Who will lead the campaign to save the Union?

Gus O'Donnell is right to warn that the future of the UK is an "enormous challenge".

In a valedictory article for today's Telegraph, Gus O'Donnell, the outgoing head of the civil service, warns that the question of "whether to keep our kingdom united" will be an "enormous challenge". It may seem like an obvious statement but it is also a necessary one. Far too few in Westminster have considered what an independent Scotland would mean for England.

We all know who will lead the Yes campaign - Alex Salmond - but who will lead the No campaign? Not David Cameron, whose party holds just one seat in Scotland (the country has more giant pandas than Tory MPs). Canny as ever, Salmond will wait until the Tories are at their most unpopular before calling a referendum.

One option floated by some in Labour is for Gordon Brown, who retains immense respect in Scotland, to return to lead the charge against independence. Only the former prime minister, they say, would have the gravitas required to take on Salmond. But this discussion is taking place in far too narrow a circle. The threat of Scottish independence, which would deprive Labour of 42 of its 258 Westminster seats in a single stroke, should be near the top of Ed Miliband's in-tray.

At the very least, it is likely that Scotland will win full fiscal autonomy within the next five years. As Salmond has said, the referendum ballot paper will contain two questions: the first on full independence and the second on "devolution max" or fiscal autonomy. While the Scottish public remains divided over independence, there has long been a majority in favour of devo max.

Scotland would win complete control over spending, borrowing and taxation, leaving Westminster in charge of only foreign affairs and defence - a degree of autonomy comparable to that enjoyed in Spain by the Basque Country and Catalonia. The economic relationship between England and Scotland would be profoundly altered. What, for instance, would be the consequences for English business of Scotland adopting an ultra-low rate of corporation tax? If judged successful, would fiscal autonomy be extended to England and Wales?

O'Donnell's article is a salutary reminder that these discussions need to be had now.

Update: Salmond has responded to O'Donnell's comments:

I have always regarded Sir Gus O'Donnell as a model civil servant, who has been extremely fair in recognising and respecting the democratic mandate of the Scottish Government.

Sir Gus is right to recognise the importance of the constitutional issue, and the SNP Government are up for the challenge

George Eaton is political editor of the New Statesman.

Photo: Getty
Show Hide image

Something is missing from the Brexit debate

Inside Westminster, few seem to have noticed or care about the biggest question mark in the Brexit talks. 

What do we know about the government’s Brexit strategy that we didn’t before? Not much, to be honest.

Theresa May has now said explicitly what her red lines on European law and free movement of labour said implicitly: that Britain is leaving the single market. She hasn’t ruled out continuing payments from Britain to Brussels, but she has said that they won’t be “vast”. (Much of the detail of Britain’s final arrangement is going to depend on what exactly “vast” means.)  We know that security co-operation will, as expected, continue after Brexit.

What is new? It’s Theresa May’s threat to the EU27 that Britain will walk away from a bad deal and exit without one that dominates the British newspapers.

“It's May Way or the Highway” quips City AM“No deal is better than a bad deal” is the Telegraph’s splash, “Give us a deal… or we walk” is the Mirror’s. The Guardian opts for “May’s Brexit threat to Europe”,  and “May to EU: give us fair deal or you’ll be crushed” is the Times’ splash.

The Mail decides to turn the jingoism up to 11 with “Steel of the new Iron Lady” and a cartoon of Theresa May on the white cliffs of Dover stamping on an EU flag. No, really.  The FT goes for the more sedate approach: “May eases Brexit fears but warns UK will walk away from 'bad deal’” is their splash.

There’s a lot to unpack here. The government is coming under fire for David Davis’ remark that even if Parliament rejects the Brexit deal, we will leave anyway. But as far as the Article 50 process is concerned, that is how it works. You either take the deal that emerges from the Article 50 process or have a disorderly exit. There is no process within exiting the European Union for a do-over.  

The government’s threat to Brussels makes sense from a negotiating perspective. It helps the United Kingdom get a better deal if the EU is convinced that the government is willing to suffer damage if the deal isn’t to its liking. But the risk is that the damage is seen as so asymmetric – and while the direct risk for the EU27 is bad, the knock-on effects for the UK are worse – that the threat looks like a bad bluff. Although European leaders have welcomed the greater clarity, Michel Barnier, the lead negotiator, has reiterated that their order of priority is to settle the terms of divorce first, agree a transition and move to a wider deal after that, rather than the trade deal with a phased transition that May favours.

That the frontpage of the Irish edition of the Daily Mail says “May is wrong, any deal is better than no deal” should give you an idea of how far the “do what I want or I shoot myself” approach is going to take the UK with the EU27. Even a centre-right newspaper in Britain's closest ally isn't buying that Britain will really walk away from a bad deal. 

Speaking of the Irish papers, there’s a big element to yesterday’s speech that has eluded the British ones: May’s de facto abandonment of the customs union and what that means for the border between the North and the South. “May’s speech indicates Border customs controls likely to return” is the Irish Times’ splash, “Brexit open border plan “an illusion”” is the Irish Independent’s, while “Fears for jobs as ‘hard Brexit’ looms” is the Irish Examiner’s.

There is widespread agreement in Westminster, on both sides of the Irish border and in the European Union that no-one wants a return to the borders of the past. The appetite to find a solution is high on all sides. But as one diplomat reflected to me recently, just because everyone wants to find a solution, doesn’t mean there is one to be found. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.