A longer read for the weekend: “The Law’s the Law, for A’ That” – Legal Reflections on the Scottish Independence Referendum

Piper outside Court of Judiciary Some rights reserved by @ B E L ™We’re grateful to the Lib Dem Lawyers’ Association for sending through to us the recent lecture given by Lord Wallace of Tankerness QC, Advocate General for Scotland and Leader of the Liberal Democrats in the House of Lords. He gave this year’s ’80 Club’ Lecture, posted below…

When I was appointed Advocate General for Scotland, following the formation of the Coalition Government in May 2010, a reporter from the Annandale Observer, the local newspaper which covers my native town of Annan, phoned to ask if I was the first Liberal Democrat ever to hold the post. I had to politely point out that, in fact, I was only the third person ever to hold this office. It was established by the Scotland Act 1998, which also provided that the holder of the historic office of state, the Lord Advocate, would become a law officer of the devolved Scottish administration. The position of Advocate General for Scotland was therefore created to be the law officer advising the UK government on Scots law and legal issues, as well as discharging certain statutory functions created by the Scotland Act.

Accordingly, there was no Advocate General in the administration of William Gladstone, formed after his election triumph in 1880. However, as a Scots law officer serving Her Majesty’s Government, and thus inheriting some of the responsibilities of the Lord Advocate, I looked up who was appointed Lord Advocate in that historic government. The answer gave some insight into the political times.

Mr John McLaren MP for the Wigtown Burghs was made Lord Advocate, and, following the requirement of the time that newly appointed ministers had to fight a by-election, Mr McLaren duly resigned his seat, fought the by-election and lost. Two months later, he lost on a further attempt to re-enter Parliament as MP for Berwick-upon-Tweed. However, help was close at hand; indeed, very close at hand. His father, Duncan McLaren, a very distinguished former Lord Provost of Edinburgh, duly resigned his Edinburgh seat, the following year, 1881, and made way for his son. His tenure in office was short-lived, as later in 1881, he resigned as Lord Advocate and as an MP and took his seat on the Scottish bench as Lord McLaren, where he had a notably successful judicial career.

John McLaren as Vice-President of East & North of Scotland Liberal Association had also been a leading organiser of Gladstone’s Midlothian campaign of 1879-80. Gladstone said very little about Home Rule in his Midlothian speeches, and, of course, the term ‘devolution’ was of a much later creation. But addressing the issue in a speech in the Dalkeith Corn Exchange in November 1879, William Gladstone said:

“The man who shall devise a machinery by which some portion of the excessive and impossible task now laid upon the House of Commons shall be shifted to the more free and therefore more efficient hands of secondary and local authorities, will confer a blessing upon his country that will entitle him to be reckoned among the prominent benefactors in the land.”

Proud of my Scottish Liberal heritage, I quoted these words when members of the newly elected Scottish Parliament convened in Parliament House, the home of the old Scottish Parliament, before processing to the temporary home of the new Parliament ahead of its official opening by the Queen on 1st July 1999. Few of us thought then that fifteen years later we would be in the midst of a referendum campaign about Scottish independence. Quite frankly, when I was sworn in as Advocate General in May 2010, I didn’t anticipate that I would be devoting any, let alone so much time to the legal issues relating to the holding of a referendum itself and the legal implications of independence.

I quite deliberately start with reference to the legal basis for the referendum, and how we came to a position today where we are just over six months away from such an historic decision.

There was no doubt that the SNP majority government elected in May 2011, had a manifesto commitment to hold a referendum on Scottish independence. The UK government recognised the importance of their manifesto pledge being honoured. The problem was that the Scotland Act 1998 makes it clear that the Scottish Parliament does not have the power to pass legislation that relates to a reserved matter. The view of the UK Government was that any Court, looking at the powers of the Scottish Parliament as they stood, would conclude that the Parliament had no power to enact legislation for a referendum on independence.

In January 2012, the then Secretary of State for Scotland and I set out the UK Government’s understanding of the legal position on legislative competence.

However, we made it clear that we wanted to help the Scottish Government fulfil its manifesto commitment, so that a referendum would not only be fair and decisive, it would also be legal.

In spite of the potential cornucopia of riches for the legal profession, the last thing we wanted was proposals for a referendum which could be credibly challenged in court.

After white papers published by the respective governments, and months of negotiations, an Agreement was signed by the Prime Minister and First Minister in Edinburgh on 15th October 2012.

That agreement, in which the two governments committed themselves to respecting the outcome of a fair, legal and decisive referendum, lead to an order under section 30 of the Scotland Act 1998 being passed by both Houses of Parliament at Westminster and the Scottish Parliament, before being approved by the Queen-in Council. That order conferred upon the Scottish Parliament the competence or vires to legislate for a single question referendum on independence to be held before 31st December 2014. It is to the credit of the Scottish Government that they opted for a constructive approach which ensured a lawful and democratic outcome, rather than have the issue challenged in the courts.

Subsequently, the Scottish Parliament, consistent with the terms of the Order, has passed legislation both relating to the franchise for the referendum as well as for the referendum itself. The question, as proposed by the Electoral Commission, and legislated for in the Scottish Independence Referendum Act 2013, will be

“Should Scotland be an independent country?”

Reaching agreement to pave the way for a legal, fair and decisive referendum was only the start of the legal considerations which have attended this crucial issue.

Whilst obviously politically charged, an issue such as the creation of a new state gives rise to important legal considerations.

Legal issues matter: they determine how a state operates on the international stage and how it organises its affairs at home. In terms of public international law, there are issues of what constitutes a state, and – crucially in the context of the present situation – issues of state succession.

It is because these issues are complex, yet so important that I established a Legal Forum to analyse, debate and challenge the legal views being expressed by the UK government.

The Scottish Cabinet Secretary for Education, Mike Russell, described it as a ‘kangaroo court’. It included, among others, six university professors (including Professor Beaumont), the President of the Law Society of Scotland, the then Dean of the Faculty of Advocates and a former judge of the European Court of Justice – each acting in a personal capacity, and without necessarily supporting the Better Together side of the debate. Arguably it was one of most qualified mob of marsupials ever assembled.

Our deliberations together with a legal opinion obtained from two renowned legal experts in the field, Professor James Crawford from Cambridge University and Professor Alan Boyle of Edinburgh University helped inform the first of a series of Scotland Analysis Papers, which the UK Government has published to inform the referendum debate.

The opinion from Professors Crawford and Boyle – which was published as an annex to the Scottish Analysis Paper – concluded that, in the event of a ‘Yes’ vote in favour of leaving the UK, in the eyes of the world and as a matter of law, Scotland would become an entirely new state.

In international law, new or ‘successor’ states are regarded as fundamentally different in law from ‘continuator’ states. A successor state, in contrast with a continuing state, does not automatically inherit the rights, obligations and powers of the predecessor.

Thus in the event of independence, the remainder of the UK – as the continuator state – would continue as before, and Scotland would form a new, separate state.

There are four key grounds for reaching this conclusion.

First, the majority of modern international precedents favour that conclusion.

Not only are there a number of international precedents but we have a precedent close to home. The formation of the Irish Free State in 1922 was treated as a change in the UK’s territory and not a break in the continuity of the UK.

Secondly, certain factors influence state continuity.

These include the continuing state retaining the majority of the predecessor state’s population and territory. That, of course, would be the case if Scotland were to become independent with the remainder of the UK accounting for around 92% of the population and 68% of the territory of the UK.

Thirdly, there is the likely recognition by other states.

Here, the United Kingdom’s position on the international stage is significant. It is one of the 5 permanent members of the UN Security Council, a key member of NATO and the EU and party to several thousand bilateral and multilateral treaties. The international community is likely to recognise the remainder UK as the continuing state – to do otherwise would cause enormous disruption within the international institutional framework.

And fourthly, the legal opinion makes clear that the only way that UK and Scotland could both become new states would be if the remainder of the UK agreed to become a ‘new state’.

The so-called velvet divorce of the Czech Republic and Slovakia, where two successor states emerged, is often prayed in aid of this line of thinking. The crucial difference with Scottish independence is that the extinction of Czechoslovakia was effected by the consent of both new states – neither wished to claim continuation of its identity. But in the present case, it is hard to envisage any scenario whereby the UK Parliament would ever have a mandate from the people of the continuing UK to dissolve the UK by voting the state out of existence.

To most people it would surely seem obvious that independence would mean Scotland becoming a new state – how could it mean anything else?

But legally, this position has very important consequences for Scotland on the world stage and at home. And these consequences have been the subject of much heated debate in recent weeks, not least because the Scottish Government doesn’t always appear to acknowledge these consequences. They seem to suggest that as a result of a “yes” vote in Scotland the entire UK would dissolve along with the Treaty of Union. That somehow, after independence, Scotland would get to keep what we have now because the government of the continuing UK, other nations, and international organisations would agree to it:

Agree to automatic and continuous EU membership with all the terms the UK currently enjoys;

Agree a currency union which the Chancellor, Shadow Chancellor and Danny Alexander, on behalf of the Liberal Democrats have all clearly ruled out on the basis of advice and evidence as being neither be in the interests of Scotland nor the continuing UK;

Agree membership of NATO, despite the SNP’s opposition to nuclear weapons.

Consider for a moment, the implications for membership of international organisations.

On independence, the remainder of the United Kingdom, continuing as the same state as before, would maintain its membership of international organisations on the same terms as it does now. This includes the United Nations, and in particular, as a permanent member of the Security Council, the European Union, NATO and the International Monetary Fund, the G8, G20 among many others.

An independent Scotland, however, would have to apply to become a member of whichever organisations it wished to join. There is no doubt that in some cases that would be relatively straightforward –application for membership of the UN, for example, might not be problematic. But application for membership of other organisations would depend on whether an independent Scotland would meet the criteria for membership.

An application to join NATO, for example, would require the North Atlantic Council to decide whether Scotland met the membership criteria. That is far from certain.

There are implications too for international treaties. Following independence, the remainder UK would continue as the party to the many thousands of international treaties that it is party to now. An independent Scotland, however, would need to undertake a process of becoming party to, or confirming participation in as many of these treaties as it wished to become a party to.

In some cases, this would be straightforward, for example, in the case of many human rights treaties. In many others, it would not, and treaties to which an independent Scotland wished to accede may require re-negotiations that take time to conclude

There are two issues on which I’d like to elaborate from a legal perspective, as they have possibly generated most discussion and controversy:

  • An Independent Scotland’s membership of the EU; and
  • The issue of a sterling currency union.
  • The position of the European Union is unique in many ways – it has its own body of law, its own institutions, and in that sense is unlike any other international organisation – it is a “new legal order of international law” [Case 26/62 Van Gend en Loos v NederlandseAdministratie der Belastingen [1963] ECR 1]. Nevertheless, it is an international organisation, and in the absence of any specific provision in its rules to the contrary, a new state such as Scotland would not join automatically on separation from an existing Member State – as the Scottish Government has claimed in the past.

    There is no explicit treaty provision for this process in the EU’s own membership rules, and so there is no reason to think that Scotland would be entitled to join without some form of accession process, and therefore no legal basis on which Scotland could somehow automatically inherit the UK’s existing opt-outs.

    In the Scottish Government’s White Paper, published in November, last year, the Scottish Government did acknowledged that some process of agreeing independent membership would be required, arguing for a ‘seamless transition’. The position is, I accept, without precedent. But whereas most commentators and no lesser personages than the President of the European Council and President of the European Commission have cited Article 49 of the Treaty on European Union as the basis for any application for membership by an independent Scotland, the Scottish Government, in its White Paper, claims that Article 48 is a more appropriate alternative, as it – according to the White Paper – “provides for a Treaty amendment to be agreed by common accord on the part of the representatives of the governments of the member states.”

    It’s a proposition which hasn’t got much traction or won many friends. The simplistic description in the White Paper betrays a staggering naivete. The ‘ordinary revision procedure’ (ORP) has certainly never been used to expand the membership of the EU; but it also provides for the European Parliament requiring a Convention to be held to examine the proposals and make recommendations ahead of an Inter-governmental conference. Moreover, Article 48 allows any aspect of the Treaties to be revised. Simply to state that indicates that the genie could well and truly come out of the bottle and lead to a complex set of negotiations which could propose Treaty changes, well beyond Scottish accession.

    It has also been argued, notably by a former UK judge on the ECJ, Professor Sir David Edward, that in accordance with obligations of good faith, sincere cooperation and solidarity, the EU institutions and all the Member States (including the UK), would be legally obliged to enter into negotiations, before separation took effect, to determine the future relationship within the EU of the separate parts of the former UK and the other Member States.

    In a recent debate on the Scottish independence referendum in the House of Lords, Britain’s former Ambassador and Permanent Representative to the EU, Lord Kerr of Kinlochard, speculated on what might happen in the hypothetical event of a ‘yes’ vote and the need to try and avoid a hiatus between independence day and the successful conclusion of negotiations – and subsequent ratification – of EU Treaty changes providing for Scottish membership. His solution is that:

    “..it would be the United Kingdom Government’s job to attempt to negotiate informally the terms of Scotland’s entry into the European Union and the transitional arrangements for the period before … the treaty was ratified.”

    In an even more breathtaking scenario, he contemplates the possibility that,

    “the negotiations would have to be conducted by a UK team flying the union jack. You cannot stop members of the Council negotiating with the Commission. They would have to operate on agreed instructions from the London Government and the Edinburgh Government.”

    Without going as far as endorsing such a scenario, it is an understatement to say that the process would be uncertain and complex.

    However, on any view, an independent Scotland would have to go through some form of negotiation as to the terms of its membership.

    Here again, there are important legal considerations.

    In their White Paper, the Scottish Government sets out its position by claiming that it will “approach EU membership negotiations on the principle of continuity of effect: that is a transition to independent membership that is based on the EU Treaty obligations and provisions that currently apply to Scotland under our present status as part of the UK..”

    That is a bold claim, but as I have already indicated on the basis that Scotland would be ‘new state’ and the rest of the UK would be a ‘continuing state’ Scotland would not automatically inherit the terms of membership currently enjoyed by the UK, although these would still be enjoyed by the continuing UK, subject to minor adjustments for example in number of members of the European Parliament. Crucially, Scotland would not inherit any of the UK’s opt-outs – in relation to the Euro, and the Schengen provisions on border control – nor would it inherit the UK’s budget rebate. In fact, given the mode of calculation of the rebate it would be impossible for Scotland to share in the rebate. Rather an independent Scotland would most likely be contributing to it!

    Remember too that both the process and the terms of an independent Scotland’s membership would have to be agreed by every one of the EU’s existing 28 member states. As Sir David said at one of my legal forum meetings, “All that is certain is uncertainty.”

    But from the foregoing, I believe there are a number of points which can be stated with reasonable legal certainty, in the event of a ‘Yes’ vote:

    • Scotland would not automatically become a member of the European Union;
    • By one means or another, Scotland would have to apply for EU membership;
    • There would have to be a negotiation on the terms of membership of an independent Scotland – and there is no automatic inheritance of the UK opt-outs or rebate.
    • The continuing UK would still benefit from current negotiated opt outs;
    • Any Treaty changes, as a result of negotiations would require the agreement and subsequent ratification by all current EU member states.

    The other issue of recent controversy is that of currency union. In a speech on 13th February, the Chancellor of the Exchequer set out the economic rationale for rejecting a sterling currency union as being in the interests of neither Scotland nor the continuing UK.

    But this issue is also underpinned by a legal analysis.

    It is important to understand this, as it knocks on the head the assertion made by the First Minister, Deputy First Minister and others that the rest of the UK is just trying to be beastly to Scotland. When UK ministers say that the Bank of England would not belong, in part, to an independent Scotland, that is an expression of the legal position, not a calculated asset-grab.

    SNP Ministers proceed from two fundamentally flawed claims.

    In their White Paper, Scottish Ministers claim that “the pound is Scotland’s currency just as much as it is the rest of the UK’s”

    And the Cabinet Secretary for Finance in the Scottish Government, John Swinney MSP, has argued that the Bank of England is “as much our bank as it is anybody else’s”.

    With respect, they are wrong on both counts.

    The legal analysis set out in the first Scotland Analysis Paper makes it clear that in the event of Scottish independence, the institutions which currently serve the United Kingdom will serve the continuing United Kingdom. For obvious reasons, the Scottish Government doesn’t assert that it should continue to have a share of the UK Parliament. By a similar token, the UK central bank, the Bank of England would continue to serve the continuing UK as its central bank, but would not do so for the newly independent Scotland.

    Whilst one should treat metaphors with care, if a group of members decided to leave a golf club and set up their own club, there might well be a proper discussion of splitting debts and assets, but it would be preposterous for the new club to claim that it could take the 7th and 18th holes with it, or claim preferential tee-off times at the existing club on alternate Saturdays in June and July.

    .The flaw in the Scottish Government’s position is to equate currency with assets. The recently published Scottish Analysis Paper on ‘The Assessment of a Sterling Currency Union’ simply but profoundly set out the position:

    “The sorts of assets that may be subject to negotiation in the event of a vote for Scottish independence are the cash, currency or gold reserves held by the UK state. These assets are very different from the system of currency itself; the particular currency used by a state is not an asset on the state’s balance sheet which can be divided up like the money in a bank account. An individual pound is an asset, as is a collection of pounds in a bank account. The pound as a system of currency is not.”

    There is no principle of international law which obliges a country to enter into a currency union with a foreign country. As indicated in the paper just referred to, United Kingdom ministers have acknowledged that, according to the well accepted principles of public international law, there would, on independence, have to be a detailed negotiation as to how relevant UK assets and liabilities fall to be equitably divided between the continuing UK and the new independent Scottish state. That is why I find it disappointingly petulant for Scottish ministers to say that if they don’t get their own way on currency union, they will not take on any liabilities. That simply flies in the face of recognised legal principles – hardly a good starting point for a new state wishing to establish itself among the family of nations, let alone impress the financial markets.

    We cannot understate the importance of the referendum on 18th September, both to Scotland and to the rest of the United Kingdom.

    If we vote yes, as our analysis paper in February said and I quote: “Scotland would leave the United Kingdom after a period of negotiations”. There will be no going back on this, no chance to think again.

    But it’s also important to recognise the limitations of any legal analysis. Some of it is fundamental in addressing the issues, and not least the basic premise that Scotland would be a new state and the rest of the UK would be a continuator state. So much else follows on from that proposition. But there are areas where legal analysis takes you only so far. We can argue from a legal standpoint that Scotland would need to apply for EU membership, but the outcome of any negotiations would depend more on political than legal negotiation.

    So when voters ask for certainty about what they might be voting for, if they vote yes to independence, the honest response might be to paraphrase Donald Rumsfeld and acknowledge the inevitability of a number of certain uncertainties.

    But as a post-script, what if, as I sincerely hope, Scotland votes ‘No’? At a simple level, we will stay in the United Kingdom and can set about the task of improving devolution still further, as all the major UK parties have committed to.

    In the past fifteen years we have come to learn about and understand the nature of devolved government in the United Kingdom. And possibly the most important reflection on that is its flexibility. There is no such thing as the status quo. Almost straight away, in 1999, Westminster agreed to confer legislative competence on the Scottish Parliament to legislate for Freedom of Information in respect of devolved public bodies. The section 30 Order which paves the way for September’s referendum is a further example of that flexibility. Without the heavens falling in, the Supreme Court last week considered a third referral by the Attorney General of Welsh Assembly legislation for clarification of limits of legislative competence. And much of the Scotland Act 2012, devolving significant tax powers to the Scottish Parliament, has still to have effect.

    As the party of Gladstone, the Scottish Liberal Democrats have been to the fore in moving the debate forward, fleshing out for our time our long-standing commitment to federalism. A report from a Commission, chaired by Sir Menzies Campbell, argues for a distribution of powers among the nations of the United Kingdom, for joint federal action where that is necessary and effective, and for parliaments and assemblies across the United Kingdom to have substantial democratic choice and opportunity combined with the responsibility that comes from significant financial powers. It sets out a route map, recognising that different parts of the United Kingdom will move at different speeds. It seeks not only a proper constitutional outcome for Scotland but sees a move towards federalism as “a first step for the United Kingdom towards a modern constitutional future.”

    In 1862, Lord Acton said that “a great democracy must either sacrifice self-government to unity or preserve it by federalism”

    But that is probably another lecture.

    * Jim Wallace is leader of the Liberal Democrats in the House of Lords and was Deputy First Minister of Scotland from 1999-2005.

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    This entry was posted in News.


    • It’s interesting how the legal legerdemain which claimed that the 1707 Union was an equal merger of states, crowns, and parliaments, gets sloughed off — when the necessity arises — to reveal the naked confession that it’s all a fraud, and that it never was anything other than the annexation of Scotland by England — and if they should separate, then England gets to keep all the goodies the united countries have jointly acquired over the last three centuries, and Scotland gets nothing.

      How the expression of such opinions is supposed to convince the Scots to remain in the Union I do not know. Perhaps the intention is quite the reverse — to inflame Scottish opinion and force them out.

    • David-1 makes a very good point. There is a lot of re-writing of history going on, not all by Mr Gove and his ‘unusual’ special advisors.
      I still have not heard one good argument as to why why the Liberal Democrats in Scotland have for the period up to the referendum joined with the old enemy the Unionists.
      There is nothing fundamentally illiberal about Scotland gaining independence.
      There is nothing fundamentally Liberal about Scotand being run as a colony of England.
      I do not remember Liberals in Scotland opposing independence for Ghana, or Malawi, or Jamaica, or Malaysia. Countries such as Canada, New Zealand, Jamaica, Malta, became independent of rule from Westinster, why not Scotland?

    • jedibeeftrix 15th Mar '14 - 6:14pm

      “There is nothing fundamentally illiberal about Scotland gaining independence”

      Indeed not.

      But neither is is there anything illiberal in arguing to maintain a relation ship that we value.

      It is a perfectly reasonable argument for the scots to make that they feel they are of sufficiently different character as a nation that they can not achieve representation in a state dominated by the interests of england.

      I disagree, I think we have muddled along very well together, and that we do in fact have sufficiant commonality in aims and expectations that shared governance breeds a stronger outcome rather than a fractured one.

      That is not an illiberal argument to make…

    • Frank Furter 16th Mar '14 - 11:54am

      It seems to me that the arguement about whether there will be two successor states or one successor and one continuator is fundamental to the scope of the referendum. I live in England, I have no vote in the referendum, I have accepted this without objection because I have assumed that rUK will be the continuator in the event of a scottish ‘yes’ vote. However, should that not be the case, then my state could be rent asunder without me having had a say in that dismemberment. Such an outcome would become apparent before the final Act of the Westminster Parliament to make Scotland independent – and would, in effect, prevent that Act passing into law, no MP or Lord could/would be party to such a flagrant abuse .

    • This lengthy article – from not just a distinguished Lib Dem but a distinguished Scottish jurist – at the very least sets out incontrovertibly the range of deep uncertainties that has got to be in the mind of all sensible voters on referendum day.

      All along Alex Salmond has sought to reassure Scots that independence is not really independence in any real scary sense – just a way of giving the Scottish parliament the right to decide everything they like without giving up any of the UK or EU props if anything goes wrong. One might say it is “Always keep a-hold of Nurse, not for fear of finding something worse but for fear of our getting it all wrong or finding problems we did not foresee.”

      Jim Wallace is spelling out here what real independence – not pretendy independence – is all about. An abbreviated version of this article needs to be widely read in Scotland.

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