Scotland: Independence Referendum

Lord Lamont of Lerwick Excerpts

Thursday 30th January 2014 Lords Chamber

[Lord Lamont of Lerwick (Con)]

My Lords, I, too, congratulate my noble friend Lord Lang on the brilliant speech with which he introduced this debate. It is a pleasure to follow the noble and learned Lord, Lord Hope, who, if I may say so, always brings a very Scottish sense of wisdom to our debates. It would be a tragedy if he were removed from this House because of independence.

This is the first time that I have ever dared intervene on the subject of independence for Scotland. As a Scot who has lived in England for a long time, I have always felt that one was not very welcome intervening in the debate. Unfortunately, I do not have my father's Glasgow accent, but I have always said that it is not necessary to sound like Rob Roy to prove one is a Scotsman.

Scottish independence would, I believe, diminish what remains of the UK in the eyes of the world. It would be the end of Britain. It is often forgotten that the name Britain came into existence only after the Act of Union, and the name would make no sense if the northern part of this island were to be removed. If Scotland became independent, people around the world would wonder what had gone wrong, what had happened. It would be just as if Illinois or Florida broke away from the United States—people would feel that the standing of the United States, its viability, was somehow diminished.

The departure of Scotland would diminish us internationally. It would have an effect on our standing in international institutions where voting power, as in the EU, is often determined by population. For example, we would have fewer votes in the Council of Ministers and fewer seats in the European Parliament. Sir John Major has said that Britain might well lose its seat on the Security Council of the UN. I do not know if that is right, but I notice that the Scottish Government's White Paper on independence states that an independent Scotland would support the United Kingdom in trying to retain its seat on the UN Security Council. How would it do that? Where are the diplomats? It has no embassies. It does not have a history of independent diplomacy. How would a tiny country be able to help a diminished, smaller UK? If that is a real problem, it is a perfect example of how we are better off together.

There is a curious thing about how Mr Salmond presents independence. He presents it as a situation in which nothing will change: the Queen will be there, the Scottish regiments will be there, the pound will be there, the Bank of England will be there. It was Lampedusa, the Italian writer, who said that things have to change in order to remain the same. For Mr Salmond, things have to stay the same in order to change.

Boris Johnson has referred to a cat’s cradle of legal and political ties. I am sure that there are many things that have not been thought of that will have to be unscrambled. I am sure that the issue of citizenship will throw up many problems. Let us take one. At present, British citizens living outside the UK cannot pass on citizenship for more than one generation, so children of UK citizens living in Scotland, if there is an independent Scotland, will be UK citizens, but not the children of their children. For many people, that could pose family problems. Let us take another question: civil servants. In many countries, the state reserves certain posts in the Civil Service to its own nationals. Will that apply in Scotland, with no UK citizens being able to work in the Scottish Civil Service; indeed, will it apply in the UK? What about the Foreign and Commonwealth Office? What about the Ministry of Defence?

Then there is the issue which the Governor of the Bank of England touched on yesterday: the question of the currency. Mr Salmond believes that in exchange for assuming part of the debt of the United Kingdom, he can have part ownership of the Bank of England. If Scotland is going to have its own fiscal system able to decide the balance between spending, borrowing and taxation within its own boundaries and determines its own deficit, that will have an effect on the rest of the UK—on the Bank of England, on monetary policy. If Scotland runs an excessive deficit—let us say, 10% of its GDP—that will have an effect on interest rates for the rest of the United Kingdom. So there would have to be some agreed fiscal limit on borrowing by an independent Scotland. There would have to be some arrangement—like that, dare I say it, between Germany and Greece and the peripheral countries of the eurozone. I am not saying that Britain would treat Scotland as Germany has treated Greece, but there would have to be some agreement.

The words sovereign, the King, sovereign, the coinage and sovereignty, the concept of independence, are all intertwined. Independence without your own currency is a very constrained form of independence. Mr Salmond wants to have a Prudential Regulation Authority that would apply throughout the UK and an independent Scotland, but public opinion will ask why the Bank of England should stand behind Scottish banks. It was expensive enough bailing out RBS when it was a British bank. Are we really going to be expected to bail it out if it gets into trouble as a Scottish bank?

Then we have had the issue of UK debt. The Treasury was forced to say that it would guarantee all existing debt, right up to the point of Scottish independence. Mr Salmond saw that as an own goal. It may have helped him a little in the argument, but the Treasury was forced to make that announcement because of the markets. The markets were nervous about an independent Scotland. There can be no doubt that an independent Scotland would have to pay a higher rate for borrowing simply because it has no track record and there would be uncertainty about what sort of fiscal policy it would follow.

Why is there all this desire to separate? It seems very much to be based on oil. One section of the country thinks it could make itself better off overnight, simply by grabbing the oil—but God put the oil under the North Sea, not Alex Salmond. There is a parallel with Shetland, where I come from. Shetland was not part of Scotland at the time of the Battle of Bannockburn. Shetland could claim part of the oil; Shetland could go independent. I am not saying it will, but how would Scottish nationalists regard that? They would regard it as destructive and selfish. Are we Scots really so different from the English? Well, of course we are—but not so different and not so much better that we need to have a Government of our own. We have been together for so long, achieved so much together. Ripping the blue out of the Union Jack would be a wretched business which would do nobody any good at all.