Scottish Independence: A Second Bite of the Cherry or a More Fruitful Pursuit?

I voted Remain in the 2014 Scottish independence referendum. Since then, I have come to the conclusion that I was young and naïve back then and didn’t completely understand all the arguments. I most likely voted ‘no’ for sentimental reasons: my heart felt more attached to being part of the UK, than Scotland per se.

Fast-forward to today and obviously being a lot more mature and educated on the debate surrounding Scottish Independence, I am still content that I would vote Remain again on the grounds that I don’t believe that the SNP’s argument for Independence is persuasive enough to warrant leaving the UK: there are far too many unanswered questions. One of the most pressing of those is, how do the SNP plan to plug the ever-burgeoning budget deficit (currently sitting at 12% of overall GDP) in a post-independent Scotland?

My solution is a far better proposition, namely, federalism.

The debate surrounding Scottish independence at a glance

The subject of independence and the country’s separation from the rest of the United Kingdom is a permanent issue in Scottish politics. Proponents of independence, such as the SNP and the Greens, contend that Scotland should have authority over its own legislation and resources. Conversely, parties that operate on a UK-wide basis such as The Conservative Party, The Labour Party, The Liberal Democrats and Reform are against this notion, arguing that Scotland gains both socially and economically from remaining within the union.

Proponents of Scottish Independence argue that Scotland signed the Act of Union treaty in 1707 on the basis of mutual respect and trust, in order to facilitate the creation of what we call today the United Kingdom. However, through time and due to a divergence of views between Scotland and the rest of the United Kingdom on a number of issues, that trust has been eroded. This has led to the creation of the SNP and their campaign for Scottish independence. Many Scottish people see themselves as being culturally different from the rest of the United Kingdom population (most notably, the English) and argue that this distinct identity should allow the country to leave a union which, as they see it, no longer serves their interests.

There are three arguments that both sides advance in favour of their respective positions.

Arguments in favour of Scottish independence

1. Self-governance: pro-independence supporters argue that Scotland’s future should be decided by the people who live there, rather than by the UK Parliament in Westminster. They contend that Scotland has been left behind for far too long by consecutive governments in Westminster who have ignored the demands of the Scottish people by prioritising England’s needs.
2. Economy and currency: proponents of Scottish independence believe that by controlling fiscal and monetary policy, Scotland would be better equipped to control its own destiny by securing the levers to deal with the economic challenges that the country faces.
3. The European Union: following the UK’s exit from the European Union (Brexit), many independence supporters believe that Scotland was taken out of the EU against the majority of its voters’ wishes and thus should be free to rejoin (Scotland voted to remain by two-thirds). They argue that Scotland sees itself as culturally more connected to Europe than to the rest of the United Kingdom.

Arguments against Scottish independence

1. Economic and fiscal deficits: an independent Scotland would face severe fiscal challenges. Its public spending per person consistently exceeds the tax revenue collected locally (Scots receive more per head than residents in the rest of the UK). Projections have highlighted large notional deficits, meaning that an independent Scotland could face immediate choices between significant tax hikes or harsh austerity cuts.
2. Trade Barriers with the UK: the rest of the United Kingdom is Scotland’s largest trading partner, accounting for the majority of Scottish exports, amounting to 60% of the total. Independence would introduce regulatory divergence and potential border friction with England, Wales, and Northern Ireland, which could severely impact Scottish businesses and negatively impact the Scottish economy.
3. Loss of shared security and geopolitical clout: remaining in the UK allows Scotland to benefit from the advanced intelligence, cybersecurity apparatus, and diplomatic reach of the wider United Kingdom. Independence would mean building entirely new institutions from scratch, including defence and diplomatic networks, which would be costly and complex to implement.

There is an alternative to pursuing independence or maintaining the status quo, that does not depend on restating the opposing positions of 2014 – federalism.

Federalism – the best of both worlds

Federalism is a constitutional arrangement recognising the domestic autonomy of the UK’s nations (England, Scotland, Wales and Northern Ireland) by agreeing a division of sovereignty. England, being the largest of the four, would continue to be governed from Westminster or through devolved assemblies in its regions (i.e. North West etc.). English ministries and ministerial functions would also be separate from those of the United Kingdom Federal Government. Westminster would retain sovereignty over UK wide matters such as Foreign Affairs, Monetary Policy and Defence. The House of Lords would be reformed as a fully elected upper chamber of the Nations and Regions, where it would be responsible for upholding the Act of Federal Union.

The UK is one of the most centralised states in Europe if not the whole OECD and federalism has long been promoted as a constitutional arrangement that could moderate this, though with little more than occasional lukewarm support from some Labour and Conservative politicians. The only mainstream parties in the UK that are explicitly in favour federalism are The Liberal party, The Liberal Democrats and The Greens.

Why would federalism be preferable to independence for Scotland?

Federalism is opposed to full Scottish independence, would firstly be a far more productive option as it would retain almost all the features that the SNP are demanding with independence, while avoiding the unnecessary uncertainty that would accompany ending the union. In other words, federalism would be the best of both worlds. It would allow Scots to retain many of the benefits associated with being part of the United Kingdom whilst also allowing a high degree of autonomy.

Secondly, SNP were offered “Devo-Max” (a term synonymous with federalism) after the 2014 independence referendum, but rejected it then and subsequently. Any rational person might question why a party demanding a complete clean break from one state, would also reject a proposal from that very same state, which could be considered the next best thing – or even a stepping stone to full independence, the ultimate goal. The SNPs obstinate response almost reeks of self-sabotage. The SNP have been in power in Scotland for almost twenty years, although on a domestic front they have a somewhat dubious record of accomplishments when the devolved areas that they have responsibility for are considered. Scotland currently has devolved responsibility for services such as healthcare, but has the highest NHS waiting lists of any UK nation. In education the SNP has failed to close the attainment gap between the richest and poorest pupils in the country and finally, in the transport brief, the ferry procurement scandal has lasted over a decade and has wasted millions. In light of these failures, some would question whether or not the SNP should be pushing to break away from the rest of the UK. A compromise position, like federalism, suitably managed, could offer many benefits without additional risks.*

* I would also advocate for full fiscal autonomy alongside federalism, allowing each federal nation to have full control of fiscal policy.

Kayed Al-Haddad is spokesperson for The Liberal Party for Economics, Fiscal Policy and Monetary Policy.