No one expects the UK Supreme Court to agree to a referendum. But what if it did?

Not even the most optimistic Scottish nationalist seriously believes that the Supreme Court of the UK will do anything to break up Britain. The clue is in the name. All constitutional matters are reserved to Westminster under the 1998 Scotland Act. This is all constitutional theatre. 

Not even the Lord Advocate, Dorothy Bain, who is going through the motions this week, thinks that the Scottish Parliament has the power to authorise any kind of meaningful referendum. However, Ms Bain's sophistry is to argue that Holyrood has a right to hold a referendum that is NOT meaningful. An “advisory” referendum that has no bearing whatsoever on the constitution. Does not “relate” to independence at all. Just an innocent wee test of opinion. No one will take any notice of it, honest. 

Is this credible? Could there be a national plebiscite on leaving the UK that did have a bearing on the constitutional future of the UK? Hardly. Both the 2016 Brexit referendum and the 2014 Scottish independence referendum were also “advisory” as Nicola Sturgeon has herself noted. Both required acts of the UK parliament to implement the result. So arguing that this new plebiscite is also advisory serves to undermine the very argument for it. 

But wait. What if the unthinkable happened? Just suppose the that the Supreme Court decided that, in some way, a referendum could be conducted without it relating to, or having an impact on the UK. Perhaps if the ballot paper stated clearly and unequivocally that this vote should not be regarded as in any way consequential or binding on Westminster. It'd be a pretty odd exercise. A kind of Schroedinger's referendum that could mean both yes and no depending on who looked at it. 

Unionists could argue that Scots were voting for a proposition that explicitly rejected independence on any imminent time scale. They would at best be voting, as in an opinion poll, off the top of their heads, emotionally, without having any clear idea of what they were voting for. Unionists would anyway try to boycott the ballot to invalidate the result. If the vote is meaningless, why dignify it by participating? 

However, this paradoxical plebiscite could still have consequences. First off, it would require the SNP to hastily cobble together a campaign for a referendum no one expected to hold during an inflationary crisis, in the midst of an energy shock and with a continuing war in Europe. You could hardly imagine a less propitious moment for Scots to go it alone. Moreover, there is no template to work from. The SNP would have to admit that the 2013 Independence White Paper is redundant. 

In 2014 Scots were voting for a proposition which involved minimal readjustment to Scotland's relationship with the rest of the UK. It was assumed that both Scotland and the rest of the UK would remain together within the European Union and the single market. That meant there would be no hard border with England and none of the regulatory and customs issues that have played havoc in Northern Ireland. 

Nor was Scotland required to have a separate Scottish currency under the 2014 prospectus. The UK was opted out of the euro and logic dictated that the most sensible thing was to retain the UK currency union post independence. Indeed, given that many institutions like the monarchy, the Bank of England and the European Union were assumed, 2014 was really a kind of federalism. 

All that changed in 2016. The UK is out of the European Union. An independent Scotland would be erecting a hard border against its largest trading partner – shades of Brexit. Scotland would also be outside the European Union for 4 or 5 years. Meanwhile, the Scottish Government would have to set up its own currency and central bank as an independent state, not least to fulfil the membership requirements of rejoining the EU. 

Many in the independence movement do not want to rejoin the EU and, like Alex Salmond, would prefer Scotland to join the European Free Trade Area, EFTA. Others insist, like the former SNP MP George Kerevan, that sterlingisation would be ruinous and Scotland needed its own independent currency on day one. The SNP has said that Scotland would retain the pound sterling, for the “time being” and only seek to set up its own currency when certain “tests” are met. We are not clear what these tests are. 

The only thing certain would be uncertainty.  So, while this referendum next year might have no constitutional impact, it could have a significant economic impact if only because it would raise all the anomalies and negatives of separatism: a form of independence that the SNP abandoned thirty years ago when it adopted the policy of Independence in Europe.

Before 2014, there was no flight of funds, people and businesses because everyone knew that the European Union and the single market were to remain as a secure level playing field upon which Scotland acquired nominal independence. But with another independence referendum on a hard-nosed separatist project, there would be every incentive for banks and individuals to hedge their bets. 

The prospect of Scotland becoming independent burdened with a current account deficit even of the order of 8% as envisaged by the Sustainable Growth Commission of 2018, and no secure currency, would weigh heavily on the minds of businesses, working people and pensioners. The Scottish pound would be devalued. Interest rates would rise. There would be no lender of last resort to head off liquidity crises. 

The prospect of higher taxation in Scotland to meet the cost of the Scottish government's social programmes, and its debt payments to the UK, might make high earners think very carefully about remaining here. Pensions would become problematic since they would no longer be paid from the UK exchequer.

None of these issues is insoluble. Nicola Sturgeon is right to say in her conference speech that small nations in Europe, like Denmark and Finland, do very well in the European Union. There is no doubt that Scotland could be a viable independent country buoyed by its prodigious energy resources and its financial services industry. But getting from here to there during the present economic turmoil would require sacrifice, imagination and exceptional fortitude.

Brexit showed what happens when a divided country embarks on a radical separatist project with no proper road map. The SNP has failed to level with Scottish voters about the likely consequences of separation. Disruption is guaranteed. Indeed, Scottish independence without a plan or a currency would make Liz Truss's disastrous “fiscal event” look like a sober and responsible financial strategy.