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Bargaining positions

6. Shouting bang is not the same as having a gun

Every lawless frontier town in history has attracted a certain kind of person, the kind who thinks of themselves as strong, virile, cunning and ruthless. These people like the idea of a land where there are no barriers to their inevitable supremacy, nothing to restrain them. Little men from small towns who were the best gunfighter ever to visit their local saloon. Their graves litter the globe.

As a quick recap, there is no binding international law that governs the distribution of rights, responsibilities, assets and obligations in the event of a nation state deciding to separate. Unless both resultant states agree at the outset that they are both successor states (i.e. they both continue to have the same rights and responsibilities as before), the only way that any resolutions can be found is through negotiation. If there is no negotiated outcome, whichever state is the continuing state of the two is (technically at least) in a position to withhold any of its assets and rights. For example Sterling. And the corollary is that the non-continuing state has the ability to reject any responsibilities or obligations, such as accepting any proportion of the debt of the continuing state.

Such is life in the Wild West – if you choose it. And that's what the George Osbornes, Danny Alexanders and Ed Balls are choosing. Stuck in some god-forsaken desert without hope (let's call it 'the Union' for brevity) they think their compadres who've had enough and are off in search of water are there for the robbing. All three of them were the toughest interns in their respective strategy units. Who will not tremble before them as they organise a press conference at which they say things?

I want to be clear; good negotiations are ones where both sides seek to find solutions that help each other, bad negotiations are ones in which one side or both seek total victory. In fact, I (like everyone else who isn't trying to belittle the Scottish people) fully expect that once there is a Yes vote, Westminster will be quick to seek to meet Scotland half way. But since the agenda is being set by the cowboys, let's just check what Scotland has in its holster.

As I have already indicated, Scotland can continue to use the pound or quickly establish a Scottish Pound pegged to Sterling if it needs to. The barriers to this are easily dealt with if we're refused Sterling – we can just take the cost of setting up a foreign currency reserve out of any debt we agree to pay back. Indeed, as I probably didn't disguise much, these are my current favourite options. We can then see if the Euro is the medium term solution for Scotland (still probably not in my opinion) or whether we move towards a free-floating Scottish Pound. So let's just get clear in our heads that leaving Sterling is hardly a problem. Indeed, virtually everyone knows that it would probably be the best option for a future Scottish economy since Sterling is not a well-managed currency for Scotland's purposes.

Having taken that to be the case, let us consider where things stand with this imaginary Mexican stand-off between Scotland and the remainder of the UK during independence negotiations. The primary bargaining chip of the rUK is Sterling. It is the only part of the main independence narrative that lies in the hands of Westminster. The primary bargaining chip held by Scotland is a reasonableness about accepting some of the UK debt. The south-to-north negotiation should sound like 'if you want Sterling then you're going to have to be reasonable about debt'. The problem is that the north-to-south answer has already been given; 'fine, we're OK with that'.

So instead Westminster has pulled out its gun and is pointing it at our heads. 'No Sterling', they say. Scotland has already sounded out its response – 'OK, we're not taking any debt'. In a standard negotiation the next step ought to be for the south to say 'in that case you're not getting...'. The problem is two fold. Firstly, what is the '…' in that threat? Secondly, Scotland has realised the gun isn't loaded and is already on its way down to the pub to meet friends.

This is the point of this blog; to make clear that there just isn't much that rUK has that we want. Many of us don't want Sterling, many do. OK, there's that. What else? In answering that question you need to remember that anything they don't give us we can pay for easily enough by not taking on any UK debt but borrowing on our own behalf, or if we want to be reasonable we simply subtract it from what payment we do agree to pay. We have got something like £100 billion to play with. If they don't give us military assets, we'll buy them. If they don't let us use the DVLA we'll start one. If they don't let us have access to their embassy network we'll rent our own. What is it that Britain has that is so unique that an independent Scotland couldn't get it elsewhere?

So what is it that Britain has that Scotland wants?

Help to avoid a default? That gambit really is a sign of terrible weakness. Scotland has no financial liability for UK debt so there can be no default. There can be no 'in effect' default. In this instance their not even shooting their guns, they're just shouting 'bang bang' in the hope we're that dumb.

So what is it that Britain has that Scotland wants?

Agreements. We want them to agree to a free-travel area. We want them to allow us to continue to hold British passports. We want them to not block our EU entry. So can they 'pull a Sterling' and just say no? No, they can't. They will never be able to block us from the EU; it's just not realpolitik. Britain cannot have its entire former northern marine territorial waters completely outside of its control. It can't not have a free travel arrangement since the impact on its economy would be severe. It could withhold a British passport. Oh boo-hoo. We'd have an EU passport. On cross-border agreements there is little they could do without causing undue harm on the rest of the UK.

So what is it that Britain has that Scotland wants?

There could be all sorts of cooperative issues. For example, in a full wild-west negotiation London would control the primary banking network in Scotland (RBS). They own the BBC and could cut off our Doctor Who. They could cut the National Grid connection at the border. Except Scotland could buy RBS's retail banking set-up using a Compulsory Purchase Order. The BBC sells rights overseas through a commercial vehicle so a 'trade embargo' would be illegal. And no, they can't cut the grid connection at the border – it would cause them more problems than it would cause us.

So what is it that Britain has that Scotland wants?

Very little, except cordial, neighbourly relations. This is the key thing about negotiation; you have to have something the other side wants if you want to get anything for yourself. If you only have one thing that the other side wants (Sterling) and you take it off the table you have nothing.

Osborne-Alexander-Balls (the No campaign is merging into one coordinated right-wing monster at such a rate there won't be sufficient hyphens in Scotland...) are amateur gunslingers. They have whipped out their pistols and they're shooting wildly into the sky in the hope that we'll be scared off before there is even a battle. This is just Shock and Awe being perpetrated on the Scots. But they're all blanks.

It is a simple statement said all too rarely in this independence campaign; Scotland does not need anything at all from London to become a viable nation. We have everything we need right here. Our future is not conditional on their permission because if they really do bluff it all the way to the end, they have nothing we need anyway.

If Osborne and his Labour and Lib Dem underlings are in a western it certainly isn't a Clint Eastwood movie. In those you can tell who is going to win by who talks the least. My god, those guys can talk and talk and talk. And talk and talk.

If only they had something to back it up with.

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