Europe Politics

UK votes in elections that could expose divides and strengthen a push for Scottish independence

Key Points
  • In recent years the United Kingdom has struggled to live up to its name.
  • Tensions and old enmities have flared between the four nations that make up the kingdom, p[particularly since the Brexit vote in 2016.
  • Scotland, Wales and Northern Ireland all have factions pushing for a break from the U.K.
Counter-protesters with Union flags face off against pro-independence protesters gathering in George Square, Glasgow on May 1, 2021, ahead of the upcoming Scottish Parliament election which is to be held on May 6, 2021. - away from the UK.
ANDY BUCHANAN | AFP | Getty Images

LONDON — In recent years the United Kingdom has struggled to live up to its name, with tensions and old enmities flaring between the four nations that make up the kingdom — England, Scotland, Wales and Northern Ireland — and a resurgent threat that the union could disintegrate.

Regional votes on Thursday could open those divides further and the parliamentary election taking place in Scotland could even set the stage for a second referendum on independence, although public opinion on the debate is on a knife-edge.

How Nicola Sturgeon's Scottish National Party fares in the election could largely determine how easily it can galvanize public opinion and pursue another referendum. The party is predicted to achieve a narrow parliamentary majority in the vote, according to the latest polling for Sky News.

Independent Scotland would face 'huge' economic challenges, former official says
Independent Scotland would face 'huge' economic challenges, former official says

The same polling carried out by Opinium also found that support for a second Scottish independence referendum remains divided at 50-50, once "don't knows" are excluded, down from 51-49 in the last Opinium poll. The poll sampled 1,015 Scottish voters between April 28 and May 3.

Analysts said the outcome to watch for is whether the SNP, the staunchest advocate of independence, will need the support of the Green Party in its bid for a second independence vote.

"They will remain in government with an anticipated 60-70 seats in the 129-seat (Scottish) parliament. The signpost to watch is whether the SNP will get the 65 seats required for an overall majority or whether they will have to rely on the Greens to provide an overall majority in favor of a second independence referendum," analysts at Teneo Intelligence noted Tuesday.

"After the vote, PM Boris Johnson is likely to declare that 'now is not the time' for a second referendum, irrespective of the Scottish election result. In this way, Johnson will attempt to kick the can down the road until the end of this UK parliamentary term in late 2024."

Sturgeon has dismissed claims she will hold a "wildcat" independence referendum if her party wins a majority in the parliament. During a Scottish leaders' debate, Sturgeon said her aim was to make the case for independence through persuasion and not through an unsanctioned plebiscite.

Johnson, meanwhile, has called the SNP's plans to hold a second referendum "uncalled for and unnecessary."

Discontent elsewhere

There are rumblings of discontent and calls for independence in other parts of the U.K., too.

Arguably, the trend toward independence was boosted in the late 1990s when the process of devolution began. This meant that certain powers and responsibilities were devolved from the government in Westminster to Scotland, Northern Ireland and Wales (Scotland and Wales have their own Parliaments while Northern Ireland has an Assembly).

On a practical level, devolution has meant that much of the decision-making that goes on in different parts of the U.K. is taken at that local level, although some policy areas, such as defense, immigration and foreign policy remain in the hands of lawmakers in Westminster.

A man holds a sign as thousands take part in the first ever march for Welsh independence from City Hall to the Hayes on May 11, 2019 in Cardiff, Wales.
Matthew Horwood | Getty Images News | Getty Images

The leader of Plaid Cymru, a Welsh nationalist party, said in April that if the party won a majority in the parliamentary (or Senedd) elections on Thursday, it would commit to holding a referendum on Welsh independence during the next five years.

Although opinion polls have typically showed that Plaid Cymru will land in third place in the elections, Yes Cymru, a group campaigning for independence, tweeted a poll in late April that suggested support for independence was increasing.

Northern Ireland also remains a political tinder box for the U.K., with its citizens largely divided down religious and nationalist lines. Protestant voters tend to opt toward staunchly maintaining the union with the U.K., while Catholic voters traditionally support republican parties and reunification with the Republic of Ireland.

The Brexit vote in 2016 was a catalyst for further divides in Britain. Scotland and Northern Ireland voted predominantly to remain in the EU, while a majority in Wales and England voted to leave. Complexities over Northern Ireland's role in the post-Brexit trade deal and a perception that it was sacrificed during the negotiating process with the EU have left some experts questioning whether a push toward reunification with the rest of Ireland could get stronger.

Philip Rycroft, former permanent secretary at the Department for Exiting the EU, has noted that a "complacent and un-strategic" approach to devolution has galvanized the push for Scottish independence and left the union once again on the brink.

"Westminster, over time, has really not paid sufficient attention to what's going on in Scotland and you could argue, likewise, in Wales and Northern Ireland," he told CNBC's "Squawk Box Europe" on Wednesday.

"The accusation is that Westminster and Whitehall had an approach of 'devolve and forget' and the handling of devolution did not get into the bloodstream of the U.K. system despite the huge changes that came with devolution in the '90s. So that has allowed the narrative to grow that the U.K. is not supportive of all its constituent parts."

Independent Scotland would face 'huge' economic challenges, former official says
Independent Scotland would face 'huge' economic challenges, former official says

Impact on sterling?

Strategists are looking at the impact the election results, particularly those from Scotland, could have on sterling, which could be closely watched as the election results emerge.

Not everyone is convinced there will be sharp moves in the pound, just yet. ING developed markets economist James Smith and chief EMEA FX and IR strategist Petr Krpata noted on Tuesday that "although the Scottish election may bring back negative headline news about another Scottish independence referendum, we don't think this should have an overly negative impact on sterling."

"This is because (a) a referendum could be years away rather than months (even if pro-independence parties win a majority); (b) as we observed with the Brexit referendum, the risk premium started to be built into GBP only six months ahead of the event; and (c) the first Scottish referendum in 2014 did not translate into a material build-up of GBP risk premium."

Scottish independence is nowhere near a foregone conclusion. As with the last vote in 2014, which resulted in 44.7% of voters voting in favor of independence and 55.3% voting against the split, question marks over Scotland's economic viability as an independent nation remain unanswered.

Rycroft says those questions are just as salient, and unresolved, in the current debate.

"There is no doubt that an independent Scotland would face some huge economic challenges. The big overhang of the deficit, which was running pre-Covid at 8-9%, a lot higher than the U.K. as a whole and Brexit means that there would be a whole bunch of really tough questions over how to handle a potential border with the rest of the U.K., if Scotland sought to rejoin the EU. There's the big question of the currency — does it use the pound, create its own currency or ultimately go into the euro?," he noted.

"At the end of the day, the debate about independence is about self-government and a sense of identity, and the challenge for the U.K. side of the debate is to persuade sufficient people in Scotland that being British as well as Scottish remains a viable long term option for them."