Belfast Telegraph

Scottish independence: Yes or no, Scots vote will change the Union forever

Northern Ireland will not remain unaffected by today's independence poll, whatever the result

By Liam Clarke

This is the first day of the rest of your life. Today Scotland will take the most momentous constitutional decision any part of the UK or Ireland has undertaken since the Anglo-Irish Treaty nearly a century ago.

Live Scotland results: Referendum counts from 32 councils on day of reckoning for Yes and No voters 

That agreement allowed for an Irish State independent of Britain. It led to civil war and the death of one of the signatories, Michael Collins.

Conflict is unlikely this time, but the change in the political climate in Northern Ireland and across Europe will be profound whether the Scots vote to go it alone or opt by a narrow margin to remain in the UK, as the polls indicate.

Whatever the result, it will spark intense debate on the future shape of the UK. The implications for us are massive – from how we are funded to our relationship to other regions, to what nationalism or loyalism actually involves.

Even in the event of a No vote it won't be business as usual. A narrow No could make it a 'neverendum referendum' with the question likely to be put to the public again. The term is borrowed from Quebec, the French-speaking region of Canada which has strong regional government. It has voted twice against independence without the nationalist cause being extinguished. The first referendum in 1980 produced a 59% majority to remain part of Canada and 40% voting to secede. A second referendum in 1995 produced a photo-finish, 50%-49%, and there are still calls for a re-run.

The current compromise allows Quebec to share the Canadian dollar but gives it control over many economic and social levers, including education, immigration, taxation and cultural policies. If this doesn't deliver, the sovereigntists have a slogan, which goes "a la prochain" – till the next time.

We could expect something similar if Scotland votes No. Alex Salmond, the SNP leader, claims the vote would never be repeated. Not everyone believes this patter.

Some say it comes from the playbook of the carpet salesman who urges us to "buy now while stocks last" and warns "when it's gone, it's gone".

The suspicion is that Mr Salmond, or his successor, will revive the issue if central government does not keep Scotland happy.

That gives the country, which is a wealthy part of the UK, a strong hand in demanding concessions.

The UK's three main party leaders have signed a pledge promising to preserve the Barnett formula, by which the block grant is allocated to devolved regions.

The Scots will also get control of anything from 15p in the pound of income tax, Labour's policy, to full control from the Tories.

The Conservatives would also give them a slice of VAT. Stamp duty and air passenger duty are also likely to be handed over, as is control of health service funding and welfare.

If that sounds fairly appetising, it could well ruin us if pushed too far here. The downside is that Scotland's block grant would be reduced to take account of the changes, just as ours was when we broke parity on welfare reform and water rates.

Tax revenues handed to Scotland would also be factored in, just as ours will be if we get corporation tax raising power next month.

This works for Scotland because, most studies agree, it takes in more tax revenue per head of population than England.

Institute of Fiscal Studies figures indicate that Scotland would be fit to stand on its own feet and pay for its public services from its own tax revenue, especially if North Sea oil is included.

The same study notes that per capita tax revenue is 23% lower in Northern Ireland than in UK as a whole. The likelihood is that if we demanded and got the same deal as a No voting Scotland, it would be painful to balance our books.

Scotland also wants to reduce corporation tax to 3% below UK rates, something that would compete with our own plans to set a lower rate.

Wales and some English regions may seek the same sort of autonomy. The implication is that the UK government could lose revenue from wealthier regions, making it less willing to subsidise us in the future.

Further devolution would reignite the so called 'West Lothian issue', which questions the voting rights of MPs from devolved regions to vote on matter which only affect England. That would reduce the leverage of our MPs at Westminster.

After the referendum the UK economy may suffer.

A recent Bank of America/Merrill Lynch survey of global fund managers found that most were going to avoid UK stocks for a year after the vote to see what happened.

A Yes vote will bring us even further into uncharted waters. Nobody really knows if Scotland will be able to keep the pound. The three main UK parties say they will veto it, though the SNP accuses them of bluffing.

A Yes vote would also be an electoral hammer blow to the Labour Party, making it more likely that we would see a series of majority Tory governments.

An independent Scotland may not be able to join the EU either. Yesterday the Spanish government signalled that Scotland's membership would have to renegotiated if it leaves the UK. Spain fears that if breakaway regions get easy entry then Catalonia will be next.

One positive may be that an independent Scotland might be forced to offer free university places to UK students under EU rules.

The SNP claims it wouldn't, but a former European Court judge, Sir David Edward, says that any refusal would not survive a legal challenge.

A possible stopgap would be to form a separate currency pegged to the pound as the Ireland did for decades after independence.

Scotland could also follow the Irish example by maintaining a common travel area, but only if it was in the EU. Another unresolved issue is the flag. Scotland intends keeping the Queen as Head of State, like Canada, but will the Union flag have to be changed? How would unionists feel about that?

And what would be the impact here if the Scottish saltire flown in many loyalist areas were to become a flag of separatism.

Without 5.2 million Scots, the UK would not be the same place and it would not seem as solid an unchangeable to either nationalists or unionists.

The nature of the State would be changed, its finances would shift and here in Northern Ireland there would a deep cultural and political shock.

We tend to handle those rather badly.

Scottish Independence Vote further reading

Scottish independence: Publicans really nail their colours to the mast 

Scottish independence: Battle between Yes and No takes a bitter twist in final hours of campaigning

Scottish independence: No camp drowned out by noisy, flamboyant and abrasive rivals who sense historic win 

Scottish independence: Break-up of the Union could hit Northern Ireland, warn business chiefs

Scottish independence: Ties that bind Northern Ireland and Scotland go way back and will survive the referendum 

Scottish independence: From oil and the pound to the Queen and tax - everything you need to know about the referendum

Will Rod Stewart abandon his love for Scotland? Will the Krankies sing for their country at Eurovision? And what would independence mean for Northern Ireland?

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Scottish independence: Breaking up would be a painful divorce, warns Cameron

Scottish referendum: Focus on devolved tax powers issue whatever Scottish result 

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Scottish independence: Unionists must change tack to save the Union

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Scotland independence could bring tax breaks for North Sea oil industry

Alistair Darling: Scottish independence referendum will go right to the wire

Scottish independence: Trade and cultural links too strong to ever break

Scottish referendum: London sells us short in buying No vote 

Independence: What's the next step for Scotland and how will Northern Ireland people living there vote?

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