Independence in focus: Scotland Bill announcement unlikely to dilute independence debate

by Mar 26, 2012 No Comments

While the debate over independence has been raging for some months, it was the largely forgotten Scotland Bill that reared its head last week.

It was announced that under the legislation Holyrood will be given new income tax and borrowing powers as part of the deal.

It has also been agreed that the contentious role of the UK Supreme Court in Scots law will be reviewed.

But, with the march towards an independence referendum well under way, it is difficult to see what relevance the Scotland Bill now holds.

Both administrations have confirmed they will recommend that MSPs and MPs support the Scotland Bill when it comes before Holyrood and the Commons.

To secure the deal, UK ministers dropped plans to return certain powers to Westminster.

It was also agreed that the package would only be implemented with the agreement of Holyrood.

The financial measures include: a new Scottish rate of income tax, the devolution of stamp duty land tax and new borrowing powers.

The UK Government said the new borrowing limits would be reviewed regularly and a consultation would be launched soon into the possibility of the Scottish Government being able to issue its own bonds.

Scottish Secretary Michael Moore, who released details of the deal in a written statement to the Commons, said it “marks a major step forward for devolution.” But the SNP’s Bruce Crawford said that although the Scottish Government had secured some important changes, the Bill represented a “missed opportunity” for Scotland.

“We know the people of Scotland want significantly more powers for the Scottish Parliament – the debate around the independence referendum has shown that – and I believe the Scotland Bill will be out of date before reaching the statute book.” That debate over the referendum has taken over party conference season this month.

How Scotland would finance itself under independence and whether it would be better or worse off remains a key battleground.

Finance Secretary John Swinney told the party faithful at the SNP conference that there was now no question on whether Scotland could afford to be independent – claiming “the case is closed”.

Hundreds of delegates to the Glasgow gathering heard the minister say that Scotland “pays more to the UK than we get in return”.

In his speech, he said: “The question our opponents have to answer is – can we afford the consequences of remaining part of the UK?” He said: “Scotland contributed 9.6 per cent of UK taxes but we received only 9.3 per cent of UK spending in return.

“With only 8.4 per cent of the UK population we paid more than our share and got less back.” The party received a boost from the corporate field also when it was reported computing giant Dell would continue to do business in an independent Scotland.

It comes as some businesses have voiced concern over independence – Scottish-based entrepreneur Michelle Mone has threatened to move her company to England.

But the Dell Corporation’s global president, Steve Felice, has indicated that the outcome of the referendum would not change the company’s commitment to Scotland.

“I cannot think of any difference,” said Felice on a visit to Scotland. “We are an organisation that deals with one customer at a time. So the customer is the Government here.” Felice said he wanted “to reiterate our commitment to Scotland”.

But opponents of independence said the SNP’s economic case for independence has been undermined after the party seemed to concede that the oil-rich Northern Isles would be allowed to opt out of joining a separate Scotland.

The SNP’s rural affairs spokesman, Angus MacNeil, hinted to the BBC that Shetland and Orkney could remain part of the UK “if there was a big enough drive for self-determination” amongst constituents.

He was reacting to a submission to the consultation on the referendum by the MSPs for Shetland and Orkney, who warned the islands could opt to remain part of the UK even if the rest of Scotland votes to separate.

Orkney and Shetland feel remote from London and Edinburgh, and it is said they could flex their muscles over neighbouring oil-rich waters.

Regarding the currency an independent Scotland would use, one of the world’s leading experts in economic competitiveness said it would have “no choice” other than to join the euro.

Professor Stephane Garelli, the director of the World Competitiveness Centre, said he believed that it made economic sense for Scotland to join the beleaguered currency if independent.

The euro’s position as the second-largest currency held in foreign reserves meant that it would make sense for an independent Scotland to join the single currency instead of remaining within sterling, Prof Garelli, a former managing director of the World Economic Forum, argued.

But he also suggested that Scotland did not yet have enough medium-sized industries to ensure economic success after independence. He said it would reduce Scotland’s voice in Europe and warned against Scotland becoming over-reliant on North Sea oil, suggesting that manufacturing and exports needed to be expanded.

The Scottish Government dismissed the claims, with a spokesman saying: “The clear position is that an independent Scotland will retain sterling, and there are strong benefits for the rest of the UK as well as Scotland in being part of a sterling zone. For example, Oil and Gas UK estimates that this sector alone boosted the UK’s balance of trade in goods and services by £32 billion in 2010 – almost halving the UK’s deficit.

“We are focused on our policy of sharing a successful sterling area with the rest of the UK upon independence, and therefore membership of the euro is neither a short nor medium-term prospect.” Regarding the debate over the actual referendum procedure, constitutional expert Alan Trench last week said Scottish independence is an “unknown proposition” and may require two referendums to ratify.

Trench, honorary senior research fellow at the constitution unit at University College London, said a referendum without prior negotiation on Scotland’s future powers would not be “fair”.

He has also called for a single yes-no question to be drafted in consultation with the Electoral Commission.

He said: “Any referendum held before independence negotiations have taken place means that voters will be voting on an essentially unknown proposition.

“They will not, and cannot, know what choices may be made about the nature of an independent Scotland in those negotiations.

That creates a serious flaw in the process.

“This could be avoided by holding a referendum after independence negotiations have taken place. However, it is not clear what the mandate for holding such negotiations would be. This is a powerful argument for the ‘two referendums’ approach.” He added: “The common wish of the two governments to have a ‘decisive’ referendum militates against having one that is also ‘fair’.” Trench has delivered his comments to Holyrood and Westminster as a single response to the two referendum consultations.

Party conference season this March has very much been consumed by the independence referendum and the Conservative event will be much the same.

The leader of the Scottish Tories launched a new group aimed at keeping Scotland in the Union.

Ruth Davidson said Conservative Friends of the Union would be open to anyone, not just party members.

The organisation was formally launched at the party’s conference in Troon, Ayrshire.

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