Scotland gov't wants do-over on independence after Brexit

Elections have consequences, and so do referendums … at least some of them. Scottish voters turned down an opportunity for independence from England two and a half years ago, a mildly surprising outcome given the celebrity support for an end to the centuries-long union and the rise even then of populist nationalism. An exercise of the latter last year led the United Kingdom to vote to leave the EU, a decision which left the sharply-Left Scots steaming.

The leader of Scotland’s home government now wants a do-over, just as Tory PM Theresa May struggles to work out a plan to fulfill the Brexit choice:

Scottish First Minister Nicola Sturgeon on Monday demanded a new independence referendum to be held in late 2018 or early 2019, once the terms of Britain’s exit from the European Union have become clearer.

A vote that could rip apart the United Kingdom just months before Brexit adds a tumultuous twist and highly uncertain consequences to the two-year process of leaving the EU after more than four decades.

“If Scotland is to have a real choice – when the terms of Brexit are known but before it is too late to choose our own course – then that choice must be offered between the autumn of next year, 2018, and the spring of 2019,” Sturgeon told reporters.

Utterly predictable, and widely predicted last June too.  Sturgeon spoke even then about the choice Scottish voters made, saying that they had “spoken decisively” in their 62% turnout for Remain in the Brexit vote. Alex Salmond, who engineered the 2014 referendum on independence, said the issue would return if Scotland got “dragged” out out of the EU. If Scotland goes, Northern Ireland may be next, where 56% voted to Remain and where they share an island with the firmly pro-EU Republic of Ireland.

Just nine months later, Scottish political leaders have begun to make good on that threat. Perhaps they waited this long to see if the Tory government in London would take Brexit seriously. David Cameron had opposed it, and resigned after the referendum, leaving Theresa May in charge. May has tried to work both sides of the issue, committing to Brexit but also to an orderly process that leaves British economic ties as intact as possible. Scotland’s ability to operate within those parameters has yet to be made clear, but Sturgeon has now become convinced that it will unfold unfavorably for her government. That leaves all sorts of questions open about what good independence might do, though:

Sturgeon has been seeking a deal that will allow Scotland to stay in the European single market and customs union. But she said she has become convinced May is pursuing a “hard Brexit” that would leave Britain outside those arrangements, which many U.K. businesses see as crucial.

“I am not turning my back on further discussions should the U.K. government change its mind,” she said.

Sturgeon is taking a big gamble. Although the prospect of Brexit has likely boosted support for independence, polls do not indicate it has majority backing. And there is no guarantee that the EU would allow an independent Scotland to remain a member.

A refusal would certainly be embarrassing, wouldn’t it? Scotland’s social-welfare system will make it tough for the nation to meet the qualifications anyway, and the rest of the EU might not want to take on another reform project on top of all their current woes. An analysis just ahead of the first referendum predicted a serious fiscal and economic crisis for a newly freed Scotland, and it’s unclear whether this might be worse now:

New IFS analysis of the latest Office for Budget Responsibility (OBR) data shows that a sharp fall in oil revenues in 2012-13 left a gap between North Sea income and Scotland’s public spending of £468 a person. That left a deficit one percentage point bigger than the UK’s, a marked change from the previous year when oil receipts left Scotland with a healthier fiscal balance than Britain as a whole.

The IFS said the OBR’s latest predictions on North Sea oil receipts suggested the gap with public spending would continue into the first year of Scottish independence in 2016 once Scotland took on its share of the UK’s debts.

Scotland would then face a budget deficit of 5.5% of GDP – £8.6bn – unless it did a deal to take a lower level of outstanding debt. Otherwise it must raise taxes, or cut spending heavily.

The IFS said that deficit “would not be sustainable for any prolonged period. Any upside surprise on oil revenues would help, for a while, but as recent experience demonstrates, these revenues can also disappoint. …

As a result, many Scottish government pledges in its independence white paper would be unaffordable, even if it recouped the £400m it says Scotland would save from cutting defence spending, no longer funding Trident nuclear weapons, and abolishing of new tax allowances for married couples and the “shares for rights” scheme.

Oil markets have not appreciably improved in the last two and a half years, and the intent of the new Trump administration to encourage American oil production will likely make matters worse for Scotland, not better. Right now the EU is busy trying to use its leverage to keep the UK as much within the common market as possible. Signaling an openness to admitting Scotland independently might make for a good negotiating position, but could end up backfiring and leaving them with another deficit-spending small country to support.

The move may not be as popular as the last referendum, though. Two of Scotland’s political parties have already come out in opposition to the proposal:

Not all Scottish lawmakers back Sturgeon, however. In fact, members of Scottish Parliament from Labour and Conservative parties expressed firm resistance to the proposition.

“Nicola Sturgeon has today given up on acting as First Minister for all of Scotland,” Scottish Conservative leader Ruth Davidson said in her official statement following Sturgeon’s announcement. …

That sentiment was echoed by the leader of Scotland’s Labour Party.

“Scotland is already divided enough. We do not want to be divided again, but that is exactly what another independence referendum would do,” Kezia Dugdale tweeted.

It looks like an uphill climb for Scottish independence once again. However, as the Brexit vote and Donald Trump’s election demonstrated, it doesn’t pay to dismiss the political power of populism, especially in terms of nationalism. Europe spent the last seventy years progressing toward a vision of single-government rule, but the last generation devolving back into ethnic liberation — starting in the Balkans and slowly moving westward. The United Kingdom could be the next nation for this nationalist impulse to unfold — and arguably has already started it with the Brexit.