The referendum no one is talking about

While Westminster is fixated on the EU, Scotland is moving ever closer to independence.

While the Tories have been warring over whether to hold a national vote on EU membership, Alex Salmond has been quietly devising his strategy for a different referendum. As the SNP leader confirmed at his party's conference last weekend, the ballot paper will contain two questions. The first will be a straight yes/no question on Scottish independence, the second will be on full fiscal autonomy or "devolution max" (devo max).

Aware that he may not be able to win a majority for independence, Salmond is attempting to ensure that the SNP ends up with a consolation prize. But no one should underestimate how radical a step fiscal autonomy would be. Scotland would win complete control over spending, borrowing and taxation, leaving Westminster in charge of foreign affairs and defence. In an ingenious move, Salmond is attempting to turn the SNP into the party of independence and the party of devolution. The distance between the two is smaller than some imagine. An independent Scotland would retain the Queen as its head of state, British military bases (although the Trident subs would go) and the pound until, in Salmond's words, "it was in Scotland's economic advantage to join the euro" (in other words, indefinitely).

However, there is every reason to believe that Scotland will vote for full independence in the second half of the five-year Holyrood parliament. The SNP has already amassed a £1m campaign war chest and the polls are moving its way. A ComRes survey published on 15 October showed that 49 per cent of Scots now favour independence, with just 37 per cent opposed. Scottish Lib Dem leader Willie Rennie posed the question: "What if devo max got 99 per cent 'yes' and one per cent 'no' in the vote while the independence option got 51 per cent 'yes' and 49 per cent 'no'?" But Salmond has already confirmed that a slim majority for independence will trump a large majority for devo max. A brilliant politician and strategist, he will wait until discontent with the Westminster coalition is at its height before calling a referendum.

Labour and the Tories, leaderless as they are in Scotland, are not even close to devising a strategy to combat Salmond. After the SNP's remarkable victory in May, David Cameron vowed to defend the United Kingdom with "every fibre in my body". But we've seen little evidence of that so far. As for Ed Miliband, he has largely avoided the subject since forgetting the name of one his party's leadership candidates (Ken Macintosh), even though Scottish independence would automatically strip his party of 41 seats. For now, all the momentum is with Salmond and the SNP. This must change. And soon.

George Eaton is political editor of the New Statesman.

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Theresa May gambles that the EU will blink first

In her Brexit speech, the Prime Minister raised the stakes by declaring that "no deal for Britain is better than a bad deal for Britain". 

It was at Lancaster House in 1988 that Margaret Thatcher delivered a speech heralding British membership of the single market. Twenty eight years later, at the same venue, Theresa May confirmed the UK’s retreat.

As had been clear ever since her Brexit speech in October, May recognises that her primary objective of controlling immigration is incompatible with continued membership. Inside the single market, she noted, the UK would still have to accept free movement and the rulings of the European Court of Justice (ECJ). “It would to all intents and purposes mean not leaving the EU at all,” May surmised.

The Prime Minister also confirmed, as anticipated, that the UK would no longer remain a full member of the Customs Union. “We want to get out into the wider world, to trade and do business all around the globe,” May declared.

But she also recognises that a substantial proportion of this will continue to be with Europe (the destination for half of current UK exports). Her ambition, she declared, was “a new, comprehensive, bold and ambitious Free Trade Agreement”. May added that she wanted either “a completely new customs agreement” or associate membership of the Customs Union.

Though the Prime Minister has long ruled out free movement and the acceptance of ECJ jurisdiction, she has not pledged to end budget contributions. But in her speech she diminished this potential concession, warning that the days when the UK provided “vast” amounts were over.

Having signalled what she wanted to take from the EU, what did May have to give? She struck a notably more conciliatory tone, emphasising that it was “overwhelmingly and compellingly in Britain’s national interest that the EU should succeed”. The day after Donald Trump gleefully predicted the institution’s demise, her words were in marked contrast to those of the president-elect.

In an age of Isis and Russian revanchism, May also emphasised the UK’s “unique intelligence capabilities” which would help to keep “people in Europe safe from terrorism”. She added: “At a time when there is growing concern about European security, Britain’s servicemen and women, based in European countries including Estonia, Poland and Romania, will continue to do their duty. We are leaving the European Union, but we are not leaving Europe.”

The EU’s defining political objective is to ensure that others do not follow the UK out of the club. The rise of nationalists such as Marine Le Pen, Alternative für Deutschland and the Dutch Partij voor de Vrijheid (Party for Freedom) has made Europe less, rather than more, amenable to British demands. In this hazardous climate, the UK cannot be seen to enjoy a cost-free Brexit.

May’s wager is that the price will not be excessive. She warned that a “punitive deal that punishes Britain” would be “an act of calamitous self-harm”. But as Greece can testify, economic self-interest does not always trump politics.

Unlike David Cameron, however, who merely stated that he “ruled nothing out” during his EU renegotiation, May signalled that she was prepared to walk away. “No deal for Britain is better than a bad deal for Britain,” she declared. Such an outcome would prove economically calamitous for the UK, forcing it to accept punitively high tariffs. But in this face-off, May’s gamble is that Brussels will blink first.

George Eaton is political editor of the New Statesman.