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Sometimes what Nicola Sturgeon says sounds almost reasonable. Try this one: “it is for the people of Scotland and no-one else to decide the constitutional future of Scotland”.
Sounds fair enough doesn’t it? Now just make one small change and replace the word “Scotland” with the word “Dumfries”. The statement still makes the same amount of sense – people in a community should decide their own destiny. The question is of course at which community level such decisions should be made.
You can quibble with Dumfries, but what about the Dumfries & Galloway region? Bigger than several countries and for centuries part of the borderland where control passed between England and Scotland. Why shouldn’t the people of Dumfries & Galloway decide their own constitutional future? Why, if the rest of Scotland decided to leave the UK, could the good citizens of Dumfries & Galloway not decide to stay in the UK? Or the people of Shetland make the same choice for that matter.
Or what about Glasgow?
Let’s say the Lothians, Perthshire, Fife and Dundee, the Highlands and Western Isles left the UK in order to do their own thing for a bit and then try to re-join the EU.
What if Glasgow decided it had had enough of the talking heads in Edinburgh and wanted to stay within the UK.
Sounds stupid? Well yes, that’s because it is stupid but no more stupid than what the SNP is proposing for the whole of Scotland.
If Glasgow and the West remained part of the UK they could trade freely with customers in the whole of the UK, the Scotland/England border would just be a line on the map and little more. Glaswegians could decide to go to live and work in England if they wanted to, they would know they could keep the pound sterling and if they were, say, a nurse they would know the world’s fifth-biggest economy stood behind their pension.
So what about Edinburgh and the part of the country which broke off – how would they fare?
There would be a real border on the M8 and at other points between the two parts of what was formerly known as Scotland. In the new country run from Edinburgh there would be no indigenous banking system and, with the proposal to create a new currency, individuals would find it harder to access mortgages and businesses would find it harder to get long-term funding. Lenders would price in the additional risk. Economic activity and living standards would inevitably fall.
Unlike businesses in Glasgow, businesses in Edinburgh would have to overcome bureaucracy to continue to trade with their customers in England. The logical thing they would do is move their operations to Glasgow just before separation. The small East and North of Scotland market could be left behind and the much-larger market in the West and the rest of the UK dealt with freely. It would not be a difficult choice. The far off possibility of being part of the EU single market would be no compensation for the loss of seamless access to the UK single market.
Quite quickly jobs, business dynamism, economic security, sustainable public finances would come under pressure in the East. Who would help? Not the West – why should they because the East made its choice and should stick with it. Not the UK for the same reason, Not the EU because the financial situation would be too dire to join. The International Monetary Fund would probably try – but what would be the price? Mass lay-offs in the public sector, pensions reduced, hospitals closed. This is not fanciful – ask the Greeks who have recently lived through just such a process.
The effect of splitting Scotland North to South would be an obvious disaster. In fact exactly that scenario is what would be in store for Scotland if it left the UK – the line of split might be different but there would be the same nasty outcome for our businesses and citizens. Being part of the UK, arguably the most successful union of nations in modern history, benefits all of us every day.
Guy Stenhouse is a Scottish financial sector veteran who wrote formerly as Pinstripe