Scotland: Independence Referendum

Lord McAvoy Excerpts

Thursday 30th January 2014 Lords Chamber

[Lord McAvoy (Lab)]

My Lords, I, too, congratulate and thank the noble Lord, Lord Lang of Monkton, on bringing this debate to the Floor of the House. We are in the year of the referendum and the timing of the debate will be regarded as kick-starting the real public debate and action on it.

The debate has been threaded throughout by some really terrific contributions from very knowledgeable and creditable people. It has also been marked by the maiden speech of the noble Baroness, Lady Goldie, making her debut today. She is a very welcome addition to the House. I hesitate to say that I look forward to her usefulness to the House, as it may be entirely for the Tory party; nevertheless, she will be an asset to the House and she is very welcome.

Among his many salient points, the noble Lord, Lord Lang, mentioned the issue of sacrifices. I endorse that sentiment. As a nation, we have come through two world wars. We suffered together, we sacrificed together. Although that may not be monetarily relevant, it is socially relevant. I certainly agree with that.

The noble Lord, Lord Forsyth of Drumlean, mentioned various reasons for the Treaty of Union in 1707, but he missed out one. One of the elements in the mix was the panic in the English Parliament that the Scottish Parliament still retained the right to recall the Jacobite James VIII.

Scotland’s place in the union is not just good for Scotland. As many noble Lords have said today, it benefits England, Wales and Northern Ireland. The union is a collective endeavour in which the four home nations are united in the pursuit of the common good. There is a desire by some to break up that relationship while claiming that none of the relationships that proceed from it will be affected. That is simply untrue. Indeed, what is proposed is a leap into the dark, leading to a complex process of negotiation and redefinition. It is simply fallacious to claim that Scotland can leave the union and that all that is positive that proceeds from it can be not simply preserved but somehow improved. Rather, the outcome of a yes vote in September will be the transformation of a relationship of partners into one of competitors—a transformation which will be bad for Scotland and bad for the remainder of the United Kingdom.

The SNP’s vision of an independent Scotland is a fantasy based on the claim that somehow everything will change while, simultaneously, nothing will change and consequently everything will be better. The relationship it envisages with what remains of the United Kingdom typifies that fantasy and how the reality would be damaging for both countries. By retaining sterling, Scotland’s monetary policy would still be determined by the Bank of England. That would effectively mean that Scotland’s borrowing and interest rates would be controlled by a foreign country. The statement by Mr Mark Carney, the Governor of the Bank of England, has surely finally scotched that fantasy of Alex Salmond.

This House’s Select Committee on Economic Affairs seriously doubted the possibility that members of the Bank of England’s Monetary Policy Committee could represent the interests of a separate country. Such a sterling union would mean a fundamental change for the worse. Monetary policy would in no way be determined in the interests of the Scottish people. This also exposes another central falsehood of the SNP’s position: its unique understanding of negotiation—that simply by declaring what you want, you will be given it. This was certainly exposed by, for instance, the noble and learned Lord, Lord Cullen of Whitekirk, describing the damage to the research facilities available to Scotland. I will come back to Alex Salmond in a minute. I do not want to spend too much time on Alex Salmond. We should concentrate on the big examples.

By breaking the political union with the UK, the benefits of four nations working together will undoubtedly be lost, and Scotland’s relationship with the outside world completely redefined. The benefits brought by shared regulation and institutions—namely, a unified labour market, integrated infrastructure and a UK-wide business framework—would either be lost altogether or severely diminished. In the area of defence procurement, which was mentioned specifically by a number of noble Lords, including my noble friend Lord Browne of Ladyton, the damage done to Scotland and to the UK would be long term. I doubt we would be able to recover from it. An independent Scottish state would have lower domestic demand for defence goods and would no longer be eligible for UK defence contracts. The Clyde would never again be able to build complex warships or aircraft carriers for the Royal Navy.

Throughout the world, the United Kingdom is working to pursue the best interests of England, Wales, Scotland and Northern Ireland. There are currently 267 embassies, high commissions and consulates in 154 countries. The idea of Scotland setting up a similar structure is laughable. My noble friend Lady Liddell mentioned Alex Salmond’s comment that we would remain best pals with England. Yet at the same time, he still propagates the idea that despite, in theory, being a member of the European Union, Scotland would bar English students from free tuition fees. Best pals? There is a touch of nastiness there, which we should always remember when we are dealing with Mr Salmond.

By leaving the union, Scotland would be damaging all the other partnerships that spring from it. The legal opinion is increasingly clear that the remainder of the UK would be regarded as the continuity state, inheriting all the international rights and obligations that currently befall the UK, while Scotland would be regarded as a new successor state. As many noble Lords have indicated, Scotland would have to reapply to join the European Union and NATO. Here, again, many in the yes campaign display a shaky understanding of the meaning of negotiation. The Scottish Government’s White Paper declares that an independent Scotland would join the EU, but not the eurozone or the Schengen area. However, this is at odds with the EU’s rules on membership. Any exemption would likely require unanimity among all the member states. At the moment, that seems extremely unlikely. The terms of membership are simply not within the Scottish Government’s gift. Similarly, the desire to become a member of NATO is at odds with SNP commitments regarding Trident. Trident is part of a NATO security umbrella. Any attempt to remove it from the Clyde would undoubtedly impact on Scotland’s relationship with other NATO countries and negatively affect its application for membership.

The union has served to advance Scotland throughout the world, and leaving it would take us into a world of uncertainty. If Scotland were to vote yes to the ending of three centuries of partnership, the remainder of the UK would face the same negative consequences. My noble friend Lady Quin indicated the dilemma of the feeling of closeness and camaraderie across the border with Scotland, and the potential damage to Northumberland and the border counties from having a separate Scotland with fiscal taxation and all the rest of it. Her powerful speech indicated the dangers of that.

A new competitiveness between the remainder of the United Kingdom and Scotland would be damaging to both. While the UK would be regarded as the continuity state in international law, its standing would be diminished—hence the apposite title of this debate in the name of the noble Lord, Lord Lang. Serious questions would doubtless be asked as to why the UK continued to retain a place on the UN Security Council. The UK’s role and influence within the European Union would also be weakened. Furthermore, Scotland’s exit from the union would be a heavy blow against the concept of multinational states. It would prompt serious questions as to the involvement of Wales and Northern Ireland within the union, potentially reawakening terrible wounds within the latter, as was mentioned by the noble Lord, Lord Trimble. It would also have a profoundly negative impact on England’s identity and politics.

The implications for the UK of a Scottish yes vote in September 2014 are unappetising. It would represent a turning inwards, a diminished outlook and a turning away from a relationship of co-operation and partnership into a relationship of competitors. Outside the union, Scotland would find itself having to try to renegotiate its relationship with the UK and international bodies. If an independent Scotland managed to enter into a sterling union, it would represent a highly regressive development. Scots would find that their monetary policy was being entirely determined by a Bank of England no longer capable of adequately representing the Scots.

Scotland’s relationships with all its UK partners would also need redefining, and it would inherit none of the privileges and benefits that currently exist. The upcoming Scottish independence referendum allows us the opportunity to articulate once again the mutual benefits that come from the union and argue for the preservation of this collective endeavour. It allows the Scots the choice of whether to remain partners within the United Kingdom or become competitors outside it.

Once again, I thank the noble Lord, Lord Lang of Monkton, for facilitating this debate. I also place on record our appreciation to the noble Baroness, Lady Anelay, and my noble friend Lord Bassam for agreeing to extend the time allowed for this important debate, which shows the House of Lords at its very best. In my opinion, it shows our relevance to a UK-wide debate. I would like to think that this debate and the powerful speeches here today mark the start of the campaign to keep Scotland within the United Kingdom.