HOW SCOTLAND MIGHT ACHIEVE INDEPENDENCE
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HOW SCOTLAND
MIGHT ACHIEVE
INDEPENDENCE
JULY 2021
HOW SCOTLAND MIGHT ACHIEVE
INDEPENDENCE
Scotland may have voted, in 2014, to remain part of the UK,
but Brexit and the SNP's persistent political ascendancy mean
that the dream, or spectre, of Scottish independence remains
alive. In this briefing – the first in a short series – we explore
some of the legal issues that will arise and how Scotland might
achieve independence – a matter probably more of politics than
of law.
The Treaty of Union between England concerned and for everyone else.
(which included Wales) and Scotland The rest of the United Kingdom (rUK)
provided that the two Kingdoms "shall could not ignore Scotland's democratic
upon the first day of May [1707] and will, but nor could Scotland dictate the
forever after be United into one Kingdom terms on which it seceded from the
by the Name of Great Britain." Forever is union. The negotiations between
a long time. Similar provisions in the Irish representatives of rUK and of Scotland
treaty of 1800 have only survived for six to establish the terms upon which
out of the 32 Irish counties, and Scotland Scotland should become an independent
has already had one referendum on country would unquestionably affect the
whether to dissolve the union. In that way business is carried on both north
vote, in 2014, the electorate of Scotland and south of the border, as would the
decided by 55% to 45% to remain within choices made by Scotland as an
the union, but Brexit and the electoral independent country.
success of the SNP mean that Scottish
Now might not be the time for full-scale
independence remains very firmly on
contingency planning for Scottish
the agenda.
independence, but it is certainly the time
The 2014 referendum followed the SNP's to consider how a (second) Scottish
winning 69 of the Scottish Parliament's referendum, followed by independence,
129 seats at the election in 2011. This might affect the organisation and conduct
majority in favour of a party whose raison of business. If independence were to
d'être is independence persuaded the occur, the planning horizons could be
UK's Prime Minister that he could not uncomfortably short, still more so the
deny Scotland the opportunity to decide time available to execute any plans.
whether or not it wished to remain within
A second independence vote could be
the UK.
followed swiftly by actual independence,
The SNP might have lost the ensuing even though unpicking the relations
referendum, but it regards Brexit (which between Scotland and England, Wales
62% of the Scottish electorate opposed) and Northern Ireland will make Brexit
as having changed everything, and it seem like a trivial undertaking. A divorce
continues to enjoy enviable electoral would, however, have profound
success. The SNP won 64 Scottish implications for anyone doing business in
parliamentary seats in the elections of or with Scotland, and there may not be
May 2021, but the Green Party, which much time to explore those implications
also supports independence, won a after a vote.
further eight seats, bringing the number
This is the first in a short series of
of pro-independence MSPs to 72;
briefings exploring some of the legal
more, even, than in 2011.
issues that will arise, including the
Independence, should it happen, will potential impact of separation on
affect anyone who does business in or businesses. This briefing looks at how
with Scotland. Scotland can be part of Scotland might achieve independence –
the United Kingdom or it can be an a matter probably more of politics than of
independent country, but moving from law. Subsequent briefings will look at:
the former status to the latter is highly
complex both for the Governments
2 CLIFFORD CHANCE
HOW SCOTLAND MIGHT ACHIEVE INDEPENDENCE
• The effect of Scottish independence on Government before the elections said that
Scotland's international status, laws, a referendum should take place in the first
people and companies. half of the current Scottish Parliament's
term of office, which runs to May 2026,
• The division of assets and liabilities
suggesting a referendum before the end
between rUK and Scotland, what
of 2023.
currency Scotland might use (the most
complex issue likely to face Scotland The SNP Government in Scotland
on independence) and the effect of will, in practice, want to ensure that
independence on contracts. independence formally occurs at the
very latest before the next Scottish
• The implications on tax and pensions
parliamentary election. If it did not,
regimes and financial services, as well
the 2026 election could offer opposing
as the consequences if Scotland were
parties the opportunity to reverse the
to join the EU.
initial decision, particularly if the
preparations for independence, including
Achieving independence negotiations with rUK, were not going
As mentioned above, the Scottish well. At the time of the first referendum,
independence referendum of 2014 the SNP anticipated that it would take
followed the SNP's triumph in the 2011 18 months of negotiations between If independence were to
Scottish elections. This persuaded the Scotland and rUK after a vote in favour occur, the planning
UK's then Prime Minister, David Cameron, of independence to put in place
horizons could be
that he could not, consistently with arrangements sufficient for independence
democratic principles, resist an (though many regarded that as a very uncomfortably short
independence referendum in Scotland. optimistic timetable). Given that a
As a result, the Edinburgh Agreement of referendum and its campaign will also
15 October 2012 between the take time, this indicates that the First
Governments of Scotland and the UK Minister does not have long before
provided for the transfer to Scotland of she must push the issue, though the
the power to hold a referendum. This was timing is complicated by the
done formally by an order in council COVID-19 pandemic.
under section 30 of the Scotland Act
Prime Minister Boris Johnson has said
1998. The object of the referendum was,
that he will refuse any request for a
according to the Edinburgh Agreement,
section 30 order, but he would need to
to "deliver a fair test and a decisive
consider the politics of refusal at the
expression of views of people in Scotland
relevant time. If he were to refuse, the
and a result that everyone will respect."
Scottish Parliament could contemplate
These steps put the legality – and the itself legislating for a new referendum,
binding nature – of the 2014 referendum though First Minister Nicola Surgeon has
beyond doubt. The outcome of the generally been reluctant to take legally
referendum was not the one the SNP had doubtful steps towards independence.
hoped for. In 2017, following the Brexit As explained below, it is unlikely that the
vote, Scotland's First Minister, Nicola Scottish Parliament currently has the
Sturgeon, asked the UK Prime Minister necessary powers to call a referendum.
Theresa May for another section 30 order
giving the Scottish Parliament power to The Scottish
call a second referendum. That request
was refused on the basis that the UK's
Parliament's powers
impending withdrawal from the EU gave The Scottish Parliament was established
the UK and its Government more than by the UK Parliament's Scotland Act
enough to occupy its time without also 1998. It has limited legislative
contemplating another Scottish competence, and anything done outside
independence referendum. that competence is not law (section
29(1)). A measure is outside the Scottish
The success of the SNP and the Green Parliament's competence if it "relates to"
Party in the May 2021 Scottish elections a reserved matter (section 29(2)(b)).
makes it inevitable that the First Minister Reserved matters include "the Union of
will again demand a section 30 order to the Kingdoms of England and Scotland"
enable a second referendum to take (paragraph 1(b) of Schedule 5). Measures
place. A White Paper from the Scottish can be taken under section 30 to enlarge
CLIFFORD CHANCE 3
HOW SCOTLAND MIGHT ACHIEVE INDEPENDENCE
the powers of the Scottish Parliament. without significantly exacerbating
This was done in order to enable the resentment in Scotland towards rUK
Scottish Parliament to call the 2014 (generally referred to derogatorily as
referendum, but that enlargement of the "London" or "Westminster") and
Scottish Parliament's powers was strengthening the SNP's hand? An
time-limited and has now expired. enhanced sense of bitterness towards
rUK might help the SNP, but the SNP
Would a referendum on Scottish
must also get the timing right. Will its
independence called by the Scottish
electoral dominance continue? Even if
Parliament, without a section 30 order,
it did, to lose one referendum may be
"relate to" the union of England and
regarded as a misfortune; to lose two
Scotland? The predominant view is that it
in relatively quick succession would surely
would, not least in the light of the draft
bar the issue for at least a generation.
Scottish legislation published in March
2021 in which the Scottish Government One compromise possibility that has been
proposed that a second referendum raised is that a section 30 order could be
should pose exactly the same question conditional on varying the electorate to
as in the first referendum ("Should include not only all UK voters resident in
Scotland be an independent country?"). Scotland but, in addition, Scots resident
Some argue, however, that there is in rUK. This would be controversial (if
nothing to stop the Scottish Parliament Scots in rUK, why not Scots outside rUK
legislating for an advisory, or consultative, too?), novel and time-consuming. Who is
referendum which, unlike the 2014 a Scot? Is it necessary to be born in
referendum, would not be accepted by Scotland, to have one or both parents
the UK Government as binding. This is born in Scotland, or perhaps a single
not convincing. A referendum asking grandparent (enough to qualify to
whether Scotland should be an represent the Scotland football team)?
independent country relates to the union Or should the SNP's definition of Scottish
of Scotland and England whatever the citizenship in the event of independence
legal or political status of the outcome. (see the next briefing in their series) be
adopted? Further, there is no register of
If the Scottish Parliament were to seek to
such "Scots." A register would therefore
legislate for an independence referendum
have to be created, which would be time
without securing a section 30 order, the
consuming and expensive, as well as
question of the Scottish Parliament's
raising still more issues. For example,
competence to do so would have to be
what proof would be required, and what
resolved by the UK Supreme Court.
political or other consequences would
There are various means by which a
follow if these expatriate Scots were
challenge to Scottish legislation could
enough to swing the vote one way or the
reach the Supreme Court, including a
other?
direct reference by a UK or Scottish law
officer or through the normal litigation Another suggestion is that a vote for
process, but there would need to be a independence should require a higher
definitive legal answer. majority (whether of those voting or of the
electorate) than 50%+1. In a referendum
If the Scottish Government did not
in 1979, Scottish devolution was
want to legislate unilaterally for a
supported by 51.6% of those voting but
referendum, there could still be legal
was not implemented because the
challenges, for example to the refusal by
legislation required, in addition, that at
the UK Government to grant a section 30
least 40% of the electorate as a whole
order, but the key is likely to lie in politics,
should vote in favour. The 51.6% majority
rather than the law. The first referendum
amongst those who voted represented
was said by the SNP's leaders to be a
only 32.9% of the electorate. This option
"once in a generation" opportunity for
of entrenching the union against a
independence, and that generation has
temporary bare majority is, however,
yet to pass. But since the first
unlikely to commend itself to a
referendum, Brexit has taken place,
Government that was content for Brexit
against the wishes of the Scottish
to occur when supported by only a little
electorate, and the SNP continues to
over a bare majority of those voting.
dominate Scottish politics. Can a UK
Government refuse a second referendum
4 CLIFFORD CHANCE
HOW SCOTLAND MIGHT ACHIEVE INDEPENDENCE
If Scotland were to vote for The position of the UK Government is
independence, what then? In the complicated by the fact that there will be
remainder of this briefing and the a general election in the United Kingdom
subsequent briefings, we look at some on 2 May 2024 at the latest, which is
of the issues that would arise following likely to be before Scotland could achieve
a successful (from the SNP's point of independence even on an optimistic
view) second referendum. timetable. The election could result in a
change of UK Government and therefore
The timing of negotiating position. Indeed, the
Scottish independence may
identity of the UK Government could
of independence not only create a new
even be determined by the (currently)
If the SNP had won the first referendum, 59 Scottish MPs who sit in the House of country; it could bring about
it wanted Scotland to become Commons (e.g. at the 2010 general
independent on 24 March 2016, a change of Government in
election, the Conservatives would have
the anniversary of the union of the crowns secured an absolute majority but for the
the old one.
of England and Scotland in 1603 (ie the Scottish MPs), though the large
date of the death of Queen Elizabeth I of Conservative majority resulting from
England and on which King James VI of the 2019 UK general election perhaps
Scotland became also King James I of makes this less likely than at the time of
England). That timetable gave 18 months the first referendum.
from the referendum for completion of the
negotiations with rUK, though many Although Scotland will remain part of the
expressed scepticism as to whether United Kingdom until independence,
that was long enough to unpick over some have questioned the continuing
three hundred years of intimate union. position of Scottish MPs in the House of
It would not be necessary for all issues Commons in the intervening period or,
between Scotland and rUK to be finalised at the least, whether they should be able
by independence day but a sufficient to vote on legislation only affecting
number of such issues would need to be England, Wales and Northern Ireland or
resolved for Scotland to function as an relating to Scotland's independence (the
independent country. The UK and House of Commons already has some
Scottish Governments may, for example, procedures providing for English votes for
want to enter into a separation agreement English laws – EVEL). If Scottish MPs do
(akin to the UK's Withdrawal Agreement affect the identity of the UK Government
with the EU) initially to provide for in 2024, their departure on independence
independence, perhaps with (time-limited) day may not only reflect the creation of a
transitional provisions, to be followed by new country, but it could also bring about
one or more agreements between a change of Government in the old one.
Scotland and rUK dealing with more
detailed issues. The Czech Republic Conclusion
and Slovakia were still negotiating almost The route to Scottish independence,
a decade after their "velvet divorce" should that be the wish of the Scottish
took effect. people, is not straightforward.
The Scottish Government would, The Scottish Government can say that its
presumably, conduct the negotiations for mandate for a second referendum is
Scotland, though it has been suggested stronger than the UK Government
that others could be invited to participate conceded for the first referendum, and it
(the UK Parliament may also need to will undoubtedly want to push for
transfer powers to the Scottish "indyref2" in the near future. The UK
Government to enable it to prepare fully Government probably holds the legal
for independence), but who should cards, but whether it can resist politically
negotiate for rUK? In practice, it would is a different question.
be the UK Government, but it could be
a group representing all the political
factions in rUK.
CLIFFORD CHANCE 5
HOW SCOTLAND MIGHT ACHIEVE INDEPENDENCE
CONTACTS
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Consultant Joint Head of Corporate, London Partner
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Simon Gleeson Simon James Dan Neidle
Partner Partner Practice Area Leader,
T: +44 207006 4979 T: +44 207006 8405 TPE London
E: simon.gleeson@ E: simon.james@ T: +44 207006 8811
cliffordchance.com cliffordchance.com E: dan.neidle@
cliffordchance.com
Mark Poulton Hywel Robinson Phillip Souta
Partner Partner Head of UK Public Policy
T: +44 207006 1434 T: +44 207006 8387 T: +44 207006 1097
E: mark.poulton@ E: hywel.robinson@ E: phillip.souta@
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Nigel Wellings
Joint Head of Corporate
T: +44 207006 8011
E: nigel.wellings@
cliffordchance.com
6 CLIFFORD CHANCE
HOW SCOTLAND MIGHT ACHIEVE INDEPENDENCE
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