Yes or no - the myth of the risk free option

Economically, is staying in a changing UK as much a risk as becoming an independent country?

David Donald
21 August 2014

Wikimedia CommonsThe referendum debate has to a great extent centred on risk. And ‘No’—the conservative option—is promoted to voters as the least risky. But this underestimates the changes in the internal and external circumstances of the United Kingdom that have brought us to this point of decision. Our current predicament is that we have failed to adapt to changed circumstances. This is particularly obvious in relation to our economy and industry. But it is also true of our social arrangements and institutions and of our political and constitutional arrangements. Politicians and governments have low public ratings and all sides and all parties are arguing the necessity of change.

That makes the status quo inherently unviable. A vote for “no change” is not on offer in the referendum. The choice we are facing concerns what changes we will make and what values we would like to drive them. We are deciding who we can trust to represent our interests and opinions. So which set of risks should we opt for?

Distaste for and distrust in political processes is dangerous and disruptive. It fuels parties like UKIP with their simple appeals. But there is a real crisis of representation across the United Kingdom. Many feel that there voices are not heard and their concerns are not met. England is experiencing discontents. And in the north of Britain a majority identify themselves as Scots and most wish greater autonomy and stronger representation of Scottish interests.

Gordon Brown’s recent proposals recognise this and his backing for federalism, though vague, is welcome. But although Menzies Campbell has endorsed the same position, the nature of his support suggests something of the battles to come in the ‘together’ camp. The term he uses, ‘power sharing’, cannot disguise shared sovereignty: this federalism will undoubtedly be a step too far for many – including some of the more Tory leaning Lib Dems.

Although greater London interests have been well represented at Westminster, other regions of England, Wales and Northern Ireland will feel less happy. Ceding sovereignty to Scotland will not meet with unanimity. It seems likely that the embedded conservative culture of southern Britain will have a disproportionate influence… but inter and intra party strife seems inevitable. UKIP wants more sovereignty not less. And Cameron’s Conservatives have to humour their voters. None of this bodes well for Scottish ambitions.

Central to the United Kingdom’s predicament is the economy. We face considerable problems in paying our way in the world: our trade balance is a serious issue. Our dependence on low cost imports will give us mounting problems as emerging nations look to provisioning at home. Their costs, and thus our prices for goods from them, will rise. In any event relying on less than stable regimes in distant parts hardly guarantees economic security. Osborn is right – if belated – in discovering that manufacturing matters. He is also right that we must place less reliance than we intended on finance and the City. But resurrecting an industrial base is re-development and the UK has never managed to create a developmental state. The complexity of UK issues and interests will impede us. The interests of the City and of industry will conflict. Would a more autonomous Scotland be better placed to re-develop?

Again Gordon Brown offers an attractive alternative. Radical decentralisation would, almost by definition, unfankle some of the relationships and allow us more latitude to adjust. But, as is often contended when Scandinavian style solutions are suggested for Scotland, we cannot by simple volition change UK economic and political culture and structures. Our path to this point in our history has created our present structures and predilections. But we are more likely to be able to change in a less complex situation.

This makes ‘yes’ an attractive option. Small states are able to adjust to world circumstances with greater agility than large ones. Of course smallness means an acceptance of encumbrances in external relationships. It means negotiating alliances and accepting that others must have a say. Defence and security is an obvious area in which this works. Security comes through pacts with others. In any eventuality, currency negotiation would be necessary. In welfare and wellbeing we could set our own priorities. Perhaps not untrammelled freedom but more democratic autonomy?

So how should the devolution plus / max left-leaning voter vote? I wish I knew—as I am one. But simplistic notions that ‘no’ will leave everything as it has been can be dismissed as delusion. Serious change is upon us no matter where we put our cross.

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