House of Lords - Scottish independence: constitutional implications of the referendum

Scottish independence: constitutional implications of the referendum - Constitution Committee Contents

CHAPTER 2: principles governing independence

The UK as the continuator state

10. A central question about the constitutional position of the rest of the United Kingdom after a "yes" vote is whether it would continue as the same state. In other words, would the United Kingdom retain the statehood of the UK, with Scotland becoming a new breakaway state? If so, the rest of the UK would technically become the "continuator state" and Scotland the "successor state". Alternatively, would the remaining part of the United Kingdom and Scotland become two new states?

11. A great deal flows from this question. Were the rest of the UK to be the continuator state, it would retain all of the public institutions of the UK.[8] It would retain the treaty obligations and memberships of international organisations of the existing UK. For example, the rest of the UK would continue as a member of the European Union (with the various opt-outs that the UK now has), the United Nations (including the permanent seat on its Security Council) and NATO. Such memberships would automatically continue; they would not have to be applied for. Were the rest of the UK to be the continuator state it would significantly shape negotiations after a "yes" vote.

12. A comprehensive legal opinion by Professor James Crawford, Whewell Professor of International Law at the University of Cambridge, and Professor Alan Boyle, Professor of Public International Law at the University of Edinburgh, on the status of Scotland and the rest of the UK in international law was annexed to the Scotland analysis paper on Devolution and the implications of Scottish independence.[9] We are not aware of any serious objection to their analysis of the principles of public international law that would apply to Scottish independence.

13. The UK Government's position follows this legal opinion: that the rest of the UK would become the continuator state and that Scotland would become a new, successor state. The Advocate General for Scotland, Lord Wallace of Tankerness QC, set out four main reasons for this:[10]

First, the majority of international precedents—from Russia being the continuator state on the break-up of the Soviet Union to Sudan continuing after South Sudan became a new state—point to the rest of the UK being the continuator state. The most directly relevant precedent is that Great Britain and Northern Ireland continued as the UK after the secession of the Irish Free State in 1922.
Secondly, the rest of the UK would retain the greater share of the population (92%) and territory (68%) of the existing UK. These factors are given weight in public international law.
Thirdly, the likelihood is that the majority of other states would recognise the rest of the UK as the continuator state and recognise Scotland as a new state.
Fourthly, where the alternative of two new states being created has applied—for example, when Czechoslovakia split into the Czech Republic and Slovakia—that has usually been by mutual agreement. The UK Government would not agree to the UK becoming a new state, so this alternative could not apply. It is relevant that the referendum is taking place only in Scotland: it is not a UK-wide referendum on whether the UK should split into two new states.

14. The majority of our witnesses agreed with this analysis.[11] Professor Alan Boyle said that it was the "only ... credible view".[12] Professor Michael Keating, Chair in Scottish Politics at the University of Aberdeen, referred to the "broad acceptance that the UK would be the continuing state."[13] Professor Stephen Tierney, Professor of Constitutional Theory at the University of Edinburgh, agreed,[14] as did commentators David Torrance and Mandy Rhodes.[15] The commentator Alex Massie said that it appeared "to be the common-sense attitude. It will be the view that will be taken by the rest of the world. If you vote to leave a club, the club remains."[16]

15. In her covering letter to the Scottish Government's written evidence the Deputy First Minister, Nicola Sturgeon MSP, appeared to question the proposition that the rest of the UK would be the continuator state. She described it as an "assertion made by the UK" and quoted a passage from Professors Crawford and Boyle's advice in which they refer to the position in international law depending on arrangements made between the two governments and the position of other states. Having said that, the Scottish Government in their written evidence did not argue explicitly against the principle of the UK being the continuator state and we are not aware of them questioning it in other forums. David Torrance said the Scottish Government "have not taken an unequivocal position ... They appear to cast doubt on the rest of the United Kingdom being the [continuator] state, but they have not said what they think would happen."[17] As so much flows from this it is incumbent on those who question whether the UK would be the continuator state to set out their analysis of what the alternative position would be.

16. The overwhelming view in the evidence we received was that after a "yes" vote the rest of the United Kingdom would continue as the same state: it would be the continuator state. Scotland would become a new, successor state.

17. This would be the case because relevant precedents support that position; it would be consistent with the rest of the UK having the majority of the territory and population of the existing UK; and it would reflect the likely opinion of other countries. No realistic alternative case has been made.

18. The fact that the rest of the UK would be the continuator state shapes discussion on the implications of independence; this report proceeds on that basis.

Assets, institutions and liabilities

19. There are clear legal principles governing the position of institutions, and the division of assets and liabilities between an independent Scotland and the rest of the United Kingdom. Where legal principles do not apply, matters are subject to political negotiations. These principles, which we set out in general terms, would have to be applied to specific instances—such as North Sea oil and the Faslane naval base.

20. It is a legal principle that, as the United Kingdom would be the continuator state, institutions of the UK would remain with that state.[18] For example, Parliament, the UK Supreme Court, the Bank of England and the BBC would—as UK institutions—remain institutions of the rest of the UK. If an independent Scotland wished to continue membership of, or form a partnership in, any UK institution, that would be for the rest of the UK to consider as part of negotiations. There is no legal right for a successor state to share the institutions of the state from which it secedes.

21. The key principle governing the apportionment of assets and liabilities would be that they would be shared equitably between the continuator and the successor states. It is a legal principle that fixed or immovable assets (such as government or military buildings)[19] would automatically become assets of the state in which they are located. Other, moveable assets (such as military equipment)[20] would be subject to apportionment through negotiations—with the only applicable legal principle being that the apportionment should be equitable. Liabilities would be similarly subject to apportionment through negotiations.

22. The Scottish Government told us that fixed assets in Scotland would become Scottish on independence, whereas all assets in the rest of the UK would be subject to negotiations.[21] This was not borne out by other evidence we heard. We were told that fixed assets would not be negotiated, but non-fixed assets would, wherever they are situated.[22] Similarly, the Scottish Government's claim to continued use (or the apportionment) of overseas property was questioned.[23] We were told that the overseas property of the United Kingdom would remain the property of the rest of the UK.[24] This is also the clear view of the UK Government.[25]

23. Given the close integration of Scotland and the rest of the United Kingdom, determining exactly what would be an equitable apportionment of assets would not be easy. An indication of the complexity of the matter was given in the Scotland analysis paper on Defence, in which it was noted, for example, that "An independent Scottish state could not simply co-opt existing units that are primarily recruited or based in Scotland, as these are an integral part of the UK Armed Forces"; and "While many military personnel and capabilities are located in Scotland, these do not operate in isolation; … they depend on close integration with other capabilities, services and infrastructure spread across the UK".[26]

24. Apportioning liabilities is likely to be equally complex. The UK Government's first Scotland analysis paper found that there was no clear consensus on the allocation of liabilities, but there were some general principles.[27] Professor Iain McLean, Professor of Politics at Nuffield College, University of Oxford, described the three options for apportioning liabilities equitably: a "historic share", gross domestic product (GDP) and population.

25. The "historic share" option would be problematic, as Professor McLean made clear:

26. This leaves the population share or relative GDP as realistic bases for negotiation. Population share would be the easiest to calculate. It would mean that Scotland would take on 8.4% of the United Kingdom's liabilities and be entitled to the same proportion of non-fixed assets.[29] GDP share would be harder to calculate as it would depend on the apportionment of North Sea oil.[30] This would need the accurate calculation of the income generated by that resource, forecasts of which were downgraded in early 2014, and apportioning the assets and liabilities associated with it.[31]

27. Plainly the UK and Scottish Governments would need to agree a basis for apportioning assets and liabilities. In order to facilitate fair apportionment of assets, a full inventory would need to be compiled by the UK Government.[32]

28. In the event of Scottish secession, institutions of the UK would become institutions of the rest of the UK, as the continuator state. Fixed assets would belong to the state in which they are located. Other (non-fixed) assets and liabilities would be apportioned equitably. The exact division would be a matter for negotiations, and would be complicated.

8 The position of UK institutions is discussed further in the next section. Back

9 February 2013, Annex A. Back

10 Q 29. These reasons summarise those in the Crawford/Boyle opinion. Back

11 We received written evidence to the contrary from the Campaign for an English Parliament, the English Democrats and Ian Campbell, a former diplomat. Back

12 Q 19. Back

13 Q 19. Back

14 Q 19. Back

15 Q 57. Back

16 Q 57. Back

17 Q 57. Back

18 This was elaborated on in a recent article by Rod MacLeod of Tods Murray LLP: 'Whose Central Bank is it Anyway?', Edinburgh Law Review, volume 18, pp 250-54. Back

19 Q 14; written evidence from the Law Society of Scotland. Back