Spreading power

Mandy Rhodes: There are now just six months until the independence referendum, given everything that is happening in the world, where does it sit in terms of your own political priorities?

Nick Clegg: I’ve made it very clear that I don’t want to see Scotland leave the UK and I will continue to do all I can to make the positive case for the UK family. My focus, my purpose in government, is for a stronger economy and a fairer society and I want to see Scotland benefit from our policies just as much as the rest of the UK. Rebalancing the economy, supporting growth in all the regions and nations of the UK has a direct benefit for Scotland. And the argument I am making that we need to stay in Europe has a lot of echoes with the case for Scotland to remain part of the UK. The £85 billion of trade across the border is an exact parallel. Tens of thousands of jobs in Scotland depend on it.

But everything we are doing respects the fact that this is a decision to be made by people in Scotland. That is why the campaign is being led by Scottish colleagues such as Alistair Carmichael, Danny Alexander, Willie Rennie, Charles Kennedy, Ming Campbell and those in other parties, of course, with Alistair Darling.

MR: There has been a noticeable shift in attention in the last few months from the Coalition, do you believe that it will be a ‘No’ vote?

NC: The whole debate is getting louder on both sides. We have now seen the Nationalists’ proposals in the White Paper. There are lots of questions that still haven’t been properly answered and in particular on currency and EU membership they have no plan. The UK Government continues to make the positive case for Scotland to remain part of the UK through its substantive Scotland Analysis papers. We are not complacent in this campaign and will work hard for every vote we can get for Scotland to stay within the UK family.

MR: The majority of Scots don’t want independence but they do want what we’ll call ‘devo max’. Why didn’t the Lib Dems support a third question?

NC: The SNP had a mandate for a straightforward Yes/No question. As was shown by Willie Rennie at the time, if there are three outcomes on the ballot paper and 90 per cent of people voted for devo max inside the UK, and 51 per cent for independence then, somehow, according to the SNP-led Scottish Government, independence would still have been declared the winner. That’s an incredulous position to be in and the Scottish public would have found it difficult to accept. Through discussions with the former Scottish Secretary, Michael Moore, we signed the Edinburgh Agreement which agreed a fair, legal and decisive referendum on a question about independence.

MR: Given you are all now promising additional powers, was that a mistake?

NC: Liberal Democrats have always supported decentralising power across the UK and encouraging local decision-making – since Gladstone’s Home Rule proposals. It’s in our DNA. That’s why we delivered the Scotland Act 2012, the biggest transfer of fiscal powers to Scotland in over 300 years.
I am taking this forward across England with ‘city deals’ which give wide-ranging new powers to the biggest cities. So, the appetite is everywhere for more local decision-making. That does not stop on referendum day in Scotland. That is why my party has set out how the 2015 General Election can trigger further decentralisation across the UK.

MR: We seem to have gone from Project Fear to being love bombed, to now the Dambusters strategy. What is the best way to persuade the Scots to stay part of the Union and don’t you feel that there is a bit of a scaremongering overload which could work against you?

NC: I don’t recognise these labels or slogans, I am afraid. The Scotland Analysis papers are setting out the positive case for Scotland to remain part of the UK family of nations. Danny Alexander and Alistair Carmichael have been at the heart of a Liberal Democrat government which is building a stronger economy and a fairer society through lower taxes, higher pensions and more jobs in Scotland. Willie Rennie and Menzies Campbell have also set out the case for a stronger Scottish Parliament. I think that shows the real value of the UK family, where we can share risks and rewards across the broad UK shoulders whilst Scotland shapes its own domestic agenda.

MR: Surely for you personally, given your family background but also politically in terms of support for federalism and Europe in particular, how can you condone a strategy of the ‘No’ campaign that talks about Scots becoming foreigners and Scotland not becoming part of the EU?

NC: I don’t accept that characterisation at all. After all, it was the confusion from the Scottish Government about whether they had legal advice on EU accession that started this whole issue. They have finally admitted that they will have to negotiate membership and that will mean starting from scratch to negotiate opt-outs currently enjoyed as part of the UK – euro and Schengen – with no guarantee of success. Remember, that it was the Croatian ambassador that told the Scottish Parliament that new countries “take pretty much what is offered”.

MR: How can the three main UK parties work together to produce a coordinated ‘no’ on a currency union, but can’t make any coordinated promises on devo max? Surely you recognise now that had you done that, you could have killed the independence question dead?

NC: The Campbell II report showed that there are areas of common agreement on more powers amongst Scotland’s parties, firstly, through making the Scottish Parliament permanent and secondly, through an agreement that the Scottish Parliament should raise more of what it spends. So there is common agreement. We have set out our vision for home rule in a federal UK and I look forward to seeing how other parties set out their plans.

MR: Did you have any reservations about getting into bed with the Coalition partners and Labour in terms of saying ‘no’ to a shared pound and at the end of the day, if it is a ‘yes’, won’t your own Chief Secretary to the Treasury have to work in the best interests of his Scottish constituents?

NC: The speech in Edinburgh by the Governor of the Bank of England, Mark Carney, and advice from the Permanent Secretary to the Treasury added further and welcome information to the currency debate. We listened carefully to what they had to say and we agreed that a currency union would not be in the interests of Scotland or the rest of the UK. All three parties have taken currency union off the table.
Scotland will not benefit from having key economic and monetary decisions made by what would be a foreign country while the continuing UK would not want to expose its taxpayers to possibly having to bail out banks in another country. The risks are too great and are compounded by the fact that the Scottish Government’s White Paper and their fiscal commission say they may move away from the pound sterling to something else after a period. The currency union between the Czech Republic and Slovakia only lasted a matter of days. It was put under pressure by the international markets because it was perceived as temporary.

MR: Would a ‘Yes’ vote force you to put Danny and Alistair out of the Government because they would be negotiating for the other side, so to speak?

NC: I am much more optimistic about Scotland remaining in the UK and after a No vote, Alistair and Danny will continue to work for a stronger economy in a fairer society across the whole of the UK. They will take forward our home rule plans for Scotland and help shift powers away from Westminster to other devolved administrations.

MR: Any promises of further powers will need to be in the UK General Election manifestos for 2015. Can you guarantee that they will be?

NC: I have already publicly said that we will go into the 2015 General Election on a platform of more powers for Scotland so there should be no uncertainty around my commitment on that.
In terms of the detail of further powers, the Campbell Commission report was published in October 2012 and outlined our vision of home rule in a federal UK. The report was adopted both by the Scottish and the federal party at our conferences and reinforced again at our recent federal conference in York. We also outlined our vision for more powers for decentralised decision-making in the rest of the UK.

MR: Do you think this referendum debate has better informed opinion generally about how the UK could be constitutionally changed and do you think there will be a thirst for further devolution throughout
the UK?

NC: This is already happening and was already happening before the Scottish referendum was on the agenda. It is the SNP that remains the only party in the referendum debate to have never delivered powers for Scotland. We have seen devolution in Northern Ireland and in the National Assembly for Wales and their powers and responsibility continue to grow. At a regional level, we have the London Assembly and direct mayoral elections around England while I have been leading on developing our city deals across England.
We passed a motion at our federal conference in York which outlines our vision on how we can strengthen what we have already and deliver even more power closer to the people.

MR: There is a fear among Scots that if they vote ‘No’ they will see the Barnett formula cut and that they could be financially punished. Can you allay those concerns?

NC: The Barnett system has been sustained through thirty years and governments of all different hues. There’s no prospect at all of anyone being financially punished because of the outcome of the referendum. As this Coalition Government has made clear, reform of the Barnett formula is not on the horizon. In fact, the only immediate threat to Scotland’s funding is a vote for independence.

MR: Another concern is that Scotland votes to stay in the UK and is then faced with an in/out referendum with regard to Europe. Isn’t the safest way for Scots to stay within the EU to vote for independence?

NC: Three million jobs in the UK are linked to Europe. That is why I have said that my party is unequivocally the party of ‘In’. The SNP’s independence plans gamble with Scotland’s membership of the EU. The pound, the UK rebate and many other EU benefits would all be up for negotiation with the other EU member states. The safest way to guarantee these positive benefits from Europe, the jobs and the economic trade, is to vote to stay in Britain and in Europe.

MR: This has been an incredibly febrile debate, really very bitter, how do you think Scots and indeed the rest of the UK come back together to live and work happily and without acrimony after it?

NC: People in Manchester, Liverpool, Aberdeen and Orkney still enjoy the same friendships, family ties and social bonds and I am confident that those bonds will remain, as strong as ever, post referendum.

MR: If it is a ‘Yes’ vote, will you recognise that is the democratic will of the Scots and help constructively in any negotiations to smooth the break-up?

NC: The Edinburgh Agreement was signed by the UK Government and the Scottish Government in order to make it clear that the result of the referendum would be recognised. Michael Moore achieved that feat and it will be the basis for going forward.

MR: A ‘Yes’ vote could give you the opportunity to reform the House of Lords – do you think it would be right for all those Scottish peers to continue in situ?

NC: As you know, I’m a great believer in reform of the House of Lords. Unfortunately, we didn’t get the reforms we wanted in this Parliament.
If Scotland became independent, it wouldn’t just be the House of Lords which would have to change – so would everything from our armed forces to the way we regulate our banks. Changes to their lordships will be the least of our problems.

MR: You signed the Edinburgh Agreement and said there would be no prenegotiation and yet isn’t that exactly what you have done by slamming the door on something as fundamental as a currency union?

NC: There won’t be any pre-negotiations. What we won’t do is negotiate a currency union. It’s not in Scotland’s interests and it’s not in the continuing UK’s interests. This is based on sound advice.
We are now in a situation where the party that is advocating independence have no plan on a currency for Scotland. They urgently need to come up with a plan B.

MR: One good thing about the referendum debate is the way people are talking about politics. Do you think you’ll see a similar engagement around an in/out EU referendum?

NC: It’s good to see people talking about issues that affect their daily lives and I hope that the European elections in May will be an opportunity for people to discuss the benefits of being part of a bigger union.

MR: Do you think the independence debate has been good for democracy?

NC: Of course. Any debate is good for democracy. It gets people talking, it gets people informed and it gets people thinking about issues that they may not have thought of before.

MR: What will your rally call be to Scotland in terms of the referendum at party conference?

NC: Quite simply, “In Britain, in Europe and in work.” The Liberal Democrats are working hard to protect jobs by keeping Scotland in Britain and Britain at the heart of Europe.