'Retire early with independence'

The SNP have suggested that plans to raise the pension age would be put off in an independent Scotland.  The Scots die earlier – two and half years, on average – and the calculations don’t look the same for as they do for England.

That has to be right in principle, but it poses a practical problem.  Currently the State Pension is geared to a person’s work history, and the records are held in England.  To administer the pensions in line with existing entitlements, the Scottish Government would need to have access to those records.  There’s no obvious practical way of doing this, short of an individual request for details of each and every person by National Insurance number.    The pension would not be paid by the English authority, so the record would then have to be transmitted back to Scotland for processing and payment.

If there was instead a Citizens Pension, based on age, the records wouldn’t matter, and the provision of pensions could start from scratch.  That is only going to be politically feasible if the scheme is more generous than existing entitlements.  The UK government’s recent reform of pensions has gone some way towards establishing the new criteria, and it would only take a few small tweaks for it to be possible.

Benefits in an independent Scotland

A recent report by the Institute for Fiscal Studies has received a lot of press attention, and it has some helpful facts and figures, but it actually does very little towards breaking new ground. It says that benefits in Scotland cost relatively more than England for some groups (notably, for people with disabilities), and relatively less for others. It says that most of the money goes on pensions, which is hardly news. And it says that if there is radical reform, there will be losers as well as gainers, and that it is only possible to mitigate the losses by spending more. So far, so obvious.

The remit of the IFS briefing note is limited; it’s concerned with expenditure rather than equity or methods of paying benefit. It doesn’t actually provide key data on the issue which most people want to know, which is what Scotland could afford. To work that out, it would be necessary to compare Scotland’s national income and government revenue on one hand with liabilities and expenditure on the other – we have a good idea of how much money is spent, but how much revenue there would be is another issue entirely. Without that, it’s not really possible to say anything about the affordability of benefits. There are no indications that Scotland’s liabilities exceed its income to such an extent that benefit payments would be impossible; but beyond that, it’s difficult to draw any firm conclusion. What a country can afford depends on what it’s willing to pay for.

There are more serious challenges to developing a devolved or independent benefit system, but they are as much about mechanism as about cost. One example which emerged earlier this week was the question of what happens to occupational pension schemes: a cross national scheme has to be funded, so any Scottish schemes would need to be separated out. That points to a general issue about such schemes, which is that the smaller the scheme is, the more difficult it can be to balance the contributory base with existing liabilities. The basic way to overcome that problem is through pooling of risks between pension schemes – which generally happens in France (it’s referred to as a form of ‘solidarity’), but not in the UK, and its absence is a major reason for the instability of current UK schemes. A larger problem is the question of what happens to the contributory National Insurance system when all the records are currently held in Newcastle. I’m doubtful that the system is susceptible to devolution. It’s hard to see on what basis records could be transferred; Scotland would need a new and different pensions scheme, like a Citizens Pension.

There are, too, problems of cost control generated by a range of benefits which pay people to buy specific services in the market – housing, social care and child care among them. This approach is inherently defective; in every case it has led to accelerating costs without providing adequate basic protection. Any government, whether it is for Scotland or the UK, would need to rethink.

What independence can do, and what it can't

The debate on Newsnight Scotland yesterday was intended to deal with the perspective of women about independence. One of the questioners asked what independence could do about gender-related violence. Now, regardless of where one stands on the independence debate, and regardless of how important the issue is, this is not a field where either ‘yes’ or ‘no’ has much to offer. I think we can say with reasonable certainty where all the parties in Scotland stand on violence against women: they are against it. And with equal certainty, we can say what difference new constitutional powers would make: none, because it will not create any powers that are not available to Parliament now.  If the issue could be legislated away, there’s nothing in the current constitutional arrangements that would have stopped it.

The Scottish Parliament already has competence in a range of fields – the legal system, education and health. If independence was to make any difference, it would be in fields that are currently ‘reserved’ under the Scotland Act.   I’m not a constitutional specialist, and this may need correction and amendment, but here is a quick list.

Areas where the Scottish Parliament already has authority to act Currently reserved areas where independence would give the Scottish Parliament the authority to act


Currently reserved areas where the primary competence would remain with the EU
  • Health
  • Social care
  • Housing (subject to limitations on finance)
  • Planning
  • Environment
  • Education
  • Policing
  • Emergency services
  • Criminal justice
  • Civil law
  • Family law
  • Local government (subject to limitations on finance and competence)
  • Culture and heritage
  • The constitution
  • Economic policy
    • Taxation and fiscal policy
    • Monetary policy
  • Public expenditure
    • Aspects of local government and housing finance
  • Benefits
  • International relations
    • Foreign policy
    • Defence
    • Overseas aid
  • Immigration and nationality
  • Access to information
  • Business
    •   Insolvency
    •    Employee protection
    •    Minimum wages
  • Consumer protection
    •    Gambling
  • Energy
  • Transport
  • Broadcasting
  • Trade
  • Financial services and markets
  • Fisheries
  • Competition law
  • Intellectual property


It seems to make sense to say that the discussion of prospects for independence ought to be focusing on the second column, and that issues which fall outside it are part of a different debate.

A currency union

We’re told again that England is “unlikely to let a separate Scotland use the pound”.  I’ve made the point before in this blog, both in relation to Scotland and about comments made about “forcing” Greece to leave the Euro, that this is not something that a government can stop.  Despite the bluster, the Treasury paper on currency union makes a central point clear: if Scotland decides unilaterally to use the pound, it can.  When George Osborne asks, then, why the UK should accept a formal arrangement with an independent Scotland, the answer is plain: because that way you have some say, and otherwise you have none.

The timetable to independence

The Scottish Government has published a timetable for independence, under the title Scotland’s future. There have been some rather weak arguments on both sides, such as the daft idea that Scotland should refer to climate change in a new constitution, the claim that Scotland could not receive English television broadcasts (the Belgians do), the idea that Scotland could become independent in the same way that East Germany was unified in the Federal west (it’s hardly the same process) or that England could stop Scotland from using the pound (money is money: look at the countries round the world that use the American dollar).

The objection has been made that there is too many points to be negotiated for independence to be possible in the time frame. The point about independence is not however that all issues have to be decided – Alan Trench has pointed out that Czech Republic and Slovakia are still negotiating agreements, 18 years after separation – but that there has to be a government capable of negotiating them, and carrying the authority and legitimacy to implement new rules. That, not the settlement of all issues, is what the timetable needs to relate to.

There would need to be negotiations about assets, land ownership (who owns the military bases?), preservation of rights (such as licences for oil production), the division of the National Insurance fund and so forth. Where there is a need for negotiation, however, it would not imply that the process of independence needs to be slowed; if anything, it would imply that it needed to be speeded up, to avoid any doubt about the status and authority of the negotiating parties.

Scotland in Europe

In a perceptive article, Michael Keating points to a series of misconceptions behind David Cameron’s position. Given the options that Cameron is proposing, which lie between moving half-way out of Europe or wholly out of it, Michael suggests that people in Scotland who are pro-European may need to vote for independence if they want to remain in the EU.

At the same time, various European officials and politicans have been lining up to say that Scotland can’t expect a smooth passage into the Union. That seems to me misjudged – and arguably contrary to European law. The Scottish Government has been denied access to political negotiations, but another route may be open to them. I’d be interested to know the view of the European Court of Justice on any proposal to remove European citizenship from the people of a successor state that is currently entitled to it.

Thoughts on a Scottish constitution

Alex Salmond suggests that a Scottish constitution could cover issues like weapons of mass destruction, homelessness and free education. I don’t resile from the policies, but they are not constitutional issues – once they are included, there is nowhere to stop. What should be left out – biodiversity, climate change, sustainability, EU membership, pensions, marriage, health care? When the abortive European constitution was under discussion, I wrote this:

A constitution is a foundational statement. It needs to be communicative, transparent, and justiciable. Every constitution needs to set out the basic institutional framework. It needs to state primary legal rules – rules of recognition, change and adjudication. It should probably state fundamental principles, like the Bill of Rights in the US constitution. But it should not include policy. Instead of confining itself to constitutional issues, the “constitutional treaty” sought both to consolidate the content of previous treaties and to include substantial elements of previously agreed policy – issues like the environment, agriculture and fisheries, and commercial rules. However important these may be, they are not constitutional principles; and whatever the merits of the policies may be, it is very questionable whether the policy which is appropriate now should be expected to be appropriate a hundred years from now.

My colleague Paul Arnell has argued against a constitution, giving the example of the right to bear arms in the USA as bad law that has proved impossible to change. That seems to me an argument against the inclusion of substantive law, rather than an objection to all constitutions. A constitution should confine itself to principles and the institutional framework. It should not include matters of policy or substantive law. And it must be short.

Scotland and the EU

First Minister Alex Salmond has been accused of lying in a TV interview, when he said that yes, the government had sought the advice of legal officers about Scotland’s position in the EU in relation to debates and documents. In the Parliament, Salmond defended himself with chapter and verse about which documents he meant. I have just checked them out for myself, and I think Salmond has the right of it. Two of the three papers he cites, Choosing Scotland’s Future (2007, p 24) and Your Scotland your referendum (2012, p4) do make statements about Scotland’s position in Europe and will have passed the law officers, even if they are somewhat thinner than a proper legal consideration might offer. The main problem the Scottish government might have in giving a fuller account would not, I suspect, be the question of the confidentiality of advice; it would be that obtaining such advice would be a breach of the Scotland Act, which deliberately and explicitly prevents the government from contemplating the breakup of the United Kingdom. Following that line of enquiry has only been made legally possible following the Edinburgh agreement.

The more important question is where an independent Scotland would stand in relation to the EU. A helpful article last month by Alan Trench in the Guardian explains that while Scotland’s position is uncertain, it is debatable whether the EU could deny a Scottish application without breaking its own rules. Europe has a federal structure, in which every citizen is a citizen of Europe as well as of the member state; denying access to Scotland would deny citizenship to EU citizens.

Further note, 1st November: The press have caught up with this argument this morning, with an honorary member of the Commission confirming that EU citizenship cannot be withdrawn and that terms of entry would be negoatiated on that basis between a referendum result and independence.