Wednesday is judgment day for Scotland’s independence efforts.
At 9:45 am local time on Nov. 23, the UK Supreme Court will decide whether or not Holyrood can call a unilateral second independence referendum without a nod from Westminster. The court heard arguments in the case on Oct. 11 and 12, and had more than 8,000 pages of written material to consider.
In arguing for independence, Scottish leaders claims the nation’s economy suffers due to its inclusion in the United Kingdom. “With independence, Scotland’s economy would move from being a part of the UK’s underperforming economy to an independent one that is stronger and fairer,” the Scottish government wrote in its Oct. 17 paper, Building a New Scotland: A stronger economy with independence. The report argues that the UK exhibits lower productivity, lower business investment, more stagnant wages, higher inequality, and higher poverty than European countries comparable to Scotland.
If Scotland gets a green light, first minister Nicola Sturgeon plans to hold an advisory referendum on Oct. 19, 2023. The yes-or-no question will be the same as the one posed to voters during the first Scottish Independence Referendum on Sept. 18, 2014: “Should Scotland be an independent country?”
But the path to the independence referendum is not so straightforward—and the outcome of a potential vote is, at this point, too close to call, according to polling company YouGov.
There are several ways the ruling could go. The judges could either let members of the Scottish parliament pass a referendum bill; decide that it’s a matter for Westminster to consider; or establish that it’s either too early or not possible for them to make a ruling.
Sir James Eadie KC, the UK government’s independent barrister on legal issues of national importance, has urged the apex court to throw the case out. He argues the case is out of the court’s jurisdiction since the bill hasn’t been passed by MSPs yet.
Even before becoming prime minister, Sunak objected to a second Scottish independence referencum. As Chancellor of the Exchequer in May 2021, he identified the vote, and the uncertainty it would bring, as a threat to the post-pandemic economic recovery. “It would needlessly divide our country and at the worst possible time. Instead, we should be focused on the job prospects of young people in Scotland,” he said.
During his conservative leadership campaign in August, he dismissed the referendum as “quite frankly barmy” and “unnecessary and divisive.” As the newly-minted UK prime minister in October, he has also urged Sturgeon’s Scottish National Party to “respect” the 2014 No vote.
In 1997, a majority of Scottish people voted for devolution in a referendum, which gave then-UK prime minister Tony Blair the mandate to pass a bill to establish a Scottish parliament and government which can rule on a number of issues such as health care and education. Decisions regarding crucial policy aspects such as foreign affairs and international trade, the fiscal, economic, and monetary system, financial regulation, and immigration, among other things, still lie with the Westminster government and parliament.
Independence would allow the Scottish government and parliament to make decisions solely for its citizens. In its October paper, the cabinet pledged to deliver on a slew of promises if it becomes independent, including:
⚡ Lower energy prices and security of supply.
🌳 Reliable lower-cost, renewable energy that would help households and give Scotland’s businesses a significant competitive advantage.
💼 A better, fairer working life, including walking back the UK Trade Union Act 2016, which restricted the right to strike.
🤑 Escape from a UK economic model that concentrates wealth in London and the South East of England, while producing inequality, low investment, and low productivity.
🇪🇺 Rejoining the European Union.
55%: voters who wanted to stay in the UK during the last vote in 2014, two years before the Brexit was held
62%: Scots who voted to “remain” during the Brexit vote, which overall went in favor of “leave.”
£470 ($559): UK workers’ estimated average annual loss due to Brexit’s negative impact on productivity and wages
4%: reduction in productivity in the long term, according to Office for Budget Responsibility estimates
£3.2 billion ($3.8 billion): estimated revenue loss per year for Scotland because of the long-run decline in productivity
£20 billion ($24 billion): earmarked investment in major infrastructure over the first decade of an independent Scotland, funded from oil and gas revenues and other windfall income, and, where necessary, from borrowing.
The mere mention of Sturgeon getting set to share a new independence referendum in June caused the pound to hit a 13-month low versus the euro. The sterling is bound to react to a vote, if and when it happens.
A heavily pro-independence outcome would hammer the pound, analysts predict. The UK would have to forge new trade deals, deal with loss of tax revenues, and restructure of the energy industry which would weaken the currency. And although Scotland said it will stick to the pound sterling for the early years of independence “for continuity and practicality,” it’s looking to transition to the Scottish pound—another change that could destabilize the pound.