Virtual Roundtable: Scotland's Place in the World: Brexit and Pandemic Recovery

Wednesday, July 15, 2020
Andy Buchanan/REUTERS
Michael Russell

Cabinet Secretary for the Constitution, Europe and External Affairs, The Scottish Government


Visiting Senior Fellow, Council on Foreign Relations

David Scheffer:

Thank you very much. Hello, everyone. I'm David Scheffer, visiting senior fellow on international law at the Council on Foreign Relations. And I've been a longtime student of Scottish devolution and aspirations for independence from the United Kingdom. We have the privilege today of being joined by Michael Russell, who is cabinet secretary for the Constitution, Europe and External Affairs of the Scottish Government, and he is a constituency member of the Scottish Parliament, representing Argyll and Bute. He was raised in Troon in Ayrshire and educated at Edinburgh University and has lived in Argyll for over 20 years. Mr. Russell was previously Minister for Environment from 2007 until 2009 and then served as Minister for Culture, External Affairs and the Constitution before moving to the role of Cabinet Secretary for Education, which he held until 2014.

He was appointed Minister for UK negotiations on Scotland's place in Europe in September 2016. I can attest confidently that Mr. Russell is a close confidante of Scottish First Minister Nicola Sturgeon. And, after her, he is the most informed and articulate spokesman on issues of devolution and independence in the Scottish Government. He has spoken often of the hazards of Brexit, of Scotland's determination to remain in the European Union, and of the inevitability of Scottish independence if Westminster continues down a destructive path of its own separation from Europe. A significant majority of Scots have repeatedly expressed their desire to remain in the European Union. While the independence referendum of September 2014 failed to achieve a majority vote, in part because of the UK government's position at the time to remain in the European Union, there is a majority of Scots for independence in all of the polls reporting in recent months. Thus, the aspirations for independence remain very much alive, while the Scottish Government prioritizes management of the COVID-19 pandemic.

So it's a bit complicated. Mr. Russell and I will engage in discussion for 30 minutes, and then I will open up the floor for questions. Please feel free at any time to raise your hand, and I’ll see those hands stack up, and I'll begin calling on individuals at the 30-minute mark. So let's begin. Mr. Russell, it's a tremendous pleasure to have you today at the Council on Foreign Relations. I want to start with this sort of cosmic question.

The Scots have a long history of division and union with the rest of the United Kingdom, which includes England, Wales, and Northern Ireland. For those in our audience who may not be familiar in detail with Scottish history and politics, can you briefly tell us what it means to be Scottish, particularly being a Scot living and working in Scotland, or the European Union during the turbulent politics of the United Kingdom and of the world today? How committed is Scotland to remaining in the European Union? And why?

Michael Russell:

I think I could probably speak for the next hour on that topic and not complete it. But let me just quote somebody who may be surprising to quote, Cecil Rhodes, who said that to be English was to win the first prize in the lottery of life. Scots don't feel that way. I think that the Scottish view of the world is much more modest, much more inclusive.

And the reason we regard membership of the EU as absolutely central is because we share European values and those values of cooperation. We share the view of the world as held throughout Europe. And we find it increasingly difficult to reconcile that with not the plain people of England, as Chesterton called them, but the English government and the way in which it operates. In order to be a normal nation, and in that simple normality, in order to be a normal nation, it will be necessary for Scotland to be independent within the EU. It is not normal to be in the type of constitutional setting where we are presently where a substantial number of the powers that we need to exercise are not available to us. And it is, I think, we have to see all this through two prisms now. The world has changed enormously in the last three or four months. And those two prisms are Brexit and the vote of the UK, but not Scotland, to leave the EU. Scotland did not vote to leave the EU and yet is being forced to do so. And the COVID pandemic, particularly, as I think it continues to change views.

Every individual death is a tragedy, and I offer my condolences to those people in the United States who have gone through such terrible times, as we've all gone through those times. But we have to come to some conclusions about those and where we want to go next, what the future will look like. There's a tremendous book that actually originates in America, John Barry's 2005 book on The Great Influenza, which celebrates the success of American medicine and the coming of age of American science. But Barry writes about pandemics in general in that book, and he comes to a conclusion, though, what makes the difference in terms of coping with a pandemic in governmental and governance terms is quality of leadership. It is governance itself. The conclusion he comes to and let me quote it because it's really important, “The biggest problem in coping with a pandemic lies in the relationship between governments and truth. Part of that relationship requires political leaders to understand the truth and to be able to handle the truth. Those in authority must retain the public's trust. The way to do that is to distort nothing, to put the best face on nothing, to try to manipulate no one.”

And I think what you may have seen in the handling of the pandemic is that in Scotland, the pandemic and the difficulties of the pandemic have added to the views that have certainly grown after Brexit, that we need to have a more honest, a more truthful, and a more values-driven politics that we are able to have, and a governance that is better for people. So we have to do a lot together, and we're not able to do that. There is a barrier between us and the world. And it is removing that barrier that is really important. And I have argued repeatedly, that devolution, the devolution settlement, the settlement under which Scotland, Wales, and Northern Ireland presently live, which is only 20 years old, has not been able to bear the weight of either Brexit or COVID, because of the demands upon the governments to serve their people. We've not been able to answer them as fully as we should, because we do not have the full powers to do so. So it's a question of where power lies, how power is exercised, and where it would better lie and be better exercised in the future.

And it is not in any sense ethnic, or racial, or to do with disliking people. I was born in England. My mother was English. Her father's proudest boast was that he had bowled out the great W. G. Grace, the cricketer. If you look at the chronology, W. G. Grace must have been a bit arthritic by then, but even so, you know, this is not about being against people. It is about a modern reaction to the world in which we live. And the better way we could run things in Scotland, if we were not at arm's length from it and removed from it. So that is a long way of saying it's normal to do it. We need to become normal because it will lead to a better governance, a better equality, a better deal for our citizens, and a better relationship north and south of the border. There's a very old saying that says independence for Scotland will get rid of the surly lodger and gain a good neighbor. And we need to go to being good neighbors with the others on this island, but not to be controlled by them.


Michael if, as the US or the UK government claims, COVID has proven that the idea of independence is not viable for Scotland, why hasn't the United Kingdom provided resources for Scotland to weather the pandemic? I just don't see much news of stuff flowing from the south to the north during the COVID pandemic.


None of us are capable of making the cost of the pandemic without an extraordinary loosening of borrowing and the loosening of the public finances. I mean that's clearly true. I mean, the UK has borrowed an enormous amount, going north of £300 billion at the present moment. We do not have full borrowing powers in the Scottish Parliament. It is one of the areas of restriction upon our powers. So we have not been able to borrow the amount we feel we need to deal with it. If you look at the scale of the German response, we're not able to match that in terms of the way in which we should to spend in Scotland. Now, the way in which Scotland is financed, as you well know, is very complex, but it relies upon essentially a thing called the Barnett formula. And for every pound that is spent in London, for certain parts of government expenditure, a proportion of that comes to Scotland, but it did, according to the proportion of the population, which is about 8.6-8.7 percent at the present moment. There is a complicated balancing formula to do with public finances and taxation, because we do not have full taxation powers. Now we have spent more than we have received in that formula on Brexit. There's no doubt upon that. Equally, Brexit has cost us far more than any compensatory payments.

But remember, part of the issue of the union is sleight of hand. If you keep reassuring people that everything is fine, and that you are looking after people, then they tend to believe it for a long period of time. And they tend to avoid the confrontation that inevitably will come. We have spent more than has been provided for. We are not able to borrow the money we need to tackle the job properly or the way in which we want to do so. And therefore we believe that the financing of this is far from proving that we rely on and would continue to rely on the UK. It actually proves the opposite. This gives a justification for saying we could do this better ourselves.


Why don't you just go ahead and hold the referendum for independence if you think the people of Scotland want independence? What is the obstacle right now?


Oh, this is where this is where it becomes very strange for people to believe. We can't do that. In 1997, when the Labour government was elected in London and was committed to devolution, devolution had been attempted twenty years earlier. It had failed on a referendum not because the people of Scotland voted against it, but because a stipulation was put in that referendum that 40 percent of those who were on the electoral roll would have to vote in favor of it, and it just failed. So there was a majority for Devolution 79, but it was not carried through. When the Labour government was elected 1997 with a commitment to devolution, then the sticking point for support for that from my own party, the Scottish National Party, which was very much a smaller party at that stage, was there to be no glass ceiling on the arrangement. In other words, if the people of Scotland at some future date from that, decided that they wanted to move on to independence, they couldn't be forbidden to do so. And the compromise position that was reached with the Labour government, I was there when it was reached. I was with Alex Salmond in negotiations with Donald Dewar, who was then the Secretary of State of Scotland.

The agreement that was reached was if the Scottish Parliament sought a referendum, then both Parliaments would have to vote for that. But there was no question that if the Scottish Parliament asked for that it would get it. And that is the mechanism that operated in 2014, that the Scottish Parliament asked to hold a referendum. It was granted. The UK Parliament voted with it. We have asked to hold another referendum, and we have been refused on two occasions.

The first time contemptuously by Prime Minister Theresa May. The second time in a complicated but equally peremptory way by Boris Johnson. So we are not presently empowered to hold that referendum. Now that is in itself a subject of debate in Scotland. Some people say that the constitution would permit you to do so. I have never believed that that is the case, because I negotiated the agreement that said something different, but we believe that if the Scottish Parliament asked for it, then it should be granted. That is not the present situation. Were that the situation, then we would be holding that referendum. The argument against it from Boris Johnson is we had one in 2014, which, you know, is equivalent to saying you had an election six years ago, you're not getting another one. Johnson has indeed said it should be a matter for a lifetime. So in other words, you had an election when you were 21. You're not getting another one until you were 60. This is democratic nonsense. But it is impossible presently for us to do so without a concomitant vote by the Westminster Parliament, which when you think about it is very strange, because the UK was able to hold a vote to leave the EU. And the EU never said, “No, you can't do this.” And if that had been done, I suspect that would have been a matter of outrage.


Well, so far, we've talked about both the pandemic and independence and I want to bring the two issues together. What is the highest priority of the Scottish Government during this year of the pandemic? Is it to deal with the pandemic, ensure the health of the Scottish people, try to get more funding for the National Health Service, restore the economy, or is it to pursue the political agenda of independence in the event Brexit and how London handles the economic withdrawal from the European Union this year, compels Scotland to break perhaps as early as next year? Are these coterminous priorities?


No, no, the priority has been an absolute priority has been COVID from the very first day. We went into lockdown on the 23rd of March. And we said the week before, as I wrote to my counterpart in the UK government that we were suspending the work we were doing on the independence referendum and that there would not be a referendum this coming year, because clearly we wouldn’t be able to prepare for one. There was no reciprocal gesture from the UK. There was an election in the UK last December. We recognize the mandate that the Johnson government had to leave the EU. We, however, won the election out the park in Scotland, 48 to 59 seats. We believe that they should recognize our mandate to hold that referendum. They have not done so.

Even so, COVID was a priority and remains a priority. We've taken out a very cautious approach. There has been a four-country approach, and I think it's fair to say it did work to start with. The lockdown was a four-country approach—Wales, Scotland, Northern Ireland and the UK—the rest of UK, England, follow the same approach. That has diverged somewhat in the last two months. And certainly, we have taken a very much more cautious position particularly on easing the lockdown. Our first minister has been much criticized for it outside Scotland. Inside Scotland, she enjoys very substantial support for what she has done. And that means, for example, today is the day where pubs and restaurants can open, and that's for the first time since the 23rd of March. Hairdressers are able to operate today. I probably look as if I need one, but hairdressers allowed to operate from today. Most of these things have happened earlier in England.

Health is a fully devolved matter. So we are able to operate that policy ourselves. And we have done so we have even made slightly different decisions on the closing of the borders. The UK’s list of border closures we did not accept in its entirety. We looked at it again. And there was one country that we took a different view, which regrettably was Spain. And we've not allowed visitors from Spain to come to Scotland without quarantine, although England has. And we base that on the science. We've been very driven by the science. We've set up our own scientific advisory structure, and we would continue to be that way, so we'd be very cautious, very careful, and it's not over. I would really stress this very, very strongly. The pandemic has not come to an end. You know, we've just had seven days with no deaths. That's the first seven-day period with no deaths since I think the end of February, beginning of March.

But we know this can come back very quickly. If you look at the figures today in Israel, for example, where you see that at one stage they were down to 10 new infections a day. Yesterday, I think there were 1400, you have to be very cautious. So we will continue to go on being quite cautious. And the First Minister has said it is not her priority presently to move on the issue of independence. But I do think that there are things happening which will force our hand, and I've said this, to react to them. For example, tomorrow the UK Government will issue a white paper on a number of topics, which is taking powers away from the Scottish Parliament. That will produce a reaction without a doubt.


Next year you will have elections for the Scottish Parliament. The Scottish National Party has the majority of the seats in the Scottish Parliament. Is the First Minister waiting to see what the results could be from those elections with a stronger majority, perhaps in the Scottish Parliament, before she would take a rather definitive step towards trying to seek an independence move after those elections?


No, I don't think so. I mean, we have a very strong mandate. In any case, I mean, you know, we have one the last I can't remember how many elections in Scotland. But you know, we won the December election. We've won every election, I think, since 2014. You know, I don't think that is the case. I think the case is that COVID is the number one priority both to suppress and eliminate the virus and to rebuild the economy. I took part in a webinar in Brussels office this morning with a banker called Benny Higgins, who is chairing our recovery group. And you know, we are very focused on the issues of economic recovery and a green recovery. I mean, Scotland, you know, has world-leading climate change legislation. We are very focused on the green recovery.

So all those things are priorities, and we need to do those. But the election is very significant next year. Because if the UK government continues in a way it's going, then the anti-devolution, the anti-constitutional change agenda will be very, very visible. And you know, that will be a place in which a decision has to be reached. The other thing we need to do is conclude this debate. I mean, I think the problem with constitutional debates is that they cause uncertainty, and it is very important that we conclude this debate. So I would want to see next year's election taking steps to say we have to conclude this, and the issue is to give the people Scotland a choice. The people of Scotland voted for a choice. We've said, for example, in the election last December, this is about choosing not to have Brexit and choosing to be independent in the EU. We won 48 of the 59 seats. It can't be really more definitive than that.


Does the rise of the Alliance for Independence Party recently, which is more focused on trying to achieve independence, rather than the Scottish National party's current priority in governing on the pandemic and then ultimately, the independence issue. Is the Alliance for Independence a realistic threat to the SNP?


I'm scratching my head to think I've ever met anybody from the Alliance for Independence. So to that extent, I have to say, probably not.

I understand the frustration that people have. I have that frustration. I would like to conclude this matter. I think there's work for us to do. But you know, if you're in government, you've got other obligations as well, and you've got to fulfill those obligations. There is a sense in which the, the debate has been about whether you can game the Scottish electoral system. If you can, because we have a two-vote system, where you vote for a constituency representative and you vote for a list representative. They think if you could, if you only stood on the list in a separate party, you would get more members.

Wherever that type of gaming of electoral systems has been tried, it hasn't worked. If you look at Germany, you know that they have a very similar electoral system to ours. It hasn't worked there. So I'm not convinced that this is something that we should entertain too much. Equally, I welcome everybody in the cause of independence. It’s a very broad church. You know, the SNP may be the cornerstone of it. But it's a very, very wide “yes” movement, which embraces people in all parts of the legal spectrum, so I'm not going to lose sleep over it. But equally, you know, I've been a member of the SNP for forty years. I think I'm getting too old to change. So I’ll stick with what I've got.


Michael, is there any way for you to describe for our audience two legal strategies: one is, is there a general description of what your legal strategy would be for independence if Boris Johnson continues to balk on a Section 30 opportunity for you to have a referendum? And then secondly, is there an emerging legal strategy, under I suppose almost any scenario, for Scotland to try to maintain its ties with the European Union, single market or otherwise?


It shouldn't be thought that we have been unwilling to compromise or to be imaginative in this. In December 2016, we published the first of a series of papers called Scotland's Place in Europe, which we put forward in compromise, which would have seen a closer relationship with a single market and the customs union. And of course, one has to be aware in politics, as in history, not to have false memories. At that stage, there was no declaration from Theresa May or the UK government that they wanted out of the single market. That was only really ruled out in the Lancaster House speech in January of 2017. So we thought it was a suitable compromise. And one of the great tragedies of Brexit is if Theresa May, having become Prime Minister, had sat down and brought the leader of the Labour Party, Nicola Sturgeon, and you know, Karen Jones, who was a leader of Wales, and at that stage, Martin McGuinness and Eileen Paisley from Northern Ireland and said, “Look, how do we all get something out of this? How do we all get a compromise here? That the UK can leave the EU, if that's the will of the people in England, but that we don't suffer greatly, and those who didn't want this get something too?” That never happened. Theresa May’s style was not to listen, but to talk. So you would just go to have a discussion with her in Downing Street, and she would talk at you for an hour about how you really just weren't able to understand how good the deal was that she was talking about. And that just didn't happen. So as a result of which we're left in a situation where there is no compromise for the UK. They want to leave, and that is quite clear where they are now, on the poorest possible terms, because the word sovereignty has become this enormously important word, and you can only exercise sovereignty, according to the Brexit extremists who are now in charge, by cutting all the links, by not having any substantial links at all, and similarly, by not accepting any of the rules that that organization has.

Now, you know, our position is we are willingly members of the EU. We agree with the pooling of sovereignty. We think the pooling of sovereignty is how people should go forward. It does not make you any the less sovereign. That is quite clear. I've asked the French, are the French any less sovereign for being in the EU? Are the Germans? The answer is no. So the question is, we want to join that. The EU will never say to any candidate member, “You're in. Fine.” But you know, we do observe the acquis. For over 40 years, we’ve observed all the rules. Members who come to join come very often from a long way back, and they have to change a lot of their systems to meet what are the 35 chapters of accession. We don't. We qualify. We've been doing it for 40 years. So the legal strategy there is we need to understand the chapters of accession very clearly and to be able to prove to the EU that we meet them all.

The issue of accession has also been a live issue with the French in recent months. The issue of membership. Montenegro was part of this. But there is no intention to exclude. We are essentially functioning as an EU member. So of course, the legal strategy there is simply to go into that position, but connected with that is the EU’s quite proper position that they would not accept a candidate member unless they were independent, because it's an organization of independent states. So you have to get yourself past first base. And that first base is independence.

How do you get to independence? Well, the barrier is holding a referendum at the present moment. I don't believe the barrier is getting the majority in that referendum. I think that would happen. Now, I think things have changed substantially from 2014. The barrier is holding a referendum. And I think there are only two ways you can go about that. The first way is to challenge that in court. And I think that is the most likely outcome. COVID has interfered with that. I think if you look at the way in which the Scotland Act was passed in 1999, there was no intention that the power to hold a referendum would be withheld for political reasons. And there are also mechanisms by which you can take a bill to the Supreme Court and have it judged there.

So you will have to follow a legal route, I think, to get to a referendum, or a purely political route, you know, and you might want to, you know, think of Parnell, no one has the right hold the march of a nation. If the people of Scotland say they want a referendum, if the people of Scotland say we wish to vote for this, you’re democratic, I'm democratic, anybody who is democratic has to accept that that is a right that they have to do so. And the longer you refuse to allow that to happen, the less democratic that person is.


Let me ask one more question and then we'll open it up. What is Scotland's place in the world today and under a prospective independent status? I asked that in the context, as well, of your relationship with NATO, which would be of interest to our American audience.


We plan to have membership with NATO. Who wouldn't? That has been an issue in the party over the years. I have always been strongly on the wing that says this would be utter madness, given both where we are geographically, and also where our politics are. So that would be our intention to be part of that Alliance. I suppose you could describe us as a small, moderate, moderately left of center, European nation. [INAUDIBLE]. In Scotland, we're a fairly ordinary, small, quite talented, European nation. Resource rich. We have a very, very rich set of natural resources, very well educated. We are, according to the OECD, the best-educated country in Europe.

We have assets to bring to the table, but we are a small European nation. That's what we are. And that's how we would operate in the world. More than half the members, actually just under half the members, eleven of the members of the EU 27, are the same size or smaller than we are. And in a rather neat thing, we're almost exactly halfway in the table of independent nations in terms of size. So there's nothing exceptional about Scotland in that regard. You know, we don't claim to be exceptional. But we do want to be normal, to go back to that point.


Well, thanks so much, Michael. That has been so helpful. I want to open it up to questions now. And I see some hands popping up and I'd like to start. I think the first one that popped up was Ambassador Peter Galbraith. Peter.


Ladies and gentlemen, as a reminder to ask question, please click on the raise hand icon on your zoom window. When you are called on please accept the unmute now prompt then proceed with your name and affiliation followed by your question.

Ambassador Peter Galbraith

Hello, can you hear me? Can you hear me?





Ambassador Peter Galbraith:

First, I want to express my appreciation for this program since my ancestors left Crinan in the Highland clearances, and my grandfather, who was in Canada, was all things Scotch as the Scottish community were called there, and he would be amazed and thrilled at the thought that Scotland might be independent. As David knows, I've spent much of my career in countries, in fact, that were breaking up or aspiring for independence. In Croatia, I was the first Ambassador there, but also East Timor, as it separated. And more recently, I've spent a lot of time in Kurdistan. And one thing that strikes me is that the power for independence is where you have a separate identity, often ethnic, where they feel unfairly treated by the majority, by the dominant group.

I wonder, in the case of Scotland, whether this sense of unfairness at this stage overpowers the economic argument that Scotland really needs to be part of the United Kingdom, that it receives large amounts of funds. And the second question I have, very briefly, is that when you look at how other countries have become independent, when the Croatians or the Slovenes held their referendum, they didn't ask Belgrade for permission, they went ahead and did it. Would you consider holding a referendum if, in fact, Westminster turns you down? Or you lose the court case?


Interesting questions. First of all, Crinan is in my constituencies, so I am the representative for Crinan. So you can you can come and see me at the constituency office, and I'd be bound to give you an explanation then. Thank you for your question. They are very good questions. Can I just challenge you in your view that in some way we are dependent upon money coming from south of the border? That is not the case. This is an area of some contention, I have to say, between economists, and when economists contend, and you will know what I mean, I tend to stand to one side until the dust is settled. But the reality of the situation is that you can certainly take an analysis of Scottish fiscal flows and see that there is substantial resource that goes the other way. And indeed, one can ask oneself, an interesting question, “Cui Bono,” who benefits? And if it was no fiscal benefit to the UK to have Scotland as part of it, why are they trying so hard to avoid independence?

So I just I think that the premise needs to be examined, as all these premises do in terms of the history of, I won't say one's economy because it's not, but if you look at the history, for example, of the British Raj, and you look at the work that's been done on that in recent years, about the position of India prior to the Empire, then you begin to see some very interesting things. So I wouldn't accept that. And therefore I don't accept that, you know, in a sense, a feeling of grievances is overcoming the finance. I don't feel a substantial feeling of grievance. I think the system doesn't work. But, in that sense, I certainly blame the politicians who are operating it, but I don't feel oppressed in that way. I'm the biographer of Winnie Ewing, who was a great SNP figure in Parliament, one of the first MPs and a long standing MEP, and she tells a story of when she was on the lobby convention in the EU. And she tells the story of meeting Robert Mugabe, who said to her that the problem with Scotland and independence is that you are not oppressed enough. I don't think that is the case. I think we have a modern case for independence. And one in which, as Alex Salmond has often said, none of us have suffered so much as a nosebleed in the course of independence. It's a peaceful and democratic movement.

In terms of permission, the big issue here is not permission, but recognition. I've talked about the way in which the EU would find an application for membership, I think, to be final. It would take some time as these things do, but it would be there. But recognition requires a constitutional route to independence. And you can see with the issue of Catalonia, that the lack of a constitutional route is a barrier to recognition. So I am cautious about taking any route that does not have constitutionality at its heart. And this is a longer process, but it is one I think it has to be gone through. And, therefore, I do not envisage circumstances in which we would say, you know, we are now going to break what is the Constitution. What we need to do is to make sure the Constitution does not attempt to break the people and to make sure that it is not a barrier to the normal process of a nation saying “we want to follow a different path.”


And Michael, can I just follow up on that and ask is one of the strongest legal points that you might contemplate the one that you made earlier, namely that where the Scottish Parliament itself is requesting the referendum, that somehow has a significant weight with respect to the UK Parliament agreeing to that?


Well, it should have. I mean, if you have a structure in which you'd have four Parliament's operating, and one of those Parliament's regards itself as sovereign, that is the UK Parliament regards itself as sovereign, which is a very medieval concept, but it still does. That system isn't one that we believe is stable, and neither actually do the Welsh, and Wales is an interesting example. Wales has a Labour government, not a Nationalist government, and yet their present First Minister, Mark Drakeford, who was my counterpart in dealing with Brexit and the UK before he became First Minister, has argued that the concept of sovereignty needs to be revisited. And in the UK, the concept of sovereignty should be shared sovereignty, and it should be willingly shared sovereignty. And therefore it can be withdrawn. Just as in the EU, you can choose not to share sovereignty. In those circumstances, Scotland would say we wish to withdraw that and take our sovereignty to put in somebody else's bank. And that's the modernization of the Constitution, which the UK needs to have. Wales, Scotland and Northern Ireland, for example, all voted against the withdrawal agreement, but it didn't matter because it can be overruled. And that is a difficulty.


Let me ask now, Paul Sheard of the Kennedy School at Harvard.

Paul Sheard:

Thanks very much. I'd like to ask about the currency that Scotland would have or aspire to have, if it gained independence from the UK and tried to rejoin the EU, and what kind of monetary arrangements Scotland would aspire to have with the UK in the interim? And of course, in asking this question, I'm mindful that the euro is the currency of the EU. And the UK had a derogation from ever adopting the euro. But a rejoining Scotland presumably would not have that derogation, automatically at least.


There is no obligation. I mean, this is an interesting issue, as you clearly know, because it's been a controversial issue in the first referendum and will be in a subsequent referendum. There is no obligation upon a member state joining to take on the euro. There's an expectation, but there is a process to go through, and for example, Sweden did not go through it and did not take the euro and is not a member of the euro area. I'm not going to give you a definitive answer on this. Because the moment I do, somebody will jump on it somewhere else and say this is why you can't do it.

Rather strangely, the issue of whether or not Scotland could have its own currency, could continue to use a sterling in a sort of sterling area, or should go to the euro, is a matter of huge debate within Scotland by the anti-independence forces. All of which seem to end up with the view that Scotland cannot make any choices about its own currency uniquely in the world, that Scotland would have to end up with cowry shells or something, because it just couldn't have a currency. And what we've said very cautiously, and we are cautious about this, is as we approach a second referendum, we'll lay out the options that we have. We have talked about whether those options should include the continuation temporarily of a sterling area, with a number of tests that were applied before we move to our own currency. Some people have argued that the euro would be a suitable currency.

I think, you know, there's been such a tabloid press attack upon the euro for years. I mean, one of the problems with Brexit, there’s been something got up substantially by this tabloid press. There's been such an attack on the euro for years, it's very difficult to have a rational conversation about whether the euro would be the right option as well. So, Paul, I'm going to disappoint you by not giving you a definitive answer. I am going to say there is, and will have to be, a definitive answer. But it's one which I think is as an aspirant country, we should only go to when we are ready with the Scottish people to have that debate. And at the present moment, that debate would be nightmarish, because it would be seen as a lightning conductor for everything else.


Thanks. I think the next person on my list is Hani Findakly.

Hani Findakly:

Thank you very much. This is quite an interesting discussion. I'm not familiar with the politics of Scotland and the UK, but I have looked at the economics of countries that have broken up, starting with the India-Pakistan breakup and looked at about 30 countries. And while there have been a few exceptions, maybe about 10-20 percent, the majority of countries that break up tend to do worse than they would have done under a union and some of that, I think, is for obvious reasons. But another part is because of what economists call externalities. Things that we don't account for, and they interact with other things. So, you know, this is history. What's more important is looking forward, and it's fully understandable the emotional and other forces that drive that. But with COVID-19 and the expectations of some kind of a new normal with changes in the world economy, trade, the value of natural resources, and other things that countries depend on for their economic performance, I wonder if you have been through that kind of analysis and whether or not you have expectation that changes in the new world after COVID-19 will continue to be a benefit a breakup of Scotland from the union?


Well, I'd refer you to a paper we published last month on the expectations we have of both a COVID recession and a Brexit recession. Whereas the rest of Europe will be suffering severely from a Brexit recession, they will have the advantage of what appears to be, and this week's EU summit will confirm it, you know, a pretty exceptional response from the EU 27 in terms of the MFF agreements that they're going to reach, and they're likely to reach with the leadership of Germany actually making sure that they do.

They will not have a Brexit recession. So the UK will be double dipping in its approach. And that's one of the reasons why we believe Brexit should at the very least have been postponed. There was an opportunity to postpone the negotiations by up to two years, which the UK refused to do. And that would have been helpful. So our view is, as part of the UK, the economic prospects are very poor and will continue to be poor for longer and will be worse than we would otherwise have it from the COVID recession. I think it was the Financial Times that estimated that the recession would be the worst for the UK since 1709. I have no personal experience most of that period. But if that is the case, then I think we've got problems there.

The second issue to consider here is the nature of Scotland, and as it is just now, Scotland is actually a rich country. I mean, you have to step back a little, and look at it. It has a small population, which is well educated. It has a very substantial amount of natural resources both of the 20th century and of the 21st century. It has a pretty considerable reputation and ability in exports. The number one food export of the UK, which is whiskey, of course, is a Scottish export, but actually, Scotland's export offering is very wide-ranging.

So there is no reason why Scotland should not flourish. The fact that it isn't flourishing now might say something about how its economy is managed, and its economy is managed by the UK. And you know, when you look at that in the light of other experiences of economies being managed at a distance, and say that actually also may be a considerable issue to factor in. So my expectation is that choosing independence now, I don't think any of us can avoid the COVID recession. But I think it will mean that we would avoid the Brexit recession. It would also mean that the potential of the Scottish economy and the Scottish people were fulfilled.

Our recovery plan leans heavily on the issue of natural capital. And I think if you look at the issue of natural capital, and the work we're doing as a well-being economy, I think you can see considerable advantages. So I'm not pessimistic about this. And I think there are occasions in which countries that go their own way suffer from it. As in personal relationships, if these things change, then people can flourish, and I would expect us to flourish.


Thank you. The next individual is Julia Moore. We can't hear you quite yet.

Julia Moore:

Okay. I apologize if this question has already been asked or was the issue was addressed earlier. Because as you can see, I'm technologically challenged by this zoom technology. But let's assume that your Scottish exit happens constitutionally as you hope, and as you describe, what makes you believe that Scotland could overcome the tremendous obstacles to getting, forget the euro, getting membership into the EU and into NATO?


Well, my personal conversations have convinced me that that is a case, to be honest. I spend a lot of time talking to people. It seems to me that the enthusiasm for having a small, new, highly educated, wealthy, and sharing European values country as a member of the European Union is likely, to be blunt, to be virtually irresistible.

You know, there is no work to be done. There’s no queue. Nobody stands before or after anybody else. You have to qualify. But you know, I think it would require quite a lot of imagination to say that Scotland, being as it is, does not qualify. And certainly, the people I talk to regularly and all of the countries believe that Scotland will be a suitable candidate member for the EU, and will be accepted as such. And indeed, it would be very strange if it wasn't. This was, of course, an argument that the UK put during the 2014 referendum as David referred to earlier. And that argument was that an independent Scotland would not be a member of the EU. Now, David Cameron as the UK Prime Minister called in a lot of favors to get a few people in the EU to say that, and Scotland was affected by it. Because for many Scots, being in the EU is extremely important. But I have absolutely no doubt from my experience, from who I talk to, and from what they are saying because, you know, many European figures are saying this entirely clearly, Scotland would be a good fit for the EU.

In NATO, I think that's also the case. I can't imagine that NATO would want to say no, that's not suitable to have. If you look at NATO membership, and if you look at our geographic position, I think that would be a strange decision to reach and a quixotic decision to reach. Whatever else you might call NATO, I don't think I’d call it quixotic. So I think in all those circumstances it is fairly obvious that will take place. It will take the procedure of admission. It will take, before that, the procedure of application. But what is different about Scotland? I would fail to understand that.


You know, I might add, Michael, an answer to Ms. Moore’s question. I certainly recognized when I was in the quarters in 2014 in Brussels, skepticism because of exactly that point that you raised, that they wanted to simply maintain the United Kingdom as a full coherent nation, a powerful one, within the European Union.

However, of course, because of Brexit, I had to witness with great interest that last summer, when the First Minister Nicola Sturgeon visited Brussels and gave some speeches there, she was feted almost by the European Commission and the European Union officials. It was a very, very different reception for Scotland. One that was very supportive and understanding that Scotland has a tremendous amount to contribute to the European Union. So, the tide, as far as I could see, had completely turned by last summer.


I attest to that. I mean, I was around in 2014, of course, and you know, in recent years I have been talking to lots of people. But, Van Rompuy, the former president of the Commission and a former Belgian Prime Minister, so not a man fond of separatism in any description, has been on the record saying if Scotland applies and Scotland qualifies, which it does, Scotland will be a member. And I'm not asking people to be wildly enthusiastic about it. But that's the fact. You know, if we qualify, and we do qualify, and if we observe the acquis, which we have done, then we will be a member, and that's what we would want to do.


Let me turn now to Frank Klotz, who is retired from the US Air Force.

Frank Klotz:

Thank you very much for an excellent presentation. I'd like to follow up with one of David's questions and your answers related to NATO. For many years now, NATO leaders have endorsed the importance of the UK’s independent nuclear deterrent force to NATO defense strategy. The UK independent nuclear deterrent depends, of course, on its space in Faslane. The SMP’s position in 2014, prior to the referendum, as I recall, was that continued presence of nuclear weapons in Scotland was not to happen. Has that position changed since? And if not, how would you see the UK’s concern, and ultimately NATO’s concern, about the future of UK nuclear forces being resolved?


Let's start with the obvious, which is, you know, a small country of five million people is not going to possess nuclear weapons and shouldn’t. Scotland has no interest in so doing and would, therefore, not be a nuclear nation. Our position has not changed on Faslane. I think there's a substantial majority in Scotland who do not wish to see nuclear weapons on Scottish soil, and you know, I am one of those people. We may take a different view on these matters, but I am sitting as the crow flies about fifteen miles from Faslane across this lovely lock outside, and I therefore think I would feel perhaps a bit better if that was not happening.

We said during the 2014 referendum that we recognize that doesn't happen overnight. And that therefore there would have to be a period in which that was negotiated and took place. But we would expect to negotiate having those nuclear weapons not in Scotland. Now, that is a matter, of course, which would have to be discussed with the UK and with NATO. But that would be our position.

Now, it could be a different government in Scotland than the one that I would favor, but I think, broadly in Scotland's there is a pretty wide agreement upon that. In the UK, the Labour Party has always espoused the continuance of a nuclear deterrent. That is not true of the Labour Party in Scotland, by and large. So I think that would be likely almost under any dispensation. We believe in strong conventional forces. We talked about how those might be arranged in an independent Scotland and you know, we would follow that and we would wish to be part of NATO, but on that one, we do not wish to see nuclear weapons in Scotland.


Michael, is there any particular opposition in Scotland to out-of-theatre operations by NATO? In other words, if you become an independent nation and join NATO, would we see Scottish soldiers in a future type of Afghanistan situation with other NATO soldiers? Is there any point of view on that?


Yeah, I think the two areas in which we've expressed our interest and concern. One is we regard NATO sanctions as being extremely important and the NATO umbrella being extremely important. So as a member, we would meet members’ obligations. If we felt those obligations fit with our own view of the world, and we also believe in the European defense model, then we'd go along with that. We're also very interested in the way in which Ireland, for example, has carved out a place for it in terms of UN peacekeeping. And we do think there's a role for Scotland in that. We have a day efficient and effective contribution from our armed forces, Scottish regiments and Scottish soldiers. We would have thought we would want to see that within that context. But you know, we are committed to NATO membership. We're committed to working with Europe on defense issues, and we're committed in terms of UN action too. So we wouldn't be standing back, but equally, we'd be doing it from our standpoint.


I want to entertain more questions. So I'll keep my eye on the roster here. But I actually have two I can pitch at to you in the meantime. One is, did you just have a special session of the Scottish Parliament? If so, why? Was it all virtual, and what was the big deal? Why did everyone have to get called back in July?


Well, you know, we have a work ethic. Unfortunately, and necessarily, during the COVID epidemic, nobody believes that we should be away for a substantial period of time. We are technically on recess, but we're meeting in three weekly cycles. Because the First Minister, and the review of our regulations under COVID takes place every three weeks, so she addresses the Parliament, and we deal with that. And we do virtual questions sessions because we believe that that we should still be answerable to the country through its representatives.

We are able to do quite a lot virtually. Where I'm sitting in my outdoor study in Argyll looking over Loch Riddon, I've done a parliamentary statement from here. I've answered parliamentary questions from here. I've appeared in front of parliamentary committees from here. Edinburgh is about three hours by car, so I've driven through on four or five occasions to do things there. But it is not a normal year. So our normal pattern would be we would end in the end of June. We would start again at the beginning of September. We finished at the end of June. We will start again on the 11th of August when schools go back. Schools have been off since the 20th of March. Schools go back on the 11th of August, and we will go back then. But I will be in parliament on the 29th and 30th of this month, and I will be doing a statement of some sort before then. So, we keep ourselves busy. We believe in serving the people.


But there's no particular crisis this month regarding London's negotiations on Brexit or anything?


Well, I think the reason I may have to give a statement before the 30th will be, you know, we're certain there will be a white paper from the UK Government tomorrow, as I said, on issues which we believe, substantially undermine the devolution settlement. So that will be part of it. But you know, the main issue is COVID. And the main issue is making sure that we keep the Parliament and the people informed of that. The first minister undertakes daily press conferences on COVID. Up until now, they've been five days a week. I think that will change shortly. But we still do them. They are televised.

She is open to press questions for a lengthy period of time. And the quote I gave you earlier about truth and being honest with people is what we try to follow. So we've tried to make sure that people have all the information they need.


I believe Peter Galbraith has another question, Peter.

Ambassador Peter Galbraith:

Thank you. And I wanted to just say I was not being critical of Scottish independence when I was asking about the economic issue. It was the sense that often in these circumstances, where people feel they're, in the case of Scotland, dragged out by what England did, that can overcome economic issues. And I also think I've pointed out that countries often do very well after independence. Obviously, the Baltic countries case in point. In fact, Croatia and Slovenia, clearly better without Yugoslavia. My question is how do events in Northern Ireland affect the Scottish situation? I think the polls show that there is a majority now for a united Ireland or at least very close.

There's a process perhaps you might explain for having a referendum there. Do you see that process going forward with Boris Johnson's government? And I guess it would raise the question of if they are willing to do it in Ireland, how could they say no to doing it in Scotland?


We've always accepted the special situation in Ireland. Ireland is recovering from, you know, a generation of civil war essentially. It is not like Scotland, and therefore, we've always accepted special arrangements for Northern Ireland have to be made and for Ireland. And we've never drawn equivalences with that and wouldn't do so. And it's quite dangerous to try equivalences, as you well know, between national movements in various places. You know, everything is different.

But there are some interesting issues in Northern Ireland, and a special settlement within Brexit is a particularly important one. There is a special protocol in the withdrawal agreement that means that Northern Ireland will sit somewhere between the EU and the UK.

It will have regulatory alignment with the EU and the border will therefore not be a border, per se, in terms of goods, and it will be treated in a special way. Now our view is if that is possible for Northern Ireland, it should have been possible for Scotland, and there should have been some special arrangements with Scotland, and that was not reached.

The question of Irish reunification is a very, very different one. You know, there are a number of players in there. I think the new Taoiseach in Ireland, Micheál Martin, has made it clear that he doesn't think the time is right for a border poll. And the border pool can be called with the consent of both sides, but I don't think that's likely to happen immediately. I think it's likely to happen at some stage.

But a lot of this is the same issue. And the issue is, Brexit has precipitated change that was underway, In any case. Northern Ireland voted against Brexit too. The only part of the of the island, so to speak, that didn't get anything it voted for was Scotland.

Wales voted for Brexit narrowly, but voted for Brexit. England voted for Brexit, Northern Ireland voted against it and is getting special status. Scotland voted against it, and it's getting nothing. And the tensions created by Brexit have exacerbated what was an ongoing process. You've got to look at the issue of Scottish independence not as some modern phenomenon. This has been going on for well over 100 years. The establishment of the committee for the Vindication of Scottish Rights in the 1850s and 1860s, they campaigned for restoration of the position of Lord Advocate. The growing administrative devolution that took place in the late 19th, early 20th century, and there's a school that would argue that what has held us back were a number of events, which renewed UK solidarity or British solidarity: the two World Wars, the creation of the of the National Health Service, and so on. But the process has been going on. I mean, you know, I mentioned earlier my grandfather. My grandfather was a publisher. He was an Englishman, but he was a publisher in Edinburgh. I think he would be astonished that there was a Scottish Parliament, because he died in the 1960s, and it was a long, long way then. I mean, there was certainly no majority for it. I think he’d be astonished that his grandson was in a Scottish Parliament, a minister in the Scottish Parliament, perhaps even more so, discussing this with a distinguished American audience on a night like this. There has been a process underway, and that process continues to be underway. And that is true in Ireland as it is true in Wales and elsewhere. It is a question of how those that process comes to a conclusion that I think we're now talking about.


Thank you so much, Michael. This has been a tremendous conversation about the past, present, and future of Scotland. And I deeply appreciate it and the Council on Foreign Relations and all of our participants do as well.

You take good care of yourself, stay healthy next to the Loch there. And we'll see you.


Thank you very much.


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