Scottish Referendum Developments

The story in Scotland is that the LibDems are reconsidering their position on an independence referendum.

We'll rethink opposition to referendum, say LibDems

The probability of having a referendum on Scottish independence increased yesterday when it emerged that the Liberal Democrats plan to review their policy on the issue in a forthcoming conference.

Currently, the Scottish Liberal Democrats are officially opposed to having a referendum, with leader Tavish Scott insisting that one should not be held in a recession. In February, he said that he would not support a referendum, and late last year his party put down a motion in parliament opposing one.

However, Mr Scott has been under pressure from senior figures south of the Border including Vince Cable, a former Glasgow councillor, to support a referendum. There has also been pressure within Scotland, including from Scottish MEP George Lyon, demanding that the party changes direction.

The Scotsman - 9 October 2009

The BBC's version is here.

I won't say anything about the LibDems' capacity to change their minds, because I think any party is likely to change its mind if it sees the chance to gain something they want from it. So this is how I read the situation.

When the SNP set up their National Conversation on Independence, the three Unionist parties responded by setting up the Calman Commission. As I saw it, the game plan was for the three parties to agree a common position on a third option to put to the Scottish people in the referendum. In broad terms, if offered a three-way choice between independence, the status quo and more powers there would be a far higher chance of people wanting to take a smaller step rather than the big one. At least that's what the opinion polls have shown when a "more powers" option has been added. But trying to define exactly what "more powers" means is rather like asking how long is a piece of string. The job of the Calman Commission was to cut that piece of string to an exact length.

At the time of their interim report, it looked as if they were coming up with a comprehensive package to be put to the people of Scotland in a referendum. But then something seemed to go wrong, and the final report in fact represented a very minimal set of proposals, as I said here.


The three Unionist parties have rather different attitudes towards further devolution. Labour don't want it to go any further than it has, so they will now always opt for as little as possible with as much delay as possible (think Peter Hain in a kilt). The Tories however, are slightly more relaxed. Obviously they want Scotland to remain part of the Union, but they are quite open to the idea of the Scots having a little more fiscal autonomy. Both parties' attitudes of course have plenty to do with their own electoral advantage. Labour need to hold on to their Scottish MPs because they need all the MPs they can get from there (and indeed from Wales) to help them push legislation onto the English (remember Academies and Foundation Hospitals) even though most English MPs were opposed to it. For the Tories, I think their position is that if Scotland has greater responsibility for its own financial affairs, they reckon it is more likely that the Scots will make economic and fiscal policy decisions that are (small c) conservative, because for the past ten years the Scottish Government could only spend what the Treasury gave it and so didn't need to make tough decisions about the other side of the equation.


But for the LibDems things are rather different. It's very easy to laugh at them because of their indecisiveness and reticence to take a part in government when offered a chance to do so. Yes, it's so much easier to stick to your ideals if you shy away taking a share of responsibility, but the fact is that the LibDems do have some very good ideals. First and foremost a steadfast commitment to a fair voting system (STV) and second that both Scotland and Wales should have full fiscal autonomy within a federal rather than centralized United Kingdom.

Measured against those principles, it is the LibDems, rather than the other two Unionist parties, who have most reason to feel let down by the final version of the Calman Report. In the end was Labour that got what they wanted out of it: as little change to the status quo as possible. So the question now becomes how the LibDems can make up for that. If they show a bit of backbone, they could pull off quite a coup.


The SNP are going to introduce a referendum bill next year in the Scottish Parliament. As things stand at the moment the SNP, the Greens and Margo MacDonald would vote in favour ... and the three Unionist parties would vote it down. But if the LibDems were to vote in favour too, the bill would get through.

So what would it take for the LibDems to change their minds and back the bill? They have to agree a proper "Devolution Max" option with the SNP, and the essence of that would be a far greater degree of fiscal autonomy than Calman's 10p of Income Tax and very little else. It would include the ability to vary Income Tax bands and thresholds, employers' and employees' National Insurance, Corporation Tax and the framework for local government finance. All these are comparatively easy to collect on a Scottish basis. It would even include a good element of North Sea revenue, because the bulk of that now comes from ordinary Corporation Tax plus a special Corporation Tax supplement (see the graph in the post I mentioned before). Letting the Scots set and keep the ordinary Corporation Tax in the same way as they would for all other companies in Scotland might be a good half-way compromise between the interests of the UK as a whole and the interests of Scotland.

The prize is that if the SNP and the Liberals can agree on this, then it simply won't matter what the other two Unionist parties think. Out of 129 seats in total the SNP have 47, the LibDems 15 and the Greens 2. So with Margo MacDonald they have 65 seats. Just enough.

Labour in particular will be mad as hell. Their ploy is going to be to make out that Calman's recommendations are a big enough step to require a vote on them in a referendum. But that seems quite pointless to me. If all four main parties are agreed on them as a minimum, then they can surely be implemented without a referendum. The only reason the recommendations aren't being implemented right now is because Labour in Westminster want to want to drag things out. As little as possible, as late as possible.


In fact the only danger I can see is to the SNP itself, and to the cause of Scottish independence in the short term. It's a tactical rather than strategic judgement. There is no chance of getting a two-option, Independence or Status quo, referendum this side of the 2011 election. It is also, I believe, going to be quite difficult to get a two-option referendum after it, because it would need the SNP to get a working majority in Holyrood which would require maybe 45% of the vote. I expect them to do well in 2011, but that would be a huge ask.

So that means there must be a three-option referendum. If the "more powers" option is weak, it increases the chance of people voting for independence, and that might persuade some in the SNP to allow the weaker Calman option. But I think it would be a mistake. I suspect that human nature tends always to prefer the middle way in a three way choice. The majority of people will not go into the fine print of the detail between the various "more powers" options. It will only register as "more powers". Therefore it in fact makes sense for those powers to be more substantial rather than less substantial. I think it's better to have a large measure of fiscal autonomy in 2010 than to take the risk of ending up with the "hardly anything" that Calman offers.


I'm sure that independence will come. But I think that it will be a case of taking a step, liking what you see, and therefore wanting more ... then liking that and wanting more ... and so on. I've never seen any logic in the idea that steps towards independence should be once-in-a-generation events. Our experience in Wales has shown that the first devolution settlement only lasted from 1999 to 2006, and that we are now likely to vote to move on from our current settlement in 2011. It's only Peter Hain who now thinks his 2006 Act will last a generation.

So what's wrong with seeing how fiscal autonomy within the UK works for a similar five or seven years? Scottish independence in 2017 seems about right to me. And I think our own independence will only be a few years behind that.

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