A Man Without A Plan

“A goal without a plan is just a wish.”

Antoine de Saint-Exupéry

Whether Scotland later this year agrees to go it alone or to remain part of the UK is of course a matter for them. What is interesting though about the campaign is how it it reveals with great clarity the problems with winning a referendum on removing a country from a union - changing the status quo. There are lessons in abundance that can be learned from the Scottish experience when considering the removal of the UK from another (albeit different type of) union - that of the EU.

The arguments of whether the Scottish people should run their own affairs democratically has been deliberately reduced down to mainly economic arguments by the Unionists; the Westminster village has closed ranks by taking advantage of the SNP's lack of preparation with regard to currency and undermining the independence case by opposing a currency union.

The three main Westminster parties are to declare that whoever forms the next UK government will not enter a currency union with an independent Scotland.

And FUD regarding Scottish exit has been in full flow:

Finance experts, academics and business leaders have raised fears that independence would destroy the economy, hit investment and force companies to migrate to England.

Words like "disaster" and "destroy" sound very familiar and is a foretaste of what we can expect come an EU referendum. Removing a country from a union needs an effective exit plan - in short a man with a plan - to negate the inherent fear factor. But as I've noted here and here, such a coherent strategy has been sorely lacking with the SNP and it is very likely to cost Salmond, and those supporting Scottish independence, the referendum.

As recent polling shows the independence vote is trailing significantly:

• Support for independence is 29%
  
• Support for remaining in the Union is 42%
• Don't knows 29%

Support for remaining part of the UK leads by a big margin, add into that the "status quo effect" inherent in any referendum and the fear factor on the "don't knows" and the campaign for Scottish independence looks doomed. Paddy Power's current odds are 2/11 against independence and 10/3 for. It would take a brave man to bet on Scottish independence.

With the referendum getting ever closer we can expect a ramping up of the same scare-mongering tactics. One such example is the Spectator this week where Alistair Daring exposes the weak links in Salmond's case:

Alex Salmond is now a man without a plan. He is offering Scots a future of uncertainty and instability. Threats of a debt default leaving Scotland and Scots with a bad credit rating. No idea which currency we would be transitioning to.

By contrast if Scots want to know the benefit of remaining in the UK, they need only reach into their pockets and pull out a pound coin. We have one of the most trusted, secure currencies in the world. We have the financial back up of being part of one of the biggest economies in the world. The pound means more jobs, smaller mortgage repayments, cheaper credit card bills and lower prices in the supermarket. Why would we gamble that for an unknown currency?

And so on...

Of course this isn’t the first part of their White Paper that has fallen apart. A few days ago Scotland’s accountants were damning in their assessment that there was no plan for paying pensions. The SNP’s own expert group admitted there was no plan for paying benefits. This is too big a decision to make without having a real plan.

Salmond has been criticised for the lack of preparation as 62% of Scots in a poll last year think the SNP's case is "not very convincing":

According to the survey for the pro-union Better Together group, 62 per cent of people said the SNP case was either “not very convincing” or “not convincing at all”. Twenty-four per cent of the doubters voted SNP in the last Holyrood election.

Thus as the SNP demonstrate having a referendum and being ill-prepared, leaves any independence campaign woefully exposed.

Be careful what you wish for...

Scotland And The EU

Today, in what appears to have been a low key affair, the Scottish first minister Alex Salmond launched his government's independence blueprint, calling it a "mission statement" for the future. Yet on first reading not a great deal has changed in the Nationalist's flawed case. The same problems remain as I noted here - there's still no coherent case on the issue of currency for example:

Alex Salmond has been pilloried after unveiling a blueprint for Scottish independence that assumes the English would continue to share the UK’s ‘crown jewels’ including the pound and BBC programmes.

Today's announcement appears to have been nothing more than a rebranding exercise. Certainly on the vexed issue of whether Scotland would remain members of the EU and if they would still retain the UK opt-outs on the Euro are still in doubt. The Referendum White Paper argues:

If we vote for independence, the eyes of the world will be on Scotland as our ancient nation emerges – again – as an independent country. Scotland will become the 29th member of the European Union...

Of course, as we are well aware, it cannot be both an independent nation and a member of the EU. Those two positions are completely incompatible. But crucially what the paper doesn't address convincingly is how Scotland will remain members of the EU on the same terms as it has now.

In Scotland's favour there is a kind of precedent that echoes their potential position and that is the one of Greenland. Greenland as part of Denmark joined the then EEC in 1973, despite 70% of the Greenlandic votes having been against membership in that referendum. However when Greenland gained home rule in 1979 it still remained a full member of the EEC. It wasn’t until it had a separate referendum on leaving in 1981 that it decided to leave. Even then it still has a special relationship with the EU as part of its overseas countries and territories.

Yet the EEC has moved on and we are now post Lisbon, so there is now no real precedent for how the EU should deal with a region of a member state seceding from the European Union, a situation the white paper itself acknowledges:

Article 49 of the Treaty of the European Union provides the legal basis, and defines the procedure, for a conventional enlargement where the candidate country is seeking membership from outside the EU.

As Scotland joined the EU in 1973 this is not the starting position from which the Scottish Government will be pursuing independent EU membership. Article 49 does not appear to be the appropriate legal base on which to facilitate Scotland’s transition to full EU membership.

This though is at odds with earlier comments made by EU Commission President Barosso who is of the opinion that Scotland would have to reapply for membership:

A letter from Mr Barosso to the House of Lords economic committee, which is examining the independence question, also confirmed his position that a new independent state would "become a third country with respect to the EU".

"What I said, and it is our doctrine and it is clear since 2004 in legal terms, if one part of a country - I am not referring now to any specific one - wants to become an independent state, of course as an independent state it has to apply to the European membership according to the rules - that is obvious."

Asked whether an independent country would have to renegotiate its terms, Mr Barroso said: "Yes.".

Ploughing on regardless convinced Article 49 does not apply, the white paper argues that there would be a "continuty of effect":

We recognise that specific provisions will need to be included in the EU Treaties as part of the amendment process to ensure the principle of continuity of effect with respect to the terms and conditions of Scotland’s independent EU membership, including detailed considerations around current opt-outs, in particular the rebate, Eurozone, Justice and Home Affairs and the Schengen travel area.

So apparently all an independent Scotland has to do is pursue membership of the European Union by seeking an amendment to the EU treaties rather than applying as a new member:

The alternative to an Article 49 procedure, and a legal basis that the Scottish Government considers is appropriate to the prospective circumstances, is that Scotland’s transition to full membership is secured under the general provisions of Article 48.

Article 48 provides for a Treaty amendment to be agreed by common accord on the part of the representatives of the governments of the member states.

Article 48 is therefore a suitable legal route to facilitate the transition process, by allowing the EU Treaties to be amended through ordinary revision procedure before Scotland becomes independent, to enable it to become a member state at the point of independence.

The problem is that Salmond with his assertions of "seeking an amendments to the EU treaties" via article 48 is now entering 'David Cameron territory' with his similar claims of trying to achieve the goal of repatriating powers. Article 48 is here - it only allows the EU treaty to be amended by unanimous consent.

This then becomes a paper which assumes the UK and the EU will agree with whatever Salmond demands. Unanimous consent which requires agreement of the UK - that Scotland has voted to leave - and countries like Spain, Belgium and Italy who have their own separatist problems and would be determined not to encourage further such sentiments. One suspects therefore Salmond's chances are going to be close to zero.

It illustrates yet again the problems of an ill-prepared independence case. It's difficult to see as a consequence any other option than Scotland voting to remain members next year particularly factoring in the status quo effect. But the lessons, which are so relevant to an EU referendum, are still not being learnt south of the border.

Thus sadly those who campaign to leave the EU are currently doomed to failure.

Update: Captain Ranty is not too impressed either, expressed in his own inimitable way.

"If You Fail To Plan Then You Plan To Fail"

Passing by without too much of a murmur south of the border is the Scottish independence referendum due to be held in September of next year. The relatively lack of comment is in direct contrast to the significant implications for the rest of the UK should the Scots wish to go it alone, not least on the thorny issue of the EU; would a breakup of the UK make our EU membership null and void? I've not heard a convincing answer on that one yet.

That aside, the referendum campaign has thrown up some interesting parallels to a potential EU referendum post 2015 and some lessons we can learn from. It should be noted first that there are one or two differences; with the except of a couple of forays by Cameron north of the border the Westminster establishment has largely refrained from interference. In addition polls consistently show Scottish voters supporting staying in the union, rather than exiting. Factor in the "don't knows" and the inherent "status quo effect" of around 15%, then it's clear the SNP and Alex Salmond has a very difficult, if not impossible, task. One suspects that Salmond has been forced to call a referendum earlier than he might have wished due to his success of winning a majority in 2011, leaving him little political choice.

Yet the useful parallels are imbued in a campaign that wishes to seek exit from a union it is a member of, a break from the status quo against the wishes of the establishment. Thus using the Scottish referendum as a dry run in anticipation of an EU one, it is immediately clear the effect major errors have on success or otherwise. Throughout it's becoming increasingly apparent that the SNP has no coherent exit plan in place which is compounding their already poor position - their case has been unraveling.

The referendum may have come earlier than Salmond hoped, but he seems remarkably unprepared given that the SNP is a party that has been in existence since 1934, and Salmond has been its leader since 1990 (albeit with a 7 year hiatus between 2000 and 2007).

Perhaps the lack of detail was the reason that Salmond preferred initially to concentrate on a sense of Scottish national identity and patriotism culminating, just before last year's Olympics, in the rather ridiculous phrase Scolympians:

In a bizarre intervention, the First Minister has devised a new group name for the Scottish athletes at the games that studiously avoids any British connotations.

Mr Salmond issued a good luck message urging everyone to cheer on the “Scolympians”, an inelegant combination of the words “Scottish” and “Olympians”.

Earlier this week, he issued a press release congratulating Sir Chris Hoy as being chosen as the Olympic flag-bearer for Team GB without mentioning the team’s name. 

But the scrutiny won't go away nor can it be papered over by vacuous appeals to national identity and scrutiny is what is now happening. For years the SNP has suggested that they received legal advice that an independent Scotland could remain in the EU and as a consequence inherit the UK's opt outs such as the Euro. Salmond went as far as to confirm it categorically (10:30 mins in):

The BBC’s Andrew Neil asked the First Minister on March 4 if he had sought legal advice. Mr Salmond replied: “We have, yes.

But it turns out that was never the case, as the Scottish Sun waded in with the headline "EU Liar":

THE SNP were forced into a humiliating climbdown yesterday after finally admitting the government had never taken legal advice on Scotland’s entry to the EU after independence.

The party’s referendum chief Nicola Sturgeon announced they were dropping a bid to block demands for them to reveal law experts’ guidance.

The Nats’ challenge has already cost taxpayers £12,000 as they battled to keep the details secret.

For a country to split while still being members of the EU would be uncharted territory legally, however many including the EU Commission, are of the opinion that Scotland would have to reapply for membership:

A letter from Mr Barosso to the House of Lords economic committee, which is examining the independence question, also confirmed his position that a new independent state would "become a third country with respect to the EU". 

"What I said, and it is our doctrine and it is clear since 2004 in legal terms, if one part of a country - I am not referring now to any specific one - wants to become an independent state, of course as an independent state it has to apply to the European membership according to the rules - that is obvious."

Asked whether an independent country would have to renegotiate its terms, Mr Barroso said: "Yes.".

Which then throws up the question of what happens to Scottish exports to the Eurozone while renegotiation was happening, given that they would have no right of access to the Single Market in the meantime as they immediately become a "third country". Exports would simply stop overnight. Such a possible scenario is a damning indictment of the SNP's lack of preparation and as a consequence has been hugely damaging to their cause.

Another big question is what happens to currency. This question has long been a problem for the nationalists. They have at various times supported an independent Scottish currency or even been cheerleaders for membership of the Euro. Currently they have instead settled on a currency union between an independent Scotland and the rest of the UK, a policy that seems to be a hasty response to changing circumstances, not least the Eurozone crisis. In short a least worst option.

But this comes with its own problems. It requires agreement of the rest of the UK and there's no guarantee of that. Also, as the Eurozone is painfully aware, currency union requires political and fiscal union to work. So there would need to be budgetary and fiscal constraints in place, a common system of banking regulation, so that the lender of last resort is not underwriting the debts of financial institutions over which it has no control. The UK will inevitably insist on tight controls on Scotland’s ability to borrow, and on its ability to vary the structure of its taxes. It will be political union in all but name. An independent Scotland would have no influence over the Bank of England but would still effectively be under its control, thus making a mockery of independence. Another ill thought-out policy.

Then there's the issue of the welfare state. A vote to leave the UK would be a vote to leave its institutions, including Department of Work and Pensions and the services it provides. A report backed by SNP ministers warned that pensions are at risk:

The study, by the Scottish Government expert working group on welfare, said creating a new system immediately after independence would be so complex that there would be a “significant” chance claimants would not receive their money.

This would also affect millions of pensioners and welfare claimants in England, the report claimed, because their payments are processed at Department for Work and Pensions (DWP) offices in Scotland.

But the report’s authors were forced to admit they did not know how the Scottish benefits system would be administered after [transitional period] because they had too little information about the policies that would be pursued.

The lack of detail means for Salmond that fear, uncertainly and doubt will be the deciding factor in the referendum - dull detail matters, not empty rhetoric. The lack of preparation will put back Scottish independence for generations meaning Mr Salmond, undoubtedly against his wishes, will die a UK citizen. It has turned into a campaign where professionals are knocking seven bells out of the amateurs as Jim Sillars in the Holyrood magazine observed (my emphasis):

These inherent fault lines should have been addressed long before there was any launch of a Yes campaign. The lack of what I call “the Bible” – that is, a document based on asking all the difficult questions and providing the answers, which then delivers solid well researched, intellectually tight material for activists to use – is proving fatal. Currency, EU membership, Nato, pensions both state and private, are but four examples of work not done or sloppy thinking.

Given the woeful performance of the SNP leadership so far, it is a foolish gamble to believe that when they produce the civil service-created White Paper in the autumn, that it will fix things. There needs to be a much wider involvement in the production of a “Bible” without which Westminster will continue setting the agenda and continue to run rings round the Yes side.

It all sounds so wearily familiar, but at least we've been warned. In an EU referendum we also need to provide a "Bible" that answers difficult questions such as the one posed by Autonomous Mind:

On Day One of [unilateral withdrawal] how will British goods will be landed in continental Europe and sold into the EU market.

Otherwise we follow Salmond down the path of glorious failure.