England will pay for Scotland the brave

Scotland is making England nervous.

Panic stations are being prepared in Whitehall. English politicians have grown nervous about the Scots, fearing that they might mislay their marbles and vote Yes on September 18 to leave the UK and become an independent nation.

After months of confidently predicting a 14 point gap between the No and Yes votes, a YouGov poll published in The Times on September 2 suddenly revealed that the difference was down to six points. Other polls had suggested much the same: a tight 53 to 47 in favour of No to independence and all still to play for.

The bookies and the foreign-exchange markets grasped the poll’s implications straight away. The odds against a Yes victory fell from 5-1 to 5-2, and for a No vote from 1-8 on to 2-7. This is music to the ears of Alex Salmond, a betting man who is First Minister in the Scottish parliament, and leader of the Yes campaign. In response, sterling fell by half a point against the US dollar.

In Whitehall, the machinery of government is finally gearing up for a fight. Ministers have sent civil servants scurrying around to find information that would prove helpful in negotiations that will follow a Yes vote. But it seems like a variety of key facts -- such as long historical runs of national-income statistics -- simply do not exist. 

And as polling day approaches, the argument is increasingly irate, violent even. The moderator of the general assembly of the Church of Scotland, the Rev John Chalmers, says he is repelled by the name-calling and rancour: “Something ugly is beginning to permeate the debate.”

Scotland has been Labour’s stronghold for more than a generation, but a Labour Party shadow minister has been pelted with eggs in the constituency of the former Labour prime minister, Gordon Brown. The desertion of Labour voters from No to Yes is thought to explain why the gap in the polls has narrowed so dramatically.

A long campaign is now short of temper; it has always been short on facts. The British pound is the single issue that best illustrates the argument. Salmond has always insisted that an independent Scotland would continue to use the pound sterling. In turn for retaining access to the Bank of England as a lender of last resort, Scotland would concede the new nation’s monetary policy to the bank in London.

In Westminster, Tories, Labour and Liberal Democrats have come together to reject this option. They say that joint currency arrangements that are not based on joint fiscal as well as monetary policy do not work. They point to the euro as evidence of this. As a weapon against the Yes campaign, though, it does not seem to be working.

Salmond’s response has been to take a very substantial gamble. He declares that, if the Scots do vote Yes, the rest of Britain (now known as “rUK”) will be persuaded to accept the will of the people of Scotland (no matter how small the majority). But what if British politicians remain obdurate and refuse to share the currency? Salmond’s response to this is draconian; he says that Scotland will then simply refuse to accept its share of the national debt.

It is, of course, always possible that events may change minds in London, and that continuing to oppose Salmond’s option would prove more trouble than it is worth. In that case, Salmond would have gambled and won. But the idea that Scotland could punish the rest of Britain by refusing to acknowledge its share of the national debt is a good example of electioneering without any regard for the consequences. Were they to carry out the threat, international bond markets would be inclined to identify Scotland as a defaulter, and increase its cost of borrowing. Not a healthy start to the tricky task of building a new nation.

If Scotland wins its independence, history may well judge it a devastating defeat for the political leadership in London. Mr Miliband, the Labour leader, a London-born political apparatchik, is being exposed as a leader incapable of inspiring the loyalty of the party’s traditional voters. Labour without Scotland would be hard put ever to form a government again. As for the old-Etonian David Cameron, his legacy might prove historic: the man who presided over the break-up of the UK. And, because the Scots are his best allies if he wants to stay in Europe, losing them would increase the chance of rUK becoming detached from Europe, without any obvious allies in a troubled world.

At the start of the Scottish campaign, it was widely assumed that in the battle between the heart and the head, the head would be most influential. But the polls reveal a trend that has also shown up in the streets: the heartbeat is getting stronger. The future of the UK suddenly seems to be teetering on a knife edge. Man the panic stations!