Arc of Prosperity

Scottish Independence within the EU – with a Scandinavian Slant


Why there’s no Plan B in the White Paper

One of the recurrent criticisms of the Scottish Government’s White Paper that was released yesterday is that it doesn’t specify a Plan B, for instance in case the rUK vetoes a currency union. Many people are asking why the document couldn’t just state that if they fail to achieve a currency union, an independent Scotland will create its own currency, linked 1-to-1 to the rUK pound, for instance.

The reason they haven’t — and can’t — do this is because it would give away their negotiating position prior to the post-referendum independence negotiations with London.

The Plan B Triangle
The Plan B Triangle, a photo by viralbus on Flickr.
If the Scottish Government said that their first priority was a currency union with the Bank of England as the lender of last resort, their second one a currency union with a Scottish lender of last resort, and their third one a separate Scottish currency, Westminster could simply pick the answer they liked the best and veto the ones above it. In other words, Scotland cannot achieve the best possible deal if we give away our negotiation strategy.

Pre-negotiating some of the thornier questions would be an excellent solution to this, but this has been ruled out point blank by Westminster.

The three principles of getting the best deal, providing maximum clarity and refusing pre-negotiation are in direct conflict. We can display this in a triangle (see above). Only two principles of this triangle can be met, but not all three:

  1. If we want to get the best deal for Scotland and provide maximum clarity to the voters, we’ll have to pre-negotiate important questions such as which currency to use.
  2. If we want to provide maximum clarity and accept the veto on pre-negotiations, we’ll have to give away out negotiation strategy and accept the risk that we might not get the best deal for Scotland.
  3. If we want to get the best deal for Scotland and accept London’s veto on pre-negotiations, we have to be cagey about our negotiation strategy, thereby sacrificing a certain amount of clarity.

Given this trilemma, it’s understandable the Scottish Government has chosen the third option. They can’t force London to pre-negotiate anything, even if it would clearly be best for the voters, and of course they can’t accept not getting the best deal for Scotland.

Unfortunately, many undecided voters haven’t understood this, and they keep asking for more information. We need to explain to them that the Scottish Government has provided as much detail as they possible can without harming Scotland’s interests.

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