Scottish Parliament backs second independence vote

A constitutional status quo in flux for the foreseeable future

Last night, the Scottish Parliament voted by 69 – 59 to formally request a Section 30 order from the UK Government. If granted, this will allow the Scottish Parliament to hold a legally binding referendum on Scottish independence.

Following two days of debate in the Holyrood chamber, SNP and Green MSPs passed the motion. The Scottish Conservatives, Scottish Labour and the Scottish Liberal Democrats voted against.

The vote is largely symbolic without binding conditions. It gives First Minister Nicola Sturgeon a mandate to pursue a second referendum and pitches the Scottish Government at odds with the UK Government during the forthcoming Brexit negotiations.

What next?

PM Theresa May has said that “now is not the time for a second independence referendum” so it is safe to expect that the UK Government is not minded to grant the FM the right any time soon. Given that Ms May is about to embark on arguably the most challenging set of negotiations that have faced a British prime minister in the last 50 years, further constitutional instability is not a risk that she wants to deal with in the coming years.

However, her position is vulnerable. As Nicola Sturgeon pointed out in the debate the Prime Minister confirmed to her in their meeting that the timescale proposed for an independence referendum lines up with what the PM is proposing. She said

“The Prime Minister was clear with me yesterday that she intends the terms of Brexit—both the exit terms and the details of the UK’s future relationship with the European Union—to be known before the UK leaves and in time for ratification by other EU countries; in other words, sometime between the autumn of next year and the spring of 2019.”

Secretary of State for Scotland David Mundell indicated that another referendum may stretch out beyond 2021. The FM has pledged that, ‘I will return to this Parliament after Easter recess to set out the steps the Scottish Government will take to protect the will of parliament”.

The unionist argument that there is a ‘lack of detail’ about independence plans has much less weight when there is no detail around the terms of the Brexit negotiations. To be truthful an independence referendum denied by the UK government in that timeframe may suit both sides of the debate. The act of blocking the referendum will motivate some towards Yes, it allows the SNP to rebuild its economic case, including on currency, and it allows the Prime Minister to focus on Brexit. The simple fact of the matter is that Whitehall has no bandwidth to deal with this simultaneously and the SNP know they don’t have the polling numbers they need right now.

The battle will continue on process arguments until the negotiations start to happen in earnest (after April 29th). As detail emerges so will the extent of the Great Repeal Bill and the debate will move on to ‘what powers will be devolved’. If the UK Government remains intransigent at worst or vague at best on what will come to Scotland expect the SNP to ruthlessly exploit this for political capital.

Implications

First Minister Nicola Sturgeon unofficially kicked off the second independence referendum in her speech to journalists at Bute House on 13 March. The vote in Holyrood now provides the formal platform to build the campaign.

More information on the details of when a second vote will be held will come in due course but it is unlikely to happen any time before Britain exits the EU in March 2019. We expect that the FM will want to hold a vote before the 2021 Scottish Parliament election to capitalise on the current majority support for independence at Holyrood. But she will have to wait until the PM responds to the Scottish Parliament’s request before setting out a formal timetable.

It is unlikely the SNP and Greens will hold what has been called a ‘wildcat’ (or unauthorised) independence vote, although Sturgeon has refused to rule out that option.

The possibility of a second independence referendum is another layer of uncertainty for business in the longer term. However in the immediate term nothing much will change. Risk averse and highly regulated businesses will rightly want to closely track the developments to understand when things may happen. Others may actually see opportunities in the potential for further powers to be devolved. Regardless of a second independence referendum businesses should be under no doubt that the constitutional status quo will be in flux for the foreseeable future.