To save the Union, negotiate Scotland’s independence

The first cabinet meeting of the new term and Boris Johnson’s summer holiday were both dominated by one concern: how to turn the tide on Scottish nationalism. Johnson’s foray into the Highlands was intended to demonstrate his own personal commitment to the Union; it also allowed him to find out for himself how awful mobile phone coverage is in much of rural Scotland. The cabinet on Tuesday discussed how to stop the Scottish National party turning the legislation that will underpin the UK’s post-Brexit internal market into their latest argument for independence.

The Prime Minister is confident about his chances of knocking back the Nationalists. The decision of the Scottish Tories to dump their unimpressive leader Jackson Carlaw and replace him with Douglas Ross shows there is life in the party there. Such ruthlessness might jolt Scottish Labour into action and get it to jettison its own failing leader, Richard Leonard. But even with these changes the Unionist parties will struggle to deny the SNP a majority at next year’s Holyrood elections. If Nicola Sturgeon wins, she will certainly claim a fresh mandate for a second independence referendum. Only this week, she published plans for a draft referendum bill.

Inside No. 10, the strategy is simple: just say no. They can’t lose a referendum that they don’t allow and there is no way a legal referendum can take place without Westminster’s consent. Yet while this kind of approach has held Spain together, it is not really a recipe for stability. Those in government who think about the question most deeply are becoming concerned about how sustainable that strategy is.

The worry is that Sturgeon will keep asking for a second referendum and each time Westminster says no, support for independence will go up by a point or two. Soon, support for separation will edge up to 60 per cent and it will begin to feel that any referendum would be a confirmatory exercise. As one Tory puts it: ‘It is when you get into the grounds of inevitability that it gets very difficult.’

What to do? Well, one cabinet minister with a particular interest in the Union argues that the best way to fight the SNP is to clarify what independence would really mean. This would change the debate from being about the lofty idea of sovereignty to the cold realities of the situation. It could be done in the campaign itself, but any Unionist attempt to focus minds would be dismissed by the Nationalists as ‘Project Fear 2’.

Highlighting the economic weakness of the case for independence is essential to any Unionist victory. One recent poll suggested voters thought by a 10 per cent margin that independence would be good for Scotland economically. Which is quite something now North Sea oil revenues have collapsed (the price of a barrel is half what it was when the last referendum was held in 2014) and recent figures showed that Scotland has the worst deficit in the western world (8.6 per cent of GDP). A new EU member state needs their deficit down to 3 per cent. Doable, but only after austerity on an enormous scale. That’s the crushing cost of independence. But how to make the case convincingly?

One way — albeit a very high-risk one — is to tell the SNP that they can have their referendum but only if the terms are agreed first. The UK government would negotiate the basis on which Scotland would leave the UK, with the resulting deal put to the electorate. This would transform the debate from being one about whether Scotland should theoretically be independent into one about the hard truths of separation. It would force the Nationalists to answer the questions they would rather avoid: what currency an independent Scotland would use, what share of the UK national debt it would take on, and more. We’d see what the border arrangements between this new state and rUK (the shorthand for the rest of the UK) would be, and how trade would be managed with the two countries in different customs unions.

This approach might lead floating voters to conclude that the status quo is better than the proposed alternative. (Most voters in Australia were in favour of a republic in 1999, but the specific option on the referendum ballot paper that year could not garner majority support.) It might also bring out the fissures within the Nationalist movement. Ahead of the EU referendum, Dominic Cummings was clear that the Leave campaign should avoid embracing a specific version of Brexit because of the risk of fracturing its own coalition. The same logic applies to Scottish Nationalists today.

Negotiating the end of a 300-year political, economic and military union would make Brexit look like child’s play. Talks would take years to complete and would almost certainly be unfinished by the time of the 2024 general election, so no referendum in this parliament. But if this approach succeeded in changing the terms of the debate, it would give the Unionists a far better chance of winning — and if they won a second, post-Brexit referendum then the question really would be settled for a generation.

There are some obvious downsides to such a plan. The first is that the very act of negotiating could make independence look inevitable, demoralising the Unionist side. Johnson would also have to take a hard line during the talks to underline how economically unattractive independence would be. It is not difficult to imagine how the SNP would use this to argue that Westminster was trying to ‘do down’ Scotland or offer it a mean divorce settlement. These talks would also play into the ‘Nicola vs Boris’ narrative that the Nationalists love and that has seen support for independence rise during the Covid crisis.

No. 10 will most likely stick to its current strategy. As one insider puts it: ‘I don’t see this administration being in the place to have this fight. The inclination is just to say no.’ The danger of this approach, though, is that it just stores up problems. When the referendum does come, the Nationalists will be in a stronger position and the vote will be on the idea of sovereignty, not the reality of it. If the Nationalists triumph, the Union will be over. Once people had voted for independence, they would want it delivered regardless of the obstacles that come up. To save the Union, the government might have to take a risk.