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Deal ... or no deal?

THE political hardball over the question of Scottish independence which marked these closing months of 2012 is only just beginning.

The UK Government will continue to strike a more aggressive stance and, as the Sunday Herald reveals today, the UK Independence Party (Ukip) is now ready to throw a spanner in the works in the event of a Yes vote by demanding the best deal possible for the rest of the UK (rUK) in the ensuing general election campaign.

Having grudgingly accepted that Scotland could in theory be independent, the unionist side now intends to focus on how the reality would affect myriad domestic and international talks, each throwing up its own set of uncertainties.

Besides the issue of Europe, which has recently given the SNP such a headache, Scotland would need to negotiate international treaties with other countries and institutions, discuss our membership of Nato while making a deal about the removal of Trident from Faslane, negotiate lender-of-last-resort functions with the Bank of England as well as terms with the treasury for keeping the pound, and so on and so on.

On some points, as the SNP highlights, Scottish and UK interests would coincide, but on others conflicts are inevitable.

A Downing Street source said: "What the EU argument has opened up is the theme of Scotland's place in the world. Our job is to set out key areas like that, and show where there is certainty and uncertainty."

So is the First Minister on the rack? Is the SNP government defenceless against the coming onslaught? With almost two years until the vote, it is far too early to come to that conclusion. Alex Salmond is no slouch in a political scrap either, and his argument that the SNP's positive vision will always trump his opponents' negativity was certainly borne out in the 2011 election.

But the unionists are confident that doubt, coupled with the SNP's shakiness on basic facts, will have a fatally corrosive effect on trust in the Salmond government and independence.

A sign of that confidence is the more defiant tone now being adopted at Westminster.

When Salmond and David Cameron recently signed the Edinburgh Agreement on delivering the referendum, the Nationalists laid much store by its final paragraph, Para 30.

This states: "The two governments are committed to continue to work together constructively in the light of the outcome, whatever it is, in the best interests of the people of Scotland and of the rest of the United Kingdom."

During the Edinburgh Agreement talks, insiders report the SNP was "fixated" with the bland formula.

The government now attaches huge significance to the "catch-all clause", arguing that it paves the way for a smooth transition to independence.

Earlier this month, Salmond cited Para 30 in an article for the Washington Post as proof that an independent Scotland would have its way on joining the EU and keeping the pound.

But Westminster's tactics are now to insist that Para 30 in no way binds them to accede to SNP demands and any negotiations would be of the "robust" variety, with the rUK seeking the best deal for its citizens, something it arguably has a duty to achieve.

Appearing before the House of Lords Economic Affairs Committee last week, Michael Moore, the LibDem Scottish Secretary, repeatedly attacked the SNP's reliance on Para 30.

He said: "Paragraph 30 does not given them a free pass to all their policy wishes ... the idea that somewhere under here is a magic paragraph, that only the SNP can see, that says all these things will be sorted, is completely wrong."

Moore said this also applied to the SNP's pivotal plans for a monetary union with sterling and the Bank of England acting as lender of last resort.

On the latter point, he was vociferous: "The Scottish Government needs to stop pretending that this is somehow in the bag, that we have agreed. We have certainly not agreed that. It would take an enormous amount of persuasion for the rest of the UK to come to that conclusion."

A Scotland Office strategist said Moore's irritation followed the SNP Government privately talking up the significance of Para 30 with the financial and business community.

"What the Scottish Government is doing is going around telling people that Paragraph 30 means we will basically give them whatever.

"People should understand that's not true. The reason we pushed back hard on it is that it's important people are not misled on that."

There is also another reason for a harder bargaining position: Ukip. If there is a Yes vote, negotiations would start in the run-up to the 2015 General Election.

Currently at 14% in the polls, Ukip is already threatening to eclipse the LibDems at the election, and could well drain significant support from the Tories and dash David Cameron's hopes of a second term.

Its leader, Nigel Farage, is a canny opportunist, recently latching on to gay marriage as an issue to draw Tory voters over to his party.

Farage makes clear in his interview today with the Sunday Herald that a Yes vote in 2014 would present Ukip with the chance to run an "rUK First" campaign and demand that Westminster drives the toughest possible bargain with the departing Scots.

And where Ukip goes, the Tories and others may well feel obliged to follow.

So, no matter what the SNP thinks ought to happen under Para 30, an aggressive Ukip campaign could see negotiations take on a very different tone.

However, the SNP continues to put its faith in Para 30 and the UK's "enlightened self-interest".

One senior Nationalist said Moore and his colleagues were largely posturing for political reasons.

"The UK Government is being negative about things in the campaign because they want a No vote.

"But, if there's a Yes vote, that attitude will change literally overnight. Things said to be problems would be solved as it's sensible for the UK Government to do so.

"For instance, it would be overwhelmingly in the UK Government's interest to secure [the currency zone] to avoid a question mark over the pound."

Perhaps. But maybe the Yes camp should send Santa their wish list early next year, just to be on the safe side.

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