Scotland’s Nationalists to Set Out Independence Vision

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A British Union flag, left, flies beside a Saltire flag, the national flag of Scotland, in Edinburgh. Close

A British Union flag, left, flies beside a Saltire flag, the national flag of Scotland, in Edinburgh.

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Photographer: Simon Dawson/Bloomberg

A British Union flag, left, flies beside a Saltire flag, the national flag of Scotland, in Edinburgh.

Scotland’s nationalist government aims to establish an independent state by March 2016, breaking away from the 306-year-old United Kingdom and keeping the pound as its currency, according to the blueprint it published today.

While the most recent TNS BMRB poll showed one in four Scottish voters favor spurning the U.K., First Minister Alex Salmond said regaining sovereignty would boost economic growth and narrow inequalities.

“This paper puts beyond doubt that Scotland would start from a position of strength,” Salmond told a briefing in Glasgow. “It reflects out vast potential as a country.”

Salmond had been under pressure from U.K. Prime Minister David Cameron and his ministers to state more clearly how independence might work. The risk now is that it leaves the Scottish nationalists exposed to challenges over the details, said Matt Qvortrup, a senior researcher at Cranfield University who has written a history of referendums.

“You don’t play defensively if you’re not ahead,” Qvortrup said by telephone yesterday. “Now they have to attack, and attack ferociously.”

The Scottish National Party, which has run the government in Edinburgh since 2007, billed today’s policy statement, known as a white paper, as the long-awaited details it’s been accused by the pro-union campaigners of withholding because it would worry voters.

Photographer: Simon Dawson/Bloomberg

The debate has swirled mainly around finances: how much of the U.K. national debt the independent country would be saddled with, how much revenue it can expect from North Sea oil and if it can agree on a currency and monetary alliance with England, Wales and Northern Ireland. Close

The debate has swirled mainly around finances: how much of the U.K. national debt the... Read More

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Photographer: Simon Dawson/Bloomberg

The debate has swirled mainly around finances: how much of the U.K. national debt the independent country would be saddled with, how much revenue it can expect from North Sea oil and if it can agree on a currency and monetary alliance with England, Wales and Northern Ireland.

The 650-page policy document includes everything from currency and childcare to naval defense and organ transplants as it spelled out the next steps in negotiations should voters opt to leave the U.K. in next year’s referendum on Sept. 18.

Common Sense

The Scottish government’s general website and one devoted to the referendum both crashed just before the policy statement was published as members of the public sought details.

An independent Scotland would keep the pound as that was the “common sense position” for both Scotland and the rest of the U.K., Salmond said today.

That assertion was again challenged by the British government. A currency union “remains highly unlikely,” Cameron’s spokesman, Jean-Christophe Gray, told reporters in London.

The white paper “doesn’t really answer the big questions around currency, fiscal sustainability, and Europe,” he said. “Respecting the outcome of the referendum is a completely different thing to agreeing to whatever Alex Salmond announces at a press conference.”

The Scottish government plans to enter negotiations with the European Union on the basis of the U.K.’s current terms of membership. It has no plans to join the euro or the borderless Schengen area covering 26 European countries, Salmond said.

EU Treaties

EU treaties provided clear articles when it came to the need for a new third country to apply to the EU if it wanted to join, Olivier Bailly, a spokesman for the European Commission, told reporters in Brussels today. He declined to comment on the Scottish referendum. There were treaty implications if part of an existing member state left that state, he said.

The choice of March 24, 2016 as Independence Day if Salmond wins the referendum is rooted in Scottish history. On the same day in 1603 King James VI of Scotland became King James I of England in the Union of the Crowns. The Acts of Union in 1707, which merged the parliaments of England and Scotland to create Great Britain, was also signed on March 24.

The Scottish Parliament in Edinburgh, shut with the 1707 Acts of Union and restarted in 1999 as the U.K. devolved power, has control over transportation, health, education and justice, while Cameron’s government in London oversees the economy, defense, foreign policy and welfare including pensions.

Free Education

Scotland has maintained free higher education while England raised tuition fees. It also introduced free personal and nursing care for the elderly and abolished charges for medical prescriptions. It will continue to provide free access to higher education for Scottish students, it said today.

The Scottish government plans to scrap the so-called bedroom tax introduced across the U.K. to reduce welfare payments as well as stop plans to replace existing benefits with one monthly payment. The combined benefit, known as Universal Credit, is one of the flagship welfare policies of the U.K. coalition government.

Corporation tax would be cut by as much as three percentage points to boost companies’ competitiveness, while air passenger duty would be cut by 50 percent to encourage more travel to and from Scotland.

The state of Scotland’s finances is such that the general rate of taxation would not need to be raised after independence to maintain current levels of spending, the government said.

The party proposed the referendum after winning a majority in Scottish elections in 2011, though it has failed to translate that support into backing for its flagship policy.

Poll Findings

The TNS BMRB poll of 1,010 people showed those intending to vote for independence lagging behind support for the status quo by 18 percentage points. No margin of error was given. Undecided voters totaled 32 percent, up by a percentage point on the month. The odds of Scotland becoming independent meanwhile are now at their longest ever at bookmakers.

While opponents acknowledge Scotland could go it alone, they argue it would come at a cost.

“The white paper is a work of fiction,” Alistair Darling, a former U.K. chancellor of the exchequer and leader of the Better Together campaign against independence, said in an e-mailed statement. “It is thick with false promises and meaningless assertions. The nationalists have ducked the opportunity to answer the big questions on Scotland’s future.”

U.K. Arguments

The U.K. government has published at least eight documents outlining the risks it says are involved with independence, including areas such as doubts over automatic European Union membership. The most recent, on defense and research, said an independent Scotland might lose access to military hardware contracts and university funding sources.

Other reports have raised questions over finances. The newly independent country would need to reduce spending or increase taxes more than the rest of the U.K., the Institute for Fiscal Studies said on Nov. 18. Without budget controls, Scotland’s net debt would rise above 100 percent of national income by the early 2030s, it said.

Scots could face paying an additional 1,000 pounds a year in higher taxes in the event of independence, Danny Alexander, a Scot who is in charge of public spending in the U.K. government, said today.

A second referendum may be needed if the aspirations in the policy document can’t be met in the negotiations, Robert Hazell, director of the constitution unit at University College, London, said in an e-mailed statement.

To contact the reporters on this story: Rodney Jefferson in Edinburgh at r.jefferson@bloomberg.net; Peter Woodifield in Edinburgh at pwoodifield@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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