Tug of War

Scot Against Scot

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The referendum threatens to pull Scotland apart.
  • Why it matters

    Why it matters

    Scotland’s referendum is currently too close to call. Whichever way the result goes, the United Kingdom will be seen as an uncertain place to do business for years to come

  • Facts


    • Scotland goes to the polls on September 18.
    • If Scotland votes Yes, it would gain independence in March 2016.
    • Several financial institutions and banks support a Yes vote
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GLASGOW — These days it feels like Glasgow is holding a party to which only half of the residents are invited.

In rallies supporting Scottish independence bagpipes sound through the streets, gigantic banners fly, balloons and T-shirts are being handed out. Even the dogs are dressed up, wrapped in the blue and white colors of Scotland. The ‘Yes’ campaigners are full of the spirit of freedom.

The ‘No’ supporters are more subdued. They gather in small groups of around 50 people here and there, handing out badges and engaging pedestrians in conversation. They don’t fly Scottish flags, nor do they sing patriotic songs.

On Thursday, Scotland holds a referendum on whether it should break free from the United Kingdom. Whatever the result, half the people in Scotland will wake up at the end of the week in a country they did not want.  And the repercussions of this often bitter, emotional battle will shape the whole of the United Kingdom for decades.

The polls currently show the vote as being too close to call. Prime Minister David Cameron warned on Tuesday that a ‘Yes’ for independence would be like a ‘painful divorce’ with years of recriminations, heartbreak and arguments about money.

Those who agree with him say Scotland now has so much shared history with England, Wales and Northern Ireland, it will be impossible to separate them out.

“How can you unscramble an egg?” asked Elspeth Wright, a 59-year-old  teacher who is campaigning for the ‘No’ team in Glasgow. “It’s a very British dish that we have for breakfast and once an egg is scrambled you cannot unscramble it. That’s how I see the United Kingdom.”

But the damage is already done. Even if Scotland votes against independence on Thursday, there will always be a question over the future of the United Kingdom.

Both sides have said that Scotland’s referendum is a once in a lifetime event.  If Scotland votes ‘Yes’ on Thursday, the decision will be permanent: there can be no return to unity. But if Scotland votes ‘No,’ the issue will not go away.

Quebec has already held two referendums on independence. The pro-independence side lost both, but there is always the possibility of a third vote.

If Scotland votes ‘Yes,’ the whole of the United Kingdom faces at least two years of uncertainty, while details of how Scotland will politically, economically and fiscally separate from the United Kingdom are decided. An independent Scotland will not come into effect until 2016.

This week Deutsche Bank global strategist Bilal Hafeez warned on the BBC that a ‘Yes’ vote would cause an “unstable banking system that would result in the Scottish having to pay much higher interest rates for their debt. This will make it more expensive to attract investors.”

But even a ‘No’ vote will cause problems. There will be no option to keep the status quo.

The British government has for quite some time expected a victory of the ‘No’ faction. It began to panic two weeks ago, when polls showed a possible ‘Yes’ victory for the Scottish National Party (SNP)  for the first time. Since then, London has promised Scotland huge benefits, if only the country stays in the Union. The package is called Devo Max, meaning the Scotland will receive a huge devolution of powers.  The details are still unclear, but the general promise is that Scotland will receive more powers over taxation by Burns Night in January.

This may appeal to Scottish voters, but will do little to ease the levels of uncertainty over Scotland’s future. It raises the prospect of the United Kingdom having two separate fiscal regimes and two different regulatory systems. This will be confusing for companies operating across the whole country. There is a real risk that companies will postpone investments and major infrastructure projects for several years while details of these proposals are thrashed out.

Scots are known for being cautious and prudent, and it had been widely hoped that all the uncertainty over the future of the pound, and questions about whether Scotland would be entitled to become a member of the European Union, would scare voters into opting for the status quo. But the ‘No’ campaign has come across to many as fearful, patronizing and the Devo-Max proposals are seen as a case of too little too late.

“I’m sick of being governed by Westminster. Scotland wants to govern itself and its own taxes,” said  Julie Philip, a 29-year-old recruitment manager who is voting for independence. Like many others in Scotland, she is left wing. The center-right Conservative party may be in power across the country in a coalition with the centrist Liberal Democrats, but in Scotland, they won just one seat in the last general election. Scots also tend to be more pro-European in their attitudes than the rest of the country, and are horrified by the rise of the euro-skeptic U.K. Independence party (UKIP). “I’m so sick of voting for a government we’ll never get. We vote for Labour and SNP but what we get is the Tories and the rise of UKIP in England, Wales and Northern Ireland. It’s just sad.”

The Scots who want to stay in the United Kingdom are not, as a rule, more right wing or more inclined to vote Conservative than those who want to leave. They share similar values. There is a huge level of support in Scotland for the National Health Service: the medical system that provides medical care free at the point of use for everyone. In Scotland, university education has remained completely free, while the rest of the U.K. has introduced tuition fees.

The key difference between those voting ‘No’ and those voting ‘Yes’ appears to be whether they believe all the warnings from financial institutions, companies and international organizations. They claim that the uncertainty and political risk will damage Scotland. The ‘No’ campaigners agree it will. The ‘Yes’ campaigners say it will not.

This is the point dividing Scotland.

Ross Craig, a 33-year-old oil and gas project manager, was bravely holding up a sign at a pro-independence rally saying:  “No, thanks” –  a typically British, polite way of refusing something. He is concerned that the ‘Yes’ campaigners are too optimistic about how long North Sea oil reserves, the backbone of the Scottish economy, will last.

“The SNP bases its independence on a barrel [price] of $114 but in the whole history, oil prices have never been at that level. Basing our economy on such a volatile market is just shambolic. We’d base this country’s success on the fluctuation of oil,” he explained. As he talked, an elderly man walked passed and screamed: “You scum, shame on you. You are not a Scot.”

Mr. Craig, who is now used to this abuse, simply shrugs. “I’m being called all kinds of things such as a quisling trader and not a Scotsman,” he said, still holding his placard and walking the Scottish streets.

Meera Selva is an editor for Handelsblatt Global Edition in Berlin. Contact: selva@handelsblatt.com. Hannah Brandstaetter also contributed to this story. She lives in London and traveled to Glasgow for Handelsblatt Global Edition to report on the campaigns.




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