The people of Scotland have elected a government that, as part of its election manifesto, said that it would hold a referendum on Scotland leaving the UK. They should be allowed to do so unhindered by a panicking Westminster establishment.
However as everyone knows this referendum has no legal force. The legal locus for decision making in this respect is at the Westminster Parliament, created by the Act of Union in 1707 and the only body that can bring the Union to an end.
Should Westminster bring the Union to an end if the people of Scotland wish it? I believe that they should. We cannot talk about democratic government unless we allow “Government of the People”, which means “Government made by the People”. In a democracy if the people of Scotland wish to change the form of their government then that democracy must allow them the right to do so.
However this split, if it occurs, will require a treaty, perhaps many treaties, to decide on many things. One of these things will be property rights, another will be the distribution of the national debt, another will be defence, yet another will be taxation and things like customs duties and so on.
All of these treaties will affect the wealth and future well being of the people of England and as a result not one of these treaties can be agreed without the agreement of the People of England through a, or a series of, referendums. If the People do not agree then the politicians will have to go back to the negotiating table. If there is no agreement then there will be no end to the Union!
Is this important? Are there likely to be areas of disagreement? Where are the sticking points?
The first one will be oil. Alex Salmond likes to claim that 90% of the oil is Scottish. As Robin Tilbrook pointed out in his blog “Some of it’s ENGLANDS oil” that, on the basis of international law, between 25% and 50% of the oil belongs to England and 100% of the gas is English. If Salmond is unable to agree a reasonable compromise of between 25% and 50% of the oil, and 100% of the gas, being English then the People of England should not approve the treaty.
Alex Salmond has refused to take on the £187bn of government exposure to the Royal Bank of Scotland’s bad assets. His claim is that as the regulation of RBS was in London it is London that must bear the cost. Now, the matter that brought down the RBS was the purchase of the Dutch bank ANB Ambro. Until that point the RBS was reasonably clear of toxic assets, clear enough certainly to be able to handle any problems with its own reserves. Who then encouraged this merger? Why the same Alex Salmond that refuses to take on the costs of his actions. The Financial Times (12/12/12) reports that in 2007 Mr Salmond encouraged Sir Fred to purchase ANB and wrote to him “It is in Scottish interests for RBS to be successful and I would like to offer any assistance my office can provide. Good luck with the bid”. In 2007 he also promised “a light touch regulation suitable to a Scottish financial sector”. As the Edinburgh MP, Alistair Darling, has said “The decisions that RBS made that got it into trouble were made in Edinburgh, not in London”. Any treaty on the breakup of the Union would have to transfer to Scotland 100% of of the £187bn exposure on RBS.
What else is there? One thing that needs to be examined are the payments to Scotland for running its affairs that have exceeded those made to England. This started in 1888! George Goschen, the then Chancellor, decided that Scotland should have its own source of funding. To begin with this was not a very good deal but as 1900 came and went the cash paid per head to Scotland exceeded that paid to England, very soon increasing to a fifth more and then to more than a fifth extra. Currently it is 19% more than goes to England. If Scotland has received, say, 20% more than England over, say, 100 years then it will have received a total of 20 times that given to England, in a year, during that period. Currently England gets £8,588 per head (2010-2011) so 20 times this is £171,760. There were 5.2 million (mid-2010) people in Scotland so this adds up to a total of £893.2bn in current money terms! Now Scotland’s population has been lower over the last century. If it has averaged half the current size then a fair estimate is £446bn in current money terms rather than £893.2bn. This is an enormous sum of money and over the years it has made Scotland the third wealthiest region in the United Kingdom. The poorer regions of England who have contributed to this Scottish wealth might reasonably think about the size of the dowry that Scotland is going to leave them.
The question of dowry leads us to the division of the national debt. this is probably fairest done by dividing it by population. To this should be added a portion of the £893.2bn identified above. What sort of portion. Well much of the UK’s debt is long term, which is why we are not worried about the markets attacking us. If this represent 12 years say, then it would be reasonable for 12% of the £446bn to be added to Scotland’s share, say £50bn. This could then be used to regenerate the North. It would be their dowry!
How much debt would Scotland have to take on? If that were calculated based on population then Scotland with a mid-2010 population of 5.2 million out of a UK total of 62.2 million would take on 8.4%, say £85 – £110bn of peak debt, which with the £5obn mentioned above could be £135 – £160bn
Clearly the English cannot leave it up to their politicians to put the interests of the People of England first. English politicians are so used to giving away the wealth, and the name, of England that they would even agree to give away England’s gold. Oops, sorry, they have already agreed to that haven’t they! So the People of England must start insisting NOW! that there will be no treaty agreed on any further changes to the constitutional set up in the UK without their agreement through a referendum.GHTime Code(s): nc nc nc nc