The shrieking flaw in the proposed Scottish independence referendum is the failure to establish the terms of Independence before the referendum is held. This is vital because all parts of the UK are potentially seriously affected, especially if Cameron is mad enough to agree to an independent Scotland using the pound with the Bank of England as lender of the last resort (https://englandcalling.wordpress.com/2012/01/22/an-independent-scotland-must-not-be-allowed-to-have-the-pound-as-their-official-currency/).
The terms of independence should be negotiated between Westminster and Holyrood and put to a referendum of all parts of the UK apart from Scotland before the Scottish referendum is held. If it is rejected the Scottish referendum should be delayed until further negotiations on terms have been agreed and put to a further referendum. If that fails, either because no such terms can be agreed or because they are agreed and the second referendum rejects them, the question of Scottish incidence should be shelved for ten years to give time for reflection.
The Agreement between Cameron and Salmond
There is no provision in the agreement signed by Cameron and Salmond for what happens if no terms for independence are agreed. (http://www.scotland.gov.uk/About/Government/concordats/Referendum-on-independence). This has considerable consequences. On the face of things the strength of the respective negotiating positions of Westminster and Holyrood in the event of a Yes vote would depend on the size of the majority for independence. While it is true that a large majority for independence would add weight to Holyrood’s demands , any Yes vote, however small the majority, will give Holyrood a strong negotiating position because something has to be decided. That would put Westminster in a very difficult situation because, even if they wished to only agree to equitable terms such as Scotland not using the Pound and taking on a share proportionate to their population of all UK public debt, Westminster would be in a very difficult position if Holyrood refused such terms. In such circumstances, the odds are that a compromise which was favourable to Scotland and unfavourable to the rest of the UK would be agreed simply to honour what was implicit within the idea of a Scottish independence referendum, namely, that the referendum would result in independence if the vote was Yes.
It is inconceivable that any Westminster Government could refuse to come to an agreement on the terms of independence, because it would produce a running political sore which would never be healed. Holyrood could refuse to come to equitable terms because they would know that even if Westminster delayed matters for a while by refusing to agree terms, the odds would be strongly on them caving in sooner or later. Not only that, if a Government is formed at Westminster in 2015 which does not include the Tories, the terms would almost certainly be much more in favour than they would be if they were agreed by the present coalition. There is also the possibility of the next General Election happening before 2015 if the Coalition falls apart.
Any agreement on terms would have to be agreed by both the Westminster and Holyrood Parliaments. If so, it is unlikely that Holyrood would refuse any terms laid before them by Salmond, although they might insists on better terms . Westminster is another matter. Either the Commons or Lords or both could refuse to pass the legislation needed to give legal form to independence or the Bill could be amended one way or another during its passage to make it unacceptable to either Holyrood or the Westminster Government. There are many MPs in the Commons who have good reasons for trying to stop the Bill or of improving or worsening the conditions. There would be a particular temptation for LibDem and Labour MPs sitting for Scottish seats to jump from the UK political ship and support very favourable terms for Scotland in the hope of making a political career in Holyrood politics.
There is also the question of how English, Welsh and Northern Irish would give their assent to any terms of independence which were agreed. There has been no mention of a referendum on the terms in all parts of the UK apart from Scotland. If the Tories and Labour were behind the terms , there would be no meaningful way of voters to express their agreement or disagreement at a General Election. The odds are that the electorate would not be offered an opportunity to say Yes or No to the terms.
There is also the position of the Scottish electorate to consider. As they would be buying a pig-in-a-poke if they vote for independence, there is a very strong case for saying that the Scottish electors should have a vote on the terms before independence goes ahead.
The practical difficulties
In addition to the likely friction between Westminster and Holyrood over terms for independence, there are matters which are either wholly or partially dependent on foreigners. There is the question of whether an independent Scotland would automatically remain part of the EU or have to reapply and if they have to reapply, whether Scotland would have to join the Euro. Spain has already signalled that there would be no automatic acceptance of an independent Scotland into the EU (http://www.scotsman.com/news/politics/top-stories/scottish-independence-spain-would-not-allow-scots-automatic-eu-entry-1-2588253). If Scotland was refused membership of the EU that would have profound effects, both in terms of the money she currently receives in grants from the EU and access to EU markets, especially for Scotch whisky.
Then there is the Pound. If Westminster refused Scotland the use of the Pound, Scotland would either have to join the Euro (assuming she can join the EU as an independent state) or set up her own currency from scratch. Even if they are allowed the use of the Pound it is unlikely that the arrangement would last long. The splitting of Czechoslovakia into the Czech Republic and Slovakia in 1993 is instructive. The official division took place on 1 January. Initially both countries retained the old Czechoslovak currency the koruna, but by 8 February they had set up separate national currencies (each also called the koruna) because the Czech Republic was substantially richer than Slovakia and having the same currency made no sense because she could only be a loser. In effect, the Czech Republic would have been subsidising Slovakia if they had continued to share a currency. (Once the new national currencies were established the Czech koruna traded at a substantially higher value than the new Slovakian koruna.)
As for Nato, It is by no means clear that an independent Scotland would be accepted by that organisation. It would have tiny armed forces and its determination not to have nuclear weapons within its territory would make it an unattractive proposition for Nato members (http://www.scotsman.com/news/snp-party-conference-get-nuclear-guarantee-from-nato-leadership-told-1-2590701).
The Balkanisation of England back in play
Those who imagined the Balkanisation of England through regional assemblies had died with the humiliating rejection of assemblies put forward by John Prescott (http://www.bbc.co.uk/news/uk-england-16932030) should be on their guard. Cameron has agreed in principle to further, as yet undefined devolved powers, for Scotland if the Referendum result is No to Scottish independence. (http://www.telegraph.co.uk/news/uknews/scotland/9587910/Tories-back-new-UK-constitutional-settlement.htm).
Cameron supports the idea of a permanent constitutional convention which would decide the constitutional balance between devolved and central power if Scotland votes No. The Daily Telegraph reported on 5 October that
“It [the constitutional convention] could mean power being transferred from Westminster to the English regions or new restrictions on Scottish MPs voting on domestic English issues.
Miss Davidson, the Scottish Conservative leader, told an inquiry by MPs she supported the creation of a constitutional convention but only if it examined the balance of powers between all four home nations.
Senior Tory sources confirmed the move is backed by Mr Cameron as means of tackling “instability” in the current set-up that can be exploited by Nationalists to stir up tension and acrimony.
The Prime Minister believes that tax powers currently being transferred to Edinburgh under the Scotland Act represents the limits of “bilateral devolution” and any further changes must be considered in the context of the UK as a whole.” (http://www.telegraph.co.uk/news/uknews/scotland/9587910/Tories-back-new-UK-constitutional-settlement.htm)
The position is the same with the Independence Referendum: it is a blank cheque. By agreeing to this Cameron has placed the UK less Scotland in a position where they are likely to see further privileges given to Scotland at their expense. That is particular true of England which has no Parliament or government to speak up for its interests. If the independence referendum was lost only narrowly Scotland’s bargaining position would be strong because there would be a temptation for Westminster to agree to very extensive increases in the devolved powers available to Scotland.
It will be in the interests of politicians (and voters ) in the Celtic Fringe and those sitting for English seats whose parties rely heavily on MPs from outside of England to wield power and influence (the Tories and the LibDems) to vote for a settlement which would Balkanise England through regional assemblies. They would do this because it would emasculate England politically by reducing English political representation to a serious of minor political entities on a par or even smaller than those of the various Celtic assemblies. Nor would such assemblies have the same emotional attraction as those of the Celts because they would not represent a nation and many of the regions would not have a strong local identity.
It is probable that if English assemblies were put to a referendum most would be rejected just as the few trial ones under Prescott were rejected. But one or two might get through and that would be the thin end of the wedge because the Westminster government in favour of regional assemblies would be able, if it was still the prime revenue raising body in the UK (and it almost certainly would be), to favour those few English parts with regional assemblies and that could lure the others in given time. Alternatively, English regional assemblies could simply be created by Act of Parliament with no referenda. Once established, it would be very difficult to turn the clock back, not least because each would have established a new political class at the regional level . English electors might hate the idea but if all major Westminster parties supported it there would be nothing the electors could do.
Eternal vigilance is the watchword
There is a very real danger of England being sold comprehensively down the river over the next few years. English MPs, Peers and the media should be ceaselessly lobbied over what is happening, both over the terms of independence and what is likely to happen if the Scots vote No to independence.