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The Economics of Independence – Part 1

A Take on the Future of Scotland By Tim Rideout



2021 was, to echo Confucius, an interesting year for Scotland. In February, following the widespread riots in England following the disastrous post-Brexit shortages and disruptions, a palace coup in London saw Michael Gove become the new Prime Minister. A couple of months later the SNP and Greens secured 81 seats in the May Holyrood election with the SNP forming a majority government. It was clear and unarguable that a majority in Scotland wanted out of the UK. Nicola Sturgeon in her victory speech declared there would be a referendum in September with or without agreement from London, and then stunned the nation by announcing she would not be seeking re-election as First Minister and was standing down as SNP leader. She said she was exhausted by the efforts to deal with the pandemic and it was time for someone with the necessary fresh drive to lead the independence campaign. There was a short and somewhat bitter tussle that ended with Kate Forbes emerging as a surprise compromise candidate after it became clear that neither Joanna Cherry nor Angus Robertson could command the support of all the party.

The IndyRef2 campaign was a short affair with most minds already settled, but there were some spectacular (and fully masked!) parades with simultaneous marches involving half a million Scots on the last Sunday in Glasgow, Edinburgh, Sterling, Dundee and Aberdeen.

After 64% of Scots voted for Independence in the September 9th 2021 IndyRef 2 there was initial bluster from London about referendums only being advisory, but after the EU, Canada, Australia, Russia and China declared they looked forward to working with the new country no more was heard. President Biden, to the disappointment of most Scots, sat on the fence citing the ‘special relationship’ between Washington and London.

So almost immediately discussions started with the rUK London government on the divorce negotiations. Michael Gove travelled north to meet the First Minister at Bute House in Edinburgh, something immediately noted in the press as reflecting the new power dynamic. Kate Forbes informed the PM that the Scottish Government had provisionally fixed Independence Day for St Andrew’s Day 2023 and that this would allow a little over two years to prepare and conclude the divorce arrangements with rUK.

The Prime Minister declared, brooking no disagreement, that the United Kingdom would be the ‘Continuing State’ in terms of the Vienna Convention of International Law. Scotland would start from a clean slate in terms of international obligations. In other words, we would need to apply to join the UN, Nato, the IMF and make all the other legal arrangements. The UK would keep the pound and the Bank of England, all overseas territories and military bases, and all foreign property including British Embassies. “Scotland”, declared Michael Gove, “can have what is physically located in Scotland, but we reserve the right to take our military equipment and other furnishings and fittings from any British Government properties”. He was somewhat disconcerted when the First Minister replied that she was entirely in agreement. He started on the issue of the UK National Debt, but the First Minister smiled sweetly and said “But, Prime Minister, then you would not be the Continuing State. We would, of course, support our friends in the European Union getting the UN Security Council seat as the EU’s importance has really been under-valued for far too long, don’t you agree?

Officials drew up the agenda for the divorce negotiations, which was a surprisingly short list:

1) Payment of the state pension and pensions of (former) rUK employees based in Scotland at Independence Day. Should these be paid as per law by rUK or should rUK pay appropriate funds to the Scottish Government so it could them over post-Independence?

2) Handing over the records for National Insurance and pensions, HMRC tax data, passports and citizenship, DVLA and anything else relevant and not already under Scottish control.

3) Transfer of the national map database from Ordnance Survey to the Scottish Government.

4) Arrangements for a short-term rental of Faslane while rUK made alternative arrangements for the Trident submarines.

5) Arrangements for the removal and / or handover of UK military bases, office buildings and other rUK owned premises. It had already been agreed that in law rUK owned land and buildings would be the property of the Scottish Government apart from any premises designated for embassy use.

6) Future customs, Common Travel Area and border arrangements.

7) Removal of scrap rUK nuclear submarines from Rosyth and the clean-up costs from nuclear installations at Chapel Cross, East Kilbride, and Dounreay.

8) Determination of the Scottish Territorial Waters boundary with rUK in accordance with the UN Law of the Sea.

9) Repatriation of Scottish artefacts from the British Museum / British Library / National Gallery and the Royal Collections.

10) Arrangements for the Monarch as Head of State of Scotland.

The first round of talks was to start in London on Monday October 11th.

The issue of what to do about Alex Salmond, who had been fuming not always quietly since Alphabetgate, was solved in what was seen as a brilliant move, when Kate Forbes announced that he would be leading the Scottish delegation of negotiators. It was remarked that the Prime Minister seemed a little pale when he told the BBC that he looked forward to the discussions.

To be continued...

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