

Note the levels of borrowing that Scottish government has to take to the bankers:

  1. The £billions required to build a new state (300 government departments at £10 million each for the new IT).
  2. Building up the financial reserves for a new state.
  3. The £9.6 billion loss of Barnett formula funding.
  4. The costs associated with a new increased rate of interest on Scotland’s share of the UK national debt.
  5. The cost the loss of the union jobs (unemployment benefit and other welfare payments).
  6. The cost of joining the EU in ten year’s time.
  7. The cost of the stupefying economic crisis induced by 1, 2, 3 and 4. International bankers might posit an economic shock not less than the 2008 banking crisis which doubled the UK’s national debt.

The Scottish Government should have no choice but to publish its budget for the post vote pre-independence interregnum as a condition of the Section 30 order being granted.  It would also have to publish its post independence outlook and again would be kept honest by need to borrow from independent bankers.

What was the key learning of the last campaign?  Don’t have a rational argument with an emotional one.  The circumstances outlined here force the SNP and the Greens to run Project Fear and the pro-UK campaign (Love Scotland anyone?) to sit back and watch the moral and emotional virtue basis of Scottish nationalism depart bringing down the SNP with it.