Scottish independence: From oil and the pound to the Queen and tax - everything you need to know about the referendum
Everything you need to know ahead of September 18
As a nation prepares to vote, some issues are still high on the agenda. We take a look at what voters want to know – and where each side stands.
YES: Alex Salmond was mocked by Alistair Darling in their first debate for having “no plan B” if an independent Scotland could not share the pound. The second time they faced each other the First Minister insisted he believed Scotland could use sterling, but said he had three plan Bs – a currency fixed to the pound, unilateral use of sterling or its own currency. A poll this month suggested Mr Salmond may have taken the sting out of the issue, with 51 per cent of Scots saying they thought anti-independence politicians were bluffing when they said England would not allow a currency union.
NO: Better Together has sought to make uncertainty over a breakaway Scotland’s currency its central argument against independence. Alistair Darling deployed this message successfully in the first televised clash with Alex Salmond, but faced groans when he returned to it in the second debate. George Osborne has declared that Scotland would not be allowed to share the pound, backed by Labour and the Lib Dems. Last week the Bank of England Governor, Mark Carney, said currency union in the event of independence would be “incompatible with sovereignty”.
YES: The nationalists insist an independent Scotland would not be over-reliant on oil. They believe the UK Government has squandered most of the North Sea oil revenues by failing to establish a fund for the money to be invested. Under independence, they say, such a fund would be created. This would also help to get around the problem of oil’s volatility from year to year. To win over the industry, Scotland’s Energy Minister, Fergus Ewing, recently hinted that oil and gas firms could benefit from new tax breaks if Scotland became independent.
NO: The Better Together campaign has argued that relying too heavily on North Sea oil would be dangerous as it is such a volatile commodity. Under independence, they say, Scotland would have to draw on oil revenues to fund public spending – so if the amount raised suddenly fell, services could suffer. They also argue that there might not be as much oil under the North Sea as the Scottish Government is expecting, pointing to statements made by an oil industry expert, Sir Ian Wood, who warned last month that they may have overestimated the amount by up to 60 per cent.
Economy and jobs
YES: In the 2013 Referendum White Paper, Alex Salmond said independence would make Scotland better off. “We know we have the people, the skills and resources to make Scotland a more successful country,” he said. The Yes campaign has quoted studies claiming the economy has underperformed as a result of Westminster policies. The Scottish Government has sought to highlight the success of food, whisky and tourism. Nationalists dismissed warnings of job losses from banks relocating their HQs to England, claiming it would simply be a case of moving a brass plate.
NO: The UK Treasury warned in 2013 that the Scottish banking industry was too big to be bailed out in a crisis. With assets worth more than 12 times the country’s GDP, it said each taxpayer would face liabilities of £65,000 in the event of a collapse. The No campaign then sought to capitalise on the Defence Secretary, Philip Hammond’s prediction of 12,000 military-related job losses and billions of pounds of missed contracts if Scotland went it alone. The issue has remained at the centre of the debate, culminating in the assertion this week by RBS that it would relocate its HQ to London.
YES: Pro-independence campaigners have derided warnings about border controls as scaremongering and insist Scotland would remain part of the common travel area covering the UK and Ireland because of “our shared history, culture and borders”. Alex Salmond said an independent Scotland would need to increase net annual immigration to around 24,000 to maintain public spending. He argued that represented only a slight rise in current levels, possibly mindful of Ukip’s achievement in gaining a Scottish Euro-MP and a survey that found most Scots backed Ukip’s stance on immigration.
NO: The Home Secretary, Theresa May, suggested border controls with England may be introduced if Scotland votes Yes. She argued independence could lead to Scotland joining the European Schengen common travel area which the UK has not signed up to. Ed Miliband, the Labour leader, was quoted as saying the idea of border checks “would have to be looked at”. However, Better Together has shied away from raising immigration, perhaps for fear of accusations of playing the race card or because of the pro-Union parties’ differing instincts on the issue.
Defence and Trident
YES: Nationalists believe they are on to a winner in left-leaning Scotland with their pledge to remove Trident within five years of independence. Alex Salmond argued last week that Scotland “doesn’t need the largest and most expensive arsenal of nuclear weapons in Europe [for it] to be influential” and suggested the Trident billions would be better spent on childcare. In campaigning in the west of Scotland, the Yes camp has tried to allay fears over jobs at the Faslane nuclear base by stressing that the new Scottish Defence Force would be based on the site.
NO: Better Together has argued a Yes vote would risk Scots’ safety in a volatile world and threaten tens of thousands of jobs in defence. But it has been conscious of the hostility among many Scots to nuclear weapons, so has relied on outside experts and UK-based politicians to do the heavy pounding on defence, notably the importance of maintaining Trident. Sir David Omand, the former head of GCHQ, attacked the SNP’s proposals as “fundamentally flawed”, while a former Nato chief, General Sir Richard Shirreff, ridiculed them as “amateurish and unrealistic”.
YES: The Queen would remain head of state in Scotland, just as in Canada, Australia and New Zealand. Alex Salmond, who held a private audience with the Queen at Balmoral Castle several weeks ago, said that while she would not want to enter the referendum debate herself, she would be “proud to be Queen of Scots”. The Scottish Government’s White Paper on an independent Scotland points out that the Union of the Crowns dates back to 1603, pre-dating the Union of the Parliaments by more than a century.
NO: Although in the short term the Queen’s role in Scotland would not change, supporters of the Union say her position would be far less secure. They point to remarks by Dennis Canavan, chairman of the Yes campaign, who said last year that a national referendum should be held on who should be head of state in the event of independence. Last week, reports surfaced that the Queen was concerned about the prospect of the Union breaking up, but Buckingham Palace has categorically insisted that she is totally neutral on the subject, although she did comment yesterday
YES: Nationalists warned that failure to achieve full independence could jeopardise popular policies such as free personal care. The White Paper promised cross-border treatment would continue while reassuring people that there would be no prospect of following the reform path taken by London. In May this year more than 100 health professionals formed NHS for Yes, claiming the service was at risk of future cuts by Westminster. Alex Salmond said the Scottish NHS was threatened with “privatisation and fragmentation” by Coalition policies.
NO: Even before the launch of the campaign, opponents of independence pointed out that Scotland has always had operational control of its own NHS. In 1999 further responsibility for healthcare was enshrined in law and devolved to the Scottish Parliament, allowing Edinburgh to set its own policies and priorities including abolition of prescription charges. In May a campaign warning Scots they would no longer be able to access children’s services at Great Ormond Street backfired when the hospital in London asked for the ads to be withdrawn.
Welfare and pensions
YES: Welfare in Scotland is still controlled by Westminster, a state of affairs the nationalists say is unfair, pointing to the fact that around 90 per cent of Scottish MPs voted against the so-called “bedroom tax”. Under independence, they have promised that the deeply unpopular levy would be abolished, while the rollout of other troubled reforms such as universal credit and personal independence payments would be halted. Pensions which have already been accrued will be honoured according to the SNP, who have claimed state and public sector pensions will be paid as before.
NO: The Better Together campaign has claimed an independent Scotland would face deep spending cuts which would place a strain on welfare budgets, arguing that the nationalists’ sums do not add up. The three main Westminster parties unveiled plans last week to fast-track new welfare powers for the Scottish Parliament if the country votes No. The proposals, which include the possible devolution of control over housing benefit, the work programme and other taxes, would be agreed by late January and ready for the House of Commons to vote on after next year’s general election.
YES: The Scottish Government has said there are no plans for tax increases after a Yes vote, claiming it could raise £250m a year or more by simplifying tax and making it harder to avoid. But the chairman of Yes Scotland, Dennis Canavan, has hinted at a system which would mean the wealthy would pay more than those less well off. It is hoped a proposed 3 per cent cut in corporation tax would attract big businesses (and jobs) to Scotland, while another cut in air passenger duty would encourage more travellers to use the country’s airports and turn the larger ones into “hub” destinations.
NO: Better Together has pointed to research by the Institute for Fiscal Studies suggesting that from 2016, an independent Scotland’s public finances would face a bigger deficit than the UK’s. It argues this would leave a £6bn hole in public spending which could only be plugged by big tax increases. Under proposals unveiled by the Westminster party leaders last week in the event of a No vote, the Scottish Government would get far greater powers to influence income tax. The plans also include the potential devolution of control over other taxes such as air passenger duty or capital gains.
YES: Alex Salmond accused the “Westminster elite” of jeopardising Scotland’s EU future. Mr Salmond remains confident Scotland will successfully negotiate a “continuing” membership of the EU in the 18-month window between now and the date set for independence in 2016. In other words Scotland would not technically leave the EU. The threat of a future Tory-led UK government holding a referendum on the EU means the Yes campaign has portrayed independence as Scotland’s only “guarantee” of remaining part of the EU.
NO: Legal advice taken by the Government claims an 18-month negotiating window is “unrealistic”. The possibility that Scotland would trail the pound would prove a barrier to continuing membership. The claim is “No functioning central bank, no EU”. Allowing Scotland to be handed fast-track membership without evidence of the usual convergent economic requirements would be unprecedented. There are fears that separatist movements in Spanish regions and elsewhere will mean national vetoes being brandished and Scotland having to wait in line.
Trade and business
YES: Nationalists always knew they would face an assault from big business and got their retaliation in early. Business for Scotland was launched in March 2013 and now boasts a membership of 2,500 business people. Like its rivals, it has rolled out declarations of support, with 200 executives coming out for independence in August followed by another 100 last week. Business for Scotland says its supporters are drawn from a representative mixture of employers across Scotland. Alex Salmond has accused David Cameron of orchestrating “scaremongering” by major companies.
NO: It has been a key aim of pro-Union campaigners to rally business chiefs to warn of the perils of independence. After initial reluctance, and as the polls narrowed dramatically, they began to line up to argue against the break-up of the United Kingdom. Big names raising fears about the impact of independence in recent days have included the Royal Bank of Scotland, Lloyds, Standard Life, BP and Kingfisher. John Lewis added the warning to consumers that prices could be higher in a separate Scotland than in England.
The BBC and culture
YES: At the launch of the independence White Paper, Alex Salmond offered assurances that Scotland would still have access to all the BBC programming. A new Scottish Broadcasting Corporation (SBC) would be created as a state broadcaster, and the BBC’s Scottish staff could form part of that new organisation. In line with other no-change assurances, funding for the new SBC would be similar to the BBC’s licence fee. The same assurances have been given on other national arts organisations, already branded with a Scottish identity, such as Scottish Ballet.
NO: Alex Salmond’s belief that an SBC and the BBC would swap programming was described as “make believe” by the former Director General of the BBC, John Birt. But Mr Salmond insists “common sense” and mutual benefit over broadcasting and arts will break out after a Yes vote. Some BBC executives in Scotland worry about their future, saying STV, the main commercial broadcaster in Scotland, could be handed the role currently occupied by BBC Scotland. Economists have warned that an independent Scotland’s TV licence was likely to be triple the current UK fee.
Scottish Independence Vote further reading