Does Scotland's No Really Mean No?

A small victory for David Cameron.

U.K. Prime Minister David Cameron just came close to losing a 307-year-old union the same way historian John Robert Seeley once said Britain acquired its empire: "in a fit of absence of mind." Cameron assumed Scotland's referendum would attract the roughly one-quarter of Scots who have long wanted independence. He should have recognized long before the final days of the campaign that this would also be a protest vote.

The protest was against Cameron's Conservative Party, hated north of the border, and the austerity programs run from London that have hit Scotland's public-sector workforce, which still accounts for about a fifth of Scottish employment. Yet this kind of protest (and the weak response to it) is hardly unique to Scotland.

In England, immigrants and the flawed European Union are the targets of popular ire. In Spain, Catalonia is pushing to secede. In France, Greece, parts of central Europe and even Sweden, repolished neo-Nazi demagogues are gaining support, boosted by a continentwide protest vote in European Parliament elections earlier this year.

It is, of course, a fantasy to think that splitting countries, leaving the EU, keeping out immigrants or scapegoating dark-skinned foreigners will boost wages and the quality of life for those left behind in increasingly unequal societies. But the failure of governments to address valid complaints leaves the field dangerously open to such populism.

It's not enough -- as Cameron surely now knows, as should his colleagues across the English Channel -- to respond to crises. Elected officials need to act first to make the economic and fiscal reforms that give their countries a better chance to compete and their citizens a better chance to succeed.

Part of the problem in Scotland is that the financial crisis, and the austerity measures and low-wage growth that followed, have compounded a belief among many Scots that the system no longer works for them. In Glasgow, for example, where deprivation is highest in Scotland, it's no coincidence the city was one of the few to vote solidly in favor of independence. As Graham Doherty, a worried Edinburgh businessman, put it after voting yesterday: "We have some of the worst pockets of poverty in the U.K., so when someone comes along and promises independence will solve all your problems, people say, Why not? What do I have to lose?"

The encouraging news is that the referendum campaign was both long and (for the most part) civil, allowing Scots plenty of time to assess and weigh the arguments. And a healthy majority recognized that the Scottish National Party's promises of a more generous welfare state -- paid for with diminishing oil and gas revenues, in a joint currency the rest of the U.K. has already rejected -- was snake oil.

This was an extraordinary exercise in democracy that brought many Scots to the polls for the first time -- from both sides of the yes/no divide. Cameron now has an opportunity to redress Scottish complaints, tap into this new political engagement, and at the same time rebalance the distribution of power and money from London to the rest of England, Wales and Northern Ireland, too.

To succeed, however, Cameron will need to think bigger. If he doesn't, the next Scottish protest vote could really bring the end of the union.

Corrects first paragraph to reflect age of union between England and Scotland.

--Editors: Marc Champion, Michael Newman.

To contact the editor on this story:
David Shipley at davidshipley@bloomberg.net