15 Mar 2017

Article 50 and Section 30. Scotland is set to be Mrs May’s biggest domestic challenge on Brexit

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Article 50 and Section 30. Scotland is set to be Mrs May’s biggest domestic challenge on Brexit Triggering time is almost nigh. Will this week come to be seen as the start of one tumultuous exit for the United Kingdom or two? In her speech on 17 January, at which she stated unambiguously that the UK would leave the single market as well as the European Union (and the Customs Union by due implication as well), Theresa May effectively wagered that, despite her warnings to the contrary, the Scottish First Minister, Nicola Sturgeon, either would not seek a second independence referendum or would not win it if she called it.

This was a reasonable calculation by the Prime Minister. Polls in Scotland suggested that there was little appetite for another vote and not much sign of movement in sentiment on the independence question either. Indeed, the ordeal of the oil and gas sector in the 30 months since the issue was put in September 2014 has, if anything, increased anxiety north of the border as to how the economy would fare if divorced from the United Kingdom. Furthermore, a second defeat on independence would probably be fatal for it as a cause (as proved to be true in the case of Quebec in 1993 despite an exceptionally close vote there), would almost certainly be the end of Ms Sturgeon personally, and leave the SNP in office and sort of in power but without real purpose.

Yet despite all this it looks increasingly like Mrs Sturgeon will take the bait. Her address on Monday is the clearest indication so far that unless the final settlement achieved between the UK and the EU is to her liking then she will seek a second referendum on independence and has set out a preferred timetable, namely late 2018/early 2019 when the dialogue between Mrs May and the EU-27 should have concluded in time to allow all concerned to ratify what has emerged for a March 2019 exit.

In fact, in many senses the First Minister has now crossed the Rubicon on this matter. It is very hard to envisage the sort of deal which she would deem to be satisfactory as, at a minimum, it would have to involve Scotland staying in the single market via its own unique arrangement with the European Economic Area and that is almost impossible to conceive without the rest of the UK being in it too.

As this is precisely what Mrs May has declared will not happen, then logically there is no outcome to our departure from the EU that both the SNP and the Conservative Party can live with (bar a sudden economic collapse in the next 18 months that almost everyone agrees is the result of the UK having triggered Article 50 and is of a scale to shift sentiment about the notion of Brexit in England). As anticipated in the first BVCA Insight of 2017 as one of the five factors in domestic politics to look for, the SNP will now seek to turn the Scottish local elections which take place in every constituency across the country on 4 May into a de facto referendum on whether to seek a second referendum.

Why has the seemingly cautious Ms Sturgeon decided to all but commit herself to such a high-risk strategy? Three factors may have been decisive.

First, if the SNP cannot convince the electorate that being forced out of the EU at the behest of the English is not a sound enough reason to be a nation on its own in the EU then what other argument over the next decade or so is likely to be stronger?

Second, the First Minister has enough relationships of her own with key actors in Brussels, Berlin and Paris to have come to the conclusion that whatever form the bargain reached with Mrs May, it will not be hard to persuade Scots that their interests have proved secondary in the negotiations.

Third, and this may have been the critical element, the election of Jeremy Corbyn has prompted even more disarray inside the Scottish Labour Party with more of its former supporters drifting to the SNP and coming to the conclusion that if their traditional party does not look as if it could win a majority in the UK Parliament this side of the year 2030 then perhaps opting for independence is not a bad idea.

How might the politics of a second Scottish referendum work as the Brexit process itself develops?

Legally, Mrs May does not have to allow a second referendum. Politically, she may have no choice

In strict legal terms Scotland does not have the autonomous right to demand a referendum on any subject at all, never mind independence. For that to occur, the UK Government has to be willing to invoke Section 30 of the Scotland Act 1998, and through an Order in Council that is not blocked by either the House of Commons of House of Lords, temporarily transfer the legal ability to conduct a referendum to the Scottish Parliament.

This is what David Cameron agreed he would do in 2012 as part of an accord with Alex Salmond, the then First Minister, to permit the 2014 ballot to happen. Mrs May could, therefore, simply refuse to co-operate. In reality, this would provoke a truly serious constitutional crisis. The SNP and the pro-independence Greens do have the votes in the Scottish Parliament to ask for the referendum. The SNP manifesto for the Scottish Parliament elections last year explicitly asserted that if the UK were to decide to leave the EU then that would be a cause to conduct another referendum. If Mrs Sturgeon really wanted to cause trouble she could threaten to hold her own advisory ballot on the subject. Mrs May might not agree to another vote straight away but if the First Minister is totally determined to have one then eventually she would get her way.

The real argument, therefore, is likely to be about the timing of any second referendum

If in the end there is considered to be no political alternative as to whether another referendum is held, Mrs May does have real leverage on the terms and conditions. In 2012, Mr Cameron was very accommodating to the SNP on the details of the ballot in that Mr Salmond was allowed his favourite date for it and the Scottish Parliament largely determined the rules and the question to be asked.

There is no need for Mrs May to be as passive and one doubts that she would be. At a minimum, her terms would include an explicit acceptance from the SNP that no third referendum on independence would ever be sought and that the current constitutional accord was not to be challenged either. It would be truly put-up or shut-up time for Scottish nationalism.

The campaign would probably be of a much shorter duration than last time and Mrs May would not want it to start until after the Brexit discussions had been completed to prevent others using it as a bargaining chip against her. That would make the choice of date the main point of contention.

The First Minister wants it to be in late 2018 so that the vote is made while Scotland is still in effect in the EU and the choice can be framed as one between independence in Europe or the Union without the European Union. The vote would hence be as much about the terms of the UK’s departure as on the desirability or not of separation.

Mrs May, on the other hand, would not want a situation in which one section of the UK was holding what to all intents and purposes was another referendum on EU membership when everyone else was being denied that possibility. She would thus prefer any referendum to be held after the whole of the UK had left the European Union, albeit with transitional arrangements probably in place, so that departure from the EU and departure from the UK were to a degree seen as different subjects. Just as if Mrs Sturgeon is 100% set on a second independence referendum then she will probably achieve it, so if Mrs May is as determined that it will take place in May/June 2019 as her principal condition for conceding it, that is what is likely. If Scotland decided that it wished to embrace independence, it would have to disentangle itself from the rest of the United Kingdom first, which would probably take until about November 2020 on this timetable (opting out of the General Election in the UK in May 2020) and only then could it apply to re-join the European Union. There is a clear process by which a nation accedes to the EU. It is set out in Article 49 of the Treaty of Lisbon. Scotland is, therefore, set to be Mrs May’s single biggest domestic challenge in the Brexit procedure.

Tim Hames
Director General, BVCA


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