House of Lords, Debate on Scotland Independence Referendum, 30 Jan 2014

Moved by Lord Lang of Monkton

That this House takes note of the implications for the United Kingdom of the forthcoming Scottish independence referendum.

Lord Lang of Monkton, Conservative

My Lords, I am honoured and delighted to be able to introduce this debate on the implications for the United Kingdom of the Scottish independence referendum. I feel strongly that the question of independence for Scotland raises issues that should involve the whole United Kingdom. I welcome the number and range of interests across the House, and from across the nation, that the debate has attracted, in particular the participation, with her maiden speech, of my noble friend Lady Goldie. The House will look forward to what she has to say.

Although the referendum is now less than eight months away, I hope that today’s debate may cast a broader and more illuminating light on what has thus far been a deeply introspective debate within Scotland. Alas, PG Wodehouse gave us the English view:

“It is never difficult to distinguish between a Scotsman with a grievance and a ray of sunshine”.

We Scots have to work on that.

Scotland, for all its capacity for complaint has, over the centuries, been a full—indeed, more than full—partner in the magnificent success story of our partnership of nations and, I believe, has many friends among the other partners. With Northern Ireland and Wales, there is a kind of fellow feeling against the might of England, yet over 800,000 expatriate Scots live in England and 400,000 English people live in Scotland. It is a source of great regret that so many expatriate Scots are disenfranchised in this referendum. They may think of themselves as British and take pride in that and in their Scottish antecedents, yet north and south of the border, within two generations, countless numbers of Britons could become foreigners to their kith and kin.

For generations, Scots and English have lived alongside each other, sharing a British heritage. They fought shoulder to shoulder in the battles of the past three centuries and still serve together today; we all take pride in that. Together, they built and administered the empire before turning it into the Commonwealth, with Scots very much to the fore. Both countries are woven into the fabric of the United Kingdom. Must they now, both Scotland and England, disavow that shared history? Would that not dishonour the sacrifices, made in common cause, of those who died for the United Kingdom, a nation now to be cut in two if the present generation o fScottish nationalists have their way? I earnestly hope not.

There is nothing positive about an independence campaign that would destroy so much. However deep-rooted the fellow feeling and the sometimes grudging respect with which Scotland has jogged along within the UK, I believe that it would evaporate rapidly after a yes vote. Notwithstanding the rose-tinted spectacles of its present Government, Scotland would become a competitor of England, not a compatriot. The Governments of the remaining UK and its devolved Administrations would be obliged, regardless of sentiment or blood ties, to fight their own corners, fiercely if necessary, in the ensuing relationship. It would risk becoming like an increasingly hostile divorce, in which the parties continued to live next door to each other afterwards.

Where would that leave Wales and Northern Ireland? No wonder we hear that they feel worried and unsettled. If Scotland leaves, the population of the non-English part of the United Kingdom would be reduced by over half. The Principality and the Province would begin to look like mere add-ons to an overweening England. Surely no one would want to send vibrations from Scotland that might reopen old wounds elsewhere, but the trauma of a broken union would shake all its parts. The once-united kingdom would shrink, not just physically, but in the eyes of the world. Others would see it as diminished: diminished in size, diminished in population, diminished in strength and diminished in authority. The mother of parliaments would be viewed as unable to hold itself together. An historic partnership of peoples would seem to be crumbling and Britain’s international prestige and influence would crumble with it. Our standing in the Commonwealth would change, our standing in Europe, in NATO, the UN, the World Bank and the World Trade Organisation—one could go on. These are just some of the arguments why Scotland’s departure would be so negative and so bad for the UK.

Many specific issues have emerged in Scotland thus far, during many months of debate. I wish that I had time now to address them all in detail, but I am confident that other noble Lords will do so during the debate. Much detailed work has been done, both by the United Kingdom government departments and by many respected independent bodies. However, almost none has been offered by the nationalist Administration in Scotland. A much-heralded White Paper was published by them. We had been told that it would answer all our questions. However, at some 650 pages, it has used its very length to obscure its emptiness. It is a wish list. In reality, the governing party that wants to take Scotland out of the UK has no answers to any of the challenges that a separate Scotland would face. On almost all of them a separate Scotland would be a supplicant, based on blind optimism and reliant on concessions from others for its viability.

Take the vital issue of the currency, on which the Governor of the Bank of England was so lucid in his warnings yesterday. The SNP White Paper asserts that the pound belongs to Scotland as much as it does to England, but that is not so. It belongs not to Scotland or to England but to the United Kingdom, which the SNP wants to leave. If a separate Scotland were to use the pound as its currency, with or without the United Kingdom’s consent, it would find that its fiscal and monetary policy would ultimately reside with the nation that it had abandoned. Scotland would not have a viable central bank. It would not be able to print money in a crisis and it could not be a lender of last resort. In effect its status would have changed from that of partner to that of dependency.

On the economy, the SNP takes pride on the one hand in Scotland’s wealth, while on the other it claims that, liberated from the United Kingdom, Scotland would become one of the world’s wealthiest nations. Yet that is what Scotland is already and that wealth has been achieved as part of the United Kingdom, not just overnight but built up over three centuries. Only last month, the Centre for Economics and Business Research forecast that the United Kingdom, currently

number six in the world’s GDP table, would overtake France within five years and possibly even Germany later. Who would a separate Scotland overtake and how? We should be told that. The SNP’s answer is a vague reference to growth, yet at present throughout the western world only America is growing faster than the United Kingdom, and by only a fraction. Oil is, of course, the great panacea, but as we all know it is a commodity of volatile value, which is decided by world markets, not by Finance Ministers. No responsible Government could possibly base a national budget on oil.

At present the Scottish economy has strengths, but it also has vulnerabilities. For a start, it has too high a preponderance of public sector jobs and too low a proportion of wealth creators. Scotland does not have many large companies and more than 80% of those companies that employ over 250 people are owned outside Scotland. Of the large Scottish companies such as Standard Life, the Royal Bank of Scotland and Scottish and Southern Energy, most of their business is conducted outside Scotland. For such companies the inescapable introduction of another tax regime, separate regulators and administrative structures and the need to redesign their pension schemes would almost certainly drive some of them south.

Consider the banks in particular. We are told by the Treasury that the assets of Scotland’s banking sector are equal to over 12 times Scotland’s GDP—an astonishing figure. That would not attract the confidence of the outside world or indeed of the bank’s own directors. They need an established lender of last resort, stability and long-term security, but there would be no stability and no safety net in a Scotland in which any new financial crisis emerged. As fast as the new country established a separate financial jurisdiction, its banks would be scuttling across the border to find a lender of last resort. Already the UK Treasury has had to step in to underwrite, for a nervous world, some of the potential debt liabilities of a separate Scotland.

However, one of the present strengths of the Scottish economy—and that of England—is the extent of economic integration that exists between the two countries. Around 30,000 people travel in and out of Scotland every day to work. The postal, telephone and e-mail services hum with transactions every day between the two countries and the roads and rail services are kept busy. Those are the arteries of a united economy. Cut them and both countries would bleed.

A paper published by the Department for Business shows that in 2011 Scotland’s trade with the rest of the UK represented almost 30% of Scottish GDP. Indeed, in 2011 Scotland sold twice as much in goods and services to the rest of the United Kingdom as it did to the whole of the rest of the world. Perhaps more surprisingly, Scotland is the second biggest market in the world for goods and services from the rest of the United Kingdom; only the United States takes more. So it seems clear that, at present, the United Kingdom forms a highly efficient single market, an ever closer union of peoples that has actually worked. The OECD has recognised it as the most market-oriented, economic and regulatory environment among its membership.

No wonder the United Kingdom has among the highest employment rates in the world. Why put all that at risk?

Membership of the European Union offers no escape. It seems clear that the Scottish Administration’s plans to gain quick re-entry via Article 48 have already been rejected and that no special treatment can be gained under Article 49. It might take years, if it happened at all. What is more, the new Scotland would not take with it any entitlement to a budget rebate on entry but would have to start contributing to the remaining United Kingdom’s budget rebate. It seems probable that it would have to join the euro eventually and to join the Schengen group, which would therefore mean that Scotland could not belong to the United Kingdom’s and Ireland’s common travel area. That in turn would lead inexorably to the rest of the UK having to set up barriers and customs posts across the 95-mile border between Scotland and England, with all the hold-up and disincentive to trade that that would entail.

All this would add up to a new country with big problems, but England would surely prefer to see its neighbour as rich and successful, rather than have its second biggest customer in decline. For the first time in 300 years, England would have an undefended northern land border; it would have a country to its north that wanted to join NATO but refused to pay the nuclear entry fee. The implications for the UK’s defence are immense. I have no doubt that other noble Lords may wish to expand on that important matter and on many others.

I would like to spend a few moments in addressing what I believe could happen after the referendum if, as I passionately hope, the outcome is that the Scottish electorate vote no. The very fact of the referendum shines a light on our now complicated constitutional arrangements. I welcome the Prime Minister’s firm commitment not to discuss any further constitutional change ahead of the referendum, because that would only cloud the issue of separation—just what the separatists want. It is absolutely right that we should address the referendum question head-on, with no distraction. The question of whether or not to walk away from the rest of the United Kingdom will be one for the people who live and vote in Scotland, but what happens afterwards will not be. More devolution, or less, is a quite different matter. It is a matter for the whole United Kingdom, and that includes Wales and Northern Ireland as well as England. As others have pointed out, to resign from a club is for the individual member; to change the rules of the club is for all the members.

There seems to be an extraordinary mood among many in the Scottish political parties who oppose separation, who believe that they can simply agree on a shopping list of further powers for their Parliament and that such powers will be granted as of right. Scotland is going to have to abandon this mood and, I say gently, get real. Devolution is not just about Scotland; it affects everyone. A power devolved to one part of the United Kingdom creates imbalances elsewhere. Devolving a power is not about favours, still less about demands. It is the quality of government that matters, rather than the quantity. It is about responsibility and accountability, not just power. The present arrangements give the Scottish Government power to spend 60%of all government expenditure in Scotland—that is comparable with the German Länder and more than the Australian states and the Canadian provinces—but the responsibility is to raise only 20%. Such is the lack of accountability that has developed.

Scotland had for years devolved to it a 3p in the pound discretionary power to raise or lower income tax. It was not used. The SNP Administration even allowed it to lapse. Now there is a new Scotland Act, the 2012 Act, on the statute book for two years. It contains the biggest fiscal transfer in British history, which will soon give the Scottish Parliament the responsibility to raise 10p in the pound of its revenue locally with a corresponding cut in its block grant, and to raise more than that or less than that if it so chooses. Except on borrowing for capital expenditure, there is no upper limit to the use of that power. The Act even grants the power to invent and impose new taxes with the consent of the United Kingdom’s Parliament, but why did it give that power if it did not intend to allow it to be used? Therefore, Scotland now has the power to raise and spend what it needs to implement the policies that it judges necessary. It does not need to wrench the country out of the United Kingdom to achieve that. I find it very strange that that Scotland Act, and the authority that it brings to Edinburgh, has gone entirely unmentioned in the referendum debate so far.

However, all these changes bring anomalies elsewhere. In particular, I believe that the position of England needs to be considered. Already one can see the beginnings of a kind of identity crisis developing there. Twoof the serious flaws of the Scotland Act 1998 can surely no longer be allowed to fester—namely, the West Lothian question and the Scottish spending block, in particular the Barnett surplus. You cannot solve the West Lothian question just by ignoring it. One option to solve it that I have suggested in the past is by setting up not a separate English Parliament but an English Grand Committee within the Westminster Parliament. It is not a perfect answer, I know, but it was made to work for Scotland for 100 years before devolution and, with a little imagination and possible adaptation, it could be made to work for England. There is also the work of the McKay commission, which offers a means of diminishing the democratically offensive aberrations of the present position. It is almost a year since the commission’s report appeared and I hope that my noble and learned friend will indicate when the Government intend to respond to it. On the Barnett surplus, everyone knows that the basis of the present distribution of funds is out of date. We know that that, too, created an imbalance that can be put right. A fair-minded Scotland would agree. We need an up-to-date measurement of relative need in Scotland and elsewhere in the United Kingdom.

The United Kingdom will never settle down again, comfortable in its own skin, unless these anomalies are ironed out. They need to be addressed in a positive and broadminded way. We need to look at them not from the point of view of the outstretched hands of devolved Administrations but from the point of view

of the United Kingdom as a whole, and in its overall interests as well as those of all its parts, all of which should have a say.

I believe that we need a new approach. We need to refresh our understanding of what the United Kingdom is, its strengths and its core values. We need renewal. In short, what we need is a new unionism—a unionism that unites us, binds us and brings us together again and brings constitutional stability to the whole United Kingdom. We need to demonstrate its virtues and its fairness, not through ad hoc disbursements here or there but through a thorough and open reappraisal of our nation’s central strengths and how devolution fits into that. Above all, it is time to put the politics of grievance behind us. Others have suggested that a Joint Committee of both Houses should be set up after the referendum with broad terms of reference. I support that as one option, but we need the commitment of all the major political parties to work together in the national interest. We can turn the challenge of separation into the opportunity for reinvigoration. The break-up of Britain proposed in the referendum—this destructive, negative and irreversible process—does not need to happen. There is a positive alternative for Scotland and all of us within the United Kingdom. I beg to move.

[…]

Lord Forsyth of Drumlean, Conservative

My Lords, I congratulate my noble friend on his brilliant speech and on finally stirring up the media south of the border to talk about the importance ofthe union and the United Kingdom and of the decision that lies ahead.

It is a great pleasure to follow the noble and learned Lord, Lord Cullen, who has done such distinguished public service in Scotland. We will never forget the way in which he dealt with the sensitive issues following the Piper Alpha disaster and Dunblane. His words about research are well worth consideration and I may return to that if there is time.

I know that it is a cliché to say, “United we stand, divided we fall”, but it applies to companies, political parties and families, and it certainly applies to countries.

That is what is at stake here. It is important that we remember how this union came about in 1707. The truth is that it was an arranged marriage. It was a deal, and the deal was that the English got defence and the Scots got money.

They needed money because of the disastrous experience of the Darien project, where Scotland tried to build its own empire, its own colonies, and failed. One-quarter of the money in circulation in Scotland was lost, along with thousands of lives, in that failed venture where Scotland and England tried to continue to compete with each other. The brilliance of the Act of Union was that a partnership was formed and we started to work together, rather than against each other. And, hey ho, after about 20 years of misery—because the Scottish economy was protectionist and we had to adjust to free trade—suddenly prosperity bloomed. We had the Age of Enlightenment. Scottish philosophers such as Adam Smith, Scottish engineers and Scottish architects were dominating not just the United Kingdom but the globe.

It is very important to remember the financial aspect. All that money, one-third of the GDP, had been lost on the Darien scheme. A new institution, the Royal Bank ofScotland, was formed on the back of that scheme. Today, 300 years later, the Royal Bank of Scotland, with £40 billion lost—nearly one-third of Scotland’s GDP—again was rescued by the union. With 300 years’ experience, what kind of madness is it that cannot look to the past or to the present and conclude that the United Kingdom needs Scotland and Scotland needs the United Kingdom?

I said that the other half of the deal was defence. What happens if Scotland leaves the United Kingdom? Where will our nuclear deterrent be? That is let alone the effect on Scotland of the loss of 10,000 jobs at Faslane, and the loss of future defence contracts for the shipyards, with a further loss of jobs and everything else. But what about the position of the United Kingdom, which would be forced in practice to give up its nuclear deterrent? Where would Scotland be if it was cut off from the intelligence sharing and resources that we have, when we can see the threat that we face from terrorism? Whatof the British Army and the other armed services? Are we to say, as Mr Salmondproclaims, to the Scots men and women who fought in Afghanistan and Iraq so bravely with the union flag on their shoulders, “You have got to choose between the British Army and Alex’s Dad’s Army. You have got to choose whether you wish to be, in effect, mercenaries working for a foreign country or go off on this half-baked idea which Salmond proposes”. It is insulting. The lesson of the union and the prosperity that came was that free trade and a global outlook—not an inward-looking outlook—are the keys to success.

My noble friend Lord Steel mentioned the role that Scots have played. I wrote down some names which ring down through history, including Watt, McAdam, Telford, Dunlop, Bell, Logie Baird, Watson-Watt, Fleming, Simpson, Livingstone and Carnegie. If we turn to politics, Gladstone, Bute, Rosebery, Bonar Law, MacDonald, Bannerman, Home, Brown and Blair were all Prime Ministers who came from Scotland.

Scots have played a hugely dominant role in the United Kingdom. The idea that we are disenfranchised is the politics of nonsense.

Together, Scotland, England, Wales and Ireland have saved Europe three times. First, we saved it from Napoleon; secondly, from the Kaiser; and, thirdly, from the Nazis. When the bombs were falling in the East End in the Blitz and in Clydebank in Glasgow, we knew that we were one nation which was forged over the centuries. It is a disgrace that people should seek to break up that family tie, that bond, which has been created through our history and our common heritage, without any single indication of why it could be justified.

Can noble Lords imagine a United Kingdom with Scotland sheared away? It would be a rump. We would be an object of curiosity around the world. The prestige, the influence and the power that we still have is no longer with an empire, but we still have influence and relationships through the Commonwealth. We have institutions that are copied and admired around the world. Why should we let this constitutional Lothario enable the break-up of that union?

A week ago, Scots throughout the globe were celebrating the bard, Robert Burns. At the risk of boring the House, I remind them of his address to the Dumfries Volunteers:

“Be Britain still to Britain true,

Amang oursels united;

For never but by British hands

Maun British wrangs be righted!”


Lord Browne of Ladyton, Labour

My Lords, I am extremely pleased to follow the noble Lord, Lord Forsyth of Drumlean, and I join in the thanks and congratulations to the noble Lord,Lord Lang of Monkton, on securing this important debate. In the debates on the Scotland Act last year, I rather unkindly suggested to the noble Lord, Lord Forsyth, that Scotland had given up listening to him a long time ago. With his characteristic quick wit he came back to me immediately and said that he was never aware that Scotland ever listened to him. I can say unequivocally and, I think, uncontradicted by those who have heard him today that we all hope that the people of Scotland—my fellow Scots—listen to what he had to say today.

On that subject, perhaps I may say how pleased I am that the noble Baroness, Lady Goldie, is in her place today and that she will contribute to this debate. I certainly know that the people of Scotland listen to her, and we all wait with eager anticipation for her contribution.

I intend to concentrate on one subject alone in these few minutes: the profound implications of the forthcoming Scottish independence referendum for the defence and security of the UK.

The United Kingdom presently enjoys a very high level of security. However, although we face no existential threat, in the words of the national security strategy:

“Today, Britain faces a different and more complex range of threats from a myriad of sources. Terrorism, cyber attack, unconventional attacks using chemical, nuclear or biological weapons, as well as large scale accidents or natural hazards”.

Consequently, the task of our Armed Forces and our wider security machinery extends far beyond conventional defence. They discharge that remit to an extremely high level of competence. But that competence is built on partnerships—between us and international organisations such as NATO and the EU; between us and our allies, the US, Germany and France; and between Scotland and the rest of the UK. We can meet 21st century threats only with collective capabilities and shared approaches, and independence can only divide that capability, leaving us a little more disparate, but certainly leaving the people of Scotland more remote from the collaborative friendships that have served us so well for the past 70 years.

Let us consider intelligence as but one example. Scotland’s Deputy First Minister,Nicola Sturgeon, accepts that countering the threats facing Scotland would need,

“an independent domestic intelligence machinery”.

However, no part of the existing UK’s intelligence machinery can be disaggregated to an independent Scotland, and no effective intelligence organisation can be domestic. It would have to start from scratch and look outwards to threats that could emanate from anywhere in the world. What Scotland has already, which helps to provide security for its citizens and protect the prosperity of its businesses, could be replicated but not easily, certainly not quickly and not without considerable expense. As we wait for that, Scotland and the rest of the UK may be less effectively secure.

Further, while our relationships across the board with the US may often be misdescribed as “special”, we do have a unique defence and intelligence partnership of trust with the US. It allows us access to intelligence material without which we would be much hampered in containing the 21st century threats that we face. Although obviously secret and perhaps arguably requiring greater parliamentary scrutiny, it is essential to our security. It is improbable that an independent Scotland, particularly one intent on unilateral nuclear disarmament, would enjoy the same relationship. That also has implications, as the noble Lord, Lord Forsyth, said, for intelligence sharing with the so-called “Five Eyes” partners—Australia, Canada and New Zealand—NATO allies and, indeed, with the rest of the United Kingdom.

We must also recognise, as the noble Lord, Lord Forsyth, said, the very human dimension to this debate. Traditionally, Scotland has provided disproportionate numbers of soldiers and operatives to our defence and security forces. I think that I can say without fear of contradiction that no UK unit is without a Scottish presence—nor for that matter an English, Welsh, Irish or Commonwealth comrade. Thousands of Scots serve in our wider intelligence and security forces. Serving with distinction, they form an unbroken line back through Iraq, Afghanistan, countless peacekeeping missions and other crises, and two world wars, and deep into our history. This shared heritage and tradition is stronger than its individual components. The loss of them will not serve the interest of anyone in these islands, especially not the interests of the Scottish people.

Scots are everywhere in the defence architecture of NATO, where they enjoy considerable influence. They are accorded that influence because of their individual contribution but also because they come from the tradition, training background and experience of service in the UK Armed Forces. The armed forces of most European states of similar size to Scotland are restricted by their scale to home defence and exercises and to limited international involvement. Those few countries that are the exceptions established their military capability over years when defence spending was considerably higher, and that opportunity is gone for decades. Why would serving Scottish men and women choose to leave that tradition and join the armed forces of an independent Scotland when they could stay where they are and also enjoy the opportunity of promotion, advancement and the influence of being part of a UK larger force?

The inevitable loss of human and intelligence capability during the early decades of a separate Scotland, added to the loss of jobs in defence industries, the local impact ofthe removal of the Faslane naval base, the huge start-up costs for unique armed forces, the loss of access to intelligence and the loss of scale, will create very real risks to the people of Scotland and significant challenges for the rest of the United Kingdom. In the words of General Andrew Mackay, former GOC 2nd Division and commander of British forces in Afghanistan:

“It is easy to argue from within the comfort of a nearly 300-year-old Union that an independent Scotland would only require a small fighting force. It is not likely to be so comfortable after you have jettisoned your allies and you are on your own”.

[…]

Baroness Goldie, Conservative

My Lords, it is a privilege to make my maiden speech in this Chamber on such an important subject as the United Kingdom and Scotland’s continuing place within it. By way of preface, may I take this opportunity to thank all the staff here for their unfailing help and courtesy in guiding this rookie through the hoopsof admission and introduction? I should also like to thank your Lordships for the warmth of the welcome extended to me, not only today, and most recently by the noble Baroness, Lady Liddell, but also when my noble friends Lord Sanderson and Lord Selkirk introduced me to the Chamber.

I am Scottish born and bred. I grew up in the Renfrewshire countryside, which in many ways is very similar to the Ayrshire countryside of Robert Burns, whose birth we have just been celebrating. As he encountered the merle, the mavis and the corbie, so did I. When Burns wrote:

“A Rose-bud by my early walk,Adown a corn-enclosed bawk,Sae gently bent its thorny stalk,All on a dewy morning”,

I knew the scent of that wild rose. I had witnessed such mornings. I had a great senseof pride in being Scottish. The highlight of my childhood week was listening to Jimmy Shand and his band on the radio, learning the old Scottish tunes and jigging round the kitchen floor.

In primary school, Scottish history was an important part of our studies, but there was also a wider arena of which I was aware and could not be unaware. I grew up in the very recent aftermath of the Second World War. My father was a Glasgow Highlander in the First World War. I knew from an early age that there was a United Kingdom, that Scotland was a part of it, that these were natural concomitants and that there was nothing incompatible with that partnership and also being proudly Scottish. That perception was reinforced when I went to an excellent secondary school, Greenock Academy. There I was to learn in detail about the history of the United Kingdom: how the Act of Union came about—and, importantly, as my noble friend Lord Forsyth said, why it came about—and what had been possible down the ages within that unique partnership. Going to school in Greenock was also to see at first hand the significanceof the Firth of Clyde as a port and maritime route, an eye to the rest of the world.

Being at school in Greenock was also to understand the strategic importance of that area for the Royal Navy in time of war. Of course, in modern times the nuclear submarine base at Faslane on the Clyde has been a British defence facility of major strategic significance. After school, I was to study law and practise as a solicitor in Glasgow for many years before entering the Scottish Parliament in 1999, where I currently serve as an MSP. This autobiographical meander is merely to illustrate that from childhood through my formative years to adulthood, Scottishness and Britishness have been in my very fibre as innate and inalienable conditions.

Just as I feel part of a family within this House, I feel part of a family of nations: proud nations which constitute the United Kingdom, our United Kingdom. When I look at how together we overcame Nazism, how we fought and continue to fight against terrorism, how we exercise global influence through NATO, through being a permanent member of the United Nations Security Council, through being members of the G7 and G8 groups of countries, and how together we faced global recession and the failure of banks, I see a partnership which is relevant, which works and which is a success.

Threaded all throughout the fabric of that United Kingdom are the people and families of our individual nations. What a strength these threads give to that fabric. The famous words of the poet John Donne:

“No man is an island, entire of itself; Every man is a piece of the continent, a part of the main”,

could refer equally well to the United Kingdom. We are not defined by some diverse geographical blobs on a map. We are proud of our individual nations, and rightly so, but it is what we constitute together—this union—which is so unique and so powerful. We reach across boundaries; we are not divided by borders. To remove any part of that structure diminishes the rest. It puts the balance out of kilter, so that those who remain are affected every bit as much as those who leave. That constitutional dismemberment imperils the whole United Kingdom.

If I have a plea to your Lordships, it is this. Do not think that the independence referendum in September is Scotland’s business alone. It is not. The whole of the United Kingdom is affected by this debate. Wherever we live within the United Kingdom, if, like me, you value it, then we all need to step up to the plate to keep it. I and my fellow unionists in Scotland need the support of our fellow unionists in England, Wales and Northern Ireland. We are better together; now is the time to stand together.

[…]

Lord Hennessy of Nympsfield, Crossbench

My Lords, it is a great honour to be the first to congratulate the noble Baroness, Lady Goldie, on her fine maiden speech. Her arrival in your Lordships’ House is as timely as it is welcome because she has been at the epicentre of the questions before us today. The noble Baroness’s wisdom, which we have already felt today, will continue to be a boon to this House and so will her company, for she is hugely liked and admired across the political spectrum for her gift for friendship and for her generosity of spirit.

As a non-Scot, and the first non-Scot to speak in this debate, it is hard to know how to declare one’s interests in a debate of this kind. In my case, they come in three varieties. First, I had one Scottish grandmother and, since last year, have close family living in Scotland, in the Northern Isles. Secondly, to adapt the opening line of General de Gaulle’s memoirs, I have always had “a certain idea” of Scotland. More than that, I have had a love of Scotland since my first visit, aged 10, in 1957 when we went from London by car to the Isle ofSkye via Edinburgh and Inverness on the way up and the Clyde and Kilmarnock, where the family lived, on the way back. The third interest is difficult to declare because, as many of your Lordships will understand, male Brits of my age were brought up not to speak of emotions in public—quite the reverse. However, I cannot conceive of my country, the United Kingdom, without Scotland as part of it. My fear is that without the Scottish connection England will become a shrivelled nation, psychologically as well as geographically, and more inward looking after the equivalent of a family break-up.

Just think of the benefits that, over the past three centuries, have poured over the border from the family in the north to the family in the south, enhancing the lives of both family branches. We all have our own list—we have had several today—but here is mine in headline form. There are the continuing fruits of the Scottish Enlightenment, which we feel every day in the prowess of Scotland’s universities. I should declare an interest in that the noble and learned Lord, Lord Hope, gave me an honorary doctorate at the University ofStrathclyde a few years ago, which I wear with pride. There is Scotland’s industry and flair for invention; its gifts for public, judicial and military service; its writers and actors; and the variety, spice and bite that Scotland has brought to our Parliament and our political philosophies. That is quite enough emotion from me— probably too much—save to say that if Scotland separates, whatever the position in international law, I shall always regard it in my mind as part of my country until the day I depart for what will still, I hope, be a UK enclave in the sky.

Perhaps I may concentrate today on one aspect of what I regard as the regrettable decision taken by the Cabinet at the turn of 2012-13 that Whitehall shall not engage in any contingency planning for Scottish separation. The future of the Royal Navy’s Clyde submarine base in such an eventuality is of particular concern to me, as I am a firm believer in the need for the United Kingdom—or heaven forbid, the “remainder of the UK”, as Whitehall calls it—to sustain a nuclear weapons capacity through to the mid-21st-century as the ultimate protection against a highly unlikely but potentially utterly catastrophic contingency we might face in an unpredictable world. Sir Kevin Tebbit, a former Permanent Secretary at the Ministry of Defence, has accurately depicted the UK as the world’s most reluctant nuclear power. It is to our credit, however, that we go through a great and often anguished debate each time we face an equipment or an upgrade decision. But were we ever to give up our nuclear weapons, it should be after we have had the fullest and best informed national conversation possible, not on a side wind swirling out of the Scottish question.

Having visited Faslane and Coulport, I have some idea of the magnitude of any attempt to recreate them in England or Wales in both logistical and financial terms. My research colleague, Dr James Jinks, has furnished me with the original February 1963 study, now declassified in the National Archives at Kew, of possible bases for the Polaris force. This was the list: Devonport, Falmouth, Milford Haven, Loch Ryan, Gare Loch, Loch Alsh, Fort William, Invergordon, Rosyth and Portland. The Gare Loch was chosen for good reasons: it has deep water in which to dive quickly down the Firth of Clyde off Arran, and three possible exits en route to the patrol area—through the North Channel straight into the Atlantic, up the north-west coast of Scotland and out through the Minches, or south down the Irish Sea and through the Western Approaches.

Should an independent Scotland strive to remove the SSBN and SSN forces from the Clyde, which the SNP is pledged to do, there are now only two possible sites for relocation: Falmouth and Milford Haven. Can you imagine the planning process and the construction efforts required, let alone the cost? We may be able to take a stab at imagining these things, but the Ministry of Defence cannot under Cabinet orders. The solution, in my judgment, would be a sovereign base arrangement for Faslane and Coulport on the Cyprus model, but that idea is, I fear, regarded with horror in both Downing Street and the First Minister’s residence. I profoundly hope that the question does not arise.

I shall finish with a thought about the union post a referendum decision in Scotland not to separate. Although the union will be intact for now, there will remain the danger of a creeping estrangement between Scotland and England, especially if the SNP forms the next post-referendum Government. There could well be a continuing, perpetual drizzle of complaint about Westminster and Whitehall which would induce still more resentment south of the border and poison any conversations about further devolution. If the post-referendum relationship is one of surliness and sourness, we shall all be the poorer. I was very struck by the words of the noble Lord, Lord Lang, about learning to do things once more as a union. Post-September, if we are still together, it will be necessary to sing a song of the benefits ofunion. The union quite simply is a 300 year-old international success story. It has done great things for our people and for the world in peace and war. It can still do more, much more.

[…]

Baroness Neville-Jones, Conservative

My Lords, I add my thanks to those of other noble Lords to my noble friend Lord Lang for securing and leading this debate and for the wisdom of what he said. The noble Baroness, Lady Goldie, is no longer in her place, but it is a great pleasure to have her in this House. I agree that we have a great new weapon here—her call to arms was certainly very forceful and also quite right.

Much of the comment on the implications of the referendum in Scotland has focused on the economic aspects, but in the course of the debate so far we have also begun to see a wider picture. In a moment I will focus on the security side, which has already been mentioned by some other noble Lords. First, however, following what the noble Lord, Lord Kerr, said, I should just like to say that it is a very unattractive prospect to be caught like a pig in the middle between the Scottish Government and the Council when trying to do something. I see the point that he made—that it would be extraordinarily difficult. It is not clear to me whether the other members of the Council would play ball. That is only one of the many great difficulties that this potential scenario throws up.

Before I go on to talk a bit about the issues that conventionally come under the heading of security—and the list starts with terrorism—I should like to comment on the question of an independent Scotland’s potential membership of NATO. This throws up equally great difficulties when we come to the propositions that might confront us as regards the economic European Union. Why? Frankly, it is pretty extraordinary that a Government who dispute the central tenets of the defence policies of the alliance and seek to remove from their soil the facilities which are so important to nuclear deterrence should simultaneously imagine that they would be wanted or valued inside the alliance which their actions were weakening. It is very difficult to see how the alliance would countenance that. It does not work that way. That is another area where the Scottish people are being sold a false bill, and it is very important that they hear other voices.

I turn to issues that the noble Lord, Lord Browne of Ladyton, mentioned—and I agree entirely with what he said. I want to focus on the threats that this country has been tackling in a major way, from before 2010 but, most particularly, since the national security strategy of 2010. We identified terrorism, cyberattack and organised crime as major threats to the stability of the security and stability of this country. Terrorism and cyberattack were classed as tier 1 risks and organised crime as a tier 2 risk. Despite our great efforts and the investment that has been made since then in combating organised crime, it has enormously grown, and I would not be at all surprised to see in a further security strategy that it came out as a tier 1 risk. My point is, in relation certainly to the other two risks, that those risks are not going away; they are remaining. Daily extensive, intensive and expensive efforts manage to keep them under control.

So what are these efforts? The annual bill in this country for maintaining capabilities and for the operations of the agencies, and for the cyber intelligence alone, runs at over £2 billion per annum. That does not take into account the contributions also made by the police or other government agencies and the military to our overall strategy. As a result of that overall strategy, we have a well honed machine, which goes under the label of Contest, on which our counterterrorist effort is based and which is being used as a model to combat organised crime. It is because of Contest that we have seen so few outrages since the London bombing, but we should not imagine that it is because they are not being attempted—they are, and there are plenty of them, and the operations of the police and agencies frustrate them.

The whole of the UK benefits from this security umbrella that runs from the centre, but this would change, and it would change radically, in the event of Scottish independence. The authority of the agencies, the legal framework under which they operate and their ability to provide security would stop at the border. The noble Baroness, Lady Liddell, was quite right to say this. The Scottish Government have recognised this, and they know that they would have to set up what has been described as a security and intelligence agency, which would engage in what they have described as intelligence sharing. That is all very well, but the putative budget for defence as well as for security in an independent Scotland is only £2 billion per annum; that includes defence as well as other agencies. For a share of this sum it seems highly improbable that, with set-up costs and operations, an intelligence service could be created that was adequate to act as an effective and trusted partner to UK and other allied intelligence services. To share intelligence, agencies have to be capable of generating their own. I have no doubt that the UK, in its own security interests, would want to do what it could to increase the security of its geographical neighbour and long-time partner, but we have to recognise that the control principle governing intelligence derived from third parties would undoubtedly quite severely limit what it could share.

Scotland would lose the benefit of what the UK has at the moment in its membership ofthe “Five Eyes” community.

That would have important implications for UK security. The UK could not allow a less secure Scotland, if that turned out to be the case, to be used as a back door to penetrate the UK, and we may be sure that that would be tried. Unavoidably, we would have to fall back on securing the English-Scottish border to become a control point, with all the cost and inconvenience that would be involved. That would be true irrespective of whether Scotland were a member of Schengen or managed to persuade all parties involved to be allowed to continue to be in the common travel area of the British Isles.

I have one last point. The border between Northern Ireland and the Republic of Ireland is often pointed to as an example of the way in which it is possible to keep an open border in the face of a terrorist threat, but this is not an apt analogy. The control border is across the Irish Sea, and it most certainly is monitored and can be closed in emergencies. I would hate to think, but it cannot be excluded, that this could happen within Great Britain. The more we diverge in policy and practice, the greater the danger. We would surely be better off by maintaining the open and peaceful border that we have had for 300 years.

[…]

Lord Selkirk of Douglas, Conservative

My Lords, like the noble Lord who has just spoken, I congratulate the noble Lord, Lord Lang, on his profound and perceptive opening speech. I have spoken in this Chamber about the difficulties that I believe any independent Scottish Government would face in trying to create a credible Scottish defence force by plucking out assorted assets and personnel from the closely integrated British armed services. The military covenant, whose key principles have now been enshrined in law, states that the first duty of Government is the defence of the realm, and I wish to concentrate today on the implications for the safety of the whole of the United Kingdom if Scotland chose to become a separate country in the referendum next September.

The recent report of the House of Commons Defence Committee concluded that such a momentous change would result in the remainder of the UK,

“facing the loss of vital personnel, bases and equipment, representing as much as one twelfth of current assets”.

There would be, it warned, a consequent loss of capacity, particularly in the short term. The committee reached the alarming conclusion that the level of safety and defence currently enjoyed by the whole of the United Kingdom,

“is higher than that which could be provided by the Governments of a separate Scotland and the remainder of the UK”.

At the heart of the negotiations after a yes vote in the referendum would be the future of the United Kingdom’s Trident nuclear deterrent, as touched upon by the noble Lord, Lord Hennessy. The SNP is determined to banish those submarines from Scotland’s shores while at the same time seeking the protection of the North Atlantic Treaty Organisation, which is a nuclear-based alliance. In contrast, the Defence Committee reported that Scottish independence on those terms poses a serious threat to the future operational viability of the UK’s nuclear deterrent. The UK Government have made it clear that the horrendous cost of repositioning the nuclear armed submarines would impact financially on the whole of the United Kingdom. Giving evidence to the House of Commons Scottish Affairs Committee, Professor William Walker of St Andrews University said that the creation of a new deep-water facility outside Scotland could take at least 20 years. In what I sincerely hope will be the unlikely event of a yes vote, there is clearly substantial scope for this subject rapidly to become one of the most divisive and hotly disputed issues in any negotiations between an independent Scotland and the rest of the United Kingdom.

[…]

The Earl of Caithness, Conservative

My Lords, unlike my noble friend Lady Goldie, I am not 100% Scot. I certainly have Scottish blood in me but I also have quite a lot of Norwegian blood in me from the old days, as well as English, Welsh and Irish blood. I am not alone in that. Many in the United Kingdom have that combination. That is one of our strengths, being part of the United Kingdom, and it does not worry me. I passionately support Scotland when it comes to sport. If Scotland is playing England, I support Scotland, but if England is playing another country, I tend to support England.

The noble Lord, Lord Steel, said that his guru, Jo Grimond, did not like the word “devolution”. I do not like the word “independence”. Independence in Scotland has a certain ring about it that is quite attractive. If I ask people in Caithness, “Do you want independence?”, they hesitate. If I say, “Do you want separation?”, the answer is no. We are losing the argument by using the wrong word. We must make it absolutely clear that this is total and complete separation. It is the nuclear option; it is the end of the United Kingdom for ever. The consequences are horrific but we have not really touched on them today. In fact, I think that we have very little comprehension of how the markets and the rest of the world will react should Scotland vote for complete separation, because that is what it means. That is one of the messages that we have failed to get over.

Let us just go back to currency, because it is a key issue. It is no good the Government saying that it is not likely that we will have a sterling area. Come on, my Lords, let us be absolutely clear: there is going to be no sterling area. There must be no doubt. The more doubt that is sown in the minds of those who are going to vote in September, the more chance there is of there being a yes vote. The Government have to be absolutely clear. Should they decide that there might be a sterling area, can my noble and learned friend on the Front Bench confirm that the rest of us in the United Kingdom will get a referendum on whether we want it? It is no good the Scots saying, “We want a sterling area”. If the Government say, “Yes, well, in all the circumstances we will have a sterling area”, it will be absolutely right that the people in the rest of the UK decide whether they want to allow that to happen and whether they want to join that sterling area.

If there is to be no sterling area, Scotland has to have its own currency. It has to have its own central bank and it has to be credible. As the noble Lord, Lord Kerr, rightly pointed out, if Scotland wants to become a member of the EU, it has to be its own sovereign state. It has to have a track record. I think that it was the noble Lord, Lord Brennan, who pointed out that there will be a ghastly intermediate area between a country being part of the United Kingdom and it becoming a separate country. That will have huge implications for the rest of the UK, which will have to keep the whole ship steady.

As has rightly been said, if Scotland is accepted into Europe, it not only has to have its own currency but it has to be part of the Schengen agreement. That will automatically put border controls on the boundary between Scotland and England, and that will have an effect on tourism. The noble Baroness, Lady Liddell, was absolutely right to say that tourism is hugely important. When people come to the UK, they are thrilled to be able to arrive in London, come up to Edinburgh and then travel on to the far north. However, they will not be able to do that quite so easily. The Americans are not great travellers at the best of times. If life is made difficult for them, tourism in Scotland will suffer, although it will not suffer so much in the rest of the UK.

What will happen if Scotland is refused entry into Europe, as is highly likely? There will be a country to the north of us which is totally separate from the rest of the UK; it will not be part of Europe and it will have its own currency. There will be huge implications which we have not thought through and have not yet

assessed. That is potentially dangerous. Should Scotland become part of the EU, I do not think that that will affect the rest of the UK very much. At the moment we have 29 votes on a qualified majority basis and we will continue to have 29 votes because we will then have a population of about the same size as that of Italy. Scotland will have about seven votes—about the same as Finland. It looks likely that the top four countries will remain with 29 votes, although Germany should probably have a few more. However, I do not think that that would have severe implications for the rest of the UK.

I need my noble and learned friend on the Front Bench to quash another myth. Yesterday, it was put to me, “Don’t worry, Malcolm. We’re going to try independence but, if it fails, we’ll always come back into the UK”. No, my Lords. Will my noble and learned friend make it absolutely clear that once Scotland says yes, that is it? There can be no situation in which Scotland can come in through the back door.

The union of the past 300 years has led to peace, prosperity, wealth and influence for all of us in these sceptred isles. It is a wonderful opportunity that we have grabbed, and every country has grabbed it. TheNorthern Irish, the Welsh, the Scots and the English have always put people into the mix to make this country great. All that is threatened and there will be huge ramifications for the rest of the United Kingdom. My noble friend Lord Lang, when introducing the debate, said that, whatever happens, we have to have new constitutional arrangements. I totally support him on that. We need to work very hard in the future to make a stronger and better union for the next 300 years.

[…]

Lord McAvoy, Labour

My Lords, I, too, congratulate and thank the noble Lord, Lord Lang ofMonkton, on bringing this debate to the Floor of the House. We are in the year of the referendum and the timing of the debate will be regarded as kick-starting the real public debate and action on it.

The debate has been threaded throughout by some really terrific contributions from very knowledgeable and creditable people. It has also been marked by the maiden speech of the noble Baroness, Lady Goldie, making her debut today. She is a very welcome addition to the House. I hesitate to say that I look forward to her usefulness to the House, as it may be entirely for the Tory party, but nevertheless, she will be an asset to the House and she is very welcome.

Among his many salient points, the noble Lord, Lord Lang, mentioned the issue ofsacrifices. I endorse that sentiment. As a nation, we have come through two world wars. We suffered together, we sacrificed together. Although that may not be monetarily relevant, it is socially relevant. I certainly agree with that.

The noble Lord, Lord Forsyth of Drumlean, mentioned various reasons for the Treatyof Union in 1707, but he missed out one. One of the elements in the mix was the panic in the English Parliament that the Scottish Parliament still retained the right to recall the Jacobite James VIII.

Scotland’s place in the union is not just good for Scotland. As many noble Lords have said today, it benefits England, Wales and Northern Ireland. The union is a collective endeavour in which the four home nations are united in the pursuit of the common good. There is a desire by some to break up that relationship while claiming that none of the relationships that proceed from it will be affected. That is simply untrue. Indeed, what is proposed is a leap into the dark, leading to a complex process of negotiation and redefinition. It is simply fallacious to claim that Scotland can leave the union and that all that is positive that proceeds from it can be not simply preserved but somehow improved. Rather, the outcome of a yes vote in September will be the transformation of a relationship of partners into one of competitors—a transformation which will be bad for Scotland and bad for the remainder of the United Kingdom.

The SNP’s vision of an independent Scotland is a fantasy based on the claim that somehow everything will change while, simultaneously, nothing will change and consequently everything will be better. The relationship it envisages with what remains of the United Kingdom typifies that fantasy and how the reality would be damaging for both countries. By retaining sterling, Scotland’s monetary policy would still be determined by the Bank of England. That would effectively mean that Scotland’s borrowing and interest rates would be controlled by a foreign country. The statement by Mr Mark Carney, the Governor of the Bank of England, has surely finally scotched that fantasy of Alex Salmond’s.

This House’s Select Committee on Economic Affairs seriously doubted the possibility that members of the Bank of England’s Monetary Policy Committee could represent the interests of a separate country. Such a sterling union would mean a fundamental change for the worse. Monetary policy would in no way be determined in the interests of the Scottish people. This also exposes another central falsehood of the SNP’s position: their unique understanding of negotiation—that simply by declaring what you want, you will be given

it. This was certainly exposed by, for instance, the noble and learned Lord, Lord Cullenof Whitekirk, describing the damage to the research facilities available to Scotland. I will come back to Alex Salmond in a minute. I do not want to spend too much time on Alex Salmond. We should concentrate on the big examples.

By breaking the political union with the UK, the benefits of four nations working together will undoubtedly be lost, and Scotland’s relationship with the outside world completely redefined. The benefits brought by shared regulation and institutions—namely, a unified labour market, integrated infrastructure and a UK-wide business framework—would either be lost altogether or severely diminished. In the area of defence procurement, which was mentioned specifically by a number of noble Lords, including my noble friend Lord Browne of Ladyton, the damage done to Scotland and to the UK would be long term. I doubt we would be able to recover from it. An independent Scottish state would have lower domestic demand for defence goods, and would no longer be eligible for UK defence contracts. The Clyde would never again be able to build complex warships or aircraft carriers for the Royal Navy.

Throughout the world, the United Kingdom is working to pursue the best interests ofEngland, Wales, Scotland and Northern Ireland. There are currently 267 embassies, high commissions and consulates in 154 countries. The idea of Scotland setting up a similar structure is laughable. My noble friend Lady Liddell mentioned Alex Salmond’s comment that we would remain best pals with England. Yet at the same time, he still propagates the idea that despite, in theory, being a member of the European Union, Scotland would bar English students from free tuition fees. Best pals? There is a touch of nastiness there, which we should always remember when we are dealing with Mr Salmond.

By leaving the union, Scotland would be damaging all the other partnerships that spring from it. The legal opinion is increasingly clear that the remainder of the UK would be regarded as the continuity state, inheriting all the international rights and obligations that currently befall the UK, while Scotland would be regarded as a new successor state. As many noble Lords have indicated, Scotland would have to reapply to join the European Union and NATO. Here, again, many in the yes campaign display a shaky understanding of the meaning of negotiation. The Scottish Government’s White Paper declares that an independent Scotland would join the EU, but not the eurozone or the Schengen area. However, this is at odds with the EU’s rules on membership. Any exemption would likely require unanimity among all the member states. At the moment, that seems extremely unlikely. The terms of membership are simply not within the Scottish Government’s gift. Similarly, the desire to become a member of NATO is at odds with SNP commitments regarding Trident. Trident is part of a NATO security umbrella. Any attempt to remove it from the Clyde would undoubtedly impact on Scotland’s relationship with other NATO countries and negatively affect its application for membership.

The union has served to advance Scotland throughout the world, and leaving it would take us into a world of uncertainty. If Scotland were to vote yes to the ending

of three centuries of partnership, the remainder of the UK would face the same negative consequences. My noble friend Lady Quin indicated the dilemma of the feeling of closeness and camaraderie across the border with Scotland, and the potential damage to Northumberland and the border counties from having a separate Scotland with fiscal taxation and all the rest of it. Her powerful speech indicated the dangers of that.

A new competitiveness between the remainder of the United Kingdom and Scotland would be damaging to both. While the UK would be regarded as the continuity state in international law, its standing would be diminished—hence the apposite title of this debate in the name of the noble Lord, Lord Lang. Serious questions would doubtless be asked as to why the UK continued to retain a place on the UN Security CouncilThe UK’s role and influence within the European Union would also be weakened. Furthermore, Scotland’s exit from the union would be a heavy blow against the concept of multinational states. It would prompt serious questions as to the involvement of Wales and Northern Ireland within the union, potentially reawakening terrible wounds within the latter, as was mentioned by the noble Lord, Lord Trimble. It would also have a profoundly negative impact on England’s identity and politics.

The implications for the UK of a Scottish yes vote in September 2014 are unappetising. It would represent a turning inwards, a diminished outlook and a turning away from a relationship of co-operation and partnership into a relationship of competitors. Outside the union, Scotland would find itself having to try to renegotiate its relationship with the UK and international bodies. If an independent Scotland managed to enter into a sterling union, it would represent a highly regressive development. Scots would find that their monetary policy was being entirely determined by a Bank of England no longer capable of adequately representing the Scots.

Scotland’s relationships with all its UK partners would also need redefining, and it would inherit none of the privileges and benefits that currently exist. The upcoming Scottish independence referendum allows us the opportunity to articulate once again the mutual benefits that come from the union and argue for the preservation of this collective endeavour. It allows the Scots the choice of whether to remain partners within the United Kingdom or become competitors outside it.

Once again, I thank the noble Lord, Lord Lang of Monkton, for facilitating this debate. I also place on record our appreciation to the noble Baroness, Lady Anelay, and my noble friend Lord Bassam for agreeing to extend the time allowed for this important debate, which shows the House of Lords at its very best. In my opinion, it shows our relevance to a UK-wide debate. I would like to think that this debate and the powerful speeches here today mark the start of the campaign to keep Scotland within the United Kingdom.