Why breaking up Britain could tear apart the EU, too

September 12, 2014

A bunch of 'Yes' balloons are seen as Scotland's First Minister Alex Salmond campaigns in Edinburgh, Scotland

While recent opinion polls have swung slightly back toward the “no” camp, there remains a distinct possibility that Thursday’s Scottish referendum will trigger a previously unthinkable breakup of Britain.

If this were to happen, the biggest risks for global businesses and investors do not lie in the economic problems created by Scotland’s choice of currency or the inevitable arguments about sharing North Sea oil revenue and the British national debt. These are crucial challenges for Scotland and have been much discussed in financial institutions and think tanks. But the crucial issue for the world economy and financial markets is about the resulting impact on the European Union — and especially on Britain, which would remain the world’s sixth largest economy even if Scotland departs.

These political risks, which I discussed here last week, can be broken down into four questions: What would Scottish independence, if it happens, mean for British politics and economic management over the nine months, until the May 2015 general election? What effect would it have on the election results? How would all this turmoil affect Britain’s fraught relationship with Europe? Would Scottish independence act as an inspiration for secessionist movements in other European countries?

Britain's Prime Minister David Cameron speaks during a visit to the Scottish Widows building in Edinburgh, ScotlandThe answers to all four questions promise to be more destabilizing than almost anyone would have predicted a month ago.

Starting with the issue of other European independence movements, the answer is obvious. If Scotland votes for independence, it would become extremely difficult for the Spanish government to continue denying a similar democratic right to the Catalans and Basques. Beyond that, Flemish separatists would intensify pressure in Belgium, and the Northern League in Italy could get a new lease on life.

Focusing back on Britain, the political implications become more complex. If Britain breaks up after Thursday’s vote, Prime Minister David Cameron would have to take responsibility for promoting the referendum on needlessly risky conditions that in hindsight look downright reckless.

It was Cameron who decided to offer the Scots a simple choice between staying in the union or breaking it — instead of taking up the Scottish National Party’s proposal for a third option of increasing self-government within Britain. Cameron also allowed preserving the union to be presented as a negative option in the phrasing of the referendum question and accepted the National Party’s controversial decision to lower the voting age from 18 to 16.

For all these reasons, plus his unpopularity in the Conservative Party’s powerful anti-European wing, Cameron would likely face huge pressure to resign if the referendum passes.

The Conservative Party has a history of turning suddenly and ruthlessly against its leaders. In September 1990, nobody imagined that Prime Minister Margaret Thatcher was even remotely vulnerable. Less than three months later she was gone.

'No Thanks' badges are displayed during campaigning by Alistair Darling, the leader of the campaign to keep Scotland part of the United KingdomWhether or not Cameron is ousted after the vote, the British government would be reduced to lame-duck status until the May election. The only issues on the political agenda would be the terms of Scottish separation and the Cameron government’s astonishing complacency about presiding over national breakup.

This complacency, which voters, investors and businesses have only just started to notice, was exemplified on Monday when Sir Jeremy Heywood, head of the British Civil Service, calmly told a shocked parliamentary committee that government departments were doing absolutely nothing to prepare for the possibility of Scottish independence.

“The government has made it clear,” Heywood said, “that it does not wish to do any contingency planning and that applies to the Civil Service. When we are given a clear instruction by ministers, we obey it.”

What would all this mean for the 2015 election and subsequent policy, especially on Europe? With the government stumbling and consumed by recriminations between now and May, it is hard to imagine the current coalition winning re-election — especially given the sense of shock and national failure implied by Scotland turning its back on Britain.

The probability of a Labor-led government taking charge next year would rise to something like 70 percent or 80 percent. That prospect could be quite alarming to international investors in Britain and sterling, since Labor would likely campaign on a platform of higher taxes, shrinking the City of London’s financial activities and abolishing the concessions to foreign residents that now make Britain one of the world’s top tax havens.

To make matters worse, a Labor-led government would lack proper political legitimacy to enact its manifesto promises — much less negotiate the terms of separation from Scotland. For its majority would depend on Scottish members of Parliament due for expulsion in 2016 should Scotland leave Britain.

A constitutional crisis therefore seems almost inevitable. Labor would likely have to respond by promising another general election after Scotland’s secession in March 2016. This would mean two years of unprecedented political turmoil and economic policy uncertainty for businesses and investors in Britain, leading up to a second election in mid-2016. Labor would almost certainly lose that election to a Conservative Party that, by that time, would be strongly committed to exiting the European Union.

Which brings us to the European question. If Scotland leaves Britain, many Conservatives would consider their hold on power in Westminster as virtually guaranteed because of the removal of Scotland’s 59 members of Parliament — only one of whom is a Conservative. So the party would surely move further toward the Europhobia of its most vocal grass-roots activists.

The Tories have already promised to renegotiate Britain’s EU membership and hold an “In or Out” referendum in 2017. Whether they are returned to power in 2016, or manage to win re-election in May, the Tories would probably be emboldened by their “natural” majority in a Britain without Scotland to demand conditions for maintaining EU membership that Brussels, Paris and even Berlin would reject.

Thus if Scotland breaks Britain next week, a chain of events would begin that is likely to end with Britain breaking the Europe Union.


PHOTO (TOP): A bunch of ‘Yes’ balloons are seen as Scotland’s First Minister Alex Salmond campaigns in Edinburgh, Scotland, September 10, 2014. REUTERS/Paul Hackett

PHOTO (INSERT 1): British Prime Minister David Cameron gestures as he speaks during a visit to the Scottish Widows building in Edinburgh, Scotland, September 10, 2014. REUTERS/Andrew Milligan/pool

PHOTO (INSERT 2): ‘No Thanks’ badges are displayed during campaigning by Alistair Darling, the leader of the campaign to keep Scotland part of Britain, in Edinburgh, Scotland, September 8, 2014. REUTERS/Russell Cheyne


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Scotland must opt for independence to be able to control immigration and massive,uncontrolled immigration is what is destroying the UK and Europe more than anything else said about separation between Scotland and the rest of the UK.

Posted by cleancountry | Report as abusive

“For its majority would depend on Scottish members of Parliament due for expulsion in 2016 should Scotland leave Britain.”

re above sentence:
Not would, but may.
Poor grammar, its refers to a Labour led government in the previous sentence.
Its Labour not Labor (change your dictionary if writing about the UK)

Simplistic, superficial analysis. Could do much better.

Posted by CharlieWheeler | Report as abusive

In the unlikely event of a Yes vote, England will simply not accept the results.

If they did, the breakup of the UK would have no effects on EU, which is already building firewalls for the inevitable UK secession from the EU.

Posted by LeifLeifnephew | Report as abusive

Good riddance, the Fourth Reich needs to go.

Posted by Raoxshna | Report as abusive

First Scotland then Wales and then Catalonia. The handwriting is on the wall for the EU bureaucrats who have run roughshod over working people, wrecked prospects for peace by using NATO to aggressively make war and threaten Russia. The Commissioners of the EU insulated from the peoples control has run amok and trampled on liberty and prosperity while serving as shills for the big bankers, hedge funders and insurance companies in violation of the EU charter itself. Time to force them to pull in their horns and change course.

More power to the Scots in their quest for freedom.

Posted by Bfstk | Report as abusive

“Thus if Scotland breaks Britain next week, a chain of events would begin that is likely to end with Britain breaking the Europe Union.”

I’m trying to understand why either of those would be a bad thing – other than to members of the ruling class.

Posted by PJ2 | Report as abusive

England will not accept the result if Scotland want to independence

Posted by Jimmy.fan | Report as abusive

If GB / England leave EU then I believe the other 27 countries will move on as a smaller EU. Then there will be borders and customs between England and EU. EU would have to negotiate every trade agreement at a high price! EU is doing a very good job at integrating new member states. The living standard and freedom that EU give in these states is very improtant for the further development in Europe. England will miss this 300 million people market! EU and USA should proceed their open market plan without england.

Posted by jacobsch | Report as abusive

In 1776 m the American colonies ‘voted”yes for independence from the world’s most powerful empire … economic collapse was predicted for the “yankees” Amazingly , the USA seems to have surviver fairly well
A “yes” vote will benefit Scotland in spite of the blizzard of scare propaganda from London ~

Posted by bocacassidy | Report as abusive

The author makes a fundamental and far reaching error error in his assessment of the 2015 elections.

In the event of a Yes vote, Scotland de jure be an independent country overnight. While many issues will need to be negotiated, Scottish MPs at Westminster will not be one of them.

In the event of a Yes vote, the current 59 Scottish seats at Westminster will no longer be in play in May 2015. Even a cursory look at a colour coded electoral map of the UK shows that England, Wales and Northern Ireland will become blue Tory country, where Labour alone or in coalition with the Lib Dems, stand no mathematical chance of forming a government at Westminster.

Posted by tetris | Report as abusive

Cameron, Miliband and Clegg are awaiting instructions from Brussels.
Th e UK Parliament no longer makes policies. The EU do.

Posted by Alash | Report as abusive

Excellent Scotland,do say good bye to the Queen and her family of royals.Soon Washington will face secession also again.

Posted by BubbaTheGreat | Report as abusive

The only way that the UK (and its constituent parts) can totally control immigration is to leave the EU.

The rise of UKIP and other anti-EU parties demonstrates that there is widespread discontent amongst the peoples within the EU and this is something politicians need to take on board.

David Cameron talks repeatedly about his referendum but never actually says or pledges openly and clearly that if voters vote to leave the EU he will act to do that.We already know that there is no interest in reform from Barroso, Hollande and Merkel and we know too that Cameron’s fair weather supporters will not support him when the going gets tough.

What David Cameron should focus on is that, given there is an election in 2015, he may not be Prime Minister when 2017 comes and therefore the referendum pledge is worthless.

If UKIP win the Rochester By-election he will have cause to be concerned.

The EU want the UK to remain to discuss reform which is a farce and a con given the negative comments already stated by EU leaders.All the EU wants is our contribution to the budget and without it there could be problems within the EU as to who will be making up the deficit caused by the UK’s departure.

With the EU out of the way the UK can focus on giving greater autonomy to Scotland, Wales and Ireland as well as the northern powerhouse cities.Given this development of autonomy, the only MPs left in Westminster should be English MPs and thus there would be no need to have the additional expense and bureaucracy of a separate English Parliament.

Indeed government generally needs to be reformed to make it more efficient, cost-efficient and effective, making it not only better but cheaper.

Whether that happens is another matter and only time will tell if the UK will finally get to control its own future.

Posted by newshounduk1 | Report as abusive