HC 643 The foreign policy implications of and for a separate Scotland

Written evidence from Malcolm Chalmers, Research Director, UK Defence Policy, Royal United Services

This paper focuses on the implications for UK foreign policy (and subsequently for that of the ‘UK’) of a ‘yes’ vote in the Scottish independence referendum that is due to take place in 2014. It complements a previous article, published by RUSI. [1] Its purpose is to discuss some of the foreign policy issues that could arise as a result of a transition to Scottish independence.

The process

The Government of the UK has made clear that it would accept the result of the referendum, and that it would act in good faith to carry out the decision of the people of Scotland. In the aftermath of a ‘yes’ vote, therefore, it can be assumed that negotiations would begin in order to establish how to carry out the process of separation. The central parties would be the legally-constituted governments of the UK and Scotland. Both sides could choose to bring other political parties into the process, especially given the imminence of scheduled general elections in both the UK (in 2015) and in Scotland (in 2016). The monarchy would also have a role, especially in relation to those aspects of constitutional reform that impacted on its position in the two post-separation states.

Once the principle of separation was agreed, some issues could be resolved in a relatively straight-forward fashion. But others would be the subject of tough negotiations between the two governments. The most difficult, and consequential, would include division of UK assets and liabilities, future currency arrangements, and provisions for future monetary and fiscal policy coordination. But hard choices would also have to be made on defence and security, most notably on the future of the UK nuclear force, currently based on the Clyde.

SNP leaders have made clear their hope that the next election to the Scottish Parliament, due in May 2016, would be for the parliament of an independent state. The timetable for independence would, however, depend on the consent of both Governments. Until agreement is reached on the main substantive points of potential disagreement, it cannot be assumed that separation could occur by any particular date. There would be considerable pressure, both from concerned members of the public and from financial markets, to resolve uncertainties as quickly as possible. But both parties would also want to ensure that their vital interests – their ‘red lines’ – were protected as far as possible. The UK, as the status quo power, might have some bargaining advantage in this regard.

The international response

The attitude of the UK's main international partners and allies – especially the US and the UK's main European partners – would be critical in determining how much long-term damage was done to the rUK’s political standing as a consequence of Scotland's separation.

Emotional attachment to the Union (and regret for its passing) would play little role in shaping the policy responses from the UK's partners and allies. Their main concern would be to avoid a situation in which the division of the UK becomes a problem for the wider international community, as separation processes in other parts of the world have done in the past. Their main message to the two governments, therefore, would be likely to be: sort out your differences between yourselves, and then come to us with a joint proposal for how Scotland and the rUK would take their places within the broader community of states.

There may be some countries, especially amongst those who have been less than friendly to the UK in the past, who would take comfort from the troubles of an old antagonist. But the UK's traditional allies in NATO and the EU would have a strong interest in ensuring that both successor states remain responsible partners in, and contributors to, shared institutions and policies. Particularly at a time of wider uncertainty in Europe, they would want to avoid a prolonged period of acrimony and uncertainty in relations between Scotland and the rUK, not least because of the opportunities this could provide for others to take advantage of intra-UK discord.

This would be the wider political context in which debates on Scotland's membership of the EU and NATO would have to be seen. While there may not be a consensus amongst legal analysts, past practice suggests that Scotland would not automatically inherit the membership of international organisations such as the UN. It has also been suggested, more controversially, that rUK might also have to apply anew for recognition as a member state, as the Federal Republic of Yugoslavia had to do after the dissolution of Yugoslavia.

In practice, however, it is probable that the members of the UN Security Council – and subsequently other global organisations, such as the IMF and WTO – would vote to recognise the rUK as the legitimate successor of the UK, in the same way that Russia was recognised as the legal successor of the Soviet Union. Some questions might be raised in relation to the UK's permanent UN Security Council seat. If either Russia or China were to do so, however, they would gain no support from the US or France, who would both have a strong interest in continuing rUK participation. And they would risk undermining the viability of an institution – the Security Council – from whose current rules both still derive considerable leverage and influence.

Scotland’s primary interest would be to obtain the status and privileges that would accrue to it as a full member of the EU and (probably) NATO. Despite the current view of the SNP, it should not be assumed that Scotland would automatically ‘inherit’ membership of these organisations. But nor is it credible to believe that Scotland would be asked to ‘go to the back of the queue’ of aspirant members, behind Serbia and Albania.

A much more likely path is that other EU and NATO member states would urge the post-referendum negotiating parties to reach a bilateral agreement between them on the terms for separation. They would not want to import unresolved bilateral problems into their organisations, as many believe was the result of allowing Cyprus to join the EU without a resolution of its internal dispute.

If there is a clear and comprehensive bilateral settlement, however, other members of the EU and NATO may be sympathetic to a request that both states, on the date of their separation, would continue the membership status that they had previously enjoyed together. This transition, in the case of the EU, would be more straightforward if both states were to take on the current opt-out status of the UK in relation to the Schengen area and the Eurozone, together with other exceptional provisions (such as the UK rebate). But some differences in status might be acceptable, if proposed jointly by the two governments.

Yet it cannot be taken for granted that the separation negotiations would result in easy agreement on all outstanding issues, for example in relation to fiscal policy coordination, sharing of the national debt, border control or citizenship rights.

Scotland's transition period of 2014-2016, moreover, could coincide with a process of radical constitutional reform within the EU, as a result of which there could be a debate on whether, and in what sense, the UK would still remain an EU member. Should the rUK commit itself to a 2017-18 referendum on whether to endorse government terms for remaining in the EU, for example, there would be a strong logic for Scotland also holding such a vote, but some question as to when it should be. And, by 2016, such a debate might well colour the discussion amongst other EU states as to the terms on which Scotland and the rUK could be confirmed as members when they become two separate states.

The nuclear question

The most important security issue that the two governments would have to resolve before separation took place would be the future of the UK's Trident-equipped nuclear force, currently based in Scotland.

There would be little international sympathy, at least amongst the UK's traditional allies, were Scotland to insist that the UK's nuclear-armed submarines leave its territory on a timescale that did not allow the rUK to construct alternative bases in England or Wales. Such a policy could encourage a robust response from the rUK, perhaps even a questioning of whether it could support Scotland's NATO and EU aspirations. By contrast, were Scotland to be willing to accommodate rUK concerns on this issue, it would place it in a strong position to expect rUK support on other issues.

In this scenario, the two parties would come to some sort of binding agreement that the rUK nuclear force would remain in place in Scotland, at least until a timescale for relocation could be agreed. Some principles for determining this timescale could also be established – for example relating to SSBN replacement in the early 2030s or missile replacement in the early 2040s. This would give Scotland the assurance that, within a period of 15-25 years, it could become free of nuclear weapons if it still wished to be so. But it would also allow the rUK to make a decision of its own as to whether it continued to be prepared to incur the costs (including, for example, the need to overcome local opposition to a new Falmouth base) that remaining a nuclear weapon state involves.

Further implications for defence and security

A further advantage of a settlement of this issue would be that it would encourage close and continuing cooperation between the conventional forces of Scotland and the rUK. Protection of the rUK nuclear force at Faslane would require continuing liaison between rUK and Scottish military and security forces, based in Scotland, together with a clear agreement on submarine transit through the Firth of Clyde and surrounding waters.

In addition to capabilities that have an SSBN-protection role (such as SSN’s and, in future, possible new maritime patrol aircraft), the rUK would also have an interest in maintaining conventional military assets in Scotland for other purposes, for example RAF aircraft based in Lossiemouth for purposes of air defence. There would be a parallel set of issues in relation to security and intelligence services, where the rUK would have a strong interest in helping to develop capable Scottish counterpart services, with whom they could cooperate, for example, on counter-terrorism.

Scotland's separation from the UK would involve some reduction in the tax base from which the UK's defence budget is funded. [2] Yet the starting point for a new rUK defence policy would probably be a desire to maintain capabilities that are as close as possible to those of the UK, so as to minimise the reputational damage that post-separation defence cuts could incur. In this context, the rUK might be prepared to accept a modest rise in the proportion of national income it devotes to defence (of the order of 0.2% of GDP), compared to its rather larger predecessor.

Provided that the rUK MoD could secure agreement on the two issues of Trident basing and post-separation budgets, it could credibly argue that the rUK had military ‘hard power’ that was almost comparable to what the UK would have had in the event of the maintenance of the Union. It would be much harder to avoid the significant damage to the UK's reputation as a stable power that Scotland's independence would be likely to involve.

9 October 2012

[1] Malcolm Chalmers, ‘ Kingdom’s End ’ , RUSI Journal , June/July 2012, 157, 3, pp. 6-11.

[2] Estimates of spending and revenue produced by the Government of Scotland notionally allocate non-geographically-identifiable spending between Scotland and the rest of the UK. Around 60% of spending in this category is in defence. On this basis, £3.3 billion was Scotland's 2010/11 contribution to the funding of total UK defence spending, allocated in proportion to population share. Government Expenditure and Revenue Scotland 2010-2011 , Scottish Government, March 2012. The rUK share was £35 billion. A similar calculation could be made for the DFID and FCO budgets.

Prepared 17th October 2012