How does Scotland handle negotiations with the UK?
How important are negotiations?
Negotiations are absolutely crucial. If Scotland gets its negotiations wrong we may be living with the consequences for many years – if we get them right it can get an independent Scotland off to an ideal start. The mess off the negotiations around Brexit is a case study on why it is essential to approach negotiations utterly prepared and with a strong and coherent strategy.
What makes the difference?
The key to good negotiation is proper preparation – and ensuring that negotiations are carried out by skilled people. Put in its simplest terms, the party who wants more out of a negotiation is in a stronger position, so the less Scotland wants from England the easier the negotiations. It will be advantageous if Scotland can develop a plan for independence which is as self reliant as possible. It is also important to see negotiation as a profession – and so to recruit a negotiating team accordingly. The strategy may be set by politicians but the detail of negotiation should be carried out by experienced professionals. Negotiation is a profession with a long history and many very well understood good practices. Making sure that a negotiating team is never blind-sighted because it didn't properly consider an eventuality is very important indeed. Negotiation must be driven by a strategy and 'making it up as you go along' (which appears to have been the case with Brexit) is a recipe for disaster.
So what are the key elements of a strategy?
Very roughly there are three broad areas that need to be resolved; the division of assets, the division of liabilities and arrangements around sharing and mutual relations. There is likely to be a fair degree of shared interest in the last of these but not in the first two.
What are the key elements of mutual relations?
These have been discussed under various of the headings above. Both sides will want properly-functioning border arrangements, a UK free travel zone, effective trade relationships, consistent national security arrangements and so on. This does not mean that we can assume that the terms on which these are sought by either side will be the same, but both will want a mutually-supported outcome.
What about the division of assets?
This is not as divisive as some may assume. There are international precedents for this and a global treaty governing divisions of assets when a nation splits, but the UK is not formally signed up to these. But for assets the basic formula is reasonably straightforward – with few exceptions fixed in-country asset would be inherited by the country they are in (Scotland gets Scottish-located hospitals, the UK gets UK-located hospitals and so on) and mobile and other assets (say gold reserves or military hardware) would be shared on a per-captia basis. It isn't quite as straightforward as that since there may be some dispute around which is which, what the share is and what the value is. And there is likely to be trade-offs since it is not necessarily the case that Scotland would want a share of certain assets or in some cases that dividing those assets isn't possible (you can't inherit nine per cent of an aircraft carrier...). So during negotiation these would generally be offset against liabilities.
So what about the division of liabilities?
Liabilities can include legal agreements (the promise to do certain things in the future) and may include treaty obligations (which may also promise certain future actions). But by far the most contentious issue is the division of the national debt. Here we are little helped by international precedent because the UK may not accept it. Generally if the UK wishes to remain the 'continuity state' (i.e. wants to continue to be recognised as the UK and maintain its international position and rights over its currency and so on) then Scotland would be a successor state and so would have no responsibility to the liabilities of the UK. On that basis Scotland could negotiate from a 'zero model' where it walks away with no debt (after all, legally the debt would be the UK's in that scenario). But the UK might then contest the share of assets (though actually there are few assets Scotland would want). The UK would argue that Scotland must accept a full share of the debt and that it should be able to keep the currency, central bank, membership of the UN and so on. This is one of the major elements of the negotiation which requires a strategy. Putting the above together, the less Scotland seeks in negotiations the stronger its hand and the closer to a zero option it is able to negotiate. But there is no way to know the outcomes.
What will make the difference?
There will be a few key issues which either sides holds which the other particularly wants. In the end Scotland really only wants full recognition and sensible agreements on things like borders. Scotland might want to try and take an aggressive stance on the UK's pension commitment to Scots who have contributed National Insurance payments for their entire lives. The UK will want Scotland to take as much of the debt as it can force us to take and will also want to continue to station nuclear weapons in Scotland. These issues, the quality of negotiators, the effectiveness of the negotiation strategy and the degree of preparation is what will tip the result in either direction. But in the end, there is no reasonable a scenario where Scotland would be worse off in terms of assets and liabilities than it currently shoulders as part of the UK, and it does not want to continue to use Sterling or the institutions of the UK so there is no reason to expect that a desirable outcome for Scotland is unlikely.