The Referendum on Separation for Scotland

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House of Commons Scottish Affairs Committee

Written Evidence

Only those submissions, written specifically for the Committee and accepted by the Committee as evidence for the inquiry The referendum on Separation for Scotland are included. List of written evidence

1 The Electoral Commission 1a Supplementary The Electoral Commission 1b Further Supplementary The Electoral Commission 2 Public Questions 3 Peter Thomson 4 Adam Tomkins 5 The United Reformed Church 6 CBI Scotland 7 Professor Michael Keating 8 Rt Hon Michael Moore MP 9 Further Rt Hon Michael Moore Mp, Secretary of State for Scotland 10 John Philip McAleer 11 Peter Kellner, President, YouGov 12 Professor Alan page 13 Aidan O’Neil QC 14 John Kay 15 Ian McLean 16 Vernon Bogdanor 17 John Curtice 18 No Campaign Ltd 19 Supplementary Iain McLean 20 SSE 21 True Wales 22 Dr Matt Qvortrup 23 Supplementary Rt Hon Michael Moore MP 24 Nigel Smith 25 Additional Rt Hon Michael Moore MP 26 Robert Durward 27 Supplementary Electoral Reform Society 28 Ipsos MORI 29 Ruth Stevenson 30 Supplementary Electoral Commission 31 Professor Denis Mollison

Written evidence submitted by John McCormick, Electoral Commissioner for Scotland, The Electoral Commission

Ahead of our appearance at the Committee on 2 November 2011, I wanted to set out some of our thinking on referendums in general and, in particular, the forthcoming referendum on Scottish independence.

As a voter-focused organisation we do, of course, have a great interest in how any referendum, including a referendum in Scotland, will be conducted. Where a referendum is held under the Political Parties Elections and Referendums Act 2000 (PPERA) the Commission has a number of responsibilities including, commenting on the intelligibility of the question; regulating campaigning; designating lead campaigners and reporting on the referendum. The Chair of the Commission (or someone they appoint) acts as the Chief Counting Officer, responsible for the conduct of the referendum and ensuring the accuracy of the overall result.

A referendum called by the Scottish Parliament would not be run under PPERA and therefore there would not be an automatic role for the Commission. It would be for the Scottish Parliament to decide who they wanted to co-ordinate the administration of the referendum, regulate the campaigners or carry out an assessment of the referendum question.

Given the Commission's considerable experience in running referendums (including the referendum on law-making powers for the National Assembly for Wales which took place in March 2011 and the referendum on the voting system for UK Parliament elections which took place in May this year), we do have a view on some key points that ought to be addressed in planning for any referendum. We would offer the same advice on these points to any Parliament or legislature considering the rules for a proposed referendum. There are five main areas that we consider should be addressed in planning to deliver a voter-focused referendum, and in all of these areas we would be willing to offer advice based on our experience. They are:

• a well-planned poll which is consistently and professionally delivered;

• a comprehensive public awareness campaign so that voters know how to participate and understand what they are voting for;

• a clear process for the designation of the Yes and No campaigns, and clear rules for those campaigners;

• transparency in relation to campaign expenditure and funding;

• a careful and independent assessment of the intelligibility of the referendum question.

In our view, the nature and scope of any referendum is a constitutional issue for governments and parliaments to decide. Whether or not there is a referendum, who runs it and who votes are all fundamental constitutional questions. Our priority is simply to ensure that the referendum is well-run.

We believe it is important that the plans for any referendum are considered carefully and fully, so we do not intend to comment on speculation about the conduct of any proposed referendum until there are specific proposals to respond to. Regardless of whether we have a role in a Scottish independence referendum, when proposals are brought forward we will be ready to use our recent experience of running referendums to offer advice to ensure it is well- run for voters and produces results that are accepted.

November 2011 4

Supplementary written evidence submitted by John McCormick, Electoral Commissioner for Scotland, The Electoral Commission

Thank you for the opportunity to appear in front of your Committee last week, During the course of our oral evidence we undertook to come back to the Committee on a couple of issues where we could not provide detailed answers at that time I hope that this letter will address those outstanding questions.

Restrictions on Referendum Material Produced by Publicly Funded Bodies

The Committee asked us for our views: on what period of time before polling day local and central Government should be restricted from putting out promotional material about the referendum.

Section 125 of PPERA currently restricts publicly-funded bodies from publishing material about the referendum for 28 days prior to polling day. This restriction applies to information about the referendum and the question, as well as material related to the campaign arguments or designed to encourage participation.

In our report on the 5 May referendum we recommended that the prohibition on publication of promotional material about the referendum by publicly-funded bodies or individuals should commence at the same time as the beginning of the referendum period (i.e. the date from which campaigners can be registered as permitted participants and the regulation of referendum campaign spending begins), We believe that this would reduce the risk that the use of public money is perceived as giving an unfair advantage to one side of the argument or the other.

However, we also noted in our report that the current prohibition meant that for 28 days before polling day we had to ask Counting Officers in local authorities to carry out local activities to provide neutral information about the referendum on behalf of the Electoral Commission to ensure that they did not fall foul of the prohibition. In light of this we have also recommended in our report that for future referendums the law should be changed so that similar activities carried out by Counting Officers are exempt from the prohibition on the publication of referendum material by publicly- funded bodies or individuals.

Research on Voting Behaviour on 5 May

You asked in our session whether there was any evidence that the combination of polls had an effect on voting behaviour, with the views of voters on parties influencing how they voted in the referendum. As we noted at the meeting, the Commission would not undertake this type of research ourselves and our research team have told us that they are not aware of any research by other bodies or individuals on this topic which has been published to date. Should we become aware of any in future we will draw it to the Committee’s attention.

I trust that the information in this letter has answered the outstanding queries but do get in touch if we can be of further help.

November 2011 5

Further supplementary written evidence submitted by The Electoral Commission

Electoral Commission Note of clarification:

Q. 52: The Committee Chair asked the Commission for our views on the minimum timetable required for a well-run referendum. We indicated that it should be a minimum of 28 weeks but would like to clarify the timescales for each of the key phases within a PPERA referendum:

We believe that there should be a period of at least 12 weeks between the campaign rules being finalised and the start of the regulated referendum period. This period would allow the Commission to complete, publish and distribute guidance and give campaigners an opportunity to become familiar with the guidance before the rules come into effect.

We are also of the view that at future PPERA referendums the statutory minimum referendum period should be at least 16 weeks, consisting of the current 28 day designation application period, the current 14 day designation decision period, and a minimum of 70 days between the final date for the designation decision and polling day. This would give designated lead campaign groups more time to plan and use the benefits that PPERA makes available to them in order to put campaign arguments to voters.

Together these key phases add up to a minimum of 28 weeks.

November 2011

Written evidence submitted by Hugh Maguire

Dear Committee Members,

I welcome your inquiry into the potential referendum on Separation for Scotland.

I would like to raise a query with you regarding voting eligibility.

I am a Scot, born in Stonehaven but I live and work in Hove, England, while my family remains in Scotland.

As a result I will be affected by any significant further devolution and particularly independence in ways I am concerned will not be at the heart of the debate.

The issues of prime concern are related to my nationality, currency, tax, care for the elderly, inheritance, etc and in the extreme case potentially even my right of abode in either Scotland or England.

I feel I have a democratic right to vote on the issue of Scottish Independence, and I would be very grateful if you could consider this aspect in your inquiry. I would also welcome consideration on the effects on potential Expats when reviewing the terms under which Scotland may leave the Union.

October 2011 7

Written evidence submitted by Peter Thomson

The Future of the Union

It is clear to this author that Westminster has lost the plot as far as its North Briton region is concerned and the Scottish Affairs Committee have failed to understand the degree to which their ruminations on Scotland are irrelevant. On the issue of ‘separation’ I will demonstrate why the cause of the growing wish for Scotland to return to its natural state for any nation to be sovereign is actually being driven by the Westminster narrative of a too poor, too wee, too stupid Scotland.

1. In the decade since the resumption of the Scottish Parliament session temporarily suspended in March 1707 opinion polls in the lead up to the Scottish Parliamentary election in 2007 showed time after time that the Scots wished a new relationship between the nation states making up the current UK Union and the preferred new structure would be one of a federation of autonomous nation states. In the run up to May 2007 many Scots identified the Unionist parties as being resistant on this matter, their too poor, too stupid, too wee narrative grated on the psyche and their policies for Scotland remained controlled by their puppet masters at Westminster rather than making any attempt to relate to the growing Scottish sense of self determination.

2. In May 2007 Scottish voters sent a message to the Unionist parties, one of these parties failed to heed as they started on a campaign which had nothing to do with the people of Scotland or their stated wish but everything to do with irrational animosity towards the minority SNP Government.

3. This ‘investigation’ is merely an attempt to shore up the Scotland Act Amendment Bill by conferring legitimacy on sections of a bill that is not yet in law, nor ever likely to be given the requirement of the Sewell Convention which recognises (as did the Supreme Court’s judgement against the insurers), the Scottish Parliament as sovereign, whose Acts are to be respected and the Scottish Parliament has to agree the Scotland Act Amendment Bill in full for it to receive Royal Assent.

4. The reality for the Scottish Affairs Committee is it does not hold the people of Scotland’s sovereignty in care because under Article 19 of the 1707 Treaty of Union the independence of Scots Law and therefore Scottish Constitutional practice is protected for all time. In Scots law and constitutional practice, as pointed out by Lord Cooper in 1953, sovereignty lies with the people of Scotland and not the crown or parliament. A reality first recognised by the writing of the Declaration of Arbroath of 1320 into Scots Law and further established by the 1689 Claim of Right which stated that King James the VII and II was thrown off the throne of Scotland because he attempted to assume sovereignty to which he had no claim. The 1689 Claim of Right remains in law and unaltered and stands Messer’s Foulkes and Forsyth’s amendments in contempt of Scots Law and constitutional practice in their attempt to subvert the sovereign people of Scotland’s rights and laws. In Scots Law the people of Scotland exercise their sovereignty through the parliament at Holyrood in the first instance as demonstrated by the Sewell Convention.

5. The Scottish Affairs Committee should also be cognisant with the Treaty of Vienna to which the Westminster Parliament is a signatory on the rights of any nation state to withdraw from any treaty especially where the treaty could be considered to have been entered in to under duress or pressure by one side over the other (such as the acceptance of payments for ensuring the Treaty would be accepted or the failure to allow the sovereign people a vote).

6. The Scottish Affairs Committee also needs to be fully aware of the UN Charter on Human Rights to which Westminster is a signatory which makes clear that the people of a sovereign nation state have the right to undertake a vote to decide whether it remains within a Union, confederation and the like or returns to being an independent nation state.

7. In effect the Scottish Affairs Committee has no legal rights on the matter of whether and when a referendum should take place under Scots or International law or Treaty. The Scottish people are sovereign not parliament - neither at Westminster nor Holyrood.

8. I would suggest before any further embarrassment is heaped on them, the committee stands down, saves the public purse from any further waste of public money and understand they are the problem. Their crassness, denial and vulgar ignorance is what is driving the ‘separation’ and not the sovereign people of Scotland, their democratic wishes or their democratically elected, majority government.

October 2011 9

Written evidence submitted by Professor Adam Tomkins, John Millar Professor of Public Law, University Of Glasgow

Introduction

1. In recent years Parliament has addressed, through legislation and otherwise, a large range of constitutional questions, from fixed-term Parliaments to the electoral system for the House of Commons. On one view, all constitutional questions are important. In my view, however, there are in Britain today two pressing issues of constitutional reform that are more important than all others. Both are “ripe” issues, which the current Parliament will have to confront. The first is the relationship between the courts and parliamentary government. This matter is being addressed, for example, by the Bill of Rights Commission; it is at the core of the argument over whether convicted prisoners should be permitted to vote (and who should decide); it is the matter that lies at the heart of the Human Rights Act 1998 and the Constitutional Reform Act 2005. The second is the future of the Union(s) that make the United Kingdom what it is and, in particular, the future of the Union with Scotland. There is no constitutional question facing the United Kingdom more important, or more pressing, than this.

2. For this reason, I warmly welcome this inquiry. The greatest mistake that could be made about its subject-matter is that it is a question affecting Scotland only. It is not. Scotland’s constitutional future, whether within the United Kingdom or not, is a question that affects the whole of the UK. Separation, independence, independence-lite, devo-max, Calman- plus, or full fiscal autonomy – whatever the label and whatever the contents of the package – the matter concerns the United Kingdom and all of its various parts. The subject-matter of the Committee’s inquiry is not, and must not be seen as being, an exclusively or parochially Scottish affair.

3. Yet, already the dangers of this happening are apparent. Through force of personality and on the back of a remarkable electoral triumph, too many of what ought to be the leading political players are acting as if the Scottish Government has ownership of the question of Scotland’s constitutional future. For reasons that I shall explain, legally and constitutionally it does not. Yet, since last May, it is the Scottish Government and the Scottish National Party that have been on the front foot and the United Kingdom Government and the Conservative, Labour and Liberal Democrat parties that have been on the back foot. This is dangerously unbalanced, and is no way to conduct the serious business of constitutional reform. If your Committee’s inquiry can begin to undertake the task of rebalancing, it will surely be in the interests of Scotland and the United Kingdom alike.

4. I submit this written evidence as a professor of public law in the University of Glasgow. I have held the John Millar Chair of Public Law at that University since 2003. Before that I taught at Oxford and, before that, at King’s College London. All my legal training was in England, but I have lived in worked in Scotland for more than eight years now. I have written numerous published works on constitutional law, including most recently Turpin and Tomkins, British Government and the Constitution, the 7th edition of which was published by Cambridge University Press earlier this year.

5. I should add that, in addition to being a professor at Glasgow, I have since 2009 been a legal adviser to the House of Lords Select Committee on the Constitution. This evidence is 10

submitted solely in my personal capacity; it is not to be taken as representing the view of any member, official or committee of the House of Lords.

Constitutional Principles

6. The focus of my evidence is on the constitutional and legal implications of the issues under investigation in your inquiry. My evidence rests on the following constitutional principles and observations.

• While the Scotland Act 1998 is a complex and subtle piece of legislation in some respects, on the question of whether the constitutional law pertaining to the Union is devolved it is admirably clear and concise: the Union is a reserved matter over which neither the Scottish Ministers nor the Scottish Parliament are competent to act.

• Referendums, while generally only advisory in the United Kingdom (owing to the sovereignty of Parliament), are nonetheless constitutionally significant and should never be underestimated or taken lightly; they require the most careful and expert regulation – this last point is a constitutional principle of considerable importance.

• The Scottish Ministers do not speak for Scotland generally (either in law or in fact). In law they speak for Scotland on devolved matters. The extraordinary and unambiguous electoral victory of the Scottish National Party in May 2011 must not be allowed to obscure this. In saying this I do not undermine for a moment the undoubted democratic mandate that the SNP earned through its victory. But winning a Scottish parliamentary election entitles a party to govern subject to the rule of law; it does not entitle a party to seek to rule in a manner that disregards the legal limits to its powers; this is true irrespective of the size or weight of any party’s mandate. Scottish devolution is of course a scheme of democratic and parliamentary government. But even more fundamentally than that, it is a scheme of law. If authority is needed for this rather basic proposition, it is amply found in decisions such as Whaley v Watson 2000 SC 340 and AXA General Insurance v Lord Advocate [2011] UKSC 46.

7. The UK – and, in particular, HM Government and the UK Parliament – has the constitutional right to ensure that public bodies act constitutionally and do not act or seek to act unconstitutionally. In the event that (for example) HM Government considered that a provision in an Act of the Scottish Parliament was unlawful as being outwith legislative competence, the Government’s law officers (the Attorney General and the Advocate General) may refer the matter to the UK Supreme Court (Scotland Act 1998, s. 33). An important function of the Scottish Affairs Committee, if I may say so, is to hold HM Government to account for the ways it uses and for the ways in which it considers that it may in the future use these powers.

8. With these general constitutional principles in mind, I will address the six questions the Committee has identified.

Which jurisdiction should conduct a referendum and what is the legal basis for deciding this?

9. This is a question of law that requires to be answered (by a court if necessary) in accordance with the Scotland Act 1998. Legally, the answer to the question asked by the Committee depends upon what the referendum question is (or questions are). If the question is “Should Scotland remain in the United Kingdom” that is a question on a reserved matter and should therefore be asked (if at all) by HM Government under the authority of an Act of Parliament. Were the Scottish Ministers to seek to ask such a question in a referendum held under the authority of an Act of the Scottish Parliament (“ASP”), there is (at the least) a very strong argument that the ASP would be outwith competence and therefore “not law” under s. 29 of the Scotland Act 1998 and that the Scottish Ministers would be acting outwith their devolved competence if they sought to exercise powers in pursuit of such an ASP (Scotland Act 1998, s. 54). If the question is “Should the Scottish Government seek to renegotiate with HM Government the terms of the Union” my view would be the same: this is a reserved matter, even if the referendum question somehow made clear that the renegotiation was not intended to end the Union and that the proposal was not that Scotland should leave the United Kingdom.

10. I would argue that the questions suggested by the Scottish Government in its February 2010 consultation paper, Scotland’s Future: Draft Referendum (Scotland) Bill would also have been susceptible to challenge for want of competence. The first question was “Do you agree with the proposal that the Scottish Parliament should have its powers and responsibilities extended as described [in the Scottish Government paper, Your Scotland, Your Voice]”. The implementation of any affirmative answer to this question would require the modification of the Scotland Act 1998. Yet para 4 of Sched 4 to the Scotland Act 1998 provides that “An Act of the Scottish Parliament cannot modify … this Act” (this is subject to certain exceptions, but these are not relevant here). The ballot paper containing this question would have made clear that this proposal would entail the Scottish Parliament becoming responsible “for all laws, taxes and duties in Scotland”, subject to limited exceptions. Yet the following are expressly listed as reserved matters: “fiscal, economic and monetary policy, including … taxes and excise duties …” (Scotland Act 1998, Sched 5, part II, para A1).

How should such a referendum be initiated: e.g., via a provision in the Scotland Bill?

11. A succession of British Governments appears to have conceded that if Scotland wishes to secede from the United Kingdom, so be it. That is to say, it is not British Government policy (as far as I can ascertain) that Scotland should be compelled by force to remain in the Union if it has clearly demonstrated that it wishes to leave. Given this, and given also that, for the reasons given above, it is difficult to see that the Scottish Parliament has the competence to legislate on the matter, there is a strong constitutional case that it would be preferable for the United Kingdom Parliament to legislate on the matter, and for it to do so as expeditiously as possible. Thus, from a constitutional point of view, for the UK to hold (at the UK’s expense) a referendum in Scotland that asked the straightforward question: “Do you wish Scotland to secede from the United Kingdom?” looks like an extremely attractive option. It would certainly have the welcome effects of making it clear, first, that the question of Scotland’s constitutional future is not an exclusively Scottish concern and, secondly, that the Scottish Ministers do not have a monopoly on the matter. While they do not have a monopoly, they clearly do have a mandate. The UK Government should acknowledge this by treating the SNP’s victory in the 2011 Scottish parliamentary election as the trigger for the holding of a referendum. For the United Kingdom to hold the referendum would have several further advantages: it would be held under the powers 12

contained in the Political Parties, Elections and Referendums Act 2000 (see further on this below); and it would be regulated by the Electoral Commission (again, see further below). And, of course, there could be no doubting the legal validity of such a referendum. There is absolutely no doubt whatsoever that the United Kingdom Parliament may legislate so as to provide that a referendum be held in Scotland on this matter.

12. This, in a nutshell, is a basic legal and constitutional case. For the time being I leave it to others to analyse whether adopting such a course would be politically prudent.

What should be the process for determining the timing?

13. This is a political question, although there is a view that constitutional considerations should preclude the holding of a referendum on the same day as other elections are held. The House of Lords Constitution Committee in its report on referendums (12th report of 2009- 10, HL 99, April 2010) stated at para 145 that “referendums should not be held on the same day as General Elections” and that for other elections “there should be a presumption against holding referendums on the same day as elections …”.1 The AV referendum in May 2011 was held on the same day as elections for the Scottish Parliament and devolved assemblies in Wales and Northern Ireland. Matters of timing are considered by the Electoral Commission in their reports on these referendums (see further below).

How should the eligibility criteria for voting be determined?

14. Eligibility criteria for a referendum in the United Kingdom are (for the time being) properly determined by the legislation that provides authority for the referendum in question. Thus, the eligibility criteria for the March 2011 Welsh referendum were set out in the Government of Wales Act 2006 (s. 103 and Sched 6) and those for the May 2011 AV referendum were set out in the Parliamentary Voting System and Constituencies Act 2011 (s. 2). Both of these referendums used eligibility criteria already in existence: they did not require new eligibility criteria to be created afresh. Thus, persons entitled to vote in the Welsh referendum were those persons entitled to vote in Welsh local government elections; and persons entitled to vote in the AV referendum were those persons who would be entitled to vote in a General Election were one to be held on the day in question.

What is the role of the UK Government, the Scottish Government and the Electoral Commission in the process?

15. In addressing this question I wish to focus on the role of the Electoral Commission and on the law as established by the Political Parties, Elections and Referendums Act 2000 (“PPERA”). It is a matter of the greatest constitutional importance that voting in elections and referendums alike is fair and is manifestly seen to be fair. This requires expert regulation. We are fortunate in the United Kingdom now to have a regulator dedicated to this task: the Electoral Commission.

16. The legislative scheme for referendums is that a series of generic rules are laid down by or under the authority of PPERA (including certain aspects of timing, campaign finance, as well

1 The Committee may wish to note this report as being a valuable survey of the constitutional issues arising on the use of referendums. The Committee may wish also to note the Government’s response to the report, published by the House of Lords Constitution Committee as its 4th report of 201012, HL 34 (October 2010). 13

as rules pertaining to the designation of lead campaigns, etc). But PPERA does not confer authority to hold any particular referendum. It remains the case that each referendum requires its own, bespoke, statutory authority. This division – between the generic rules laid down in advance by or under PPERA, on the one hand, and the rules specific to a particular referendum, on the other – is constitutionally important, as it prevents those seeking to establish a particular referendum from being able to “rig” the rules so as, for example, to encourage one result rather than another. Further, both PPERA’s generic rules and those contained in the legislation establishing a particular referendum are policed and enforced by the Electoral Commission. A large range of matters, from the question itself to the registering of campaign donations and from campaign spending to the administration of the voting, falls within the Electoral Commission’s jurisdiction.

17. And here’s the catch. PPERA applies only to referendums established by an Act of (the UK) Parliament. Likewise, the jurisdiction of the Electoral Commission covers referendums established by an Act of (the UK) Parliament. Were a referendum to be lawfully held on Scotland’s constitutional future and were that referendum to be held on the authority of a lawful Act of the Scottish Parliament (“ASP”), there is nothing in principle to prevent either PPERA or the jurisdiction of the Electoral Commission being extended so as to cover the referendum. Yet this is not what the Scottish Government proposed in its February 2010 consultation paper, Scotland’s Future: Draft Referendum (Scotland) Bill. Rather, that Bill would have established a new body, the Scottish Referendum Commission, as a one-off body to regulate the referendum. The one ASP would have provided both the generic rules (contained for the UK in PPERA) and the specific rules for the particular referendum. The Scottish Referendum Commission would have been responsible to the Scottish Parliament, not to the United Kingdom Parliament, and its members (three Commissioners) would have been nominated by the Scottish Parliament. These arrangements, suggested by the Scottish Government in February 2010 it is to be recalled, would be self-evidently inappropriate now, given that the Scottish Government commands an overall majority in the Scottish Parliament. There must be a regulator for any referendum on Scotland’s constitutional future that is genuinely and fully independent and that may manifestly be seen to be so. I can see no good constitutional reason for saying that that regulator should be anyone other than the Electoral Commission; and the relevant provisions of PPERA should be made to apply accordingly.

What lessons may be learned from the experience of other referendums in the UK?

18. The Electoral Commission has published full reports on both of the referendums held in the UK in 2011 (the Welsh referendum in March and the AV referendum in May). These reports were published in June 2011 and October 2011, respectively; they merit careful and detailed examination. Both are available on the Electoral Commission’s website. The reports contain expert analysis of the lessons to be learnt. I shall not attempt to summarise these reports here.

Other matters

19. In addition to these six questions, the Committee asks for initial views about the matters that will require to be clarified before a referendum can be held. On this matter I would say the following. It is clear, as the Committee’s call for evidence demonstrates, that even on the subject of independence there is a broad range of issues on which clarification would be needed in advance of a referendum. I would agree that each of the items on the 14

Secretary of State’s list, cited by the Committee, should be on that list. But moreover, it seems clear from a range of public statements that the Scottish Government is not thinking only in terms of independence. There has been quite a lot of talk, for example, about a three-way referendum, with “full” independence and the status quo being two options, and something in between being the third. It is not remotely clear (to me) what this third option would entail but it seems, so far as I understand it, to amount to Scotland having full fiscal autonomy (a phrase in want of a definition!) without having all of the hallmarks of a “fully” independent state. Now, at least four matters would have to be clarified before any such option could be put in a referendum: (a) what, precisely, would be the legislative and executive powers vested in Scotland and what would remain with the UK; (b) could it work – i.e., is it politically deliverable, is it economically coherent, is it viable; (c) would it be acceptable to the rest of the United Kingdom; and (d) would a three-option referendum be constitutionally acceptable, even assuming (a)-(c) could be satisfactorily answered?

20. For a referendum to be constitutionally acceptable, the questions to be asked must be crystal clear as to their meaning and their effects. That is to say, the options must be clearly defined, and it must be clear what the consequences are of voting in any particular way. As to the first, it should be stressed that it is not enough that the options are capable of being clearly defined. They must in fact be clearly defined in advance of the referendum taking place. (This occurred in 1997, with the publication of the White Paper, Scotland’s Parliament pre-dating the referendum by some two months.) As to the second, with a three-way referendum, what would be the consequences of the following vote, for example: on a 65% turn-out, 35% of those voting vote for the status quo, 40% of those voting vote for full fiscal autonomy, and 25% of those voting vote for full independence? Would not the consequences of this and many other possible permutations have to be explained in advance of the referendum, so that voters knew where they were likely to stand? The importance of such questions brings us back, of course, to the points made earlier that, from a constitutional point of view, it is imperative that any referendum be expertly, professionally and fairly regulated. A key component of the Electoral Commission’s functions with regard to referendums that fall within its jurisdiction is to ensure that the question asked is intelligible.

Conclusion

21. I end this evidence with a question. On 23 October 2011 a story appeared on the BBC website entitled “SNP treads road to independence”. (At the time of writing the story is available here: http://www.bbc.co.uk/news/uk-scotland-scotland-politics-15420671.) The story contained the following claim: “Work is under way to design an independence blueprint that can command popular support. Much of this work is being done by a team of officials, who serve the Scottish government …”. Now, I do not know, of course, if this claim is true. But assuming for the moment that it is (and I have no reason to suspect otherwise), is this legal? Is it competent within the terms of the Scotland Act 1998 for officials to undertake work along these lines on the instruction of Scottish Ministers? Recall that the competence of Scottish Ministers is limited along similar lines to that of the Scottish Parliament (see Scotland Act 1998, s. 54(3)). If it is incompetent and unlawful for the Scottish Parliament to legislate on independence, is it not likewise incompetent and unlawful for the Scottish Ministers to instruct their officials to prepare the groundwork for independence? If public money is now being expended in a manner that is ultra vires, is this not a matter for the courts, for the Scottish Parliament and, indeed, for the United 15

Kingdom Government? Who, if anyone, has signed off on the legality of this work? Does HM Government accept that this work is legal? If not, what is proposed to be done?

22. The most important point is this: whether work such as this is lawfully or unlawfully carried out, it surely cannot be in the public interest either of the people of Scotland or of the people of the United Kingdom for such an extraordinarily important project of constitutional reform as the possible break-up of Britain to be developed in a fog of legal uncertainty.

November 2011 16

Written evidence submitted by The Church & Society Committee of the Synod of Scotland of the United Reformed Church

Submission on first inquiry — Referendum on Separation for Scotland At its meeting on 29th October 2011 the Church & Society Committee of the Synod of Scotland of the United Reformed Church considered the terms of the first enquiry released on 12th October 2011. On Scottish matters the Synod of Scotland speaks for the whole United Reformed Church.

The United Reformed Church submits that the Scottish National Party was the only party to have a referendum in its manifesto at the Scottish Parliamentary elections. Having been endorsed by the Scottish electorate the Scottish Government has a mandate to take the matter forward. No other body has sought or received a mandate for such a referendum; therefore no other body has the moral authority to do so.

Submission on second inquiry — Referendum on Separation for Scotland At its meeting on 29th October 2011 the Church & Society Committee of the Synod of Scotland of the United Reformed Church considered the terms of the second inquiry released on 12th October 2011. On Scottish matters the Synod of Scotland speaks for the whole United Reformed Church.

The United Reformed Church submits that there are a number of issues where Scotland currently appears disadvantaged which the Rt Honourable Michael Moore MP, Secretary of State for Scotland might usefully address prior to any referendum. These include broadcasting, the national grid and the Crown Estates.

November 2011 17

Written evidence submitted by CBI Scotland

CBI Scotland is Scotland’s leading business organisation, representing and promoting the interests of over 26,000 businesses in Scotland from every sector of industrial and commercial activity.

CBI Scotland welcomes the Scottish Affairs Committee’s two inquiries relating to a potential referendum on Separation for Scotland. CBI Scotland agrees with the view expressed by the Committee that Separation would be a major step for Scotland. In our response, we address the questions and issues from a business perspective.

First Inquiry on the Processes and Mechanics by which a Referendum would be Organised and Conducted

In this section, we respond to the questions as set out by the Committee.

Question 1. Which jurisdiction should conduct such a referendum and what is the legal and/or moral basis for such a determination?

Response 1. The Constitution of the United Kingdom, including the Union of the Kingdoms of Scotland and England, is a reserved matter under Schedule 5, Part 1 of the Scotland Act 1998. This calls into question the Scottish Parliament’s competence to legislate for a referendum on Scotland seceding from the United Kingdom and the Scottish Government’s competence to hold such a referendum. The Scottish Government and UK Government should work together to provide a sound legal basis for any such referendum.

Question 2. How should such a referendum be initiated e.g. should it be via provision in the Scotland Bill?

Response 2. In order to provide for a sound legal basis, provision for such a referendum in the Scotland Bill is one option. Another option would be to introduce a later Bill at Westminster, similar to the 1997 Bill that provided for a referendum on Scottish devolution. However, as the Scotland Bill is currently before the UK Parliament and can be subject to further amendment, this presents an opportunity to include provision for a referendum without the need for taking up additional parliamentary time to enact the necessary primary legislation at a later time.

Question 3. What should be the process for determining the timing of a referendum?

Response 3. The timing of a referendum should be determined in the best interests of the people of Scotland and the rest of the United Kingdom. The prospect of a referendum is causing concern in CBI Scotland’s membership about the possible damage that could be done to Scotland by the uncertainties arising from this commitment and its timing. This is not helpful.

Question 4. How should the eligibility criteria for voting in such a referendum be determined?

Response 4. We have no strong view as to how the eligibility of the voting criteria should be determined but would expect that the eligibility criteria would be the same as for UK general elections.

Question 5. What is the role of the UK Government, the Scottish Government/Executive and the Electoral Commission in the process?

Response 5. The UK Government and Scottish Government should work together to provide for a sound legal basis for any referendum and its processes. The Electoral Commission is an independent, trusted and respected body that could oversee a referendum and put to rest any doubts about the referendum process and the clarity and impartiality of the question to be asked.

Question 6. What lessons can be learned for the process of conducting a referendum from the experience of other referenda in the UK, including the March 2011 referendum for the devolution of further law making powers to the Welsh Assembly Government?

Response 6. We have no position on this precise question but would offer the view that any referendum should be about independence only and should not involve other additional questions that could deliver a confused or unclear result.

Second Inquiry on Identifying those Issues which will need to be Resolved before a Referendum is held in Order to Allow Voters to make an Informed Choice

We agree with the Committee that the second inquiry should seek to identify those issues which will need to be resolved before a referendum is held in order to allow voters to make an informed choice. We trust too that the findings of the Committee’s inquiry will also be of considerable interest to Scotland’s business leaders.

We note that the Secretary of State has helpfully identified six areas where clarification is required. In February 2007, when the prospect of a devolved government formed by the Scottish National Party appeared to be more likely following that year’s May election, the Council of CBI Scotland invited the SNP to answer a number of questions about their plans for independence. Some questions were responded to and some were not. Our Council considered the responses and regarded them as unconvincing in making the business and economic case for independence.

The questions are as valid today as they were in 2007 and largely relate to the broad themes that the Committee intends to explore. In our view, and in the spirit of the respect agenda, we hope that Scottish Government Ministers will meet with the Committee to answer these questions and any other questions of interested parties. The questions that we invited the SNP to answer are as follows and have been revised to bring them up-to-date and into today’s context. A number of additional questions are likely to arise as the debate moves forward.

Question 1. An independent Scotland would require its own full panoply of government departments, for example: - a treasury, a central bank and revenue authority; a foreign office with embassies and consulates; armed forces; a ministry of the interior; and various commissioners and regulators. What is the Scottish Government’s estimate of the set up costs of this sovereign government infrastructure including, for example, an independent Financial Services Authority for Scotland or, as in England, Wales and Northern Ireland, its successor organisations?

Question 2. What is the Scottish Government’s estimate of the on-going costs to the public purse and to business of these departments of state and regulators (e.g. the financial services sector being regulated by FSAs and/or their successors on both sides of the border)?

Question 3. The Government Expenditure and Revenue in Scotland 2009-2010 (GERS) data shows a non-oil Scottish public sector deficit of £19.9bn, 17.8% of Scottish GDP, including a population share to Scotland of the total UK expenditure on financial sector interventions. The Scottish Government adjust the data, principally by adding back 91.4% of oil and gas tax revenues to show a deficit of £14.0bn, 10.6% of Scottish GDP. How much oil and gas would be allocated to Scotland as a result of independence negotiations? How would the Scottish Government fund an independent Scotland’s current levels of public spending in the current era of declining oil and gas production (down from a peak of 4.5m barrels a day in 1999 to 2.2m barrels a day in 2010 and declining further over time)?

Question 4. An independent Scotland would need to charge taxes on individuals and businesses principally on the basis of taxable incomes and profits earned in Scotland. This would mean segregating those incomes and profits earned in Scotland from the remaining parts of the United Kingdom. What are the Scottish Government’s estimates of the initial and on-going direct and indirect costs to the public and private sectors of separate PAYE and personal and business tax assessment and collection systems in an independent Scotland?

Question 5. Given that Scotland could not automatically join the euro, or may not wish to join the euro immediately following secession, what would be the currency of an independent Scotland?

Question 6. How would Scotland’s inflation target be set?

Question 7. How would Scotland’s inflation target be met?

Question 8. What level of interest rates would the Scottish Government set to control inflation and offset the risks of the international financial markets holding our currency?

Question 9. What are the Scottish Government’s estimates of the costs to businesses in Scotland of exchange rate risk and currency conversions between Scotland and England?

Question 10. Has the Scottish Government thoroughly assessed and quantified the risk of a number of Scotland’s firms (including our financial services companies employing 100,000 people, and another 100,000 jobs dependent on them, and exporting 93% of their services to the rest of the UK) not remaining headquartered in an independent Scotland due to the vast majority of their customers, shareholders and other stakeholders residing in England – a foreign country? Moreover, has the Scottish Government carried out a risk assessment of potential losses of business to Scottish firms operating in the remaining parts of the United Kingdom after secession?

Question 11. How would an independent Scotland sustain the immediately lost jobs such as 6,500 jobs at the Faslane naval base (increasing to 7,700 as the UK submarine fleet is moved there) and the 5,000 jobs in our naval shipbuilding and ship repair industry, which are largely dependent on UK military orders?

CBI Scotland trusts that this paper is of assistance to the Scottish Affairs Committee. We would be happy to expand on our questions and answer any further questions that the Committee may wish to put to us.

November 2011 20

Written evidence submitted by Michael Keating, Professor of Politics, University of Aberdeen

There has been some question as to whether a referendum to permit the Scottish Government to negotiate with the UK Government for Scotland to become independent would be legal and constitutional. These are two slightly different questions, because of the nature of the UK constitution. There is no single written document to which one can refer to resolve constitutional issues. Some of the constitution and many of the procedures are written down in statutory law, while others are matters of convention and understanding. A third consideration concerns democracy.

The Law The issue of legality is a narrow one, whether this would be permitted under the Scotland Act. This clearly states that the Union is reserved to Westminster, so that the Scottish Parliament could not, under its terms, unilaterally secede from the United Kingdom. This, however, is not what is proposed; rather the proposal is to give the Scottish Government a negotiating mandate. I do not think that this would in itself violate the legislation, although the point is not clear and an argument might be made to the contrary.

The Constitution The constitutional argument is more complex and hinges on interpretation rather than a simple reading of the law. Westminster governments and English lawyers have usually taken the view that the Westminster Parliament is supreme on all matters and that this supremacy is the fundamental basis for the constitution. Scottish constitutionalists, on the other hand, have tended to see the United Kingdom as a union rather than a unitary state. Scotland never surrendered its sovereignty and is free to resume it when its people so choose. The Scottish Parliament, established by referendum, is the expression of this and entitled to take the initiative on constitutional change, although not to act unilaterally since that would violate the principles of union.

Interestingly, in spite of the Westminster doctrine, the principle of self-determination has been conceded by prominent unionists. Margaret Thatcher wrote that Scotland as a nation has an undoubted right to national self-determination and to independence if Scots should chose it. John Major declared that no nation could be kept in a union against its will. Almost the entire Scottish Parliamentary Labour Party accepted the sovereignty of the Scottish people when they signed the Claim of Right in 1988. Even opponents of independence nowadays usually share this notion. It must therefore be accepted as one of the shared understandings of the constitution, although not written into law. It follows logically that if the Scottish people have the right to self-determination, they must have the means to exercise the right. There is no more proper way to do this than by a referendum called by the national parliament, and endorsed by the people as a whole. If only Westminster can decide on the holding of an independence referendum, including its timing and wording, then the claim to self- determination is meaningless.

Democracy The best international guidance we have on these matters comes from the Canadian Supreme Court’s judgement in the Quebec secession reference. The court declared that the wording of the Canadian constitution did not give Quebec the right to secede. On the other hand, it ruled that, if the people of Quebec did so decide, by a clear majority on a clear question, then the government of Canada would have a duty to negotiate. It came to this conclusion by applying the principles of democracy, to which the Constitution has to bend.

In Scotland, a government with a mandate to hold a referendum at a time announced before the election, proposes to put the question to the people. This is an exercise in the proper workings of democracy.

The Question There is always going to be an argument about the question, since independence can mean different things, depending on the relationship to the rest of the United Kingdom and Europe, on matters like border controls, the currency and joint institutions. There is nevertheless a case for a clear question, such as that proposed in 2007 ‘I agree that the Scottish Government should negotiate a settlement with the Government of the United Kingdom so that Scotland becomes an independent state’. The political parties will then offer their own interpretations of this and of the consequences, for the voters to decide.

Opinion polls have regularly suggested that the largest body of voters in Scotland favours neither the status quo nor traditional independence, but what have become known as ‘devolution-max’. Considerations of democracy indicate that they should be able to choose this option.

The Consequences The referendum would on a mandate to negotiate. Any settlement, whether independence or devolution-max, would have to be negotiated with the UK Government and ratified by both parliaments. If negotiations were to break down completely, we would beyond the limits of constitutionalism.

Conduct of the Referendum The Electoral Commission has a proven record and a reputation for impartiality. It would be appropriate for it to be given the responsibility for the supervision of the referendum.

November 2011 22

Written evidence submitted by Rt Hon Michael Moore MP, Secretary Of State For Scotland

We welcome the decision by the Scottish Affairs Committee to open its inquiries into a possible independence referendum and the implications if Scotland were to leave the United Kingdom.

The Government agrees with the Committee that Scotland separating from the rest of the UK would be a major step and that both the proposals for a referendum and the implications of leaving the United Kingdom warrant full, open and detailed investigation.

This Government believes it is for the people of Scotland to decide their constitutional future, but we also believe that Scotland is best off as part of the United Kingdom. We share a common heritage, outlook and set of values, whilst at the same time retaining our distinct cultural traditions. Our partnership delivers economic security, international influence and better prospects for Scotland. The United Kingdom is a successful enduring partnership which delivers stability and prosperity to all of its constituent parts.

The Government believes that there are a considerable number of issues to be resolved before the Scottish public could be asked reasonably to decide on the future of Scotland within the United Kingdom. As your call for evidence acknowledges, in my speech to the David Hume Institute I highlighted six important areas where people in Scotland should be given clarity:

1. What regulation would be applied to our banks and financial services and who would enforce it?

2. Which currency would Scotland adopt and how could entry and influence be guaranteed?

3. How would Scotland's membership of international organisations – including the EU - be assured?

4. What would be our defence posture and the configuration of our armed forces?

5. How many billions would Scotland inherit in pension liabilities and who would pay for future pensions?

6. How much would Independence cost - what is the bottom line?

These are six important questions, but there are many others for the Scottish Government to answer before we have anywhere near the clarity on what an independent Scotland would look like.

The Government believes that devolution within the United Kingdom offers the best arrangement for people in Scotland. As the Government is demonstrating through its delivery of the Scotland Bill, we are committed to strengthening devolution in Scotland. The Scotland Bill will result in the largest transfer of fiscal powers since the creation of the United Kingdom, bringing real financial responsibility and accountability to the Scottish Parliament. The measures in the Scotland Bill are significant; they will take detailed work and engagement from both the UK Government and the Scottish Government to deliver them successfully.

The Government is committed to engaging with the Committee's important work on this issue and looks forward to providing detailed evidence once the Committee has clarified its areas of focus.

November 2011 23

Further written evidence submitted by Rt Hon Michael Moore Mp, Secretary of State for Scotland

Scotland's Constitutional Future: a Consultation Document on Facilitating a Legal, Fair and Decisive Referendum

Today the Government published a consultation document to seek views on facilitating a legal, fair and decisive referendum. I have provided a copy of the consultation document to you and to all members of the Scottish Affairs Committee.

The consultation document sets out the Government's clear view that it is not within the powers of the Scottish Parliament to legislate for a referendum on independence. It is our view that any referendum on independence brought forward by the Scottish Government would be likely to be challenged in court and that the Scottish Government would lose.

The consultation document makes clear our view on the legal position. However, we are equally clear that we will honour our commitment not to stand in the way of a referendum.

Our consultation document sets out the options for legislating on a referendum. We make clear that our preference is to provide the Scottish Parliament with the powers to hold a referendum that is capable of inspiring the trust and confidence of people on either side of the independence debate. To do this we must first ensure the legal basis for a referendum. Secondly, we must ensure that is conducted in a fair way and, finally, we must ensure that a referendum is decisive, to end the current uncertainty that is damaging Scotland.

This document is relevant to the two inquiries of the Scottish Affairs Committee related to the Referendum on Separation for Scotland and I look forward to engaging with the Committee on this document further.

January 2012 24

Written evidence submitted by John Philip McAleer

Executive Summary

This evidential submission is in response to the invitation contained in the Select Committee Announcement (“the Announcement”) of 12 October 2011.

The evidence is divided into two parts, covering the two separate Inquiries referred to in the Announcement. I have retained the numbering contained in the Announcement.

The evidence contained in this submission is based upon reading and research on matters pertaining to the Constitution of Scotland and of the UK. Reference to matters which could be deemed political occur only where they illustrate, help to ground or otherwise place in context, constitutional matters. I have, however, attempted to be aware of cultural and political sensitivities throughout.

The First Inquiry

Since the Holyrood Election of May 2011, there has been extensive discussion of the constitutional position of Scotland and of the UK, of which the Committee will be aware. This discussion is inevitably political and, equally inevitably, takes place within the constitutional context in which politics operate. While it is often said that the UK lacks a written constitution, it is more accurate to say that it lacks a codified constitution and that reference may be made to statute, judicial decision and surrounding materials in examining and attempting to clarify constitutional questions.

There is a further issue of nomenclature and terminology, which has existed since the Scotland Bill of 1997, and before. The devolved body at Edinburgh is not, and cannot be regarded, constitutionally, as a parliament. This is due to the constitutional sovereignty of Parliament, which is indivisible. The term “parliament” is often used, colloquially, to describe other UK representative bodies, such as the Tynwald, the House of Keys, and the States of Jersey. Colloquial usage does not affect the constitutional position.

While this expresses the constitutional position, it is recognised that the institution of the “Scottish Parliament” and particularly the Scottish Parliament building, has come to occupy a significant role in the cultural and political life of the nation. It would be counter- productive and wrong to deny this cultural and political reality and would serve only to alienate citizens from participation in a rational examination of the constitutional issues before us.

Question 1

In examining the question of jurisdiction, while case law and commentary have been examined, the first point of reference is to the Scotland Act 1998 (“the Act”) and the schedules thereto. Schedule Five defines clearly the nature and extent of the powers reserved to Parliament and Schedule Six those which are devolved to the Scottish Administration. Schedule Five, is not on one view necessary, following the alterius rule of statutory interpretation, meaning, in this context, that any power which is not specifically devolved, is reserved. However, it has value in enhancing the clarity of the provisions.

The unequivocal answer to Question1 is that only Parliament has jurisdiction over a constitutional referendum anywhere in the UK. Any attempt by the devolved administration at Edinburgh to organize, promote or otherwise operate a form of plebiscite on separation in Scotland is unconstitutional and thus illegal.

With any such attempt, the administration could face challenge by process of Judicial Review (of Administrative Action) based upon the legal concept of ultra vires, meaning that of a statutory body acting outside the scope of its’ powers.

Question 2.

On initiation, the options would appear to be:

(i) Inclusion of the enabling provisions in the Scotland Bill;

(ii) Initiation by means of enactment of a specific Bill devoted to the subject.

Q2 (i) The Scotland Bill, currently in progress through Parliament, contains a number of amending provisions, still subject to debate and resolution. It is thought inappropriate and unwise to include a constitutional matter of such significance as separation for Scotland within these provisions.

Q2 (ii) It follows that a constitutional matter of this magnitude should be considered in a specific, dedicated Bill of its’ own. This would follow practice adopted in the enabling legislation which led up to the devolution referendums of 1979 and 1997.

Question 3.

On timing, the timing of a referendum is a matter for determination by Parliament in the course of consideration of the Bill at Q2 (ii) (above).

Question 4.

On eligibility, that also is a matter for Parliament, as in Q3 (above). Practice, as in the devolution referendums (above) and also in the EEC Referendum (1975) and the Electoral Reform Referendum (2011) suggests that eligibility be defined as for the provisions on eligibility in Parliamentary elections.

Question 5.

On roles, the role of the UK Government is paramount in the process, as the only legitimate body capable of the initiation of such a referendum.

The Electoral Commission is the independent, statutory body charged by Parliament with the conduct and regulation of referendums (Political Parties, Elections and Referendums Act, 2000). It follows that conduct and regulation of a referendum should be remitted to the Commission.

The Scottish Government/Executive has no formal role in the process, as it is a reserved matter. However, it may be thought appropriate and politic for both the Scottish Executive 26

and representatives of Scottish Local Government to be included in a process of consultation, however informal.

Question 6.

The most recent available example of the process of conducting a referendum within the UK is that of the Electoral Reform Referendum of May 2011.

The Committee will recall that the referendum asked the preference of the electorate between the existing “first past the post” system and a system known as the “Alternative Vote”. The existing system was preferred by a substantial majority. The principal lesson derived from this example is the need for the provision of clarity as to the question (s) being put and for the provision of supporting information on the question(s). These needs, in this instance, were, by common consent, unmet.

The example of the Wales referendum of March 2011 is related, but distinct. This was a referendum on the extension of powers devolved from Parliament to the Wales Assembly. It was not a referendum on separation. This distinction is of the absolute essence. Any proposed extension of devolved powers for Scotland falls to be considered with the questions raised by the Secretary of State for Scotland in the second inquiry.

The Second Inquiry

The second inquiry seeks clarification on six areas as defined in the announcement.

In order for a referendum on separation, with the magnitude of its’ attendant consequences, to be properly considered, it is important that it be not confused with amendments to the existing schedule of devolved powers. Amendments to devolved powers need not even necessitate a referendum, and may be debated and enacted as part of the parliamentary process.

It would appear that all six areas referred to by the Secretary of State are proposed extensions of devolved powers. These questions probably fall to be considered as amendments to the Act, in much the same way as the proposed amendments to the Scotland Bill currently in progress through Parliament.

What is unclear is why clarification and consideration of the six areas need take place prior to a referendum on separation except as part of parliamentary debates. If the outcome of a proposed referendum is in favour of separation, then surely the six areas like all others, fall to be considered under a new dispensation.

The clearest and most certain approach is for a separation referendum to be confined to the single question of separation.

The six areas are elements within a political, rather than constitutional debate. To these may be added the question of the electoral scope of such a referendum.

Should it take place only within Scotland or throughout the UK?

Should there be a form of threshold included, by which any calculation of the outcome refers not only on votes cast for or against the question posed in the referendum, but also to the votes cast in the context of the eligible electoral vote? This is what happened prior to the Devolution Referendum of 1979, where Parliament, in accepting an amendment to the proposals before it (the “Cunningham Amendment”) introduced a threshold by which the outcome was determined by votes cast in favour of devolution reaching a threshold of 40% of the votes of the eligible electorate

Conclusion

In this submission, I have attempted to maintain a clear distinction between matters constitutional and matters political, though these elements are clearly interwoven. I hope that what I have been able to offer is of assistance to the Committee in its’ deliberations.

December 2011

Written evidence submitted by Peter Kellner, President, YouGov

The purpose of this note is to consider some of the issues that could arise should the proposed referendum in Scotland invite voters to consider three options rather than two.

I shall label these three options, “status quo”, “devo-max” and “independence”. For the purpose of this analysis, however, the precise labels do not matter; my central argument is that any three-option referendum raises issues that at one level are technical but, at another, raise questions about the nature of a democratically legitimate outcome.

Of course, a decisive outcome could dispel all doubts. If, say, 60% of voters prefer one option, and 20% each of the other two, then the result is beyond question. The problems would arise if none of the three is the first choice of a majority of voters.

These are various ways in which a three-option referendum could be held. And the choice of system could decide the outcome. Here are five examples of different approaches to a three- option referendum.

1. First-past-the-post

Scots would put a cross against their favourite system, just as they plump for their favourite candidate in general elections. Suppose this produces the following result:

Status quo: 34% Devo-max: 30% Independence: 36%

The most popular choice is independence. Scotland would go its own way, even though fewer than 50% of Scots voted for this outcome.

2. Alternative vote

This is the system proposed for Westminster and rejected in last May’s UK-wide referendum. People put a ‘1’ against their favourite option/candidate, ‘2’ against their second, and so on. The winner needs 50% support.

Suppose my FPTP example above reflects first choices. None of the options passes the 50% mark, so the least popular choice, devo-max, is eliminated. This would bring into play the second choices of the 30% who put a ‘1’ against devo-max. Suppose they divide 20-10 in favour of the status quo rather than independence. Then the final outcome would be:

Status quo: 34% + 20% = 54% Independence: 36% + 10% = 46%

On these figures, the status quo would prevail.

3. Two questions – version a

This is the method that Scotland’s First Minister has been reported to favour. People would be asked two questions: would they favour or oppose a move from the status quo to devo-max; and would they favour or oppose full independence?

I would expect a large majority of supporters of independence to prefer devo-max to the status quo. In my example, suppose the 36% supporting independence divides 28-8% for devo-max. Then the referendum would produce a clear 58-42% majority for devo-max over the status quo, while (assuming the same calculations as in system 2 above) rejecting independence by 54- 46%.

4. Two questions – version b

The first question would ask people whether they wanted to keep the status quo or change to a different system. The second question would ask which system people wanted if change were to take place. If the first question produced a majority for the status quo, that would be the end of the matter. But if a majority wanted the system to change, then the results of the second question would decide which change was implemented. In my example, devo-max would again emerge as the winner.

5. Condorcet voting

The eighteenth century French philosopher, Marquis de Condorcet, proposed a new way to establish which option is preferred more than any other when three or more options are on offer. His method can be likened to as a mini soccer league, with each option as different club. Under the Condorcet system, there would be three votes, equivalent to the three matches that would be needed for each option to ‘play’ each other. Thus voters would be asked three questions: a) would they prefer the status quo or devo-max? b) the status quo or independence? c) devo-max or independence?

In my scenario, these would be the results of the three votes:

Devo-max beats the status quo (assuming those who give independence as their first preference mainly prefer devo-max to the status quo)

The status quo beats independence

Devo-max beats independence

In this illustrative scenario, devo-max emerges as the preferred choice.

Those five methods produce three different outcomes, each of which could be deemed to be democratically legitimate. And although methods three, four and five produce the same outcome in this scenario, there are conditions under which they would not – or where there could at least be some doubt. Suppose support for independence rises, so that under method three, the two votes produce the following outcome:

Vote 1: Devo-max 65%, status quo 35% Vote 2: Independence 52%, status quo 48%

These results could be interpreted in two ways. Supporters of independence could claim a majority for their ambition, and argue that Scotland should move towards separation from the rest of the United Kingdom. Opponents of independence could argue that, implicitly, devo-max is more popular than independence, and that Scotland should remain within the United Kingdom but with greater “devo-max” powers.

Methods four and five would resolve this issue, by giving electors an explicit choice between devo-max and independence.

There is another way to proceed, which could remove doubts about democratic legitimacy. It would be to follow what New Zealand did twenty years ago when it decided to change its voting system.

New Zealand applied method four, as outlined above, but held two referendums. The first, on September 19, 1992, was a non-binding referendum. It asked voters two questions: did they want to change the country’s voting systems and, if change were to happen, which system would voters prefer?

On the first question, voters divided 85-15% in favour of change.

On the second question, a clear majority of just over 70% backed a mixed-member proportional system (MMP); the other three options gathered a combined total of just under 30%.

A second referendum was held a year later, on November 6, 1993. This was binding. It offered voters a straight choice – the status quo or MMP (as this had emerged as the favourite ‘change’ option in the first referendum). This produced a 54-46% vote for MMP. New Zealand’s election system was duly changed.

This two-referendum approach could be applied to Scotland. As outlined in method 4, the first referendum could ask (a) people whether they wanted to move away from the status quo, and (b) if change were to happen, would people prefer devo-max or independence.

If vote (a) produced a majority for the status quo, then that would be the end of the matter.

If vote (a) produced a majority for change, then Scotland’s Government would start negotiations with the British Government on how to implement in detail whichever option emerged victorious from vote (b).

When those negotiations were complete, a new referendum would be held – the status quo, or the arrangements (whether for devo max or independence) that had been negotiated with London.

In practice this is likely to produce the same outcome as a Condorcet-method referendum – although the dynamics of a two-referendum process mean that views could change between the first and second referendums (as they did in New Zealand: MMP won far less decisively in the second referendum than seemed likely after the first referendum).

Some people, such as Robert Hazell of the Constitution unit, have argued for a two-referendum process in any event, even if only two options are on offer: status quo or independence. This would allow people to judge the basic principle in the first referendum, and the outcome of detailed negotiations in the second. If three options are to be offered to Scotland’s voters, then a two-referendum process offers an added advantage: that the legitimacy of the final outcome would be largely proof against doubt and dispute.

February 2012

Written evidence submitted by Alan Page, Professor of Public Law, University of Dundee

Introduction

1. The question of the Scottish Parliament’s power to legislate for a referendum on independence needs to be seen in its proper political context. Last May’s Scottish parliamentary elections effectively decided that there should be a referendum on independence. The political question having been decided, two legal questions then arise: 1) ‘Does the Scottish Parliament have the power to legislate for a referendum on independence?’ and 2) ‘If it does not have the power, or its power is unclear, by what means and subject to what conditions might it be authorised to legislate for a referendum on independence?’ The first of these questions has been raised publicly by the UK government in recent weeks, essentially with a view to securing a voice in the process. That result having been successfully achieved, the focus has now shifted to the means by which the Scottish Parliament might be given the power – or else its power put beyond doubt – and the conditions if any to be attached to that power.

Does the Scottish Parliament have the power to legislate for a referendum on independence?

2. The relevant provisions of the Scotland Act are: section 29(2)(b), which provides that the Scottish Parliament has no power to make laws which ‘relate to’ reserved matters; Schedule 5, paragraph 1(b), which includes ‘the Union of the Kingdoms of Scotland and England’ among the matters reserved to the Westminster Parliament; and section 29(3), which provides that the question whether a provision of an Act of the Scottish Parliament ‘relates to’ a reserved matter ‘is to be determined … by reference to the purpose of the provision, having regard (among other things) to its effect in all the circumstances.’

3. Much has been made in recent weeks of the fact that the referendum legislation would ‘relate to’ the reserved matter of the Union of the Kingdoms of Scotland and England. The mere fact that a provision relates to a reserved matter, however, is not sufficient to condemn it. Were it to do so it would mean that the Scottish Parliament’s legislative competence would be severely limited. There are few Acts of the Scottish Parliament that cannot be said to be related to a reserved matter.

4. It is for that reason that the Act provides that the question whether a provision of an Act of the Scottish Parliament relates to a reserved matter is to be determined by reference to the purpose of the provision, having regard (among other things) to its effect in all the circumstances. It is only when a provision is directed to a reserved matter that it is liable to be struck down by the courts.

5. The difficulty with the purpose test, as the architects of the Scotland Act clearly recognised, is that a legislative provision seldom has one clear, unambiguous purpose. More commonly it may be said to have several purposes or, in the language of the Act, to relate to several matters. What the purpose test as laid down in section 29(3) of the Scotland Act requires the court to do therefore is to identify its dominant or true purpose - what it is really about - , for which purpose it is required to have regard among other things to its effect in all the circumstances. If, having had regard to its effect in all the circumstances, the court concludes that it is about a reserved matter, it falls to be struck down as being beyond the Scottish Parliament’s legislative competence.

6. What then is the true purpose of the referendum legislation? What is it really about? Is its purpose to further the Scottish government’s aim of achieving independence, as the United Kingdom government maintains? Or is it, in the words of the long title of the draft Referendum (Scotland) Bill, simply about seeking the views of people in Scotland on a proposal about the way Scotland is governed? 32

7. As is to be expected an inquiry into the purpose of the referendum legislation alone is likely to prove inconclusive. It is only when regard is had to the effect of the legislation, including its effect on the reserved matter of the Union, that it becomes clear in my opinion that its true purpose is not to solicit the views of people in Scotland on a proposal about the way Scotland is governed, but to further the Scottish government’s aim of achieving independence. A referendum is not a disinterested exercise in opinion gathering. It is embarked upon for a purpose – in this case to mobilise Scottish opinion in support of independence. The fact that there may not be a majority for independence does not in my view detract from the fact that that is its intended effect and hence its true purpose.

8. Faced with a referendum that asked ‘Do you agree that Scotland should become an independent country?’ it is my opinion therefore that a court would hold that it was about the reserved matter of the Union and hence that it was beyond the Scottish Parliament’s legislative competence.

Challenging the referendum legislation

9. Were the Scottish government to press ahead on the basis of its interpretation of the Scottish Parliament’s powers there is no question it would face a legal challenge. The challenge might be brought by the United Kingdom Law Officers before the Referendum (Scotland) Bill is presented for the Royal Assent, or, in the event of the Bill not being challenged by the Law Officers, by an individual once the Act was on the statute book. As I have indicated such a challenge in my view would be likely to be successful.

10. One would have to ask, however, what exactly such a challenge would achieve even if it were to be successful. It would not dispose of the question of the referendum - the Scottish government’s political mandate would remain intact. All that it would do would be to highlight the gap between the Scottish government’s political mandate and the Scottish Parliament’s powers under the Scotland Act.

11. That is why the focus has shifted, rightly in my view, from the essentially unproductive question of whether or not the Scottish Parliament has the power to legislate for a referendum on independence to the question of the means by which it might be authorised to hold a referendum and the conditions if any to be attached to that power.

Authorising the Scottish Parliament to legislate for a referendum on independence

12. The United Kingdom government’s consultation paper Scotland’s Constitutional Future identifies two ways in which the Scottish Parliament might be authorised to legislate for referendum on independence. The first is by means of an order under section 30 of the Scotland Act. The second is by means of primary legislation, which might take the form of a stand-alone Bill or an amendment to the current Scotland Bill.

13. A section 30 order offers a number of advantages. The first is that it can be made at any time. It is not therefore subject to the same time pressures as an amendment to the Scotland Bill. It would therefore allow negotiations between the two governments to continue, at least until the results of the Scottish government’s consultations on the draft Referendum (Scotland) Bill were known.

14. A second advantage of a section 30 order, assuming an amendment to the Scotland Bill were to be ruled out, is that it can be secured more quickly than a stand-alone Bill. But perhaps its most important advantage, over both a stand-alone Bill and an amendment to the Scotland Bill, is that it is not open to amendment. There is no possibility therefore of an agreement being overturned or amended against the two governments’ wishes. As things stand there cannot be complete confidence about the Coalition government’s capacity to deliver its side of any agreement. A section 30 order would provide that confidence. 33

Subject to what conditions?

15. This is a fast - or perhaps not so fast - moving area. Depending on which newspaper one reads agreement has been reached on the question of Electoral Commission oversight but not on the timing of the referendum, the number of questions on the ballot paper or the extent of the franchise. I have no observations on the timing of the referendum or the franchise. On the number of questions on the ballot paper, the point I would stress is that the existing devolution settlement is a highly flexible one. There is no limit to the adjustments that can be made – providing the political willingness to make those adjustments is there. The independence referendum need not therefore be seen as the last word in defining the relationship between Scotland and the rest of the United Kingdom.

Alan Page

February 2012 Written evidence submitted by Aidan O’Neill QC

1. INTRODUCTION 1.1 In preparation for the oral evidence session of Scottish Affairs Committee on Monday 27 February at 1.00 pm in connection with the Committee’s inquiry into The Referendum on Separation for Scotland, I have prepared the following brief for the assistance of the Committee.

1.2 In sum my evidence will be as follows: (1) Neither the Scottish Parliament nor the Scottish Ministers have the legal powers to hold a referendum on independence for Scotland under the Scotland Act 1998 in its current form. The devolved authorities in Scotland would have to be granted specific further powers by Westminster in order to make any such referendum by them lawful

(2) Similarly, neither the Scottish Parliament nor the Scottish Ministers have the legal powers to hold a referendum on further devolved powers short of independence for Scotland (“devo-max”) under the Scotland Act 1998 in its current form. The devolved authorities in Scotland would also have to be granted specific further powers by Westminster in order to make any such referendum by them lawful

(3) It is currently unclear what the effect of Scottish independence might have in relation to Scotland and the rest of the UK’s membership of and participation within other international organisations (for example the United Nations, the Security Council, NATO, the Council of Europe, G8). These are issues in which international law is more readily shaped by and blends into international politics

(4) Should Scotland become independent, there are good legal arguments based on EU law (rather than EU politics) to the effect that Scotland and the rest of the UK will be regarded as continuing Member States of the European Union on the basis that the Court of Justice of the European Union (“CJEU”) would wish to give primacy to the idea of individuals’ existing European Union citizenship continuing no matter the constitutional changes within Member States.

2. THE CONSTITUTIONAL POSITION OF THE SCOTTISH PARLIAMENT UNDER THE SCOTLAND ACT

2.1 The Scotland Act 1998 is premised on a unitary constitutional model (the United Kingdom as a “Nation State” rather than a “State of Nations”). Under this model legal power is devolved to Holyrood, but not divested from Westminster. On this constitutional analysis, Section 1(1) of Scotland Act provides that “there shall be a Scottish Parliament” because the Crown, acting on the advice of the Westminster Parliament, so wills it; not because the “Scottish people” has brought it into being.1 The Scotland Act modifies the terms, but maintains the fact, of Union between Scotland and England: section 37 states that “The

1 See AXA General Insurance Ltd v The Lord Advocate [2011] 3 WLR 871 per Lord Hope at para 46: “The Scottish Parliament takes its place under our constitutional arrangements as a self-standing democratically elected legislature. Its democratic mandate to make laws for the people of Scotland is beyond question. Acts that the Scottish Parliament enacts which are within its legislative competence enjoy, in that respect, the highest legal authority. The United Kingdom Parliament has vested in the Scottish Parliament the authority to make laws that are within its devolved competence. It is nevertheless a body to which decision making powers have been delegated. And it does not enjoy the sovereignty of the Crown in Parliament ... Sovereignty remains with the United Kingdom Parliament. The Scottish Parliament's power to legislate is not unconstrained. It cannot make or unmake any law it wishes.”

Union with Scotland Act 1706 and the Union with England Act 1707 have effect subject to this Act”.

2.2 The Westminster Parliament has set legally enforceable limits on the power of the Scottish Parliament by providing in Section 29 of the Scotland Act as follows “29.— Legislative competence (1) An Act of the Scottish Parliament is not law so far as any provision of the Act is outside the legislative competence of the Parliament. (2) A provision is outside that competence so far as any of the following paragraphs apply— (a) it would form part of the law of a country or territory other than Scotland, or confer or remove functions exercisable otherwise than in or as regards Scotland, (b) it relates to reserved matters … 2 2.3 Section 54(3) SA provides that it is outside the “devolved competence” of the Scottish Ministers to exercise any of their functions in any way which would be outside the legislative competence of the Scottish Parliament.

2.4 As the First Division noted in Imperial Tobacco v. Scottish Ministers (which concerned the issues as to whether sections 1(1) and 9 of the Tobacco and Primary Medical Services (Scotland) Act 2010 banning retail display of tobacco products and outlawing tobacco vending machines was outside the legislative competence of the Scottish Parliament and accordingly not law) even if one were to characterise the Scotland Act as a “constitutional statute”, that did not mean that there was any legal presumption in favour of the validity of the acts of the devolved authorities under the statute. 3 The Lord President observed that the purpose of the Scotland Act was “the division of functions between the Scottish Parliament and the United Kingdom Parliament. There is nothing in the statute or in its background which suggests that one should read the provisions of Schedule 5 [to the Scotland Act], or of any of the other provisions of the statute, expansively or restrictively.” While Lord Reed said this: [71] The Scotland Act is not a constitution, but an Act of Parliament. There are material differences. The context of the devolution of legislative and executive power within the United Kingdom is evidently different from that of establishing a constitution for an

2Imperial Tobacco v. Scottish Ministers [2012] CSIH 9 per Lord Brodie at para 164: “164. .. Section 29 defines the scope of the devolved power. It does so by identifying the characteristics of a provision which place it outside the legislative competence of the Parliament. The scheme whereby legislative competence is conferred on the Scottish Parliament is one where what is not specifically identified as being outside competence is devolved, albeit that in terms of section 28(7), the Parliament of the United Kingdom, consistent with its sovereign character, retains all of its pre-Act power to make law for Scotland (this is qualified in practice by the "Sewel Convention" in terms of which the Parliament of the United Kingdom will not legislate with regard to devolved matters without the consent of the Scottish Parliament).

3Imperial Tobacco v. Scottish Ministers [2012] CSIH 9 per Lord Brodie at para 182: 182 … Clearly, the broad purpose of the provisions of the Scotland Act to which reference was made in the course of discussion is the division of legislative competence as between the Scottish Parliament (by devolution) and the United Kingdom Parliament (by reservation). ….The provisions [of the Scotland Act] under scrutiny are undoubtedly constitutional but the values that they embody: that some powers should be devolved while others should be reserved, do not lend themselves to providing an answer to a question as to which precisely are the powers which have been devolved and which are the powers which have been reserved. …. Section 29 and Schedules 4 and 5 provide the mechanism for allocating legislative competence as between the two parliaments but I see there to be nothing in that mechanism or in the discernible purposes of the Act as having the result that in construing the relevant reservation one should, on the one hand, lean towards finding a matter to be devolved or, on the other, lean towards finding it to be reserved.

independent state such as Jamaica or Barbados, or a British overseas territory such as Bermuda. In form, the Scotland Act does not resemble the fundamental rights provisions of a constitution: its provisions are dense and detailed. The Scotland Act can also be amended more easily than a constitution: a factor which is relevant, since the difficulty of amending a constitution is often a reason for concluding that it was intended to be given a flexible interpretation. Although the UK Government's stated policy on legislation concerning devolved matters, 4 known colloquially as the Sewel Convention, may impose a political restriction upon Parliament's ability to amend the Scotland Act unilaterally, there have nevertheless been many amendments made to the Act. They include amendments to Schedules 4 and 5, which can be effected under section 30 by Order in Council”

and

“[T]he power of the Scottish Parliament to legislate is limited by the Act of Parliament which established it. It is the function of the courts to interpret and apply those limits, when called upon to do so, so as to give effect to the intention of Parliament. In performing that function, the courts do not undermine democracy but protect it. As Lord Bridge of Harwich observed in X Ltd v Morgan-Grampian (Publishers) Ltd [1991] 1 AC 1, 48: ‘The maintenance of the rule of law is in every way as important in a free society as the democratic franchise. In our society the rule of law rests upon twin foundations: the sovereignty of the Queen in Parliament in making the law and the sovereignty of the Queen's courts in interpreting and applying the law’. 5

2.5 Thus any interested party may bring a challenge before the courts as to the compatibility of any Act of the Scottish Parliament (or action or inaction on the part of the Scottish Ministers) with the limitations on their powers as laid down in the Scotland Act. 6

4 Currently embodied in the Memorandum of Understanding and Supplementary Agreements Between the United Kingdom Government, the Scottish Ministers, the Welsh Ministers, and the Northern Ireland Executive Committee, Cm 7864, 2010, para 14

5 Imperial Tobacco v. Scottish Ministers [2012] CSIH 9 per Lord Reed at para 58:

6 AXA General Insurance Ltd v The Lord Advocate [2011] 3 WLR 871 per Lord Reed at paras 169-70: “169 … There is thus a public interest involved in judicial review proceedings, whether or not private rights may also be affected. A public authority can violate the rule of law without infringing the rights of any individual: if, for example, the duty which it fails to perform is not owed to any specific person, or the powers which it exceeds do not trespass upon property or other private rights. A rights-based approach to standing is therefore incompatible with the performance of the courts’ function of preserving the rule of law, so far as that function requires the court to go beyond the protection of private rights: in particular, so far as it requires the courts to exercise a supervisory jurisdiction. The exercise of that jurisdiction necessarily requires a different approach to standing.

170 For the reasons I have explained, such an approach cannot be based upon the concept of rights, and must instead be based upon the concept of interests. A requirement that the applicant demonstrate an interest in the matter complained of will not however operate satisfactorily if it is applied in the same way in all contexts. In some contexts, it is appropriate to require an applicant for judicial review to demonstrate that he has a particular interest in the matter complained of: the type of interest which is relevant, and therefore required in order to have standing, will depend upon the particular context. In other situations, such as where the excess or misuse of power affects the public generally, insistence upon a particular interest could prevent the matter being brought before the court, and that in turn might disable the court from performing its function to protect the rule of law.” 3. REFERENDUM ON SCOTTISH INDEPENDENCE

3.1 Paragraph 1 of Schedule 5 to the Scotland Act states that: “The following aspects of the constitution are reserved matters, that is— (a) the Crown, including succession to the Crown and a regency, (b) the Union of the Kingdoms of Scotland and England, (c) the Parliament of the United Kingdom”

3.2 Thus any Act of the Scottish Parliament which “relates to” the union between Scotland and England, or the constitutional position of the Crown or the UK Parliament, will simply not be law because any such Act would be outside the legislative competence of the Scottish Parliament to pass. On the face of it, this presents an insurmountable legal obstacle to the Scottish Parliament enacting any law which would provide for an independence referendum to be held in Scotland. How else might any such measure, in terms of both its purpose and effect, 7 be described other than as “relating to” these reserved aspects of the constitution ? And, Lord Sewell, the promoter of the Scotland Bill in the House of Lords, advised Parliament: “[A]s the Bill stands the Scottish Parliament will not be able to legislate to hold a referendum on independence as the union of the kingdoms is already a reserved matter. …. [L]egislation for a referendum on independence would be legislation about whether the Union should be maintained and so be beyond the competence of the [Scottish] parliament.” 8

3.3 And in promoting the Scotland Bill before the House of Commons, the then Secretary of State for Scotland Donald Dewar MP said in response to three direct questions from MPs as to whether or not the Scottish Parliament of itself could initiate a referendum on independence that: “It is clear that constitutional change--the political bones of the parliamentary system and any alteration to that system--is a reserved matter. That would obviously include any change or any preparations for change ….A referendum that purported to pave the way for something that was ultra vires is itself ultra vires…..[M]atters relating to reserved matters are also reserved. It would not be competent for the Scottish Parliament to spend money on such a matter in those circumstances.” 9

3.4 The current SNP led Scottish administration has previously argued that it would nonetheless be lawful for the Scottish Parliament to make provision for an “advisory” referendum on independence which was not “legally binding” but which would, it is said, give the Scottish government a political mandate to open “independence negotiations”

7Martin v Most, 2010 SC (UKSC) 40 per Lord Walkers at paras 44, 46 and 49, in relation to the task of defining the legislative competence of the Scottish Parliament: “That task is different from defining the division of legislative power between one federal legislature and several provincial or state legislatures (as in Canada or Australia, whose constitutional difficulties the Judicial Committee of the Privy Council used to wrestle with, often to the dissatisfaction of those dominions) ... These background matters must have been in the mind of those who undertook the drafting of the Scotland Act (and in particular the provisions directly relevant to these appeals). But in the Scotland Act Parliament has gone further, and has used more finely modulated language, in trying to explain its legislative purpose as regards 'reserved matters'….. [The expression ‘relates to’] is an expression which is familiar in this sort of context, indicating more than a loose or consequential connection, and the language of section 29(3), referring to a provision's purpose and effect, reinforces that.”

8 http://www.publications.parliament.uk/pa/ld199798/ldhansrd/vo980721/text/80721-32.htm

9 http://www.publications.parliament.uk/pa/cm199798/cmhansrd/vo980512/debtext/80512-35.htm with the UK Government. No formal legal advice to this effect has been published by the Scottish Government.

3.5 But the argument that the devolved authorities in Scotland have power to organise a non- binding referendum which relates to reserved matters, but not a binding one would seem to be difficult one to sustain before a court in the face of any challenge to the legality of such provision by the Scottish Parliament for the following reasons, among others: (i) given the principle that a delegated authority cannot itself further delegate power or fetter the discretion statutorily granted to it, no referendum ever organised by the Scottish Parliament could ever said to be “binding” on it, so the purported distinction between “binding” and “non-binding” referendums is meaningless;

(ii) neither the Scottish Parliament or the Scottish Ministers has any power to alter the terms of (and limitations imposed by) the Scotland Act itself (see paragraph 4 of Schedule 4 SA). And no referendum organised by the devolved authorities could ever bring it within their powers to make any provision relating to the dissolution of the Union of Scotland and England. Accordingly any expenditure of Scottish public monies by the Scottish devolved authorities in organising and holding any referendum could potentially be subject to challenge before the courts as irrational, and so unlawful;

(iii) the claim to be able to hold any such referendum runs contrary to the understanding and intention of the UK Parliament when passing the Scotland Bill.

3.6 There is no doubt, however, that the UK Parliament has the power to make arrangements for referendums anywhere within the UK on such issues as it wishes to consult the people on. The UK Parliament may therefore itself hold a UK dissolution/Scottish independence referendum or confer, on such conditions as it consider proper, power on the Scottish Parliament to make provision for such a referendum. Further under Section 30(2) SA the UK Government may by Order in Council modify the terms of Schedule 4 and 5 of the Scotland Act as it may consider “necessary or expedient”.

3.7 In a statement to the UK Parliament on 10 January 2011 Michael Moore MP, the Secretary of State for Scotland, has stated that it remains the view of the current UK Government – consistently with the position taken by Lord Sewel in 1997 - that the Scottish devolved authorities had no power to legislate for an independence referendum, since its purpose and intended effect would ultimately be to seek to achieve Scottish independence. The UK Government rejects the claim that one could distinguish in law between a binding and non-binding referendum for these purposes. The UK Government has therefore decided that - following a public consultation process 10 as to the timing and terms of and process for any such referendum - to provide the necessary powers to the devolved authorities for such a referendum to be held by them in Scotland.

3.8 As regards the political/moral legitimacy of Westminster so intervening in “internal” Scottish affairs, it may be noted that in the 2010 General elections to the UK Parliament, of the 59 MPs elected from Scotland, only 6 were from Scottish Nationalist Party, with the remaining 53 of Scotland’s MPs being made up of parties (Labour, Conservative and Liberal Democrats) all committed to the maintenance of the union between Scotland and England. Unionist MPs in the Westminster Parliament therefore claim to have a political

10 See Scotland’s constitutional future: a consultation on facilitating a legal, fair and decisive referendum on whether Scotland should leave the United Kingdom CM 8203 (January 2011) available at http://www.scotlandoffice.gov.uk/scotlandoffice/files/17779-Cm-8203.pdf and democratic mandate from the people of Scotland on this matter, just as much as (if not more than) the nationalist MSPs in the Scottish Parliament.

4. REFERENDUM (QUESTION) ON INCREASING THE POWERS OF THE SCOTTISH PARLIAMENT

4.1 In its own January 2012 consultation paper Your Scotland, your referendum the Scottish Government has said this “Powers of the Scottish Parliament to legislate for a referendum “1.5 A wide range of opinion has been expressed about whether or not the Scottish Parliament has the power to hold a referendum consulting the Scottish people about independence. The Scottish Government’s February 2010 paper set out a referendum question asking whether the powers of the Scottish Parliament should be extended to enable independence to be achieved. The Scottish Parliament has the power to legislate for a referendum as long as that would not change any reserved law or relate to those aspects of the constitution which are reserved by the Scotland Act 1998. The referendum question proposed in 2010 was carefully phrased to comply with that requirement. Much independent legal opinion supports the Scottish Government’s view.

1.6 What is not in question is the competence of the Scottish Parliament to legislate for a referendum about changes to the powers of the Scottish Parliament within the framework of devolution. Legislation to hold a referendum on “devolution max” for example … is clearly within the existing powers of the Scottish Parliament. …. 1.25 While the Scottish Government’s preferred policy is independence, it recognises that there is support across Scotland – from individuals and organisations – for increased responsibilities for the Scottish Parliament short of independence. One option, full devolution (or “devolution max”) was set out in some detail in Your Scotland, Your Voice and associated, more detailed publications. Under this option, the Scottish Parliament would, with certain exceptions, be responsible for all laws, taxes and duties in Scotland. The main exceptions, which would continue to be the responsibility of the UK Parliament, would include defence and foreign affairs, financial regulation, monetary policy and the currency. Short of independence, this option would confer significant economic powers on the Scottish Parliament.” 11

4.2 I am afraid that I do not share the Scottish Government’s expressed confidence that: “legislation to hold a referendum on ‘devolution max’ for example … is clearly within the existing powers of the Scottish Parliament.”

There is no doubt that the Scottish Parliament has power to organise referendums or polls in relation to devolved matters. However the issue of whether the Scotland Act should be altered to allow for further powers to be devolved to the Scottish Parliament by Westminster is not a devolved matter. Instead Paragraph 4(1) of Schedule 4 to the Scotland Act 1998 says in terms that: “An Act of the Scottish Parliament cannot modify or confer power by subordinate legislation to modify this Act.”

4.3 A “devo-max referendum” organised and funded by the Scottish devolved authorities without specific further authorisation from Westminster, would arguably therefore also be ultra vires as being any attempt by the Scottish Parliament to widen the scope of its

11 http://www.scotland.gov.uk/Resource/0038/00386122.pdf

legislative competence as defined in Schedules 4 and 5.12 The lawfulness of any such referendum might also be made the subject of a challenge before court as an abuse of powers by the Scottish Parliament and the Scottish Ministers on the basis that organising and holding referendum would involve the devolved authorities in spending public money and otherwise using public resources to ask a question in relation to a matter which it has no power to effect, namely further amendment of the Scotland Act to give the Scottish Parliament more powers.

5. AN INDEPENDENT SCOTLAND AND INTERNATIONAL ORGANISATIONS 5.1 Arabella Thorp and Gavin Thompson, researchers in the International Affairs and Defence Section and the Economic Policy and Statistics Section of the House of Commons Library Research have jointly authored - for the benefit of UK Parliamentarians - a short paper entitled Scotland, Independence and the EU. The authors consider the possible legal consequences for the EU and the UK of Scottish independence and state: “This is a major question in the independence debate, and one to which there is no clear answer. There is no precedent for a devolved part of an EU Member State becoming independent and having to determine its membership of the EU as a separate entity, and the question has given rise to widely different views.”

5.2 They note that there are at least three different possibilities under international law: (i) Scotland is to be regarded as a wholly new State, with the remaining Union of England Wales and Northern Ireland (EWNI) being treated in international law as a (territorially decreased) continuation of the UK. The authors cite the precedents of the 1947 partition of India and the creation of Pakistan, and of the 1962 translation of Algeria from a series of départements integrated into metropolitan France to an independent State.

(ii) Scotland and EWNI are each to be regarded as successor States to the divided UK. The authors refer in this context to the de-merger of the short-lived United Arab Republic (1958-1961) back into its original constituent States of Syria and Egypt

(iii) neither Scotland or EWNI are to be regarded as successor States to the dissolved UK. The authors here allude to the birth, in 1993, of two wholly new States, Slovakia and the Czech Republic, from the territory of the former Czechoslovakia.

5.3 On the first scenario (which Thorp and Thompson term “continuation and secession”) EWNI as the “continuing UK” would retain the UK’s pre-secession treaty obligations and its membership of international organisations, including the EU and NATO, the Council of Europe, the UN and the IMF. Scotland would start with a blank slate in terms of treaty rights and obligations, and would have to apply to be admitted in its own right as a new member of all and any international organisations.

5.4 On the second scenario (which they call “separation”) Scotland and EWNI would each succeed to the UK’s existing international commitments, and would each automatically accede to the international organisations of which the UK was a member, but now as two States rather than as one.

12 See DS v HM Advocate, 2007 SC (PC) 1, per Lord Hope para 23: “[T]he limits of the legislative competence of the Scottish Parliament are defined in sec 29(2). The matters listed there extend well beyond incompatibility with the Convention rights. They include legislation relating to reserved matters as defined in sch 5 and legislation which is in breach of the restrictions in sch 4. An attempt by the Scottish Parliament to widen the scope of its legislative competence as defined in those schedules will be met by the requirement [in Section 101] that any provision which could be read in such a way as to be outside competence must be read as narrowly as is required for it to be within competence.”

5.5 On the third scenario (which the authors describe as “dissolution”) neither Scotland and EWNI would succeed to any of the UK’s international obligations or memberships. Both States, newly independent of each other, would have to sign anew any treaties they wished to be bound by, and enter into negotiations with any international organisations they wished to be members of.

5.6 Of course, as the precedents of the break-up of the former USSR and the break-down of the former Yugoslavia show, the reality is likely to be more complex and one which may change over time. In international politics, just as much as international law, context is everything. Thus, some States and international organisations may choose to recognise EWNI as the “continuing UK”, or as the sole successor State to the UK. Others might prefer to hold both EWNI and Scotland to the UK’s prior obligations and memberships. And yet others could seek to take advantage of what they would characterise as the “dissolution” of the UK to escape the international obligations formerly owed to it, and/or to declare the UK’s previous membership of international organisations to be void. This is, in a sense, where international law runs out and international Realpolitik takes over. Everything depends on the particular terms of constitutions of international organisations, the extent of international recognition and the degree to which an international consensus is reached as to the status to be accorded to an independent Scotland and/or to a continuing UK shorn of its northern territories.

6. AN INDEPENDENT SCOTLAND AND THE EU

6.1 But what of the EU ? According to the Court of Justice of the European Union (the CJEU), the EU differs from other international organisations in being “based on the rule of law, inasmuch as neither the Member States nor its institutions can avoid a review of the question whether the measures adopted by them are in conformity with the basic constitutional charter, the Treaty.” 13 The Luxembourg Court has continually stressed the distinctiveness of the EU legal order from, and its primacy over, other systems of public international law, including the UN Charter, 14 noting as long ago as 1964 that: “By contrast with ordinary international treaties, the EEC Treaty has created its own legal system which, on the entry into force of the Treaty, became an integral part of the legal systems of the Member States and which their courts are bound to apply. By creating a Community of unlimited duration, having its own institutions, its own personality, its own legal capacity and capacity of representation on the international plane and, more particularly, real powers stemming from a limitation of sovereignty or a transfer of powers from the States to the Community, the Member States have limited their sovereign rights, albeit within limited fields, and have thus created a body of law which binds both their nationals and themselves. 15

6.2 From the perspective of the Court of Justice, EU law is an overarching supranational legal order binding on and enforced against the Member States. Membership of the EU may be likened to a form of international citizenship for nations. Just as the citizen cannot select obligations once citizenship has been accorded, so Member States may not reject Treaty obligations which prove uncongenial. And EU law – unlike general public international law – also imposes obligations and confers rights directly on individuals. Article 20(1) of the Treaty on the Functioning of the European Union (“TFEU”) re-asserts the concept of EU

13 Les Verts http://eur‐lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:61983CJ0294:EN:PDF

14 Kadi v. Commission http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62005CJ0402:EN:HTML

15 Costa v. ENEL http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:61964CJ0006:EN:PDF citizenship, first created in the 1992 Maastricht Treaty. The status of EU citizen is automatically afforded to “every person holding the nationality of a Member State” though and “citizenship of the Union shall be additional to and not replace national citizenship”. However, in Zambrano v Office national de l’emploi (ONEm) the CJEU Grand Chamber claimed that “citizenship of the Union is intended to be the fundamental status of nationals of the Member States. … In these circumstances, Article 20 TFEU precludes national measures which have the effect of depriving citizens of the Union of the genuine enjoyment of the substance of the rights conferred by virtue of their status as citizens of the Union.” 16 While the conferral on individuals of rights associated with national citizenship remains wholly within the exercise of the sovereign power of the Member States, the CJEU has held that the purported withdrawal of a Member State of national citizenship rights or status once conferred may bring matters within the ambit of EU law. Thus in Rottmann v Bavaria the Grand Chamber of the CJEU found that EU citizenship required a Member State to exercise its powers to deprive or withdraw an individual’s nationality compatibly with the principles of EU law. The fact that such issues fell centrally within the legal competence of the Member States did not, in the view of the Grand Chamber, preclude the concurrent application of EU law in this area. Because the exercise of that Member State power against its own nationals also directly affected the rights conferred on that Member State’s national qua EU citizen, the matter was held to fall within the jurisdiction of the CJEU as the ultimate guardian of the EU citizen’s EU law rights.

6.3 Further, the EU Charter of Fundamental Rights now has the same legal value as the Treaties (Article 6(1) Treaty on European Union). The opening recitals to the Charter’s preamble are in the following terms (emphasis added): “The peoples of Europe, in creating an ever closer union among them, are resolved to share a peaceful future based on common values. Conscious of its spiritual and moral heritage, the Union is founded on the indivisible, universal values of human dignity, freedom, equality and solidarity; it is based on the principles of democracy and the rule of law. It places the individual at the heart of its activities, by establishing the citizenship of the Union and by creating an area of freedom, security and justice.”

6.4 How do those considerations impact upon the question as to the effect, as a matter of EU law, of Scottish independence on the UK’s membership of the EU ? I would suggest that rather than analyse the matter from the classic viewpoint of public international law – which recognizes only States and international obligations as the subject and object of international rights and obligations – EU law requires one to look at the issue from the viewpoint of the individual EU citizen.

6.5 Seen from that angle, the question to ask is whether the CJEU would consider that the fact that Scotland became independent required that all (or any portion) of the previous UK citizenry thereby be deprived of their acquired rights as EU citizens ? Given the CJEU’s high theology of the primacy of EU law, and of EU citizenship as being “the fundamental status of nationals of the Member States”, it is suggested that the most likely position that the Luxembourg court would take, if faced with the question of Scottish independence, would be the second scenario - “separation”, as outlined by Thorp and Thompson above. That is to say that the CJEU would rule that Scotland and EWNI should each succeed to the UK’s existing membership of the EU, but now as two States rather than as one. Such a ruling by the Court would affirm the primacy of EU law over national and international law, confirm the role of the CJEU as the final arbiter on such weighty matters of State(s),

16 Zambrano v Office national de l’emploi (ONEm) http://eur- lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009CJ0034:EN:HTML and be presented as EU law re-connecting with, and protecting the acquired rights of, individual EU citizens. 17

6.6 The very form and structure of the EU Treaties might also lead the CJEU to refuse to countenance the possibility of any form of automatic secession from the EU, whether by the splitting of a Member State into two or more international persons or by any other mechanism not expressly provided for in the Treaties. The EU Treaties have been concluded for an unlimited period (see Article 53 TEU). Indeed, until the insertion of a new Article 50 TEU by the 2007 Lisbon Treaty, the Treaties contained no provision for the secession or unilateral withdrawal of Member States from the EU. Before that, a State or part thereof might leave the EU not by unilateral act, but only after negotiation and agreement; thus, in 1985, Greenland left the EU after formal amendment of the Treaty. Article 50(3) TEU now provides that the Treaties shall cease to apply to a Member State from the date of entry into force of any withdrawal agreement; or failing which, two years from the date of notification of withdrawal has formally been given by the Member State to the European Council. In sum, a Member State can now lawfully get out of the EU, but only by timeously and expressly applying so to do.

6.7 So, contrary perhaps to the as yet unexpressed hopes of some UK Eurosceptics, Scottish independence is unlikely to provide either Scotland or the rest of the UK with a “get out of (EU-) gaol free” card. But the implications for the UK’s other international obligations, relations and memberships would remain to be determined should Scotland ever leave the (British) Union.

February 2012

17 See for example Case C-399/09 Marie Landtová v Česká správa socialního zabezpečení 22 June [2011] ECR I-nyr (http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:62009CJ0399:EN:HTML) where the Court of Justice (controversially) ruled that a national rule allows payment of a supplement to old age benefit solely to Czech nationals residing in the territory of the Czech Republic was contrary to EU law. The case concerned a Czech national who worked from 1964 until 31 December 1992 in Czechoslovakia. After the dissolution of Czechoslovakia, she then worked until 31 August 1993 in the territory of the Slovak Republic, and then, from 1 September 1993, in the territory of the Czech Republic. The EU law rights of Czech and Slovak nationals qua EU nationals not to be discriminated against trumped the constitutional arrangements which had been entered into by the two new States in connection with the dissolution of Czechoslovakia. Written evidence submitted by John Kay

Banking and Currency in Scotland, The Implications of the Crisis of 2008

If Scotland had been independent in 2008, and events in the banking sector had evolved in a similar way, there would have been three broad categories of action available to the Scottish government:

The support option: the Scottish government would guarantee most or all of the liabilities of Scottish banks

The internationalist option: the Scottish central bank would take the lead in an international support operation for these banks

The resolution option: the companies would go into some form of administration while the Scottish government took control of their retail and commercial activities within Scotland. Although the head offices of both banks were in Edinburgh, both had substantial activities elsewhere. Only about one in six of the more than 200,000 employees of HBOS and RBS worked in Scotland, and both employed more people in England than in Scotland. Any government faced with the collapse of banks whose head offices are located within its territory, but whose activities are mostly located outside it, faces similar.

Ireland adopted the first option, of guaranteeing all liabilities, and it was a mistake. Certainly it is not a decision which could responsibly have been made in Scotland. The liabilities of the two Scottish banks amounted to about 30 times Scottish GDP, or almost three-quarters of a million pounds per inhabitant of Scotland. Both these figures are substantially higher than the corresponding figure even for Iceland. Not only do most inhabitants of Scotland not have three quarters of a million pounds, but they do not expect to earn three-quarters of a million pounds in the course of their lifetime. The rationale of such support is even less persuasive in the Scottish case. As in Iceland (and in contrast to Ireland) the activities which led to the collapse of the Scottish banks mostly took place outside the country.

Once the scale of the problems faced by the Scottish banks become evident, the Scottish government’s guarantee would simple not have been credible. Markets would have asked whether Scottish taxpayers would be willing or able to meet the potential liabilities. They would not have been readily convinced that political support for such action would continue even if Scotland had the capacity to meet these obligations. The government which had made such a commitment would have been turfed out, and deservedly so, as the Irish government was. Before that point the Scottish government would have had to seek international assistance, or abandon its pledges.

Of course, there are assets on the other side of the balance sheet, and assets of better quality than those on the balance sheets of the Icelandic banks. But not only could the Scottish government not have known, even approximately, what their assets were worth, it is now evident the banks themselves did not know, even approximately, what these assets were worth. Senior executives of HBOS and RBS continued to give Panglossian accounts of their situation – evidently in good faith – until they were removed from office. The quality of Lloyds’ due diligence on HBOS appears to have been execrable although Lloyds had greater capacity to undertake such diligence than any government, more time, and more incentive to do so.

But the central point is that a calculation that treats the liabilities of banks whose head offices are in Scotland as liabilities of the population of Scotland cannot be appropriate. There is no possible explanation of why a Scottish taxpayer should pay off foreign institutions which made loans to ABN-Amro. The size of the liabilities of the Scottish banks makes the absurdity of such an assertion particularly clear. But it does not matter whether the denominator of the calculation is the population of Scotland, the population of the UK, or the population of Edinburgh. The liabilities of Scottish headquartered banks are not liabilities of the Scottish people, either morally or legally. The support option would have been extremely risky, was almost certainly not sustainable, and could not in any event have been justified to Scotland’s taxpayers.

The specific nature of the second option, the international alternative, depends on the monetary arrangements adopted by an independent Scotland. The logic of independence might point to a freely floating Scottish currency. The experience of small European countries which have followed this route, such as the Scandinavian states which remain outside the eurozone, is that there is a strong de facto link to European monetary and exchange rate policy.

The experience of Iceland illustrates the extent to which vulnerability is the corollary to freedom of action. Iceland considerably aggravated its difficulties by failing to accept advice or practical help from other Nordic countries until its crisis was unmanageable. There are serious limits to the reality of economic independence in a global world.

An independent Scotland might have broken the link to sterling and joined the eurozone. The Irish comparison offers a mixed verdict. Ireland’s link to the euro and particularly to European interest rates contributed substantially to the inflationary boom in Ireland during the years up to 2007. But after the virtual collapse of the Irish banking system in the autumn of 2008, the resources of the European Central bank, and the implied support of European institutions, put Ireland in a stronger position as a eurozone member than if the country had enjoyed monetary independence. But the cost of European support was a serious loss of autonomy, as the new Irish government elected in 2011 would soon learn.

Probably the best alternative, and probably also the likeliest, is a continued monetary union with England. A Scottish peg to the pound sterling might be an informal arrangement. For many decades following Irish independence, that country linked its currency to the pound sterling in this way, effectively bound by UK monetary policy but playing no part in its formulation. But an informal peg would leave Scotland almost as vulnerable in the event of a specifically Scottish crisis – such as the collapse of Scottish banks – as with a freely floating currency.

An alternative possibility involves a formal monetary union with England. The specific institutional arrangements for this would no doubt have been negotiated as part of the overall discussions surrounding any independence settlement. Plainly, if there were such a monetary union, there would also need to be some kind of growth and stability pact. An English government would not in future be likely to agree to enforcement mechanisms as ineffectual as those of the European Growth and Stability Pact. Although a formal monetary union might offer some Scottish influence – probably slight – on the monetary policies of the currency union, the price is a significant loss of the fiscal autonomy which might be an aspiration of independence. Of course, the apparent loss of political freedom is only an acknowledgement of the limited economic autonomy available to a country whose principal trading partner is its much larger neighbour.

If Scotland pursued the internationalist option within a British monetary union it would have been to London and Washington, rather than Brussels and Frankfurt, that the first calls would have been made when the Scottish banks faced failure. RBS had large retail operations in England and the United States, and London was the central location of its wholesale trading. The Scottish central bank governor might reasonably have been asked to explore a support operation in which the US and English governments took the principal role.

In the circumstances of October 2008, it is likely that willingness to provide such support would have been forthcoming. That is not, of course, the same as saying that it would have proved possible to reach an agreement. In the most closely analogous case – the collapse of Fortis, the equally unhappy partner of RBS in the ABN-Amro takeover – an agreement between the governments of Belgium, the Netherlands and Luxembourg to provide support fell apart when the scale of the losses became apparent. The Dutch and Belgians took unilateral action to assume control of operations in their own countries, and the dispute was acrimonious. The failure of Fortis led to the fall of the Belgian government – not, it should be acknowledged, an infrequent occurrence.

The funds provided to Fortis by the national governments and the proceeds of sales of divested units were, however, sufficient to enable the holding company to remain solvent. The liabilities of the wholesale creditors of the bank were therefore discharged and insolvency avoided. But Fortis was predominantly a retail financial institution and its wholesale liabilities were not remotely on the scale of those of RBS.

That draws attention to the third option available. The resolution option is the default option – it is the one that will follow if there is no unilateral bailout (the support option) or international agreement (the internationalist option). Understanding the consequences of the resolution option is therefore necessary to determine how much effort, if any, should be devoted to pursuing the alternatives.

In the case of RBS and HBOS, resolution would imply that the Scottish Government would take control of the Scottish retail and commercial activities of the bank while the company as a whole went into administration. The presumption would be that the English and US governments would do the same in respect of commercial banking operations in their own countries.

The English government would have had the option of acquiring the investment banking and trading operations of the Scottish bank. Such an option might be exercised through emergency legislation in England, purchase from the administrators, or an immediate offer to the holding company. The Scottish government would have a similar option, though it would have been extremely foolish to have exercised it. It would also have been extremely foolish for the English government to have exercised that option, but perhaps more likely that it would. There would have been strong pressure from the international financial community to follow that course.

Even if Scotland had been part of a monetary union with England, there could – and probably would - have been a distinct Scottish regulatory authority. The issues of monetary policy and financial regulation are substantially separable. In this scenario, although the Bank of England would have retained responsibility for the monetary policy of an independent Scotland, neither the Bank nor the FSA would have exercised a regulatory role north of the border. Regulation in Scotland would, however, have to be undertaken in an international and European context

Would an independent Scotland regulatory authority have managed matters better than the United Kingdom’s FSA? There are two conflicting considerations here. Small countries are more vulnerable to what is often called crony capitalism. The business and political elite consists of a limited number of people, who know each other well. There is a perception of common interest. In many respects this community of interest is valuable – homogeneity of outlook and informality of process can be a competitive advantage in business, and small European states have derived economic benefit from it. But in both Iceland and Ireland the links between politics and finance were certainly inappropriate if not actually corrupt. Crony capitalism contributed centrally to the financial crisis in both countries.

It is hard to believe that Scotland would have entirely avoided similar dangers. The palpable – and justified – pride which was taken in Scotland over the international expansion of the Royal Bank would almost inevitably have encouraged an identity of interest between the Scottish Government and Scotland’s largest business. Nor would such an involvement have been wholly a bad thing. But it would almost certainly have been a bad thing when regulatory action to constrain excessive risk taking or to discourage unduly ambitious acquisitions was required. Excess of ambition and willingness to accept risk was characteristic of both major Scottish banks in the years before 2007.

There is, however, an opposing consideration. Some countries were more effective than others in anticipating and restraining excess in their financial services industry. Many of the states who achieved this are small, and Australia and Canada are conspicuous among them. The more restrictive and conservative stance of financial services regulators in these countries was one differentiating factor. Scotland might plausibly have been more like Australia and Canada than England or the United States.

But the issue is complex. The regulatory stance is not exogenous. Regulatory capture – the tendency of regulator to see the industry through the eyes of the principal firms in the industry - is endemic in financial services. If Britain and the United States got the regulation the City and Wall Street wanted, Canada and Australia got the regulation Toronto and Melbourne wanted. Regulation in these countries bolstered what was already a more conservative banking culture. The influence of retail bankers on conglomerate banks in Canada and Australia was much greater than in the UK where American investment banks, and other banks which had adopted their culture, have been the dominant force.

It is certainly possible that Scotland might have been more like Canada and Australia, and that a relationship between regulators and bankers might have sustained the traditionally more conservative Scottish financial services culture in the face of international and market pressures in the years up to the crisis. We do not know. We do know that distinguished boards of RBS and HBOS failed to restrain excessive ambitions and risk taking on the part of senior executives mostly drawn from that Scottish banking tradition. A Scottish regulatory authority might have done better but there is no compelling reason to think it would.

The cost, or strictly speaking the exposure, which the UK government incurred in bailing out the Scottish banks would have been beyond the resources of the Scottish government. Some have drawn from this the conclusion that Scottish independence, even if desirable, is an impracticable dream. This view has been canvassed since the events of October 2008, and the crisis of the Scottish banks has substantially damaged the cause of Scottish independence among thoughtful people in Scotland and outside it.

The premise that Scotland could not have handled the bailouts as the UK government did is correct. But the conclusion that this demonstrates the impossibility of independence is wrong. The Scottish government probably would not, and certainly should not, have done what the UK government did. But although the UK government was able to do what it did, the UK government did not need to do it, should not have done it and should certainly not do it again.

RBS and HBOS, like other financial institutions, received support from the UK government because these organisations were viewed as ‘too big to fail’. But neither a democratic society nor a market economy can contemplate private sector organisations that are ‘too big to fail’. Such a company represents a concentration of unaccountable private power, answerable neither to an electorate nor to a market place.

And ‘too big to fail’ destroys the dynamism that is the central achievement of the market economy.

It is preposterous to suggest that since modern diversified conglomerate banks are ‘too big to fail’, it is necessary to create governments whose resources are many times larger than those of diversified conglomerate banks. The ‘too big to fail’ problem must be tackled in other ways than adapting our political system to the aspirations and needs of megalomaniac financiers, and it can be tackled in other ways.

Limits on the size of banks are urged by some, but it is more important to limit their scope than to limit their scale. Financial conglomerates are riven by clashes of culture and conflicts of interests: contagion within institutions has meant that failures in relatively small parts of their operations have jeopardised the survival of the entire company. The government guaranteed retail deposit base has been used as collateral for speculative trading in wholesale financial markets.

Far from making financial conglomerates necessary, financial innovation has reduced the necessary size and scope of banks by establishing active markets in risk and maturity transformation. These developments mean that diversification need no longer be managed within a single institution. Financial innovations are capable of reducing substantially the risks associated with retail banking, but have been used inappropriately to bring about precisely the opposite result as the wholesale operations of banks have not only assumed but magnified the risks that their retail arms have discarded.

The best future model for Scottish financial institutions is one in which the utility of normal commercial banking is separate from the casino of investment banking. Retail banking should return to a conservative model. Risk-taking activities should be undertaken only by people who not only have skin in the game – who share losses as well as profits - but who derive capital, both debt and equity, from external investors who have a direct commercial relationship with the risk takers. The history of financial services in Scotland since the eighteenth century has been one in which a reputation for prudence has been no obstacle to ambition. The events of recent years, in which ambition ran ahead of prudence, proved in the long run to damage rather than to enhance competitive advantage.

But the banking crisis and the 2007-8 crisis more generally does illustrate the limits of the economic independence or autonomy which Scotland – or any small country – can enjoy while it participates in a global trading environment and capital market. Scotland will inevitably either be part of an explicit currency union, or at least have its currency formally or informally linked to the currency of larger states. Such linkage has implications not only for monetary policy, but also for policy towards the financial sector and inevitably involves restrictions on fiscal policy as well. But the banking crisis neither strengthens or weakens the case for greater autonomy or independence for Scotland.

February 2012 Written evidence submitted by Iain McLean, Professor of Politics, Oxford University

A 3-option referendum

1. There is considerable interest in a referendum (or referendum question) inviting Scottish voters to vote for or against something currently labelled as “devolution-max”. Those promoting such a question wish it to be put in addition to the referendum question on Scottish independence, the terms of which are currently being negotiated by the Scottish and UK governments.

2. One motive for such a demand is that “devolution-max”, although currently undefined, appears to have majority support in Scotland. The most reputable opinion poll series, Scottish Social Attitudes, has shown that for two decades the largest single group of respondents have opposed Scottish independence, but have favoured more powers for the Scottish Parliament. There are as yet no reliable figures to say whether or not opinion has moved since the recent announcement by the Scottish Government of its plan for an independence referendum, and the UK Government’s response.

3. The academic discipline known as “social choice”, that is, the mathematical study of the properties of choice and election systems, has existed for over 200 years and has a lot to say on the practicality of a 3-option referendum; but it has not featured in policy discussions to date.

4. The most relevant result is that if opinion is single-peaked, then any well-behaved choice system will select the majority-winning option. I define these terms below.

5. Opinion is single-peaked if the options can be arranged in some order such that nobody ranks the middle option(s) lowest. Opinion on constitutional options for Scotland would this be single-peaked if, for instance, everybody whose first preference was Scottish independence ranked devolution-max above no change, and everybody whose first preference was no change ranked devolution-max above Scottish independence.

6. A majority-winning option is an option which wins a majority in straight comparisons with each (all) of the other options on offer.

7. A well-behaved choice system is one which always selects the majority-winning option when one exists. There are rare circumstances, known as a “cycle”, in which no majority-winning option exists (i.e., A beats B, which beats C, which beats A). Although of great theoretical interest, this possibility is probably not relevant to the Committee’s current inquiry. However, it must be considered by Parliamentary draftsmen (see below).

8. These criteria rule out an option which has been canvassed: namely using the Alternative Vote (AV), as proposed unsuccessfully for House of Commons elections in 2010-11. Under Alternative Vote, each voter lists the options in order of preference 1,2,3... If no option gains more than half of the vote, the option with fewest first preferences is eliminated, and those ballot papers are reassigned according to the second preference (if any) on each of them.

9. Whether or not AV would have been a good system for electing multiple candidates such as MPs (on which I express no opinion), it is a terrible system for any situation such as a referendum where a single option must be chosen, because it is not well-behaved as defined above.

10. It may fail to select a majority winner when one exists. This would be a fundamental violation of majority rule.

11. On the other hand, failure to put a “devolution-max” option up for voting might also lead to a perverse result. This may be illustrated from the history of the referendum on an Australian republic held in 1999.

12. Three options were being publicly discussed at the time: A: no change, Australia continues as a constitutional monarchy; B: Australia becomes a republic with its head of state chosen by both houses of Parliament; C: Australia becomes a republic with a directly elected head of state.

13. The only option that appeared on the ballot was B. It was defeated and the status quo A therefore remained.

14. However, robust poll evidence shows that the majority of Australian voters preferred C to both B and A. The referendum failed to choose the majority winner.

15. The decision to put only a single option up for voting probably had two motives, one sound and the other unsound. The sound reason is that multi-choice referenda are difficult to conduct and to interpret. The unsound reason is that Australian policy- makers assumed that the people of Australia would see B as intermediate between A and C. Therefore they assumed that public opinion would be single-peaked, with B being the option that nobody placed last. However, the monarchist campaign cleverly did not defend A but attacked B on the grounds that “you don’t want a bunch of politicians to choose your head of state, do you?”

16. I conclude that, PROVIDING that devolution-max can be defined to the satisfaction of the Electoral Commission, it would be desirable to have it as a ballot option.

17. This could be achieved by asking two questions independently (as in the Scottish referendum of 1997) or by putting both independence and devolution-max on the same ballot, but counting the votes by a well-behaved procedure.

18. Committee members will recall that in 1997 the ballot propositions were ‘I agree that there should be a Scottish Parliament’ and ‘I agree that a Scottish Parliament should have tax-varying powers.’ The result was Yes to both (74.3% of voters saying Yes to Q1 and 63.5% of voters saying Yes to Q2.)

19. The result was easy to interpret, as a Yes/No and a No/No result would equally have been. A No/Yes result might have seemed strange but would have been interpretable.

20. However, the procedure was not ideal even for the questions then on the ballot, because some voters did not have a straightforward choice: especially those voters who did not want a Scottish Parliament, but who thought that if the majority of voters supported it, it should have tax powers. It can be proved that this non- straightforwardness is an inescapable feature of a double-independent-question referendum such as that of 1997.

21. A more serious objection to copying the 1997 procedure is that, whereas in 1997 it was clear that a Yes/Yes implied support for a Parliament with tax powers, it is quite unclear what a Yes/Yes vote to both independence and devolution-max would imply.

22. The most difficult case, which is not at all unlikely, is a Yes to both independence and to devolution-max with the latter gaining higher support than the former. A Scottish government, if controlled by the SNP, would interpret such a result as a mandate for independence; a UK government would predictably resist that claim. Result, possible stalemate.

23. It is also unlikely that the Scottish and UK governments could come to an advance agreement on how to interpret such a result.

24. By elimination, therefore, I conclude that the best way to organise a referendum is by a single ballot in which voters are asked to rank both independence and devolution-max compared with the status quo. To the voter, the ballot paper would look identical to an AV ballot. The instructions to voters would state “please place a 1 against the option you most wish, and, if desired, a 2 against the option that is your second preference”. However, ballot papers which expressed only a first preference should still be treated as valid.

25. However, the counting procedure would be designed to find the majority winner by comparing A against B, A against C, and B against C. It would not be difficult to put this rule into Parliamentary language in a Bill or secondary legislation, nor would it be difficult to count, either by hand or with computer assistance. Such a procedure is known in the technical literature as a “Condorcet” procedure, after the Marquis de Condorcet (1743-94).

26. Nevertheless, the possibility of a cycle (see paragraph 7 above) always exists, however remote. Scottish opinion is probably single-peaked, but (as in Australia) policy-makers must not jump to such a conclusion prematurely.

27. The Bill (/statutory instrument) must therefore provide in advance for a cyclical outcome. The easiest solution would be, following parliamentary precedent, to say that in the event of a cycle the status quo prevails.

28. Everything in this note is based on the assumption that the questions to be asked, and any accompanying descriptions of the options, are subject to approval by the Electoral Commission, which I understand that both the Scottish and UK Governments accept should be the regulator of this referendum.

March 2012

Written evidence submitted by Vernon Bogdanor, Research Professor, Institute of Contemporary History, King’s College, London.

1. This evidence deals primarily with two problems. The first is whether the issue or issues to be decided in the referendum is for the Scottish electorate alone to decide; or whether the rest of the United Kingdom should also be consulted. The second is whether there should be a multi-option referendum. The evidence also discusses briefly the issues of eligibility to vote and timing.

2. Two fundamental principles need to be observed for a referendum to be legitimate. The first is that a referendum is held in the interests, not of governments or political parties, but of the electors. Its purpose is to allow voters to express their opinion on a major constitutional issue. The second is that the procedures to be held, including eligibility to vote and the precise wording of the question, should not be decided by those with an interest in the result. The players should not also be the referee. Therefore, such questions should be decided by the United Kingdom’s Electoral Commission which has an office in Edinburgh and a Commissioner with specific responsibility for Scotland.

3. The question of timing is a matter for political judgment. My own, for what it is worth, is that the sooner the referendum is held the better. There are a limited number of arguments for and against independence, and for and against devolution. To allow the next 30 months to be dominated by the constitutional debate would be harmful to British politics since it would distract attention from the many major economic and social issues in the United Kingdom which need to be confronted. Moreover, it would be likely to harm the Scottish economy since businesses may be unwilling to invest in Scotland amidst a climate of constitutional uncertainty. That was certainly the experience with Quebec before its two referendums on independence.

4. The issue of independence is one for the Scottish people alone; although of course the terms of independence must be a matter for negotiation between the Scottish government and the government of the United Kingdom. It is now generally conceded that if it is the settled wish of a particular part of the United Kingdom that it wishes to secede, it should be entitled to do so. The history of Britain’s relations with Ireland from 1885 to 1922 shows the danger of refusing to accept this principle.

5. The issue of further devolution – for example, devo-max – is not, however, one for the United Kingdom as a whole, for it alters the terms on which Scotland remains within the Union. In principle, there is no reason why there should not be a referendum on devo- max in the rest of the United Kingdom as well as in Scotland. But that would lead to problems were Scotland to vote `Yes’ to devo-max, and the rest of the United Kingdom to vote `No’. That, no doubt, is one of the reasons why the referendums on devolution in 1979 and 1997 were restricted to Scotland. MPs from the rest of the United Kingdom may be understood as having tacitly surrendered the right of those they represent to a referendum. There is a good reason for this. England is by far the largest part of the United Kingdom, containing around 85% of the population. If the English are united on an issue, their wishes will undoubtedly be reflected in Parliament. The continuation of the Union depends in large part on a sense of self-restraint on the part of the English. That self-restraint was not shown in relation to Ireland after 1885. It has so far been shown in relation to Scotland. Of course, at some point it is perfectly possible that English tolerance and patience will come to an end. If that happens the Union will come to an end. It will certainly come to an end were the English to insist on pressing their role as the dominant nation in the United Kingdom to its limits.

6. The issue of further devolution is very much on the political agenda. Alex Salmond, the First Minister of Scotland, has declared that while his favoured option is independence, he would like to see a third option of further devolution on the ballot paper in the referendum. The Prime Minister has indicated that, were the Scots to reject independence, the government would seek to implement a further unspecified measure of devolution. But he takes the view that the referendum should pose just a single question – whether or not the Scots should seek independence. His argument for this is that the referendum should produce a clear, decisive and unchallengeable outcome.

7. The difficulty with the Prime Minister’s position, however, is that the devo-max option seems at present to be the favoured option of the Scots, being more popular than either the status quo or independence. It would be odd to have a referendum in which the most favoured option were to be excluded from the ballot paper.

8. The United Kingdom referendum on the alternative vote in 2011 illustrates the weakness of this approach. Survey evidence indicated that the preferred option of those who favoured a new electoral system was some form of proportional representation, not the alternative vote. Yet the option of proportional representation was not on the ballot paper. Perhaps that is one reason for the low turnout in the referendum – 42% - and the general lack of interest in it. Democracy was not well served by this referendum.

9. It would, moreover, be unfair to ask the Scots to reject independence without specifying precisely what the alternatives were. To suggest that there is a mystery prize which cannot be revealed until after independence is rejected is hardly satisfactory. Further, Scots may remember that Lord Home in 1979 told Scottish voters shortly before the referendum that, if they rejected the Scotland Act, a Conservative government would produce an improved version of devolution. In the event, the Scotland Act secured a narrow majority in the referendum, insufficient to persuade Westminster to implement it. The Conservative government which came to power shortly after the referendum did not, however, implement its promise to produce an improved version of devolution. A suspicious Scottish voter might fear that, if she were to reject independence, and if the SNP were then to be defeated in the Holyrood elections in 2015, Westminster might then forget about devo-max and the status quo would be preserved.

10. Since the purpose of a referendum is to suit the interests, not of governments or political parties, but of the people, there must be a strong case for a multi-option referendum. That would require Westminster to specify before the referendum precisely what it was prepared to concede in terms of further devolution to the Scottish Parliament in the event of independence being rejected.

11. Of course, there is a problem if no option secures a majority in a multi-option referendum. But that problem is not difficult to resolve. It was resolved in New Zealand in referendums on electoral reform through the device of a run-off referendum. In 1992, a referendum was held in two stages. The first stage asked two questions. The first question was `Should the current first past the post system be retained?’ The second question was, `Regardless of how you voted under Part A, if there was a change to another voting system, which voting system would you choose?’ Voters were then offered four alternative voting systems.

12. The run-off referendum took place on the same day as the 1993 general election in New Zealand. The preferred alternative in the answer to the second question in the first referendum, a proportional representation system, was put against first past the post. Proportional representation was victorious and duly adopted for the 1996 general

election. In 2011, a further two-stage referendum was held to discover whether New Zealanders wanted to change; but they decided to retain proportional representation. 1

13. It would be perfectly feasible to have a run-off referendum in Scotland – perhaps two weeks after the first referendum – if no single option secures a majority in the first referendum. That would allow Scots to reflect carefully on the choices available. The United Kingdom government has argued that `two options should generally be preferred, as this avoids ambiguous results and should help voter comprehension’. 2 But the experience of New Zealand shows that there is no reason why the outcome of a multi-option referendum should not be clear-cut, decisive and legitimate. The experience of New Zealand also shows that voters are perfectly well able to understand the various choices available in a multi-option referendum. There is no reason why Scottish voters should be any less sophisticated. It would be patronising to argue otherwise.

March 2012

1 Further details of the New Zealand referendums can be found in Vernon Bogdanor, The Coalition and the Constitution (Hart, 2011) 2 Constitution Committee, 4th Report (2010‐11) Government Response to the Report on Referendums in the United Kingdom (HL Paper 34), p. 11. Written evidence submitted by John Curtice, Professor of Politics University of Strathclyde

The merits of holding a single question versus a multi-option referendum on Scotland’s constitutional future

1. On both sides of the debate, there is a professed wish that the outcome of the forthcoming referendum on Scotland’s constitutional future should be widely accepted by politicians and the public. The UK Government has stated that the referendum on Scotland’s constitutional future should be ‘legal, fair and decisive’. The Scottish Government has indicated that the conduct of the referendum needs to be ‘beyond reproach’. In any event, any referendum that lacked these qualities would be unlikely to provide a stable basis for the future government of Scotland.

2. However, there is considerable disagreement about the form that such a referendum should take so that that objective is achieved. The UK government takes the view that to be ‘decisive’ the referendum should only ask a ‘single straightforward question’ on whether the Scotland should remain part of the UK or become an independent country, arguing that ‘on this one issue’ such a vote would ‘end the uncertainty’. In contrast, in the belief that ‘there is support across Scotland for increased responsibilities for the Scottish Parliament short of independence’, the Scottish Government has stated that ‘it is willing to include a question about further devolution on the lines of “devolution max” if there is sufficient support for such a move’.

3. There are different ways in which a referendum might be considered ‘decisive’. One is that it is widely accepted as providing an authoritative decision on the particular question put before voters. The other is that it is widely regarded as providing an authoritative resolution of the issue that the referendum addresses. The referendum on the alternative vote held in May 2011 might be considered a referendum of the first type. It is widely accepted as having resolved the question of whether that particular system should be used to elect the House of Commons without necessarily having ended the debate about the respective merits of using a proportional rather than a majoritarian system. In contrast, the referendum in 1975 on Britain’s membership of the then Common Market might be considered to have resolved for a considerable period of time at least the debate about whether Britain should be a member of that organisation.

4. A referendum is less likely to resolve an issue if it fails to encompass (and specify fairly) what are widely regarded as all of the key policy alternatives. Because of the wide variety of electoral systems in existence, it is always quite likely that any referendum that asks voters to choose between just two alternative systems will fail to bring a debate about electoral systems to a conclusion.

5. However, the decisiveness of a referendum may be thought to depend not only on the character of the options put before voters but also on whether the outcome unambiguously identifies which is the most popular option. Achieving that objective is often regarded as less straightforward in the case of a referendum in which more than two possible alternative responses appears on the ballot paper. This is despite the fact that it is rarely regarded as unproblematic to hold an election in which voters are asked to choose between more than two candidates, as is nowadays the usual position in elections to the House of Commons.

6. This distinction between an election and a referendum arises in people’s minds because it is widely felt that to be decisive a referendum has to demonstrate clear popular support for whichever proposition is declared the winner. Thus it is widely presumed that the winner should secure the expressed support of a majority of those voting. This requirement is also sometimes reinforced by a stipulation that the outcome of a referendum is only deemed to be valid if one of the propositions secures the assent of a given proportion of the total voting population. In contrast, in the case of elections it is not always considered necessary for the winner to secure the expressed support of a majority, an outlook that was endorsed in last year’s referendum in which the public opted to keep single member plurality rather than switch to the alternative vote.

7. It thus should not come as a surprise that referendums in which voters are asked to choose between more than two alternatives have only been held relatively rarely. However, they are not unknown. Key examples include:

Newfoundland (constitutional status) 1948 Puerto Rico (constitutional status) 1967, 1993 and 1998 Sweden (pensions) 1957 Sweden (nuclear power) 1980 Finland (prohibition) 1931 New Zealand (prohibition) 1919-1987 New Zealand (electoral system) 1992

8. Different approaches have been taken to conducting such ballots and determining which option should be declared the winner. In Puerto Rico, Sweden and Finland, voters were invited only to cast one vote, and the winning option was simply the one that secured most votes, irrespective of whether that constituted more than half of all those voting. In practice that threshold was reached on two of the three occasions in Puerto Rico and the ballot on prohibition in Finland, but not in the 1993 referendum in Puerto Rico or in either multi-option referendum in Sweden.

9. In the case of the referendums on prohibition, which were held contemporaneously with every New Zealand general election between 1919 and 1987, voters were invited to cast either one or two votes, as they saw fit. This practice might be regarded as a form of ‘approval voting’ under which voters are invited to indicate which options they are willing to accept rather than simply which they prefer. The winning option was required to secure 50% of the vote if any change was to be implemented. Prohibition only narrowly failed to meet that threshold in 1919, but from 1928 over half of all votes cast were for no restriction beyond the existing law.

10. The expectation that whatever option is implemented should secure at least half the vote can be achieved by holding more than one ballot. In the event that no one option secures 50% of the vote, a second ballot is held in which the least popular option(s) is (are) eliminated and voters invited to choose between the two most popular options in the first vote. This was the approach used in Newfoundland in 1948, as a result of which the most popular option on the first ballot (self-government) was overtaken on the second ballot by the second most popular (becoming a province of Canada).

11. An alternative mechanism by which the criterion that the winner should have the expressed support of at least half of those voting may be met is through the use of an alternative vote ballot. This path was not pursued in any of the referendums cited in para. 7, but there would seem no reason in principle why it could not be.

12. The New Zealand referendum on the electoral system combined a two-ballot approach with the use of a ‘gateway’ question to determine which option should be set against the status quo in the second ballot. In the first ballot voters were invited first of all to state whether they wanted to retain the current system, and if it were not to be retained, which of four possible alternatives they would prefer. As an overwhelming majority voted against the status quo (single member plurality) what proved to be the most popular alternative (additional member system) was included on a second ballot together with the status quo, and eventually secured a narrow majority. The second ballot was held even though well over half of voters had backed one of the alternative systems and more voters had voted for a second alternative (STV) than backed the status quo. The procedure might thus be regarded as one that gave the status quo a privileged position as well as ensuring that the eventual winner had the expressed support of a majority of those who voted.

13. Apart from the widespread expectation that the eventual winner of a referendum should secure the expressed support of a majority, a further criterion that it is often argued any winner of a multi-option ballot should fulfil is that it represents the Condorcet winner. The Condorcet winner is the option that is preferred by most voters in all of the possible pairwise comparisons of the options on the ballot paper. In other words, if there are three options on the ballot paper, A is the Condorcet winner if more people prefer A to B and more prefer A to C.

14. The attraction of identifying the Condorcet winner is that it is the option with the best chance of generating a consensus, and thus perhaps the option most likely to resolve an issue. However, there is no guarantee that a Condorcet winner exists –in the case of electoral systems one could well imagine that most voters might prefer the additional member system (AMS) to single member plurality (because it is more proportional), the Single Transferable Vote (STV) to AMS (because it gives voters more choice of candidates), but single member plurality to STV (because it retains single member constituencies).

15. There is then clearly a risk that a multi-option referendum could fail to ensure that the winner has the expressed support of 50% of those voting, and especially so if a simple plurality rule were used. Meanwhile, there is no guarantee that a plurality, two-ballot, or alternative vote system will necessarily pick as the winner the Condorcet winner (if it exists), with the risk being greatest with plurality rule. At the same time, however, there is good reason to believe from polling evidence that in the case of Scotland’s constitutional future a potential Condorcet winner does exist - and that a referendum on that subject that only invited voters to choose between independence and the status quo would result in the exclusion of that potential Condorcet winner from the ballot paper. If so, then such a referendum would seem unlikely to provide any kind of conclusion to the constitutional debate and in that sense at least prove decisive.

16. Surveys and polls that have invited voters to choose which one of independence, devolution max/plus and the status quo they most prefer have consistently found that none commands the support of half of voters. The following table summarises the findings:

Independence Devo Max/Plus Status Quo ScotCen/SSA 2010 28 32 27 ScotCen/SSA 2011 43 29 21 TNS/BMRB (11/12) 28 33 29 TNS BMRB (1/12) 26 30 32 ICM (1/12) 26 26 37 Panelbase (2/12) 31 26 28 Thus if a multi-option referendum is to be held in which the winner is seen to secure the expressed support of at least 50% of voters, it is highly unlikely that a simple plurality ballot will prove suitable

17. A Condorcet winner usually exists when voters’ preferences are arranged along a single dimension, such as from left to right. It appears to be the case that most voters’ preferences in respect of Scotland’s constitutional future do have this character, and that consequently a Condorcet winner probably does exist in the form of remaining in the UK but with the Scottish Parliament having significantly enhanced powers.

18. These features of public opinion are discernible from those polls that have asked voters separately whether they would vote for or against independence and whether they would vote for or against devolution max/plus. Most such polls find that a majority would vote in favour of devolution max /plus while a majority would vote against independence. The following table illustrates three recent examples; in each case those saying they did not know how they would vote have been excluded from the calculations.

Independence Devolution Max/Plus Yes No Yes No YouGov 39 61 58 42 (1/12) Ipsos MORI 43 57 75 25 (1/12) Panelbase 47 53 66 33 (2/12)

In line with these findings the 2010 Scottish Social Attitudes (SSA) survey found that while 62% felt that the Scottish Parliament should make most decisions on welfare benefits and 57% said the same about taxation, just 31% reckoned Holyrood should be primarily responsible for defence and foreign affairs.

19. The contrast between the results displayed at para. 16 and those at para. 18 arises because the vast majority of those who support independence prefer devolution max/plus to the status quo. In the YouGov survey, 76% of supporters of independence were willing to vote for devolution max/plus, while in the Ipsos MORI poll, the equivalent figure was no less than 90%. (Note that don’t knows have been excluded from this calculation, which cannot be made for the Panelbase poll.) In similar vein, 94% of those who think that the Scottish Parliament should be responsible for defence and foreign affairs also believe it should have control over taxation. As a result, while the Union is preferred to independence, devolution max/plus is clearly preferred to the status quo.

20. No survey has asked people to choose specifically between devolution max/plus and independence, and thus strictly speaking we cannot be sure that devolution max/plus is currently the more popular of these two, and thus represents a Condorcet winner. However, it seems highly likely that those who prefer the status quo would prefer devolution max/plus to independence and thereby ensure that it was the more popular. In support of this expectation we find that, according to the 2010 SSA, only 8% of those who said that their first preference was the status quo believed that Holyrood should be responsible for defence and foreign affairs.

21. However, although it appears that devolution max is a potential Condorcet winner, it is evident from the table at para. 16 that not only would it not necessarily emerge as a winner in a plurality ballot, but it would also not necessarily (albeit with a lower likelihood) prove a winner under the alternative vote or a two ballot referendum - as there is no guarantee that it would emerge as one of the two most popular options amongst voters’ first preferences. Any such ballot might thus be potentially subject to procedural criticism. On the other hand, it might be felt that if devolution max/plus were not at least one of the two most popular options amongst voters’ first preferences this would mean that there was insufficient strength of support behind it to provide the basis of a resolution of the debate about Scotland’s constitutional future.

22. A number of methods have been devised for counting preferential votes (as in an alternative vote style ballot) in such a way that the Condorcet winner is identified. Typically such methods use the information contained in such ballots to ascertain which option is the winner in each pairwise comparison of the options. The apparent complexity of and current unfamiliarity with such methods may well be thought to militate against their use.

23. In practice, given that voters’ views do appear largely to lie along a single dimension, a Condorcet winner that is backed by the expressed support of at least 50% of those voting should be identified if voters were asked to vote separately for and against independence and for and against devolution max/plus. The winner would be whichever of those two options secured most support so long as it secured at least 50%. However, it would have to be accepted that such a ballot would be open to tactical manipulation; those voters whose first preference was independence and second preference devolution max/plus might vote against devolution max/plus to reduce its chances of outpolling independence. This indeed is a general problem with attempts to identify a Condorcet winner. It would also have to be accepted that it might be the case that an option that had secured the expressed support of over 50% of voters might fail to be declared the winner, on the grounds that another option had proved even more popular.

24. An alternative approach that might be thought less subject to tactical manipulation would be to adopting a variant of the procedure used to determine New Zealand’s electoral system. First of all voters would be asked whether or not they wanted Scotland to become an independent country or remain part of the UK. Second, they would be asked whether some form of devolution max/plus should be introduced if Scotland were to remain part of the UK. In this case, supporters of independence would have little reason not to indicate support for whichever unionist option they preferred. Consequently, in the event that independence was rejected it is highly likely that whichever unionist option was the more popular would secure the expressed support of at least 50% of those participating in the ballot. Note though that it would mean that independence would be declared the winner so long as it secured 50% support in response to the first question, though of course this would also be the case if the referendum were simply a vote for or against independence.

25. There is a clearly a risk that a multi-option referendum will fail to produce a result that proves indecisive because the method of voting and counting is disputed. There are though ways in which those risks can be reduced. Meanwhile, these risks need to be balanced against the risk that also apparently exists that a referendum that does not include some form of devolution max/plus will prove indecisive because, omitting a potential Condorcet winner, it fails to resolve the issue of Scotland’s constitutional future. A wise politician will wish to assess these relative risks carefully rather than dogmatically assert that one approach will indisputably prove more decisive than the other.

March 2012 Written evidence submitted by No Campaign Limited

No Campaign Limited Under the name “NO to AV” No Campaign Limited was formed for the purposes of fighting the AV Referendum of 2011. It was the designated lead campaign group on the No side. Although the company is now formally dormant, the individuals involved in its operations continue to take an interest in referendum-related matters.

Matthew Elliott is a board director of No Campaign Limited and was the Campaign Director of NOtoAV, which turned public opinion from being 2:1 in favour of introducing the Alternative Vote to voting 2:1 against a year later in the referendum. Matthew also founded the TaxPayers’ Alliance in 2004, to campaign on behalf of taxpayers and to tackle government waste, and is still serving as Chief Executive. He launched Big Brother Watch in 2009 to fight the surveillance state, and has been described as "probably the most effective political campaigner that Britain has produced in a generation".

William Norton is a board director of No Campaign Limited and was the Responsible Person for the AV Referendum, handling the legal and compliance aspects of the campaign. He was also the registered referendum agent for No Campaign Limited in all 440 electoral districts. In the past William acted as referendum agent for North East Says No Limited, which was the designated lead campaign group on the No side for the 2004 North East Referendum. He is the author of White Elephant: How the North East said NO (Social Affairs Unit, 2008), an account of the regional assemblies issue and how the North East Referendum answered it.

Executive Summary

Any Scottish Referendum should be fought under PPERA • In terms of ensuring widespread legitimacy for the result, it would be best to legislate for a Referendum under the PPERA framework, without any “special measures”. • Use of PPERA would ensure that the Electoral Commission vetted any referendum question. They have a demonstrable track record in securing the re-writing of unacceptable questions. • The Chair of the Electoral Commission should be the Chief Counting Officer, as directed by PPERA. Power could be taken to appoint a local Deputy Chief Counting Officer, as happened in the Welsh Referendum. • Not only does the Electoral Commission already have the function of neutral and independent referendum oversight under PPERA, it has experience and a track record in discharging the role. • The Electoral Commission formally reports to the UK Parliament following every PPERA referendum. There is no reason why it could not submit a joint report to both the UK and Scottish Parliaments following a Scottish Referendum. • On balance, the best mechanism for holding a referendum would be a bespoke Referendum Bill including the Question and conferring a trigger power on the Scottish Parliament. This would be introduced after PPERA has been amended and once sufficient progress has been made in addressing the “Unanswered Questions”.

The timetable for a Scottish Referendum • Until there is some information about the “Unanswered Questions” concerning practical post-secession issues it would be impossible to hold a fair and decisive referendum. You cannot form Yes and No Campaigns for a referendum until you know what you are being asked to say “Yes” or “No” to. • Autumn 2014 might, if anything, be too short a deadline. However that does provide additional time in which to address issues around the current PPERA framework. • The precedent of the Welsh Referendum should be followed to allow a two-thirds majority of the Scottish Parliament to trigger the holding of a referendum. The Question (as vetted by the Electoral Commission) and the rules for the ballot would be set down in UK legislation. It would be prudent, however, to prohibit the combination of a referendum with other elections. • The referendum period should be a minimum of 16 weeks.

There should only be a single question • A Second Question would only be justifiable if it involves a genuinely subsidiary matter which is connected to the First Question and not a wholly distinct issue. Otherwise it will confuse the voters and prejudice the ability of campaigners to put their case effectively. • The test is clearly failed if a Second Question for Scotland involved greater devolution (or, for that matter, less) within the UK.

PPERA should be revised before any future referendum is held • Generic rules for the conduct of referendum ballots should be placed on a permanent statutory footing, by inserting them as a new Schedule to PPERA. • The rules on declarable spending should be amended to remove double-counting where two campaign groups share expenditure (e.g. for a joint rally). • Evasion of the spending limits is best prevented by strengthening the requirements for registration as a permitted participant with proof from the responsible person that each group is genuinely independent. • The provisions for the reporting of loans which applied for the AV Referendum should be incorporated into PPERA on a permanent basis. • The provisions for grants to designated lead campaign groups should be replaced by a matched-funding arrangement to reimburse 50% of a designated organisation’s spending on its mail-shot and TV broadcasts, up to a maximum of payment of £500,000 for a UK-wide referendum. This would still represent a reduction from the current maximum grant figure of £600,000. • The provision which prohibits undue influence of a referendum by public authorities is defective and not fit for purpose. It should be replaced by a new measure: ¾ Restrictions should continue to apply to Ministers of the Crown, government departments, local authorities, public bodies and organisations who receive a majority of their resources from public funds. ¾ “Public funds” should include EU funding, which is currently ignored altogether. ¾ Restrictions should run from the day after designation of the official Yes and No Campaigns – or when the Commission decides that it cannot designate. ¾ Breach should create an offence (which it does not at present). The Electoral Commission and anyone eligible to vote in the referendum should be able to refer a case to the courts. ¾ Expressing or providing support for one side in a referendum should be prohibited as well as the activities currently forbidden. ¾ Designated organisations should not be able to publish material or information which would be prohibited if another individual or body published it directly.

The Draft Bill proposed by the Scottish Executive is inadequate • The proposed question is unacceptable. • Refusing to pay grants to designated organisations creates the risk of not providing the voters of Scotland with the full and equal information they deserve. • It is wrong for Scottish Ministers to appoint the Chief Counting Officer. • The Draft Bill omits any regulation of campaign loans. • The provisions relating to a designated organisation’s right to send a referendum address to every voter appears to be unworkable. • Apparently the cost of the air-time for referendum broadcasts would be a declarable expense – which also appears to be unworkable. • The proposed spending limits would give an unfair incentive for political parties to take the lead roles in the referendum and contain an obvious loophole. • The rules on joint expenditure are misconceived and would penalise different groups that want to co-operate on one side. • The restrictions on undue influence of a referendum using public money are even less adequate than the current PPERA “safeguards”.

1. Any Scottish Referendum should be fought under PPERA 1.1. There is no need to reinvent the wheel. There is an existing framework for fighting a referendum, laid down by the Political Parties, Elections and Referendums Act 2000 (“PPERA”). That statute was drafted following a full review of the area by the Committee on Standards in Public Life, under the chairmanship of Lord Neill, in their Fifth Report of October 1998. That report considered the recent experience of the 1997 referendums, as well as looking back to the 1975 European Referendum, in formulating their recommendations. 1.2. The PPERA framework sets out the basic regulatory system for a referendum (donations, expenditure rules, registration of participants etc.) which would be common to all referendums. It envisages that the specific detail which would be unique to any given referendum (question, date, referendum area, conduct of the ballot etc.) would be contained in bespoke legislation. That broad division, whilst it can be criticised as to which items fall either side of the line e.g. generic conduct rules, makes sense. 1.3. There is no good reason to depart from the PPERA framework for any Scottish Referendum. The special devolved status of Scotland within the UK does not mean that there has to be a special devolved way of holding a referendum. Wales also has a (slightly different) special status, yet PPERA was used for the Welsh Referendum of 2011. If PPERA is not the “right” way to hold a referendum, it should be corrected so that all future referendums can benefit (a view we subscribe to – see Section 4). 1.4. In terms of ensuring widespread legitimacy for the result, it would be best to legislate for a Referendum overseen under the PPERA framework, without any “special measures”. There are distinct advantages in using the PPERA framework for any referendum on the possible secession of Scotland from the UK.

Who sets the question? 1.5. Under previous PPERA referendums, the questions have always been written into the specific legislation for each vote.1 The questions have been settled by Parliament, which in practice means politicians. 1.6. However, under PPERA section 104, the Electoral Commission has the duty to consider the “intelligibility” of each proposed question and report to Parliament upon it. They do so on the basis of published guidelines.2 1.7. This is not a rubber-stamping exercise. The Electoral Commission recommended and secured the re-writing of the original questions in both 2011 referendums. • The Welsh Question was re-written principally to remove ambiguity and to ensure a more comprehensible translation into Welsh.3 • The AV question was re-written to be easier to understand (two shorter sentences in

1 North East Referendum: Regional Assemblies (Preparations) Act 2003, section 3; Welsh Referendum: The National Assembly for Wales Referendum (Assembly Act Provisions)(Referendum Question, Date of Referendum Etc.) Order 2010 (SI 2010/2837), article 4; AV Referendum: Parliamentary Voting System and Constituencies Act 2011, section 1. 2 Electoral Commission Referendum question assessment guidelines (November 2009). 3 Electoral Commission Report on the referendum on the law‐making powers of the National Assembly for Wales (June 2011), paras 2.7 and 2.8. clearer language), less biased (focus group research found that some people considered the original to be slanted) and to make more explicit that a Yes vote would lead to a complete replacement of the current voting system.4 1.8. It would be naive to expect that any referendum question could be settled outside the political process. Since it is an inherently political act, it would also be undesirable for the writing of the question to be passed to an independent body, because that could compromise their independence. However, the current PPERA arrangements offer a useful control in that they would force legislators to justify publically any question which received an adverse report from the Commission – and if they ignored such a report, that would probably become an issue in the following referendum (with the adverse publicity neutralising the gain from any bias in the question itself). 1.9. As the experience of 2011 indicates, the PPERA arrangements work well. They would not apply to a referendum conducted under standalone Scottish legislation (as the Commission themselves concede5). If such a review role were given to a different body created especially for a Scottish Referendum it would not carry the same authority. 1.10. The terms of the Scottish Executive’s draft Bill indicate that the Electoral Commission have a valuable contribution to make in vetting any question (see Section 5).

Who counts the votes? 1.11. PPERA section 128 directs that the Chairman of the Electoral Commission will be the Chief Counting Officer, unless an alternative is appointed by the holder of that post. An exception relates to Northern Ireland, where the Chief Electoral Officer is to be Chief Counting Officer for a Northern Ireland-only referendum and otherwise must be the counting officer for the whole of the region. For understandable electoral purposes the whole of the region is treated as a single voting area with an independent election staff. Under PPERA there is no direct ministerial power to remove the Chief Counting Officer (other than in extremis removing the Chair of the Electoral Commission). 1.12. This provides an objective and impartial basis for the conduct of the ballot. It has been used on three occasions, in each case in a slightly different way. • In 2004, the section 128 power was exercised to appoint the Chief Executive of Sunderland City Council as Counting Officer for the North East Referendum. • In 2011, the Chair of the Electoral Commission acted as Chief Counting Officer for the Welsh Referendum, but the specific regulations included a provision to appoint a Deputy Chief Counting Officer and the Chief Executive of Pembrokeshire Council (who is also the returning officer for Wales for European elections) held that post. • In 2011, the Chair of the Electoral Commission also acted as Chief Counting Officer for the AV Referendum, but the specific legislation included the appointment of Regional Counting Officers to oversee certification of results at a regional level. The Convener of the Electoral Management Board acted as the Regional Counting Officer for Scotland in the AV Referendum. 1.13. Scotland has a different system for administering elections to the rest of the UK, following the recommendations of the Gould Report after the debacle of the introduction of STV for local government. The Convener of the Electoral Management Board directs the activities of local returning officers, which is not the case in conventional elections elsewhere (although a similar power for the Chief Counting Officer to issue directions to returning officers was used for the AV Referendum). 1.14. In practice, the day-to-day operational management of the Referendum would be in the hands of the Convener. The only question is whether the Convener holds the legal post of Chief Counting Officer and, if so, who is responsible for that appointment (with the

4 Electoral Commission Referendum on the UK Parliamentary Voting System. Report of views of the Electoral Commission on the proposed referendum question (October 2010). 5 Electoral Commission Referendum on the voting system for UK Parliamentary elections (October 2011), page 17, note 3. implied power of removal). 1.15. The obvious solution is to follow the example of the Welsh Referendum, with the Convener being Deputy Chief Counting Officer. Alternatively, if thought preferable, the Chair of the Electoral Commission could directly appoint the Convener along the lines of the 2004 North East Referendum. Whichever outcome is followed, it would obviously carry greater confidence if it were decided by the independent Chair of the Electoral Commission, rather than politicians involved in the referendum itself.

Who should regulate the referendum? 1.16. A neutral and impartial body should oversee the conduct of elections. Such a body already exists (the Electoral Commission). Not only does it already have that function under PPERA, it has experience and a track record in discharging the role. There is no need to invent something that already exists. 1.17. The Electoral Commission formally reports to the UK Parliament following every PPERA referendum. There is no reason why it could not submit a joint report to both the UK and Scottish Parliaments following a Scottish Referendum.

How should the Scottish Referendum be authorised? 1.18. It has been suggested that a Scottish Referendum could be held under (a) a statute of the Scottish Parliament; (b) an amendment to the current Scotland Bill; (c) a Section 30 Order under the Scotland Act 1998; or (d) a special Referendum Bill. 1.19. As can be seen from a cursory reading of the Scotland Act 1998, the Scottish Parliament does not have the legal power to hold a referendum on leaving the UK. 1.20. The current Scotland Bill could be amended. However there would not be time to address the “Unanswered Questions” (see Section 2) and it would probably not be possible to use it to amend PPERA (see Section 4). 1.21. A Section 30 Order could be used, but the text of the Order would have to include such matters as the Question, the conduct rules for the referendum and other ancillary details which would be advisable given the current draft Bill produced by the Scottish Executive (see Section 5). An Order would probably not be the best vehicle for ensuring line-by-line parliamentary scrutiny. 1.22. On balance, the best route is probably a bespoke Referendum Bill including the Question and conferring power on the Scottish Parliament to trigger a referendum. This would be introduced after PPERA has been amended (see Section 4) and once sufficient progress has been made in addressing the Unanswered Questions.

2. The timetable for a Scottish Referendum

2.1. There are three issues involved in determining the timetable for any Scottish Referendum: when should it be held; who sets the date; and how long should the referendum period last?

When should a Scottish Referendum be held? 2.2. The Scottish Executive’s suggested timetable, set out in their Consultation Document,6 envisages a process lasting nearly three years, culminating in an Autumn 2014 poll. 2.3. The process for the North East Referendum started in May 2002 and ended in November 2004. In that case the UK Government had to (a) consult on the possible powers of a regional government; (b) pass framework legislation for holding a poll; (c) consult each region on whether there was sufficient interest in holding a referendum; (d) await the recommendations of a Boundary Commission for the possible reorganisation of local authorities; and (e) enact statutory instruments containing the specific detail for the ballot.

6 Your Scotland, Your Referendum (January 2012). 2.4. The Welsh Referendum had a gestation period of at least five years (from the passage of the Government of Wales Act in July 2006 to March 2011). That was because the 2006 Act merely authorised the calling of a referendum on additional powers and there had first to be a lengthy local consultation process. The actual vote of the National Assembly for Wales which triggered a referendum took place in February 2010, meaning that the process required about thirteen months to initiate and conclude. 2.5. The AV Referendum took, from the publication of the Bill to the holding of the poll, about ten months (July 2010 to May 2011). That was considered at the time to be too short and to have created administrative difficulties. In practice most of the delay came about because the parliamentary Bill contained non-referendum matters, dealing with a reorganisation of Westminster constituencies. The administrative problems which did occur were mainly caused by the decision to hold the AV Referendum at the same time as other elections, resulting in a ten week referendum period that commenced immediately on Royal Assent. 2.6. Such problems as did happen with the AV Referendum, therefore, arose for reasons other than the shortness of any preliminary consultation time. From the perspective of the mechanics of holding a referendum, then, an Autumn 2013 poll would be eminently feasible since it would not coincide with any other elections. 2.7. However, concentrating solely upon the administrative and mechanical aspects overlooks the most important factor of whether a referendum can reasonably be held: whether people are in a position to cast a fully-informed vote. • In the North East Referendum of 2004 voters were asked whether they wanted a regional assembly. They were able to judge the merits of this proposal because the Government published in advance a draft Bill setting out the powers and responsibilities of such a body. In County Durham and Northumberland there were Second Questions concerning a reorganisation of local government if an assembly were approved. Voters could choose fairly because they were told what the new local authority boundaries would be under either choice. • In the Welsh Referendum of 2011 voters were asked whether they wanted the powers of the National Assembly for Wales to be extended. They were able to judge the merits of this because the new powers were specified in advance. • In the AV Referendum of 2011 voters were asked if they wanted to replace the existing voting system for the House of Commons. They were able to judge the merits of this proposal because the legislation set out how the precise rules of how AV would have worked. 2.8. In any Scottish Referendum voters will be asked, in one form or another, whether they want Scotland to leave the UK. How can they judge the merits of this proposal without some indication of the likely relations between a Scottish State and the rest of the UK, let alone with the rest of the world (such as membership of the EU, etc.); the likely financial position of a Scottish State (what happens to the UK National Debt?); or the personal implications for themselves and any family residing outside Scotland? 2.9. The Scottish Affairs Select Committee has already identified a number of very pertinent questions which have not yet been answered.7 Until there is some information about these and other practical post-secession issues it would be impossible to hold a fair and decisive referendum. You cannot form Yes and No Campaigns for a referendum until you know what you are being asked to say “Yes” or “No” to. Holding a referendum would be like shooting Niagara Falls in a barrel, wearing a blindfold. 2.10. Obviously, some of these questions would never be finalised or exactly quantified unless there was a Yes vote for separation from the UK. But it would be possible to agree the broad outlines in advance – and doing at least that much would be an essential pre- requisite of holding any referendum, and far more important than the mechanics of

7 House of Commons Scottish Affairs Select Committee The Referendum on Separation for Scotland: Unanswered Questions Sixth Report of Session 2010‐12 (February 2012). arranging the ballot. 2.11. This is likely to take a considerable period of time. Autumn 2014 might, if anything, be too short a deadline. However that does provide additional time in which to address issues around the current PPERA framework (see Section 4) which ought to be resolved irrespective of whether a Scottish Referendum ever takes place.

Who sets the date? 2.12. Scottish Ministers clearly have their own reasons for their preferred Autumn 2014 date. It would be naive to pretend that referendums are not called for dates which politicians believe will favour them – but the experience of the North East and AV Referendums suggests that they are not always the best judges of this. 2.13. The Welsh Referendum of 2011 offers the closest parallel. In that case UK legislation8 empowered the National Assembly for Wales to trigger a referendum by a vote of two- thirds of the members. The mechanics for the Welsh Referendum, including the question and the determination of polling day, followed in subsequent statutory instruments issued by Parliament at Westminster. 2.14. There seems no good reason not to follow this precedent, or even to extend it by allowing Scottish Ministers to nominate a particular date. The Question (as vetted by the Electoral Commission) and the rules for the ballot would be set down in UK legislation. Sufficient progress would have to have been made with the “Unanswered Questions” before that UK legislation was enacted. Scottish Ministers would doubtless choose a date they thought favoured them – but they would still have to secure a two-thirds majority of the Scottish Parliament for it. 2.15. Experience in May 2011 indicates that a referendum can be combined with local and devolved elections. It is not clear, however, that this would have been true for a General Election. Neither can it be denied that local authority electoral services departments were under considerable strain in administering a referendum ballot at the same time as other elections. We experienced extreme delays in confirming the correct number of counting agents we could appoint – in some cases this was sent by post and not received until after the referendum had been held. It was difficult to reach people by telephone and emails were not always handled quickly. There were surprising problems in transferring the electoral registers from some councils. 2.16. That suggests it would be prudent to prohibit another combination of polls. Any delegated authority to the Scottish Parliament to call a Scottish Referendum should therefore also restrict it to that extent.

How long should the referendum period last? 2.17. The “referendum period” is the interval of time during which special legal restrictions and control apply. PPERA envisages it as lasting at least ten weeks9 and no more than six months.10 2.18. The referendum period for the AV Referendum ran from Royal Assent to 5 May (79 days). The lead-in time required to arrange the free mailing to voters meant that the No Campaign were obliged to pre-empt designation and place the order with printers before we knew that we had been designated as the official lead group on the No side. Even then we only just managed to acquire all of the local authority electoral registers in order to maintain our printing schedule and ensure that referendum addresses were delivered to the Royal Mail in time. If the No Campaign had been forced to wait until designation, e.g. if there had been a credible risk of a contested application, or if we had received insufficient donations to risk making the advance commitment, then it would not have been possible to have issued a leaflet to every voter.

8 Government of Wales Act 2006 section 104. 9 Only indirectly, by reading together PPERA section 103 and section 109. 10 PPERA section 102 2.19. PPERA should be amended to include a greater minimum duration for any referendum period. We note that the Electoral Commission has reached the same conclusion (see Section 6 - Recommendation 11) and we are happy to endorse their proposals for a minimum 16 week period.

3. There should only be a single question

3.1. In the UK referendums have always been structured as questions with Yes/No options between which the voter casts a single choice. That provides clarity both in terms of the debate (it becomes a straight choice between two options only) and the legitimacy of the result (by definition, one option must receive a simple majority). Where there are three or more options, it would be possible for the most popular choice to receive less than 50% of the vote and that would raise doubts as to its legitimacy, especially where there is no turnout threshold. 3.2. “Two Question Referendums” are technically separate, but conducted on the same day with the Second Question only becoming operative in the event of a particular result on the First Question. They have been held on two occasions: • Scotland in 1997 (the Second Question being whether any Scottish Parliament should have tax-varying powers); and • parts of the North East of England in 2004 (voters in County Durham and Northumberland were asked to vote on a reorganisation of local government if a regional assembly were to be approved). 3.3. In both cases “turnout” for the Second Question was lower than for the First, most likely because of a greater tendency of No supporters on the first ballot not to vote in the second. Certainly in the North East in 2004 the Second Question received less media coverage and attention, tending to be ignored or subsumed into the debate on the First Question. Neither official campaign on the First Question involved themselves in the Second. On the whole, for supporters of the No Campaign there was very little interest in the Second Question. But it is probably fair to say that some supporters of the Yes Campaign in County Durham and Northumberland did take different stances on the Second Question and that may have had an impact on their effectiveness on the First Question. 3.4. A Second Question would only be justifiable if it involves a genuinely subsidiary matter which is connected to the First Question and not a wholly distinct issue. Otherwise it will confuse the voters and prejudice the ability of campaigners to put their case effectively on one of the two Questions. That test was (more or less) satisfied in the North East in 2004 because the subject matter of the main referendum concerned the reorganisation of local government arrangements across the region. 3.5. The test is clearly failed if a Second Question for Scotland involved greater devolution (or, for that matter, less) within the UK.

4. PPERA should be revised before any future referendum is held

4.1. PPERA was first enacted in 2000. It has been amended in the intervening period, but not in respect of the referendum provisions. There have now been five official referendums (three, technically, in the North East in 2004) and two in 2011. It is appropriate to review how the rules work and, we contend, amend them in the light of experience. Although a Scottish Referendum ought to be fought under UK law, that PPERA framework ought to be improved before this takes place.

Generic conduct rules 4.2. At present PPERA provides a broad regulatory framework but the precise mechanics relating to the conduct of the ballot are left to one-off statutory measures enacted on each occasion. This is generally left very late in the day, creating uncertainty and administrative difficulties for returning officers. Most of the problems with the AV Referendum can be traced to this source. 4.3. It has been a longstanding recommendation of the Electoral Commission that the conduct rules should be placed on a permanent statutory footing, by inserting them as a new Schedule to PPERA. 4.4. This would have the effect of bringing PPERA referendums into line with referendums in England on the introduction of directly-elected Mayors. From the outset they have been governed by a series of standing regulations for the conduct of polls.

Shared expenses calculation rules 4.5. PPERA Schedule 13 sets out the provisions governing the declaration of referendum expenses. As they are drafted and have been interpreted they can lead to double- counting where two campaign groups share expenditure (e.g. for a joint rally) but both have to declare the same total spending. 4.6. Generally this has not been a practical issue in the past because the spending limits for referendums, especially where one of the groups involved was a designated lead group, were much higher than required for the campaigns concerned. It still represents a defect which ought to be corrected. Double-counting could be an issue in, say, a close-fought regional referendum where the spending limits are much lower (especially if, for one reason or another, the Electoral Commission are unable to designate lead campaign groups for both sides). 4.7. The AV Referendum was subject to a bespoke provision governing “spending in concert” which expressly reinforced this effect for groups which were not designated. The thinking was probably to prevent manipulation of the spending limits by requiring groups that acted in concert to each declare all of the expenditure involved. So far as can be known, the rule had no practical impact on the AV Referendum (although most of the campaign groups on the Yes side opted to file a joint expenditure return). 4.8. The Electoral Commission have recommended that the concert party rule apply to all future referendums, except where there are no designated organisations. The concert party rule did not apply to the Welsh Referendum, but equally, there were no designated organisations on either side. Instead, a large number of local groups registered as permitted participants on one side. There has always been a suspicion that this was an attempt to engineer a higher amount of spending above the limit applicable to a non- designated campaigner. If the Electoral Commission’s recommendation had applied for the Welsh Referendum, it would have had no effect. 4.9. The mischief which the legislation ought to prevent is evasion of the spending limits. The abuse which should be blocked is the creation of dummy organisations to qualify for additional spending capacity. The test should be whether different bodies are in substance the same organisation. That could be handled by strengthening registration as a permitted participant (PPERA section 106): requiring a declaration from the responsible person that the group is genuinely independent, supported by details of their separate bank account, payroll arrangements and administration.

Control of loans 4.10. The financial controls for referendum campaigners were originally intended to mimic those applying generally to political parties. Since 2000 PPERA has been amended to control loans to parties and Schedule 9 of the legislation which applied to the AV Referendum introduced them on a one-off basis. PPERA should be amended so that those provisions are permanently added to the legal provisions governing all referendums.

Grants to campaigners 4.11. PPERA section 108 permits the Electoral Commission to designate lead campaign groups on each side in a referendum. They are only permitted to designate for both sides together, not one side only (the “both-or-neither” rule). Once designated, a lead campaign group may issue a referendum address through Royal Mail and to make referendum TV broadcasts. It still has to pay for production, but delivery is paid for by the taxpayer and air-time is free. 4.12. Designated organisations are also eligible for grants from the Electoral Commission. This was a key recommendation of the Neill Committee, which advocated the provision of grants to referendum groups to cover “core funding” and ensure a level playing field between the two sides.11 The Neill Committee were particularly influenced by evidence that “the referendum campaign in Wales in 1997 was very one-sided, with the last- minute No organisation seriously under-funded and having to rely for financial support essentially on a single wealthy donor. The outcome of the Welsh referendum was extremely close, and a fairer campaign might well have resulted in a different outcome.”12 4.13. The payment of grants to both sides in a referendum predates the introduction of PPERA. In the 1975 European Referendum, £125,000 each was made available to the two lead groups. PPERA section 110 sets a maximum amount of grant that may be paid (£600,000) but otherwise allows the Commission to determine quantum and criteria on a case-by-case basis. • In the North East Referendum of 2004, grants of £100,000 were paid to both sides. • In the AV Referendum of 2011, the Commission decided on a maximum grant of £380,000 to reimburse “eligible spending”. This covered campaign infrastructure and specifically excluded campaign materials and activity. £114,000 was paid on designation, with the balance claimable on provision of evidence of expenditure. Due to the restrictive eligibility criteria, both sides only claimed in the region of £140,000- £150,000 each. • Similar rules would have applied in the Welsh Referendum of 2011, with proportionately lower amounts. No grants were paid to either side for the Welsh Referendum, but only because in the end no designation took place. 4.14. Thus, grants in the two 2011 referendums could not be used to finance the preparation of mail-shots to voters or official TV broadcasts. The result was less than satisfactory: • In the Welsh Referendum the No campaign decided not to apply for designated status, meaning no designation could be made on either side. Allegedly this was because they could not raise sufficient funds and wished to avoid being out-spent by a Yes campaign which could better exploit a higher spending limit. The result was that voters in Wales were denied the opportunity to hear fully from both sides. • In the AV Referendum the Yes campaign decided not to send a mail-shot to all voters. Allegedly this was because they ran out of money (although it should be said that they chose to send rather expensive literature). 4.15. What is the purpose of designation? It is to ensure that there is a reasonable presentation of the arguments on both sides. That is why the two lead groups are entitled to freepost mailing of their referendum addresses and TV broadcasts. Therefore, the grant should be paid to ensure that these two facilities are taken up, so that the public receives a minimum level of information. 4.16. Evidence from the AV Referendum indicates that the Yes Campaign spent about £427,000 on their (limited) mail-shot and perhaps a further £54,000 on TV broadcasts, making a total of £481,000 on designated status. That represented about 24% of their total declared spending and a little under 10% of their limit. The No Campaign spent £929,000 on their mail-shot to the whole UK and a further £139,000 on TV broadcasts, making a total of £1,068,000 on designated status. That represented about 43% of their total declared spending and a little over 20% of their limit. 4.17. There should be a matched-funding arrangement written into the grant provisions in PPERA section 110. The grant should be paid to reimburse 50% of a designated

11 Fifth Report of the Committee on Standards in Public Life, paragraph 12.36 12 Fifth Report of the Committee on Standards in Public Life, paragraph 12.32. organisation’s spending on its mail-shot and TV broadcasts, up to a maximum of payment of £500,000 for a UK-wide referendum. Campaigns would still have to spend £2 in order to receive £1 of grant. That assumes that the cost of printing a reasonable mail-shot to every voter and preparing a basic TV broadcast would be £150,000. If a designated campaign spent less than this, it would receive a proportionately smaller grant, but if it spent more the grant would still be capped at £500,000. In this way designation would ensure that the public receive a reasonable minimum contact from both sides. That would still represent a reduction from the current maximum grant figure of £600,000. 4.18. If the grant were to be restructured in this way then it would solve the “problem” of one side making a “tactical non-designation”. Applicants would know that if successful they could cover half of the cost of designated status. But the grant would be pegged at only 10% of their spending limit.

Mis-use of public funds 4.19. PPERA section 125(1) prohibits publication of “material” which (a) “provides general information about a referendum”; (b) “deals with any of the issues raised by any question on which a referendum is being held”; (c) “puts any arguments for or against any particular answer” in a referendum, and (d) is “designed to encourage voting”. “Material” clearly includes information in any form, e.g. an interview, because “publish” is defined in section 125(4) as “make available to the public at large, or any section of the public, in whatever form and by whatever means”. It is not confined to leaflets which are printed and handed out at railway stations. 4.20. The PPERA purdah applies to Ministers of the Crown, government departments, local authorities and “any other person or body whose expenses are defrayed wholly or mainly out of public funds or by any local authority”. It applies only during the final 28 days of the referendum period. There are exemptions for the Electoral Commission, the BBC, S4C and designated organisations. 4.21. The objective behind PPERA section 125 is clear: to prevent undue influence of a referendum by the use of public resources. This was almost certainly to address lingering allegations that the 1975 European referendum was in some way rigged. 4.22. Section 125 has been an issue in two of the referendums fought under PPERA (and it is understood that it was also a concern in the Welsh Referendum, even if no cases were ever pursued). It is not fit for purpose. • In the North East Referendum of 2004 it became clear that there is no mechanism for adjudicating or enforcing section 125 against a Minister of the Crown. The circumstances were that a Minister gave a newspaper interview two days before polling day to announce a change in government policy that would favour a North East Regional Assembly, were one to be approved. He considered this news to be a reason for voting Yes. The then Chief Executive of the Electoral Commission claimed he had no authority over section 125 complaints, and that it did not apply to the conduct in question. The Propriety & Ethics Unit of the Cabinet Office informed the No Campaign that it had no powers to force a Minister to obey section 125. • In the AV Referendum, in regard to a taxpayer-funded campaign group, it became clear that the machinery of section 125 is too obscure and slow-working to provide any remedy even in a case that constituted a clear breach. The circumstances were that a campaign group on the Yes side received a majority of its income from various public sector sources. They submitted a letter to the Commission in support of the Yes Campaign’s application for designated status. The group’s logo appeared on the Yes Campaign’s website as a supporter, and its own website publicised its support for a Yes vote. The Enforcement Team of the Commission took until the 27th day of the purdah period to decide that there was insufficient evidence of breach. When pushed further, they claimed that although they had by then found such evidence, nothing could be done after polling day. 4.23. The purdah is the only legal restriction which applies to public authorities during a referendum. So far its deficiencies have not been significant because, broadly, the only breaches have involved participants on the losing side. There are strong grounds for amending it in any event, but it should be obvious that a Scottish Referendum raises particular concerns because there are likely to be at least two public authorities (the UK Government and the Scottish Executive) on opposite sides. Section 125 as it stands should be replaced by a new measure with the following provisions: • It should continue to apply to Ministers of the Crown, government departments, local authorities, public bodies and organisations who receive a majority of their resources from public funds (retaining exemptions for the Electoral Commission, the BBC, S4C and either designated organisation). • “Public funds” should include EU funding, which is currently ignored altogether. • A 28 day purdah period is too short. The Electoral Commission’s longstanding view is that the purdah should run from the start of the referendum period.13 A sensible and principled compromise would be for it to start on the day after designation of the official Yes and No Campaigns – or the Commission decides that it cannot designate (for whatever reason). Designation creates official groups entitled to public money. That is an obvious point for restricting any other form of publically-funded interventions. • Breach should create an offence (which it does not at present). The Electoral Commission and anyone eligible to vote in the referendum should be able to refer a case to the courts. • It should prohibit expressing or providing support for one side in a referendum as well as the activities currently forbidden. (In the case of Ministers, this restriction would apply to them in their official capacity, not party political activity, but that merely reflects the current position on, e.g. electioneering.) • It should clarify that the purdah extends to placing information in the public domain in any form and does not allow designated organisations to publish material or information on behalf of an individual or body which would be prohibited if that individual or body published it directly.

5. The Draft Bill proposed by the Scottish Executive is inadequate

5.1 The following comments are based upon a cursory review of the Draft Bill published by the Scottish Executive as part of its consultation exercise for calling a Scottish Referendum.

The proposed question 5.2 Unlike a PPERA referendum, there is no explicit provision in the Draft Bill for the Electoral Commission to advise on the intelligibility of the Referendum Question. That omission should be remedied. 5.3 The initial proposed question in the Draft Bill is: Do you agree that Scotland should be an independent country? 5.4 This is unacceptable. The arguments which led to a redrafting of the AV Question are equally applicable here. • “Do you agree...?” is a loaded question. • It does not make the consequences of a Yes vote sufficiently clear, but assumes that the voter understands it to be the case. • Independence as a concept is only meaningful as independence from something, and that something (the UK? the EU?) should be made plain on the face of the question.

13 See Electoral Commission Referendum on the voting system for UK Parliamentary elections (October 2011). • Many people would consider that Scotland already is a “country”, with its own distinct legal and governance system. It clearly already has a different status within the UK compared to, say, Northumberland or Surrey. 5.5 Therefore, a better-phrased Question would be: Should Scotland leave the United Kingdom? 5.6 Ultimately, however, the final wording of the Question should be settled by the Electoral Commission, not Ministers. That is one of the reasons why there is an Electoral Commission in the first place.

No grants for campaigners 5.7 The Consultation Document proposes that no grants will be made to designated organisations. No rationale is given for this decision. It creates the risk of not providing the voters of Scotland with the full and equal information from both sides that they deserve. 5.8 In addition to the arguments of principle advanced by the Neill Committee in 1998, and never challenged, it is established practice to make grants available to campaign organisations. A failure to do so must raise questions about the good faith of Ministers to ensure a fair and equal contest between the two sides. 5.9 The proposals for the Referendum already concede the principle that there will have to be some outlay of public money for campaigners, since Draft Bill Schedule 4, paragraph 7 envisages a reimbursement of the cost of postage for the referendum addresses (although as drafted, that provision seems unworkable – see below). It would be better if the proposals put this on a more principled footing.

Position of the Counting Officer 5.10 The Consultation Document states that the Convener of the Electoral Management Board is “likely” to be appointed Chief Counting Officer for the Referendum (Paragraph 2.5), and views are invited upon this suggestion as if it were a firm commitment. 5.11 However the Draft Bill is silent. It merely gives Ministers a power to appoint anyone as Chief Counting Officer (Clause 4(1)). They also have a power to remove the Chief Counting Officer “if they are satisfied” there are grounds of inability to perform the functions due to physical or mental health or disability. There seems to be no basis for challenging Ministers’ grounds for reaching such a conclusion.

Control of loans 5.12 Why are there no provisions in the Draft Bill equivalent to Schedule 9 of the legislation which applied to the AV Referendum (control of loans to permitted participants)?

Referendum freepost delivery 5.13 Draft Bill, Schedule 4, paragraph 7 covers a designated organisation’s right to send referendum address post free. It appears to be unworkable. 5.14 The provision states that a designated organisation can recover the cost of postage from the Electoral Commission (on what authority?). In contrast, PPERA Schedule 12, paragraph 1 entitles a designated organisation to send referendum addresses “free of any charge”, with the cost settled direct between Royal Mail and the authorities. That is an important difference. 5.15 There is a cash-flow problem for the campaign if it has to pay for the cost of postage and then claim reimbursement. The upfront cost is likely to be greater than its spending limit for the entire referendum, and perhaps twice as much. Presumably, by virtue of Draft Bill Schedule 4, paragraph 11(2)(a) the mailing cost would not count as a referendum expense, and by virtue of Schedule 4, paragraph 32(1)(a) the reimbursement would not count as a declarable donation, but as drafted the Bill’s operation is still a clumsy way of doing things. 5.16 It is unrealistic to expect a campaign to raise an additional amount equal to more than its spending limit, spend it upon postage and then reclaim funds from the Electoral Commission which it cannot use for referendum purposes. The alternative, borrowing the money, is equally unattractive. Not only would the designated group still incur considerable referendum expenses (either actual or notional, depending on the rate of interest charged on the loan), but it is obviously undesirable for political campaigns to be financed by non-declarable loans rather than declarable donations. 5.17 As worded, the provision only makes sense for an organisation which would be politically active after the Referendum and could use the reimbursement for other projects, i.e. a political party.

Referendum broadcasts 5.18 Draft Bill Schedule 4, paragraph 11(1) states that all of the costs of production of referendum broadcasts are to be regarded as referendum expenses. Thus, the Draft Bill clearly envisages that there will be broadcasts on behalf of both sides. However, there is no equivalent of PPERA section 110(4)(c) which entitles a designated organisation to free air time for its broadcasts. Thus the value of air-time for any broadcasts would count towards the spending limits. That would be unworkable. 5.19 Even if airtime was to be provided free by broadcasters on a voluntary basis, under the Draft Bill that would constitute a donation and notional expenditure. The exemption for public funds would not apply to commercial broadcasters and, as defined, neither the BBC nor Channel Four would count as “public funds”. 5.20 It is possible that the Scottish Parliament is not considered to have the legislative competence to unilaterally require broadcasters to devote free air-time to referendum broadcasts. That problem would, of course, fall away if the Referendum were to be held under the PPERA framework.

The amount of the spending limits 5.21 The Draft Bill includes two features (Schedule 4, paragraph 19) not present in PPERA. 5.22 The spending limit for a designated organisation is additional to the limit which would apply if it were a non-designated campaigner. • Therefore, if a political party were designated as a lead group on one side, it would have a £1,000,000 spending limit, but if a non-party or cross-party group were designated to lead the other side, it would have a spending limit of only £800,000. • This is clearly wrong as a matter of principle. Furthermore, it creates an incentive for political parties to take the lead roles on either side in the Referendum. That risks tainting the Referendum by making it a partisan dispute, instead of a national conversation above party. 5.23 The flat rate spending limit for political parties is linked solely to being represented in the Scottish Parliament at the start of the referendum period, not to share of the vote. • There is nothing to prevent a party engineering an artificial “split” for the duration of the Referendum. A party with, say 2 MSPs, could temporarily engineer twice the spending limit of a party with, say, 69 MSPs. This is an obvious loophole. • By linking a party’s spending limit to its share of the vote, PPERA ensures a rough- and-ready connection between spending and the level of public support each party can claim to represent. PPERA is not perfect but it is better than the Draft Bill provisions, which favour well-financed but unrepresentative political parties.

The calculation of declarable spending 5.24 The Draft Bill contains a provision governing “expenses incurred as part of a common plan” (Schedule 4, paragraph 20). Where expenses are incurred as part of a “plan or other arrangement” among groups on the same side, each group has to declare all of the spending as counting towards its total. There is no distinction between the status of the groups, i.e. whether designated or not. This appears to be based upon a specific provision about “concert parties” which applied in the AV Referendum. 5.25 The test in the Draft Bill is whether groups are working to a common plan. That is misconceived. In any well-run referendum there will always be some form of plan or co- ordination between sympathetic groups on the same side. The need for contact and co- operation will be even more acute if, say, there are a number of different political parties on one side who are more used to opposing each other. But the risk is that as soon as they try to reach a sensible plan for fighting the Referendum, all of their expenditure becomes double-counted and they exceed their overall limit. Paragraph 20 as it stands is unworkable.

The purdah applicable to public authorities 5.26 The equivalent of PPERA section 125 in the Draft Bill (Schedule 4, paragraph 26) is confined to Ministers and parts of the Scottish Administration, the Scottish Parliamentary Corporate Body and local authorities. There is no equivalent for grant-funded organisations that are not public bodies. That creates an obvious loophole for the mis-use of public resources. A campaign group or body wholly or mainly dependent upon taxpayers’ money could be financed to support one side in the Referendum (and this would arguably not rank as a reportable donation, due to the exemption in Schedule 4, paragraph 32). 5.27 The Draft Bill has managed to take the PPERA section 125 purdah and produce something even less fit for purpose.

6. Electoral Commission recommendations

The Electoral Commission’s report into the AV Referendum14 contained a series of recommendations which summarised their views of the two referendums of 2011. For completeness, we attach our response. Future referendum legislation

Recommendation 1 – Timing of legislation for future referendums In planning for any future referendum, the UK Government should aim to ensure that there is confirmation that a referendum will take place (either by Royal Assent to a referendum Act or the making of an Order providing for a referendum) at least 28 weeks in advance of the proposed polling day.

Recommendation 2 – Amending the legal framework for future referendums The UK Government should amend the framework for future referendums held under Part 7 of PPERA to reflect the lessons learned from the delivery of the March and May 2011 referendums.

Recommendation 3 – Providing greater certainty about the detailed rules for the conduct of future referendums The UK Government should use the powers provided to the Secretary of State in section 129 of PPERA to make a generic order providing for the conduct of any future referendum. These three recommendations essentially make the same point: that there ought to be a standard set of referendum rules with a minimum timetable for the referendum period. We agree with this principle.

Recommendation 4 – Considering the implications of holding future referendums on the same day as scheduled elections The UK Government and Parliament should continue to consider proposals in future to hold a referendum on the same day as another set of polls by on a case-by-case basis. If it introduces proposals to Parliament in future to hold a referendum on the same day as another set of polls, the UK Government should also publish at the same time its assessment of the implications of

14 See Electoral Commission Referendum on the voting system for UK Parliamentary elections (October 2011). holding the polls on the same day. This recommendation is naïve. Referendums will always be timed for a moment which the responsible minister (in 2011, Nick Clegg) believes provides maximum political advantage. Voter information at future referendums

Recommendation 5 – Ensuring intelligible questions for future referendums If any significant changes are made to the proposed referendum question during the passage of any future referendum Bill, the revised question should be re-considered by the Commission before Parliament concludes its consideration of the legislation. We agree. We would like to congratulate the Electoral Commission in their successful re-writing of the original, unacceptable, 2011 Question.

Recommendation 6 – Ensuring appropriate use of public money in informing voters about the referendum The prohibition on publication of promotional material about the referendum by publicly- funded bodies or individuals should commence at the same time as the beginning of the referendum period for future referendums, but activities carried out by Counting Officers, under any statutory duty to promote participation and in accordance with the CCOs directions, should be exempt from the prohibition on the publication of referendum material by publicly-funded bodies or individuals. We agree. See further our comments under Section 4. Improving the experience for voters

Recommendation 7 – Ensuring accessible voter materials for future referendums and elections The UK and Scottish governments should ensure that the modifications specified by the Chief Counting Officer to key voter-facing forms and notices for the May 2011 referendum are reflected in legislation for future elections and referendums. The Government should also provide powers for the Electoral Commission or other relevant statutory officer holders to specify modifications to the format, layout and wording of key voter-facing forms to ensure usability and intelligibility. We agree. Standardisation of forms and notices for use by voters will reduce production costs and encourage a greater range of suppliers. At present Electoral Reform Services Limited controls an alarming proportion of the market.

Recommendation 8 – Ensuring access and confidence in the voting process at future referendums and elections The UK Government should introduce legislation to make clear that eligible electors who are entitled to vote at a polling station and who are in the queue to enter the polling station at the close of poll will be allowed to vote, and that it should be the responsibility of (Acting) Returning Officers rather than local authorities to designate polling places for polling districts at UK Parliamentary elections, and that any public building may be available for use as a polling place. We also want the UK Government to bring forward proposals for a comprehensive electoral modernisation strategy. We agree to an extent. The suggestions about electors-in-the-queue and improved opportunities to vote for service personnel and overseas electors are clearly right. However, the suggestion that Returning Officers acquire responsibility for siting polling stations is naïve. Where the location of a polling station is a locally contentious issue then transferring the responsibility to the Returning Officer would risk the politicisation of their position. We are not convinced that the 2011 elections and referendum provide any evidence to support any change. We reserve our position on “electoral modernisation” until we know more about the precise proposals. Do they extend to the introduction of vote-counting machines?

Recommendation 9 – Ensuring access and confidence in the postal voting process at future referendums and elections The UK Government should introduce legislation to enable Electoral Registration Officers to request corrected or refreshed personal identifiers from absent voters at any time in addition to the current required five-yearly refresh, and require Returning Officers to provide information about electors whose postal votes were rejected due to a mismatch of personal identifiers so that Electoral Registration Officers can request corrected or refreshed identifiers or, where necessary, further investigate possible electoral malpractice. We agree. Campaigning at future referendums

Recommendation 10 – Timing of legislation We recommend that the Government ensure that there is a period of at least 12 weeks between the campaign rules being finalised and the start of the regulated referendum period. This period would allow the Commission to complete, publish and distribute guidance and give campaigners an opportunity to become familiar with the guidance before the rules come into effect.

Recommendation 11 – The referendum period We recommend that at future PPERA referendums the statutory minimum referendum period should be at least 16 weeks, consisting of the current 28 day designation application period, the current 14 day designation decision period, and a minimum of 70 days between the final date for the designation decision and polling day. This would give designated lead campaign groups more time to plan and use the benefits that PPERA makes available to them in order to put campaign arguments to voters. We agree with these proposals, which essentially repeat or expand Recommendation 1.

Recommendation 12 – Designation of lead campaign groups We recommend that: • When considering the case for future referendums, legislators should take into account whether the referendum is likely to stimulate a level of debate which would generate willing and able applicants for designation. However, this step would not in itself ensure that such campaigners will seek designation at a particular referendum in future. • The Government should take steps to reduce the potential advantages to a prospective lead campaigner of deciding not to apply for designation. We do not agree with this recommendation, which would create a dangerous weakening in the neutrality of referendum campaigning. The “both-or-neither” rule of designation is a core principle of UK referendums.

Recommendation 13 – Grants to designated lead campaign groups We recommend that the Commission’s ability to pay grants to designated lead campaign groups in instalments be confirmed for future referendums. We agree, but consider that this recommendation misses the point about the role and quantum of Electoral Commission grants.

Recommendation 14 – Expenditure limits for registered campaigners that are subsequently designated as a lead campaign group We suggest that the Government consider whether the legislation on spending limits for registered campaigners that are designated as lead campaign groups should be clarified for the avoidance of any doubt at future PPERA referendums. We agree. This recommendation appears to flow directly from a concern which we raised with the Commission ourselves.

Recommendation 15 – Expenses incurred by persons acting in concert We recommend that the Government consider amending the ‘acting in concert’ provisions to remove or relax them in cases where there are no designated lead campaign groups. The Commission have missed the point about concert parties – see Section 4.

Recommendation 16 – Expenses exclusion for the media Subject to any further consideration by Parliament of how the regulation of political campaigning should apply to the media in general, we recommend that the clarification that press comment is not subject to spending controls should be incorporated into PPERA for future referendums. We agree. Our position on the regulation of the media is reserved.

Recommendation 17 – Regulation of loans The Government has powers to introduce loan controls for referendum campaigners, and for candidates and non-party campaigners at elections, via secondary legislation. We understand that that Government intend to do this and we recommend that the relevant secondary legislation be brought forward as soon as practicable. We agree that it would be sensible to align the position of third party campaigners with referendum campaigners and political parties. It would also be sensible to enshrine loan controls within the wider PPERA framework rather than one-off measures.

Recommendation 18 – Reporting donations We recommend that the Government consider the options for an element of prepoll reporting of donations, and introduce a suitable provision for future referendums. Once the loan controls for referendum campaigners are in place, as recommended above, we recommend that such a pre-poll reporting requirement should also apply to loans. We disagree. Our views on this issue have changed, as a result of our experience. We now consider that legislative change along these lines would be unworkable, counter-productive and probably futile.

Recommendation 19 – Restriction on publication of material by publicly funded organisations We understand that the Government may wish to revisit the overall scope of section 125 to clarify it. We recommend that this review should consider what, if any, sanctions should apply to breaches of this provision. We agree. We do not agree with the account which the Electoral Commission have given of their performance following our complaints.

Recommendation 20 – Regulation of campaign arguments We invite the Government and Parliament to confirm that a role in policing the truthfulness of referendum campaign arguments would be inappropriate for the Commission. We agree. There already exist 45 million people with the function of policing the truthfulness of campaign arguments. They are called voters. The delivery of future referendums and elections

Recommendation 21 – Ensuring an effective management structure for future referendums The UK Government should establish a standard management structure for any future referendum held under the PPERA framework, reflecting the structure in place for the May 2011 referendum.

Recommendation 22 – Supporting the effective delivery of future referendum polls by Counting Officers The Chief Counting Officer for any future referendum should communicate to Counting Officers and referendum campaigners details of the proposed approach to overseeing the delivery of the referendum no later than six months before polling day, including details of: the key directions which COs will be required to follow; the policy and process to consider request by COs for exceptions to the CCO’s directions; and the process for monitoring the performance and delivery of key referendum activities by COs during the months leading up to polling day. The Chief Counting Officer should also aim to ensure that detailed instructions and any supporting materials are issued to Counting Officers no later than four months before polling day.

Recommendation 23 – Ensuring the efficient conduct of future referendum polls The UK Government should ensure that the conduct order which should be in place for any future referendum allows observers who are properly accredited by the Electoral Commission to attend proceedings carried out by Regional Counting Officers. For a referendum where the Chief Counting Officer has appointed one or more Regional Counting Officers have been appointed, the rules should not require the certification or announcement of count totals at a regional level.

Recommendation 24 – Improving the management and delivery of future elections The UK Government should ensure that its review of the funding arrangements for elections to the UK Parliament and the European Parliament also considers the wider question of how to achieve an appropriate level of consistency and performance for all types of elections in the UK, building on the experience and lessons learned from the 2011 polls. We have no strong views on these matters. We note they represent extension of the powers of the Electoral Commission. We are not convinced that the experience of the 2011 referendums provides any evidence, either for or against, an enhanced role for the Commission in other elections. The funding of future elections and referendums

Recommendation 25 – Improving the process for funding elections and future referendums The UK Government should reflect on the experience of implementing this framework for the 2009 and 2010 elections and the May 2011 referendum to consider how the funding of future elections and referendums might be improved. For future referendums held under the PPERA framework, the UK Government should amend PPERA to give responsibility to the Electoral Commission for negotiation with Her Majesty’s Treasury on fees and charges for Counting Officers, as well as for receiving and administering claims from Counting Officers relating to the referendum. We have no view on this matter. We note that it represents a further extension of the powers of the Electoral Commission.

March 2012 Supplementary written evidence submitted by Iain McLean, Professor of Politics, Oxford University

1. As promised during oral evidence on 07.03.2012, I am pleased to supply the Committee with a note on the short-lived Czech-Slovak currency union of 1993.

2. Czechoslovakia came into existence in 1918 largely due to the efforts of its first federal president Tomas Masaryk.

3. The Czech Lands (Bohemia and Moravia) had many features in common with Slovakia. Their languages are mutually comprehensible; their economies developed similarly in the democratic period of 1918-38.

4. However, they also had cultural differences. Both had been part of the Austro- Hungarian (Hapsburg) empire; however, the Czech lands had been governed from Austria, and Slovakia from Hungary. The Roman Catholic Church commanded more loyalty in Slovakia than in the Czech Lands.

5. During the Second World War, the Czech Lands, minus Sudetenland, became the Protectorate of Bohemia and Moravia, under direct German occupation. Slovakia was governed by a puppet clerical regime.

6. The reunited Czechoslovakia came fully under Communist control in 1948. The ‘Prague Spring’ of 1968 was led by a Slovak, Alexander Dubček, but ended in the Warsaw Pact invasion of August 1968.

7. In the ‘Velvet Revolution’ of 1989, Czechoslovakia became a federal parliamentary democracy. Its first elected President was one of the leaders of the Velvet Revolution, Vaclav Havel.

8. The parliamentary elections of 1992 revealed a complete disjunction between the parties gaining seats in the Czech Lands and those gaining seats in Slovakia. The dissolution of the federal state was agreed between the party leaders – Vaclav Klaus in the Czech Lands and Vladimir Meciar in Slovakia – without a referendum in either territory. President Havel resigned in protest at what has become known as the ‘velvet divorce’.

9. The agreed division of the country into the independent states of the Czech Republic and Slovakia took effect on 1 January 1993. One of the terms of the ‘divorce’ was a continued currency union. However, the union lasted only about five weeks. It broke up in early February 1993.

10. The fiscal and monetary institutions set up by the divorcing parties are described as follows in an econometric study made available to the Committee1:

To mitigate the economic effects of the split, the Czech Republic and Slovakia retained a common currency, customs union and common labor market. While the customs union and freedom of movement of labor were intended to remain in place indefinitely, the monetary union was conceived as a temporary measure. Nevertheless, the two sides agreed to retain it at least for the first six months of 1993 and then consider further extensions. However, either side could withdraw from the union in case of the following

1 J. Fidrmuc and J. Horvath, ‘Stability of Monetary Unions: Lessons from the Break‐up of Czechoslovakia’, 1998. Later published in Journal of Comparative Economics 27: 4, 1999, pp. 753–781. developments: ¨ fiscal deficit of either republic exceeded 10 percent of budgeted revenues; ¨ foreign exchange reserves of either republic fell below one month’s worth of its imports; ¨ inter-republic capital transfers exceeded 5 percent of total bank deposits; and ¨ Monetary Committee (see below) could not reach an agreement on fundamental monetary-policy issues. The State Bank of Czechoslovakia (SBCS) ceased to exist with the demise of the federation, and instead both republics established their own central banks. For the duration of monetary union, so-called Monetary Committee was charged with determining monetary policy. The governors as well as two senior officials from each central bank were members of the Committee and monetary policy was decided by simple majority vote. The policy was then to be implemented by both central banks in accord with the decisions of the Monetary Committee.

11. After the break-up of the currency union, in July 1993, the Slovak central bank devalued the Slovak crown by 10% from its starting parity with the Czech crown. Both countries were part of the central-European wave of accession to the EU in 2004. Slovakia joined the Euro in 2009. The Czech Republic has not. It appears neither to have a current intention to join nor to have been successfully coerced by the Eurozone countries into an early commitment to join.

12. The comprehensive econometric study made available to the Committee has established that in 1993 the Czech Republic and Slovakia met many of the conditions for an optimum currency area. These include: economic shocks in the two territories were positively correlated; high ratio of mutual trade to trade with the rest of the world; no barriers (including cultural or linguistic barriers) to inter-territory mobility; both territories were small open economies.

13. On the other hand, Slovakia had considerably higher unemployment than the Czech lands and had been more heavily industrialised in the Communist era. It therefore had a higher proportion of capital-goods industry that was not competitive in world markets. Although after 1989 there were no barriers to labour mobility, there was not much of it. The effects of these imbalances were mitigated by fiscal transfers from the Czech lands to Slovakia. Their drying-up in 1993 worsened the short-term relative position of Slovakia.

14. The imbalances mentioned in the last paragraph were sufficient to lead to immediate speculation about the likely collapse of the currency union and the relative decline of the Slovakian currency and Slovakian reserves. This became a self-fulfilling prophecy within days of the creation of the currency union. For instance, throughout January 1993, many Slovak firms and individuals transferred funds to Czech commercial banks in expectation of Slovak devaluation shortly after the split.

15. The break-up of the currency union was agreed by the parties on 2 February 1993 and implemented on 8 February after an imposed freeze on movement of funds from 4 to 7 February.

16. The relevant part of the study cited in paragraph 10 concludes:

It seems that political factors played crucial role in determining the break-up of Czechoslovakia. This view is consistent with the work of authors who stressed the preeminent role of political factors in creating and sustaining monetary unions. ... According to Machlup (1977, p.71), “What ultimately counts, however, is that all members are willing to give up their independence in matters of money, credit and interest. Pragmatically, therefore, an optimum currency area is a region no part of which insists on creating money and having a monetary policy of its own”2.

17. If there is a lesson for an independent Scotland, it seems to be that, even in an optimum currency area such as Scotland and the rest of the UK, markets would force any currency union apart unless the conditions specified by Machlup are met.

March 2012

2 Fidrmuc and Horvath, p. 13, citing Machlup, Fritz (1977), A History of Thought on Economic Integration, New York: Columbia University Press. Written evidence submitted by SSE

1. SSE (formerly Scottish and Southern Energy) is a UK owned and based utility with a core focus on the energy markets in Great Britain. It is the second largest energy supplier, supplying over 9 million customers. It is also the second largest generator of electricity in the UK, and the largest generator of renewable energy. SSE also operates the electricity distribution networks in South Central England and the North of Scotland, where it also operates the transmission network.

2. The following statement is evidence that SSE submitted to the Scotland Office, the Scottish Government and the Economy, Energy and Tourism Committee of the Scottish Parliament.

3. SSE has no wish to become involved in a constitutional or political debate. This submission should be considered in its entirety, and SSE will not be adding to it with on- or off-the-record comment to any stakeholders

Statement

4. SSE has considered the practical implications for its businesses of the consultations issued in January 2012 by the UK Government and the Scottish Government and they are set out below. In doing so, SSE is mindful of the fact constitutional arrangements are matters for voters.

5. SSE employs people, serves customers, owns and operates assets and has plans to invest in England, Wales, Scotland, Northern Ireland and the Republic of Ireland. It expects to continue to be a significant business in England, Wales, Scotland, Northern Ireland and the Republic of Ireland in the short, medium and long term and has a legitimate expectation that its investments in existing assets will continue to be adequately remunerated. SSE has no plans to move its Registered Office from Perth.

6. SSE believes that the interconnection and integration of the electricity and gas systems and markets in Scotland and in England and Wales should continue regardless of the outcome of the referendum on Scotland’s future. This means that there should continue to be a single energy market for the islands of Great Britain, just as there is a single electricity market for the island of Ireland. Indeed, SSE supports further harmonisation of energy systems and markets to strengthen security of supply and achieve efficient use of energy resources for the benefit of customers.

7. SSE has long acknowledged, most recently in its Annual Report 2011, that regulatory change and legislative change, of which the current proposals to reform the electricity market in Great Britain are an example, are among the principal risks it has to manage, and it has extensive experience of doing so.

8. The forthcoming referendum, however, increases the risk of regulatory change and legislative change with regard to the electricity and gas industry in Scotland because it means there is additional uncertainty about the future. This additional risk will apply up to the date of the referendum and, should the result be a vote in favour of a change in Scotland’s status, will continue until there is a binding agreement on all of the issues that could affect the electricity and gas industry in Scotland.

9. This is because under the existing arrangements investment in new long-term electricity and gas assets in Scotland and England and Wales is effectively remunerated through the bills paid by electricity and gas customers throughout Great Britain. These arrangements were established by the United Kingdom Parliament, and Ofgem regulates electricity and gas markets in Great Britain.

10. New arrangements would have to be established in the event of Scotland deciding it would no longer be part of the United Kingdom and becoming independent. Determining those arrangements would be just one aspect of the extensive negotiations between the Scottish and UK governments which would follow. In these negotiations no issue, including the electricity and gas industry, would or could be looked at in isolation from all of the others.

11. Moreover, there does not appear to be a consensus on how Scotland’s position with regard to the European Union, which has a major influence over electricity and gas systems and markets in Member States, would be determined in the event of a referendum result in favour of Scotland ceasing to be part of the United Kingdom.

12 To be sustainable, all investments have to be adequately remunerated and additional uncertainty about key issues such as regulation and legislation makes decision-making in long- term businesses more difficult. This means SSE has a responsibility to consider the risks to adequate remuneration when making investment decisions concerning any operations and assets, including those in Scotland. Its policy, most recently described in its six-month financial results statement published in November 2011, is to apply where appropriate a risk premium to the level of remuneration expected from individual projects.

13. The practical application of this policy means that when making final decisions with regard to possible new investments in Scotland, which will have to be adequately remunerated if they are to be made, SSE will have to decide whether the additional risk of regulatory and legislative change with regard to Scotland means it should apply a risk premium to the investment proposal. If it concludes that a risk premium should be applied, it will have to determine what that premium should be; and, if a risk premium is applied, it will have to assess the impact of that premium on whether or not to proceed with the investment proposal.

14. Making investment decisions is about striking the right balance between risk and reward. The additional risk of regulatory and legislative change does not mean that SSE will not invest in projects in Scotland while its future is being determined. The development of SSE’s existing projects in Scotland will continue as planned. It does mean, however, that the additional uncertainty represents increased risk, of which SSE will have no alternative but to take account in making final investment decisions on those projects while that additional uncertainty remains.

15. It does not mean that anyone should seek to attribute to SSE a view on whether or not Scotland should remain part of the United Kingdom: SSE does not believe it is appropriate for it to have a view on that question, which can only be answered by voters.

March 2012

Written evidence submitted by True Wales

1. Which jurisdiction should conduct such a referendum and what is the legal and/or moral basis for such a determination?

The UK Government should be responsible for conducting a potential referendum on Separation for Scotland on the grounds that either a Yes or No outcome would have profound consequences across the UK. It is notable that the Silk Commission report on tax and constitutional arrangements in Wales has been delayed in anticipation of the outcome of the referendum in Scotland.

However, the referendum should occur in collaboration with the Scottish Government to minimise any preventable chance of conflict. The referendum should be conducted in the modern spirit of a devolved Scotland which enjoys reciprocal benefits as an equal part of a successful union of nations.

2. How should such a referendum be initiated e.g. should it be via provision in the Scotland Bill?

The referendum should be initiated via provision in the Scotland Bill.

3. What lessons can be learned for the process of conducting a referendum from the experience of other referenda in the UK, including the March 2011 referendum for the devolution of further law making powers to the Welsh Assembly Government?

(i) The choice of question for the referendum on separation for Scotland

In the case of the 2011 referendum in Wales on direct law-making power for the Assembly, those of us on the No side of the argument consider the question itself to have been deeply flawed. The most glaring error, in our view, was to allow the inclusion of a denial in the question on the ballot paper that a Yes vote would bring tax powers to the Welsh Assembly:

The Assembly cannot make laws on subject areas such as defence, tax or welfare benefits, whatever the result of this vote.

This statement was included despite a clear commitment on the part of the UK Coalition Government to a Calman-style inquiry in the event of a Yes vote, as promised in its Programme for Government, 20th May 2010. As we pointed out at the time, the Electoral Commission would have been aware that the Calman Commission dealt principally with tax and borrowing powers for the Scottish Parliament. It is a serious matter that the people of Wales were misled on this issue, not merely by the denials of politicians but also by a stubborn refusal to modify the proposed referendum question itself.

We regret the fact that the vote on the supposed ‘minor tidying up exercise’ - as it was promoted by Assembly politicians and a number of MPs before March 1st - is now being seen as an historic and overwhelming endorsement of the devolution record to date and a green light to further dramatic constitutional and fiscal changes. This has occurred even though only 23% of voters supported the change and almost 300,000 people voted against it.

Indeed, on 15th July 2011, the leaders of the four main Assembly parties called for the Welsh Calman Style commission - now known as the Silk Commission - to have a wider remit than purely finance; it will look at the possibility of devolving other powers to the Assembly including the legal system and energy projects.

We believe it is essential that in the referendum on Separation for Scotland the question is clear and unambiguous. It should not make the issue a technical matter including an option for Devo Max or Devo Plus; this would not only ensure an obfuscation of the central issue leading to public confusion but might also elicit little more than a sense of collective boredom, leading to apathy and a low turnout. The question should be simple, with a Yes or No answer, asking the people of Scotland whether they wish to separate from the rest of the UK or, alternatively, whether they wish to remain a part of the UK.

(ii) Funding of campaigns

Another important factor in the arrangements for the referendum was the funding of the respective campaigns. Electoral Commission guidelines stipulate that an organisation can only be designated as a lead campaign if it “adequately represents those campaigning for the relevant outcome”. We were accused by politicians in the Yes camp of not being sufficiently representative of No campaigners. Our response to that is that such claims are inappropriate when those on the No side were left largely unrepresented by a political class which overwhelmingly failed to express the concerns of thousands of people. The fact that almost 300,000 people voted No despite the efforts of leaders of all the main political parties, certain unions, the third sector and the Church shows just how serious it is that elected politicians failed to represent a large proportion of the voting population.

It is continually claimed by some in the Yes campaign that the low turnout in the recent referendum was a direct result of True Wales refusing to accept taxpayers’ money. The Electoral Commission’s document, Key Principles for Referendums guidelines, stresses that there “should be no barriers to campaigners putting forward arguments for any of the possible outcomes” and that “the process for designating lead campaign organisations for each outcome (and consequent distribution of public funds and access to media) is easy to understand, and accepted as fair”. We suggest that there were significant barriers to participation in this process, as laid out by the Political Parties, Elections and Referendums Act (PPERA), for a grassroots campaign such as ours.

In the final week before the applications were due to be submitted, it became evident to us that it better suited our campaign to continue as we were, putting all our energy into leafleting door-to-door and in town centres to ensure that our No arguments reached as many ears as possible. We did not, therefore, decide to abstain from applying in order to scupper the Yes campaign but because the funding on offer under the rules would not have benefited us as a No campaign.

The statement in the guidelines that the “extent to which the applicant is an ‘umbrella organisation coordinating the activities of a number of member organisations’ would be considered in the designation of campaigns, played a minor part in our decision. Our membership comprises individuals, many of whom belong to the Labour, Liberal and Conservative parties or to no party at all. Unlike the establishment led Yes campaign, which formed an umbrella over the leaders of the main political parties, unions, third sector groups as well as the Church hierarchy, True Wales could not be described as an umbrella organisation. Grassroots members of those very organisations were involved in our campaign. However, the fact that we could not describe ourselves as an ‘umbrella group’ left us vulnerable to the damage that would have been inflicted if our application had been turned down. This was, though, a risk that we would have been prepared to take.

When the PPERA was devised, it had perhaps not been envisaged that the two sides in a referendum might be so different in type. The Yes campaign had established promoters with access to pre-campaign funding and continuing financial support. The No campaign was a common interest group of ordinary people without significant funding or access to it.

We had never at any point intended to accept all of the funding from the Electoral Commission - although, right up until the last days of the Electoral Commission deadline, we were absolutely determined to apply to be the lead campaign. We believe that accepting the full £70,000 would have rightly been perceived as hypocritical behaviour from a group that condemned cavalier attitudes on the part of many politicians towards public money. Ultimately, though, the rules meant that in reality we had little choice but to abstain from applying. Having formerly registered, in any case, for designated campaign status, we fought as we began - as a grassroots campaign.

A major factor in our decision not to apply for lead campaign status was that funding was to be released to the campaign teams too late for us to make maximum effective use of it, and was too heavily tied up with restrictions on its use to allow the No campaign to use it to deliver its own strategy. The funding could only be used to cover infrastructure costs - that is “staff and office costs”, but “not the costs of campaigning materials”. The assumption of the referendum financing scheme was that the referendum, like Assembly Elections, would be conducted from local premises; however, modern day politics has moved on to communications via documents, broadcasting and electronic media. Funding was not on offer to campaigns to spend either on leaflet communications or electronic media deployment.

The designated lead campaigns were to be declared on 2nd February 2011 in preparation for four weeks of campaigning. We had little money to spend in advance of any forthcoming funding and would, therefore, immediately have been placed at a disadvantage to the comparatively well-resourced Yes campaign in not being able to spend any money until we received it. Under the rules, we would have received the initial instalment but only “as soon as reasonably practicable”; given this time scale, it would have been virtually impossible for us to use it for office space - the only commodity we were allowed to spend it on - even if we had wanted to do so. We thought we could perhaps invest in a ‘mobile office’ (i.e. touring van) and refuse the additional £49,000. We certainly could not have established the “multiple offices in order to communicate with voters” that the Electoral Commission considered ‘may be desirable’. Had it been possible to spend some of the funding on campaign literature, our decision might have been different.

The free postal delivery of one piece of literature to every elector was, on the surface, appealing but, ultimately, was not free; we would have had to fund the printing of 1.3 million leaflets and arrange their boxing and enveloping for the Post Office, an absolute impossibility given our financial position as a subscriptions-funded grassroots campaign. Following our decision not to apply for lead campaign status, IWA director John Osmond, calculated that “printing 1.3 million leaflets sufficient to reach every Welsh household” would cost in the region of £24,000. He suggested that this sum was “within the sights of the Yes campaign, but not the No campaign”. He was absolutely correct in citing this as a major reason why True Wales decided against registering as the lead campaign.

We had also read about the prohibitive cost of the ‘free’ leaflets in the North East of England. According to the Electoral Commission report, the printing cost in one case was £87,000. As the rules stated that no money could be spent on campaign literature, it is only right that we should acknowledge that we were deeply concerned at the idea of Yes material reaching every household while we would have had no choice but to forfeit the not-so-free postal delivery. This, we believe, would have given the well-resourced political establishment an even greater advantage in the dissemination of propaganda than was currently the case; such a situation would not have brought an equitable and democratic debate to the people of Wales.

During the course of our campaign, we produced about 150,000 leaflets which we distributed in all parts of Wales. We raised that money through subscriptions and small donations. Our detractors accused us of stifling debate by not applying for lead designation status and denying the Yes campaign taxpayers’ money. We believe that it is important to point out that without us - a group of ordinary people who are not politicians - there would have been no debate at all and this fundamental constitutional change would have been nodded through without the whisper of a No argument. Even the most vociferous Yes advocate must surely acknowledge that that would have shown our democracy here in Wales to be in a very poor state indeed.

(iii) Turnout in the Welsh Referendum

In our view, the low 35% turnout resulted not from a lack of referendum literature but from a number of other significant factors. After all, the Electoral Commission, in accordance with its guidelines, published an impartial “household voter information booklet” which would be the “core communication” to ensure that each voter was properly informed. In essence, we believe that not enough people saw this vote as relevant to their day-to-day lives; in this sense, the restriction of the debate to a narrow technical matter failed to ignite the imagination of the people of Wales, as well as denying the electorate a proper discussion on the devolution journey.

The decision to hold the referendum on a separate day to the Assembly elections meant that the referendum became not only £5 million more costly, but also less likely to attract a high turnout. As Peter Browning pointed out in his evidence to the Lords’ Committee on the Constitution (12th Report of Session 2009–10), “On past evidence of referendum turnout in the UK”, it was “doubtful whether voters would turn out to vote in similar numbers as for elections” and added that “low turnout would weaken the legitimacy of the result” (p 112). Michael Marsh, Professor of Comparative Political Behaviour, Trinity College, Dublin, suggested that one of the difficulties with referendums is that voters “do not necessarily want to know, they have much more important things on their mind”(Q.174). Professor Butler cited “the rapid decline in turnout in Switzerland, often viewed as the European exemplar of direct democracy” (Q.6). Many of us on both sides of the campaign have readily admitted to difficulties involved in conveying the importance of this vote to a large number of citizens.

The Key Principles for Referendums guidelines determine that “there should be integrity and transparency of campaign funding and expenditure”. Beyond official funding, this is very difficult to ensure as there is no requirement on campaigns to declare sources of funding during the referendum period. Ascertaining those sources were, of course, problematic even after the event. We do not believe that the public has been fully informed as to how much material/financial help (including labour) was provided to the Yes campaign by political party offices, the unions and by third sector organisations which receive Assembly funding. For our part, we ran our campaign on just under £4,000.

Some witnesses to the aforementioned House of Lords Committee argued that referendums “tend to be dominated by elite groups, including politicians, the media, and wealthy individuals”, rather than “ordinary” citizens. Dr Uwe Serdült, Centre for Research on Direct Democracy (c2d), asserted that “the arsenal of direct democracy is an institutional weapon for organized interests (political parties, interest groups, employer’s and employee’s associations) and not for the people as such” (p 137). Peter Browning warned that referendums were rarely if ever free from influence by politicians and minority groups (p 112). Despite the efforts of the Electoral Commission throughout the process, this referendum on direct law-making power for the Welsh Assembly reflected that trend. Our experience demonstrates that the current arrangements under the Political Parties, Elections and Referendum Act do not provide for an environment within which a group comprised entirely of ordinary citizens can feasibly operate as a registered lead campaign.

(iv) Lessons to be learned from the March 2011 Referendum in Wales

In Wales, few politicians who leaned towards a No vote because they were concerned about where the devolution journey was leading us dared to speak out. Perhaps they feared being perceived as disloyal to their Party or did not want to be accused of being ‘anti-Welsh’. Politicians - including those at Westminster - who favour keeping Scotland in the United Kingdom should not leave the outcome of a referendum on Separation to chance. They need to demonstrate that supporting Scotland’s place in the UK with representation in the EU, the UN, NATO, the G20, the World Bank and the IMF is pro-Scottish, not anti-Scottish. If the debate is one-sided, the people of Scotland will be deprived of a chance to hear important arguments which will inform one of the most significant political decisions of their lives.

The question on the ballot paper is a key factor in any referendum: the Welsh question focused on the technical matter of direct law-making powers in the devolved areas, rather than on the expansion of the devolution journey desired by the Cardiff Bay political class. The outcome of the referendum has been interpreted as an assent to the latter. For the sake of legitimacy, the question in the referendum on Separation for Scotland should reflect the reality of what will happen in the event of a Yes or No vote. It would not be appropriate to obfuscate the matter with complicated diversions on the desirability or otherwise of Devo Max or Devo Plus, either of which constitutional arrangements could emerge via the evolution of devolution without a referendum.

March 2012

Written evidence submitted by Dr Matt Qvortrup

Introduction

This paper analyses if the Courts are likely to hold a decision to hold an advisory referendum on Scottish independence to be ultra vires. In analysing this the essay draws on statutory interpretation and relevant case-law.

Would the Scottish Parliament be entitled to hold an advisory referendum on independence? Opinions are divided. The Scottish Government – headed by the Scottish National Party (who have e majority at Holyrood) thinks the answer is yes. The British government – as represented by the Lord General Lord Wallace – thinks not1.

Needless this is a political issue. And, consequently, the aforementioned parties reflect their political interests. There is nothing wrong with that. But as the issue is likely to come before the courts, we need qua lawyers to isolate the political prejudices and focus exclusively on the legal questions.

The role of Courts under the Constitution

Given the constitutional, historical and political importance of this issue it is important that the Courts are not “guilty of usurping power” and that it is recognised that “judicial review is concerned not with the decision [to hold a referendum], but with the decision making process [itself]”2 ¸, or – to cite another obiter dictum by Lord Bingham, remember that the Judges have “one function, which is to rule on the lawfulness of decisions”3.

The Legislative Framework S.29 of the Scotland Act 1998

The hypothetical decision under review is an advisory referendum on independence. Given the constitutional position, i.e. the doctrine of the sovereignty of Parliament, a referendum can never be binding4. But would it be legal or would it be ultra vires, i.e. outside the legislative competence of the Scottish Parliament as set out in the Scotland Act 1998?

The Scotland Act 1998 established a devolved parliament for Scotland. Under the Act, the Parliament is entitled to legislate in a number of areas, though these are not positively specified5. These powers are limited by S.29 which states that “an Act of the Scottish Parliament is not law so far as any provision of the Act is outside the legislative competence of the Parliament’6. S.29 (2) (b) limit these powers by reference to so-called ‘reserved matters”. These are listed in Schedule 5 (1) (a-c) and include “the Crown including Crown and regency”, “the Union of the Kingdoms of Scotland and England” and “the Parliament of the United Kingdom”7.

Excursion: Statutory Interpretation: Pepper v Hart?

1 Lord Wallace of Tankerness, QC Glasgow University 11 January 2012 2 Chief Constable of North Wales v Evans [1982] 1 WLR, 1155, 1173, per Lord Bingham 3 R v Cambridge Health Authority ex Parte B, 1 WLR, 1998 4 Colin Turpin and Adam Tomkins (2007) British Government and the Constitution 6th Edition, Cambridge, Cambridge University Press, p.533 5 Peter Leyland (2012) The Constitution of the United Kingdom, Hart, Oxford, p.252 6 S.29 Scotland Act 1998. 7 Schedule 5 (1) (a‐c) Do statutory provisions rule out an advisory referendum? One argument put forward by opponents is that the promoters of the Bill expressly rejected any public vote on the matter8. For example, in the House of Commons, Donald Dewar, the Secretary of State for Scotland, said that “a referendum that purported to pave the way for something ultra vires is itself ultra vires”9. There can be little doubt that Dewar was of the opinion that a referendum would be unacceptable. But it is questionable, from a Constitutional law point of view, if this statement has any legal implications

Following the decision in Pepper v Hart10, the Courts may only use Hansard in cases where there is ambiguity and if a literal reading of the Act leads to absurdity11. In its rulings on the constitutionality (sic!) of Scottish legislation, the SC (and indeed lower courts) have not invoked Hansard. Presumably because they do not feel that the Act was ambiguous or would lead to absurdity. It is unlikely, therefore, that the SC will place much emphasis on the statement by the promoter of the Bill.

To date the SC has only dealt with one case that directly considered the issue of ultra vires decisions by the Scottish Parliament, namely AXA v Lord Advocate12. In AXA the plaintiffs challenged The Damages (Asbestos Related Conditions) Scotland Act 2009, which has had been enacted to reverse The House of Lord’s Decision in Rothwell v Chemical & Insulation Co Ltd13.

Judiciability and Locus Standi

Before entering into an analysis it is necessary to determine if the issue would come before the courts at all.

The first condition is standing. Given that the British Government has standing14 there is no question that Westminster could challenge a Scottish referendum in the Courts. Whether an individual or a group of individuals could challenge a decision to hold an advisory referendum is more questionable. A pressure group could challenge the decision under the familiar rule of World Development Movement 15 Traditionally, it would have been difficult for a single concerned individual to challenge the decision, as the courts previously were reluctant to allow “busibodies, cranks and mischief makers” to challenge decisions16 but since Lord Rees-Mogg’s challenge to the Maastricht Treaty17, even this rule has been relaxed, and it seems that even a concerned individual is able to challenge decisions. An application for judicial review is unlikely

8 Select Committee on the Constitution: Referendum on Scottish Independence, 24th Report of Session 2010‐ 2012, HL Paper 263, p.10. 9 H.C. Debs 5 December 1998, Col. 257. 10 Pepper(Inspector of Taxes) v Hart [1993] AC 593, per Lord Brown‐Wilkinson. 11 See generally: Colin Turpin and Adam Tomkins (2007) British Government and the Constitution 6th Edition, Cambridge, Cambridge University Press, p.443. 12 AXA v Lord Advocate [2011] UKSC 46. Other cases that considered decisions by the Scottish Parliament or the Scottish Executive (Government), include Martin v HM Advocate [2010] UKSC 10, A v Scottish Ministers UKPC D5, Whaley v HM Advocate [2007] UKHL. Originally the Judicial Committee of the Privy Council were charged with adjudicating disputes over the interpretation of the Scotland Act, but since the enactment of The Constitutional Reform Act 2005, this function has been transferred to the Supreme Court (SC). 13 Rothwell v Chemical & Insulation Co Ltd UKHL 39 [2008] 14 S.31 (3) Senior Courts Act 1981 15 R v Secretary of State for Foreign Affairs ex p. The World Development Movement Ltd, [1995] 1 WLR 386, the five conditions are the importance of the matter, whether anybody is better placed to make a claim, the need to up‐hold the rule of law, the role of the pressure group, the relevant statutory duty involved. 16 IRC v National Federation of Self‐Employed and Small Businesses Ltd [1982], AC 617 17 R v Secretary of State for Foreign and Commonwealth Affairs ex parte Rees‐Mogg [1994] 2 WLR 115 to be ruled out on procedural grounds as long as it is filed promptly and meet the other requirements18.

The more substantial question is if the courts feel that the issue lends itself to judicial review, i.e. if it is judiciable. In CCSU v Minister for the Civil Service, Lord Diplock held that certain issues of high politics were non-judiciable19.

Given that the issue of a referendum on Scottish independence was on of the most contentious issues in the 2011 elections to the Scottish Parliament (in which the Scottish National Party (SNP) won an overall majority) a reasonably strong case could be made for the view that the issue is too politically sensitive for the Courts to decide. This seems to have been acknowledged by the Courts. In AXA, Lord Reed noted obiter that “if the question which arises is not judiciable – that is to say, is not suitable for the courts to decide, having regard to their constitutional function – then it cannot be made subject to judicial review”20. Given that the issue in AXA was less controversial (See next section), it is conceivable that the courts would hold a judicial review challenge to be non-judiciable.

Would a Decision be Ultra Vires?

It would – at first sight – appear that a judicial review of a decision by the Scottish Parliament falls squarely within the established doctrine, namely to “keep inferior bodies within their legal power”21. It has traditionally been the case that the SC has “power in its exercise of supervisory jurisdiction to regulate the process by which decisions are taken by any person or body to whom a jurisdiction power or authority has been delegated”22.

The basic argument in against the holding of a referendum is based on the legal argument that “under [S.29] of the Scotland Act 1998, the Union is a reserved matter...this means that even if a referendum in Scotland is organised by the Scottish Government and supported by a majority for secession, this would only be the first step in a process”23.

Based on this argument the Scottish barrister Aidan O’Neill QC argued in his evidence to the Scottish Affairs Committee in the House of Commons that S.29 presents “an insurmountable legal obstacle to the Scottish Parliament enacting any law which would provide for an independence referendum to be held in Scotland”24. Similarly the House of Lords Select Committee on the Constitution has taken the view that “any referendum on Scottish independence would have both the purpose and the effect of making a decision related to a reserved matter; namely the union”, and would therefore be ultra vires25.

Relevant Case Law: Scottish Law

These arguments are persuasive, at least up to a point. It is a fundamental principle of public and administrative law that public bodies may not make decisions or take actions without

18 r. 54 Civil Procedure Rules 19 Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374, 20 AXA a Para 144, Per Lord Reed. 21 E. Guisseni (2008) Constitutional and Administrative Law, 1st Edition, London, Sweet and Maxwell, para 14.002 22 West v Secretary of State for Scotland [1992] SC 385, 412, 23 Peter Leyland, The British Constitution, 252. 24 Aidan O Neill, Evidence to the Scottish Affairs Committee, S.3.2. 25 Select Committee on the Constitution: Referendum on Scottish Independence, 24th Report of Session 2010‐ 2012, HL Paper 263, p.10 statutory authority26. It would seem natural, therefore, to start analysis by inquiring if there is statutory authority for holding a referendum under the Act. Whether the answer to this question is affirmative hinges on the interpretation of the words in S.29, i.e. that an Act by the Scottish Parliament is “not law so far as any provision in the Act is outside the legislative competence of the Parliament”.

Case law has not dealt directly with the referendum but general guidance as to how the courts might adjudicate in cases concerning ultra vires issues can be found. In the Scottish case Imperial Tobacco v Scottish Ministers it was held that “the Scheme whereby legislative competence is conferred on the Scottish Parliament is one where what is not specifically devolved as being outside competence is devolved”27. In short, what is not expressly prohibited is allowed. Based on this it would seem that the Scottish Parliament is entitled to hold a referendum, albeit an advisory one.

Case Law and Ultra Vires: The Jurisprudence of the Supreme Court

Imperial Tobacco suggests that a decision to hold an advisory referendum would not be ultra vires. But would the SC take the same view if it were to adjudicate on the matter?

Second guessing the decisions of the Courts is notoriously difficult. And knowing what determines the decisions of their Lordships is a speculative business. In the words of American legal scholar Jerome Frank - “the ultimately important influences in the decisions of any judge are the most obscure, and are the least easily discoverable” 28. We can, however, make educated guesses on the basis of precedents.

Assuming that the challenge does not fall at this hurdle, how might the Supreme Court rule on the matter?

In AXA, the SC held that “Acts of the Scottish Parliament are not subject to judicial review at common law on the grounds of irrationality, unreasonableness or arbitrariness”29 and later in the same case it noted that the “the grounds for judicial review...cannot be applied”30.

This, of course, does not exclude procedural impropriety or illegality. The former is unlikely to be a cause for concern, as the decision to hold a referendum will be debated in the Scottish Parliament prior to its enactment, and therefore, meet the requirements of a fair hearing and audi alteram partes31

The more likely challenge is that of illegality. The Scottish courts have held that a decision by the Scottish Parliament regarding an issue not expressly mentioned in the Scotland Act, was not ultra vires. But would the SC reach the same conclusion?

In AXA the SC held that the the Scotland Act provided a “delegation” of “power to legislate in areas that have not been reserved to the United Kingdom Parliament”32. Hence, it would appear that a decision to hold a referendum would not be ultra vires as it is not an expressly reserved matter.

26 R v Richmond upon Thames London Borough Council ex Parte McCarthy & Stone (Development) Ltd [1992], 2 AC 48 27 Imperial Tobacco v Scottish Ministers [2012] CSIH 9, per Lord Brodie, at Para 164 28 Frank, J. (1930) Law and the Modern Mind, New York, Brentano’s, p.114. 29 AXA, 52, per Lord Hope 30 AXA at 144, per Lord Reed. 31 E.g. Fairmount Investments Ltd v Secretary of State for the Environment [1976] 1 WLR 1255 32 AXA 45, per Lord Hope. Again, it seems that as the right to hold a referendum – in effect conduct a large consultation – is not ultra vires as it is not an expressly reserved matter.

But the SC went further than merely stating the principle that what is not expressly illegal is intra vires. According to AXA there is an equally fundamental reason against intervening in an a fortiori decision to hold a referendum. This reason is based on the constitutional position of the judges in a constitutional democracy. In such a system the Courts must be careful not to overstep the boundaries of their constitutional role. This position was set out at some length by Lord Hope in AXA:

While the judges, who are not elected, are best placed to protect the rights of the individual, including those who are ignored or despised by the majority, the elected members of the legislature of this kind [in this case the Scottish Parliament] are best placed to judge what is in the country’s best interest as a whole...The advantages that flow from the depths and width of the experience of its elected members and the mandate that has been given them by the electorate suggests that the judges should intervene, if at all, only in the most exceptional circumstances33.

Now it could be argued that a referendum on the continuation of the Union would be a “most exceptional” circumstance, especially if it was binding. In this case, it would touch upon the reserved matters and hence be ultra vires. But given that the vote is advisory only, and that it would have to be followed by negotiations between Westminster and Hollyrood (a position that the Scottish government now accepts34), it would be unlikely for the Supreme Court to strike the Scottish governments decision.

The fact that the SC accepted the Scottish government’s right to enact The Damages (Asbestos Related Conditions) Scotland Act 2009, which was not in the manifesto in any of the parties, makes it even more unlikely that they would quash a decision that was in the manifesto of the party that won a majority in the 2011 elections. This point is underlined by the fact that Lord Hope made specific reference to “elected members and the mandate that has been given them by the electorate”. Given that the SNP won 69 out of the 129 members of the Scottish Parliament on a commitment to “bring forward our referendum bill in the next parliament”35, a challenge seems unlikely to succeed.

This point is not an accidental one but a fundamental premise in the jurisprudence of the Supreme Court. The position in AXA – as acknowledged by the SC36– is in line with the fundamental principle established in R(Countryside Alliance) v AG, in which it was held that “the democratic process is likely to be subverted if, on a question of political or moral judgement, opponents of an Act achieve through the courts what they could not achieve through Parliament37.

By challenging the Act, the opponents would fall squarely into the category of those who seek to “achieve through the courts what they could not achieve through parliament”. This – given the SC’s previous jurisprudence – would seem unlikely.

Conclusion

33 AXA at Para 49 34 IN the Consultation Paper Your Scotland, Your Referendum The Scottish Executive, wrote “Following a vote for independence, the Scottish Parliament and Government would carry forward the People’s will. This Would involve negotiations with the UK Government”, The Scottish Government, Your Scotland, Your Referendum, Consultation, January 2012, The Scottish Government, Edinburgh, 2012, p.28 35 Scottish National Party (2011) Re‐elect A Scottish Government working for Scotland, Edinburgh, SNP, 28 36 AXA Para 49, per Lord Hope 37 R(Countryside Alliance) v AG [2007], UKHL 52, at Para 45, per Lord Bingham.

The conclusion – based on the evidence of existing case law is that it is unlikely that the SC would hold a decision to hold an advisory referendum on Scottish independence to be ultra vires. The two main reasons for this are:

• A permissive reading of S.29: In both Imperial Tobacco and in AXA it was held that what is not expressly within the ‘reserved powers’ in Schedule 5, is legal, and that the Scottish Parliament has power to “legislate in areas that have not been expressly reserved”38. The Power to hold a referendum is not expressly mentioned as being reserved. Hence the right to decide to hold a referendum is not ultra vires

• Presumption against judicial interference in the democratic process: The Court is unlikely to hold a decision to conduct an advisory referendum ultra vires as this would violate the principles set out in R (Countryside Alliance)v AG, namely that the “democratic process is likely to be subverted...if opponents of an Act achieve through the Courts what they could not achieve through Parliament39. Given that the SNP won a majority of the seats in the Scottish Parliament in 2011 on a manifesto commitment to hold a referendum, denying the Parliament the right to hold such a vote would be to allow opponents to “achieve through the courts what they could not achieve through [the Scottish] Parliament”, and hence violate the legal principle established by the Supreme Court. That this reasoning was affirmed in AXA further underlines this point40.

Further, given the highly politicised nature of the issue, it is questionable if the a challenge would be judciciable, as per the principles established in CCSU v Minister for the Civil Service. In AXA, the Court raised some concerns about subjecting any decisions of the Scottish parliament to judicial review. Although the Court accepted that the issue before them in AXA was judiciable, the same is not given in the case of a challenge to a decision to hold a referendum on Scottish independence.

“Legal practice”, wrote the American jurist Ronald Dworkin, “is an exercise in interpretation”41, Determining whether the Scottish Government and the Scottish Parliament is entitled to hold an advisory referendum or if such a vote is ultra vires is not a question that can be answered with cast iron certainty, but a question which requires a careful of case law and statutory interpretation. Based on the principles of jurisprudence by the Senior Courts it seems that the chances that their Lord- and Ladyships will strike a decision by the Scottish Parliament down seems rather unlikely.

March 2012

38 AXA at Para 45, per Lord Reed. 39 R (Countryside Alliance)v AG [2007] UKHL 52, per Lord Bingham. 40 AXA at 49, per Lord Hope 41 Roland Dworkin (1982) ‘Law as Interpretation’ Texas Law Review, Vol. 60, p.527‐550, 527 Supplementary written evidence submitted by Rt Hon Michael Moore MP, Secretary of State for Scotland

Extending the franchise to 16 and 17 year olds

I was grateful to you and the Committee for the opportunity to give evidence on the matter of the proposed independence referendum in Scotland. You invited me to confirm that no formal representations have been made by Scottish Ministers on changing the local government (and by extension, the Scottish Parliament) franchise to include 16 and 17 year olds.

As I said at the time, I can only answer for the period since May 2010. Certainly, since this date, there has been no communication or meeting at Ministerial level through which a request has been made to change the local government franchise, which as you know is a reserved matter. My officials inform me that, whilst they have been made aware from time to time of the Scottish Government's position on 16 and 17 year olds voting, no approach has been made on the specific point of amending the local government (and, thus, the Scottish Parliament) franchise.

I hope this assists the Committee with its work and I look forward to receiving a copy of your report in due course.

March 2012

Written evidence submitted by Nigel Smith

One detail that the evidence stumbled on yesterday (14 March 2012) was the broadcasting arrangements. In a binary referendum, the broadcasters aim for 50:50 balance in their output during the regulated referendum period usually about 4 months. If there is a third option it immediately becomes 33:33:33 putting devo max on an equal footing with Independence. A nonsense in my book!

And another. In the 1997 devolution referendum the Electoral Commission (if it and PPERA had existed then ) would have had to designate a campaign for all 'possible' outcomes meaning three. The fourth option - a tax power without a parliament - was not a ‘possible outcome’ in the words of PPERA so did not legally exist.

March 2012 Additional written evidence submitted by Rt Hon Michael Moore Secretary of State for Scotland

You will be aware that the Government's consultation on Scotland's constitutional future closed on 9 March. It is my intention to publish a full summary of the responses when Ministers and officials have had the opportunity to analyse and consider them fully.

However, you will be aware that referendum amendments will be debated in the House of Lords tomorrow. To enable their Lordships to have as full a debate as possible I want to provide an initial summary of the findings that have emerged from the consultation so far.

I was very pleased with the way that people in Scotland engaged with the consultation, with almost 3000 responses received. These responses included many thoughtful replies from men and women across Scotland and beyond and also from businesses, academics, political parties, trade unions and others from across civic Scotland.

The Government's key proposal in the consultation was that the referendum must be legal, fair and decisive. To provide for a legal referendum, we set out our view that a section 30 Order should be agreed, to devolve to the Scottish Parliament the power to legislate for a referendum. Initial analysis of the responses indicates clear support for our proposal; a significant majority of those who responded to this issue agreed that powers to hold a referendum should be devolved to the Scottish Parliament and of these, the great majority supported using a section 30 Order. However, analysis of any consultation is not simply a matter of counting responses and so I am pleased that our preference for agreeing a section 30 Order was endorsed by constitutional experts including Matt Qvortrup, Adam Tomkins and Alan Trench, and by knowledgeable organisations such as the Law Society of Scotland, the Electoral Reform Society of Scotland, the Royal Society of Edinburgh and the British Academy.

Of course, the Scottish Government in their consultation also accepted that a section 30 Order was the best way to remove doubts about the competence of the Scottish Parliament. I welcome this endorsement, and while I recognise that the Scottish Government's consultation is still ongoing, I look forward to agreeing a section 30 Order with Scottish Ministers, to allow a legal, fair and decisive referendum.

I will publish a full summary of the other issues raised in the consultation after the Easter recess. However, early analysis of the responses shows clear support for a single question on independence; for the referendum to be held sooner rather than later; for the Electoral Commission to be involved in oversight of the referendum and for the Scottish Parliament franchise to be used for the referendum.

In making this information available now, I am seeking to balance the need to ensure that tomorrow's debate in the House of Lords is as well informed as possible, with the need to provide Parliament with a full and detailed analysis of the consultation in due course.

March 2012

Written Evidence submitted by Robert Durward, Managing Director, Cloburn Quarry Company

Politicians Are Becoming Dangerous

If necessity is the mother of invention then affluence must be the mother of decay. Our society is weakening and we have become lazy, abrogating responsibility for everyday matters to the political elite. In consequence, our politicians have become estranged, less able and driven by their own agenda.

The current independence campaign by the Scottish National Party is a case in point. Having collected just 23% of the available vote in 2011, the SNP have made breaking up the United Kingdom the predominant issue on the political calendar. It matters not that a referendum was but a minor part of their manifesto or that a consistent two thirds of the Scottish electorate, when polled, indicate a preference for staying put.

Although such plebiscites normally contain only a “for or against” option, proposed alternatives to independence in the forthcoming referendum are growing by the minute. Whatever we end up with, two things are certain; a) it will be hugely complicated and b) the electorate will have very little say in its final design. We have of course been here before with the Devolution Referendum in 1997. This allowed the political elite of the day to conjure up the 1998 Scotland Act setting out the parameters for the new Scottish Parliament. The 1998 Act can best be described as a short term fix by politicians to suit their own ends at that time. Rather than improving Scotland’s democratic system, it simply created a brand new set of problems; the Act is divisive, placing barriers between Scottish and English politicians; the parliament was not made responsible for raising the money it spends; a significant percentage of its members are of limited ability; it has no second chamber to moderate its legislation; it is overstaffed with 129 MSPs for only 73 constituencies; it sits for only one and-a-half days per week, it is expensive to run and voter turnouts are low.

In recognition that mistakes had been made, the Calman Commission was formed in 2007 to carry out a review. Their report, published in 2009, was aimed at “deepening devolution and increasing fiscal responsibility.” Few outside the magic circle contributed, but it has formed the basis of the Scotland Bill. This has made its way through both parliaments and is now at the committee stage in the House of Lords. Once again the public pay scant attention as the political elite prepares to hand down yet more complicated edicts.

Are politicians too smart for the electorate or have we become too complacent about those who act and speak on our behalf? This disconnect developed gradually over a long period of time and with many contributory factors; the growing ability of the state to control our lives; handouts to buy votes; consultations to provide the ‘right’ answer; minority driven legislation; complex legislation; multiculturalism, rights instead of responsibilities, European diktats, the list is endless. Yet we descended the slippery slope of our own free will and now find ourselves in a situation that our ancestors, many of whom fought and died for our freedom, would never have countenanced.

Recovery is possible and the starting point must be the re-engagement of as many people as possible in the democratic process. It happens in other countries and it used to happen here. Paid councillors and regionalisation simply created fiefdoms of incompetence saddled with a ‘them and us’ culture. It is time to replace paid bureaucrats with enthusiastic stakeholders working collectively for the common good.

Despite its shortcomings, the Scottish parliament fits the need for increased local decision making, but it must be improved. The usual suspects producing complex politically motivated

reforms via self-appointed committees will no longer suffice. Any successful settlement will need to cater for the aspirations of the majority and be as straight-forward, simple and cost effective as possible. From a business perspective the present system is catastrophic, incomprehensible and guaranteed to cause problems. There are 129 MSPs elected under a mixed first-past-the-post and proportional voting system for just 73 constituencies. A number of responsibilities are devolved to the Scottish parliament and some are reserved to Westminster. We therefore have a further 59 Westminster MPs who cannot take part in Holyrood proceedings, just as our MSPs cannot take part in Westminster debates. This is confusing, it is inefficient, it devalues our MSPs and it embeds division. Scotland was also deliberately hobbled with proportional representation to avoid any chance of its legislation upsetting Labour’s Scottish hegemony. Scotland’s 188 parliamentarians are numerically responsible for only 19,500 voters whereas English MPs are responsible for 68,000. Again from a business perspective, the solutions are staring us in the face, simplification and quality control.

Simplification: The roles of MPs and MSPs should be combined and their number set to match the number of constituencies available. We would then have 73 MSPs elected by first-past-the- post, able to go to Westminster. With appropriate timetabling, MSPs could easily share their time between the two parliaments. Debating UK wide issues at Westminster and devolved issues at Holyrood, Scottish politicians would no longer vote on English issues.

Quality Control: The Scottish parliament has acquired an unfortunate reputation for profligate and lightweight legislation. The surest way of addressing this would be by the addition of a suitably qualified revising chamber. Members of the second chamber would be elected from their constituency of residence. They would stand on their experience and record rather than a political platform. In other words, they would be elected on their ability to deliver rather than their ability to promise. A non-political revising chamber of people from the community would address two significant problems. The growing disconnect between politicians and those who elect them, and politically motivated poor quality decision making driven by the constant struggle to get re-elected.

Complex suggestions are also emerging for creating different tax regimes from the rest of the UK. These proposals are idealistic, they have not been sufficiently thought through and they would cause endless confusion. In the middle of an economic crisis, this episode increasingly resembles two bald men fighting over a comb. How can we possibly explain such an egotistic and selfish campaign to other less fortunate nations? And how shall we explain it to our own children whilst teaching them to embrace and value other cultures? Our generation will have the dubious honour of being the first ever to leave its children in less auspicious circumstances than it enjoyed for itself. Are we actually going to compound our folly by breaking up their homeland as well?

The Scots who wish to remain within the United Kingdom must be given a viable option to vote for as a the status quo is plainly not fit for purpose. Claiming that other options could only be considered after independence had been rejected is pure political sophistry. If the political elite continue to disdain the wishes of ordinary people and exclude them from the decision making process, then they will simply create another rotten structure to replace the one we already have. I strongly believe that “devo-simple” would allow Scotland to once again forge ahead. These ideas will no doubt be ridiculed by those in power – speak out before it is too late.

April 2012 Supplementary written evidence submitted by Electoral Reform Society

1. Introduction and Context This written evidence to the Scottish Affairs Select Committee is submitted in support of the oral evidence given by attendance at the Committee on Wednesday 14th March 2012 of: Katie Ghose- Chair of Yes in May Ltd and CEO of Electoral Reform Society and Willie Sullivan – Head of Field Operations for Yes in May and Scottish Director of Electoral Reform Society.

We were invited to apply our experience of campaigning in the AV referendum in 2011 but also of our current roles at the Electoral Reform Society. The Committee Chair drew our attention to the evidence submitted by No to AV Ltd and stated that he would assume we agreed with their submission unless we noted in writing otherwise. In this submission section 3 is a specific response to that request, where sections of the No to AV submission with which we disagree are inserted in italics and our reasons for disagreement stated.

2. Executive Summary 2.1 We consider a referendum on independence to be within the mandate of the SNP Government in Scotland but believe that the proposition and timing of such a referendum should be decided by the Scottish Parliament with the question, planning and organisation of the poll managed by the Electoral Commission in Scotland under the framework laid out in the Political Parties, Elections and Referendums Act 2000 (PPERA), but reporting to the Scottish Electoral Management Board and therefore the Scottish Parliament. The mechanisms and lines of accountability must be agreed between both Governments. We support the use of a a Section 30 order under the Scotland Act 1998 to describe this

2.2 We note that the Electoral Commission has recommended a number of changes to PPERA and we would support all of these. However currently the campaign rules etc governing a referendum are included in the primary legislation that sets the date, proposition etc for each poll. This means that the rules are not generic. We would support the development of a generic set of rules to be included in PPERA .

Key observations would be.

a) That the rules should be known and understood by the campaigners as far out from the vote as possible- this would be solved if the basic rules were in PPERA.

b) That the period between application and designation should be sufficiently long to allow proper planning and implementation of a proper campaign plan. i.e printing of freepost

c) That the strategic decision of one campaign not to register as a lead organisation should not disadvantage the other side i.e. The No campaign failing to register in Wales meaning that the Yes campaign could not spend up to the limit of a lead campaign

d) The public grant is important but is too restrictive in only being allowed to be spent on administrative costs and not actual campaigning

e) That the broadcast media, particularly the public broadcaster, should have more of a defined responsibility in covering the debate

3. Response to No to AV Evidence As requested by the Chairman we have only noted where we disagree with this evidence 3.1 Any Scottish Referendum Should be Fought under PPERA

1.8. It would be naive to expect that any referendum question could be settled outside the political process. Since it is an inherently political act, it would also be undesirable for the writing of the question to be passed to an independent body, because that could compromise their independence. However, the current PPERA arrangements offer a useful control in that they would force legislators to justify publically any question which received an adverse report from the Commission – and if they ignored such a report, that would probably become an issue in the following referendum (with the adverse publicity neutralising the gain from any bias in the question itself).

3.1.1 While we have no strong objection to this position and this is a tried and tested method we would suggest that the option of a parliament making a general proposition i.e. describing what is it they want to find out, and leaving the exact wording of the question to testing and consultation of the Electoral Commission should be considered.

3.2 How should the Scottish Referendum be authorised? 1.21. A Section 30 Order could be used, but the text of the Order would have to include such matters as the Question, the conduct rules for the referendum and other ancillary details which would be advisable given the current draft Bill produced by the Scottish Executive (see Section 5). An Order would probably not be the best vehicle for ensuring line-by-line parliamentary scrutiny.1.22. On balance, the best route is probably a bespoke Referendum Bill including the Question and conferring power on the Scottish Parliament to trigger a referendum. This would be introduced after PPERA has been amended (see Section 4) and once sufficient progress has been made in addressing the Unanswered Questions.

3.2.1 We disagree with this and feel that a section 30 order allowing the Scottish Parliament to bring forward a Referendum Bill is the best way to authorize the referendum.

3.2.2 The SNP secured an unprecedented majority in the 2011 election campaigning on their intention to hold a referendum. The Scottish Social Attitudes Survey 2011 found that 72% of people favour the Scottish Parliament making more decisions about issues that affect Scotland, up from 50% in 2010.

3.2.3 All of these decisions should be made with the widest possible consultation, particularly with the Electoral Commission and other bodies experienced in running referendums and public information campaigns. Ideally anything that cannot be set out in PPERA would be reached in agreement between the two governments. However at this time that looks unlikely and if you were to ask us who has the greatest political and democratic legitimacy to make the decision it would probably not surprise you that the Electoral Reform Society feels that it is the Scottish Parliament whose representation more fairly reflects the votes of the Scottish people.

3.3 Who sets the date? 2.13. The Welsh Referendum of 2011 offers the closest parallel. In that case UK legislation [1] empowered the National Assembly for Wales to trigger a referendum by a vote of two-thirds of the members. The mechanics for the Welsh Referendum, including the question and the determination of polling day, followed in subsequent statutory instruments issued by Parliament at Westminster.

2.14. There seems no good reason not to follow this precedent, or even to extend it by allowing Scottish Ministers to nominate a particular date. The Question (as vetted by the Electoral Commission) and the rules for the ballot would be set down in UK legislation. Sufficient progress would have to have been made with the "Unanswered Questions" before that UK legislation was enacted. Scottish Ministers would doubtless choose a

date they thought favoured them – but they would still have to secure a two-thirds majority of the Scottish Parliament for it.

3.3.1 This negates the parliamentary majority and mandate achieved by the SNP to hold a referendum under a proportional electoral system. This would be viewed as creating an undemocratic hurdle to holding a referendum.

3.4 There Should Only be One Question 3.4.1 While we acknowledge the clarity of a binary question we feel other considerations tip the balance away from this option. Detailed polling i.e. The Scottish Social Attitudes Survey 2011 seems to suggest that Scottish opinion sits on a continuum between ‘pre devolution settlement ’ and ‘full independence’ with larger clusters around the status quo, increased powers often termed ‘Devo Max’, and to a smaller extent, full independence.

3.4.2 We feel that given current debates and state of Scottish public opinion, the best way to find out where consensus might be found is to hold a two question referendum with a so called gateway question on Status Quo v Change and a second question on Devo Max v Independence. The result of the second question will only be relevant if the first question is a positive vote for change.

3.4.3 To hold a straight binary single question with the issue of more powers as an ‘off ballot paper issue’ could threaten clarity of outcome. i.e. voters vote for the Status Quo when really they want more powers, or indeed vote for Independence because they want more than the status quo.

3.4.4 A similar system was used in the recent New Zealand Electoral Reform Referendum. The National Party’s 2008 election campaign promised a referendum, October 2009 saw the announcement of a referendum to be held on polling day 2011 (26th November, so a two year lead in). Voters were asked two questions:

The first question asked: Should New Zealand keep the Mixed Member Proportional (MMP) voting system?

The second question asked: If New Zealand were to change to another voting system, which voting system would you choose?

3.4.5 If at least half the voters opted to keep MMP, there was a section in the legislation providing for an independent review of MMP in 2012 to recommend changes that should be made to the way it works. The Electoral Commission in New Zealand are currently conducting that review. If the voters had voted in majority to change to another electoral system, then the government following the 2011 election may have called a second referendum to be held on or before the next general election. This second referendum, like in 1993, would allow voters to choose between the MMP system, and the alternative system that received the most votes in the 2011 referendum. The system that received the majority in the second referendum will become the voting system for the following general elections. FPTP was the winner of the other systems available to select (preferentially). So, there could have been a second referendum to choose between MMP and FPTP with the result that even though people could have voted in 2011 to go away from MMP, they weren't committed to changing away from it until the second referendum. Of course as it happens the vote was in favour of keeping MMP.

3.4.6 We feel that both questions should be asked on the same day on the same ballot paper as there is merit in voters being able to compare three relative alternatives at the same time during the same campaign. That said, no method of discovering voters’ views is entirely risk free. Although extremely unlikely, in our recommended system there could potentially be an

outcome where people only vote on the first question and hence those voting for a particular system are fewer than those who have voted for no change. It will be important to advise voters to use both of their votes in this situation. However disparity of turnout between two questions is actually more likely should they be asked at different times.

This is a rapidly evolving debate and we will keep our preferred option under review by continuing to analyse how voters can be given the best opportunity to express their views on all the options that command significant public support.

3.5 Grants to Campaigners 4.17. There should be a matched-funding arrangement written into the grant provisions in PPERA section 110. The grant should be paid to reimburse 50% of a designated organisation’s spending on its mail-shot and TV broadcasts, up to a maximum of payment of £500,000 for a UK-wide referendum. Campaigns would still have to spend £2 in order to receive £1 of grant. That assumes that the cost of printing a reasonable mail-shot to every voter and preparing a basic TV broadcast would be £150,000. If a designated campaign spent less than this, it would receive a proportionately smaller grant, but if it spent more the grant would still be capped at £500,000. In this way designation would ensure that the public receive a reasonable minimum contact from both sides. That would still represent a reduction from the current maximum grant figure of £600,000.

4.18. If the grant were to be restructured in this way then it would solve the "problem" of one side making a "tactical non-designation". Applicants would know that if successful they could cover half of the cost of designated status. But the grant would be pegged at only 10% of their spending limit.

3.5.1 We agree there are problems with the grant system. However to match fund spending only multiplies advantages given to rich campaigns. We would suggest that a set and equal grant is given to both sides but is available to use on any reasonable campaign spending i.e Freepost, Leaflets, Advertising, Broadcasts . A maximum of £500,000 for a UK Referendum is a good benchmark figure.

3.6 The Electoral Commissions Recommendations Recommendation 12 – Designation of lead campaign groups We recommend that: · When considering the case for future referendums, legislators should take into account whether the referendum is likely to stimulate a level of debate which would generate willing and able applicants for designation. However, this step would not in itself ensure that such campaigners will seek designation at a particular referendum in future.

· The Government should take steps to reduce the potential advantages to a prospective lead campaigner of deciding not to apply for designation.

We do not agree with this recommendation, which would create a dangerous weakening in the neutrality of referendum campaigning. The "both-or-neither" rule of designation is a core principle of UK referendums.

3.6.1 We disagree with No to AV Ltd and agree with the Electoral Commission on this. It should not be left to one side or the other to decide unilaterally whether campaigns can spend adequate amounts of money.

Recommendation 18 – Reporting donations

We recommend that the Government consider the options for an element of prepoll reporting of donations, and introduce a suitable provision for future referendums. Once the loan controls for referendum campaigners are in place, as recommended above, we recommend that such a pre-poll reporting requirement should also apply to loans. We disagree. Our views on this issue have changed, as a result of our experience. We now consider that legislative change along these lines would be unworkable, counter- productive and probably futile.

3.6.2 We disagree with No to AV Ltd and agree with the Electoral Commission on this. Who donates and how much is given to a campaign may form an important part of a transparent debate and effect who the voters might wish to support.

4. What are the problems with other question formats proposed? 4.1 There are many alternative options to structure the vote being proposed and considered with perhaps four main ones currently attracting support: a) That there is just one question on status quo v straight independence with a future debate and possible referendum question on Devo Max v Status Quo sometime in the future. b) That the gateway question (Status Quo v Change) is put first with a period of time between asking the change v no change question and the Devo Max v Independence question. c) That there is a Status Quo v Devo Max question put first with a period of time elapsing before the Devo Max v Independence question is put. d) That there is a first question of Independence v Status Quo and then a second question of Devo Max v Status Quo or Devo Max v Independence on the same day.

4.2 Generally we feel that any format that does not allow all three main options to be considered during the one campaign is unsatisfactory. There is also the danger with time separated referendums that turnout varies drastically and makes results less clear.

4.3 Specifically: Option a) is problematic for the following reason: If a voter had to weigh up the choice between Independence and Status Quo and felt very strongly that they wanted more than the Status Quo but not really full Independence they may vote for full Independence as the least worst option. As they have chosen the furthest move possible they cannot go back to a position of lesser powers.

Option b) is problematic because we feel the debate around the nature of the change should be on offer at the same time as the electorate are asked to choose between change and the status quo.

Option c) still maintains the problem of comparing the alternatives at different points in time. However it does at least allow voters to choose increased power on an incremental basis. So they can vote for Devo Max but if they think this is insufficient vote for Independence in the next referendum.

Option d) Solves the problem of relative comparisons at the same point in time however if both Independence and Devo Max received a majority vote there could be confusion over the result.

4.4 There are views that referendum campaigns are most informative and most clearly conducted around binary questions. That the debate is clearer is unarguably true. However we know that voters are often asked to decide from amongst a range of parties all presenting

complex policy platforms. We feel that the prominence of the issue and the quantity of specifically Scottish mass media mean that this risk is bearable.

5. Expenditure 5.1 The AV referendum was very different from the forthcoming Scottish Independence Referendum. The level of media and wider engagement in the AV debate was limited. The campaigns had to work particularly hard and spend a lot of money to get any attention. We would envisage the level of media interest will be considerably higher in this referendum, indeed it probably is already greater now in Scotland than it was at the height of the AV referendum. We feel it should be up to the campaigns to challenge each other, and for the media and the wider civil society to challenge the campaigns. Campaigns communicate partisan messages from particular positions. We feel it is important that the public receives both sides of the debate and therefore large imbalances in campaign spending do the voter no favours. In this particular referendum we would recommend relatively low limits on spending (those recommended in original Scottish Government consultation of £750k for a lead organisation and £250k for a political party seem reasonable) and to rely on the broadcast media to take the debate to people.

6. Wider experience of the AV referendum that might be relevant to the Scottish Referendum. 6.1 There are of course some significant differences between the two referendums. Not least the Government imposed a straightforward choice between status quo and one other option (AV) in the AV referendum – albeit many would like to have seen other options on the table. We argue public opinion in Scotland clusters around a number of options which should be included on the ballot. Additionally, as mentioned, AV did not attract the wide-ranging prominence that the constitutional debate in Scotland has at the moment.

6.2 We do know from work that Professor John Curtice did for us examining what was significant in why people voted the way they did that Party cues seemed to be very important. i.e The leader of the Conservative party helped move well over 90% of Conservative identifiers to the NO position when he entered the debate. Labour voters received confused cues and mostly voted for NO change.

6.3 The debate on both sides was roundly criticised by many as being uninformative and highly negative however we would suggest that the timescale and the inability to engage media and voters meant this may have been inevitable.

6.4 In such circumstances it is perhaps no wonder that rather than attempt to make their own mind up people looked for a cue from the party they supported as shorthand for what to do. The AV referendum debate was almost always presented through the prism of the dynamics within the Coalition Government and not about the issues on merit or otherwise. In the Independence referendum, one lens will inevitably be the fortunes of the Scottish parties but we do think, judging by the standard of coverage thus far, that there is more chance of debate focusing on the issues themselves. The early involvement of the widest range of civil society organisations will be crucial to engaging as many voters as possible and especially those who do not identify with any one party

6.5 Arguments and debates take a long time to disseminate into the wider culture and popular consciousness. We feel that issues require to be presented through a range of media and sources and views are only settled after a period of evidence gathering and consideration. In Scotland the debate has mainly been about process and will be until that is agreed. We then have some complex issues around definitions i.e. devo max, federalism, Monetary Union which deserve a public debate with the referendum as a spur to a focussed discussion. This will take time.

6.6 In contrast, despite the complexity of the question in the Welsh Referendum on more powers held last year, research by Yougov showed that most people voted mainly on their position on the constitution. This was a referendum that was announced in 2007 as part of the Welsh Assembly Coaltion agreement and the all Wales Convention was set up in October of that year charged with informing the voters over a two year period about the existing devolution settlement and gauging support for further powers . The Welsh Referendum Survey conducted by the Wales Governance Centre and YouGov, using a rolling weighted sample, has indicated that the clearest predictor of voters behaviour in the March 2011 referendum was their constitutional preference, which was far more important to voters’ behaviour than social class, identity and so on.

6.7 As Richard wyn Jones and Roger Scully put it in a recent book: ‘To some extent, voting choices were influenced by individuals‟ party attachments, and by their perceptions of the effectiveness of the devolved institution. But most important seem to have been basic attitudes towards how Wales should be governed’

7. When should the referendum be held 7.1 Our experience from the AV referendum is that proper debate, analysis and questioning of the arguments takes a good deal of time. Campaigns will present misinformation and partial arguments which can only be challenged and bottomed out over significant timescales.

7.2 Already as the debate begins there are emerging partially formed concepts and positions that are best developed and tested in the forum of public debate. The extension of these concepts and positions into full public awareness can be a long drawn out process.

7.3 Therefore, we would favour a longer time for arguments to be fully tested and worked through, and for public information and arguments to disseminate into the public consciousness. We would add that a rushed referendum with a result that Scots did not feel confident in, would cause greater uncertainty than allowing a sensible period for learning, debate and due consideration. This is an important decision; it should not be rushed, but should be made thoughtfully and in a fully informed fashion.

7.4 It is also important that all Scots who wish to are able to participate in the poll. As there is due to be a household canvass in early 2014, later in that year will be an ideal point to use an accurate and complete register. To hold the referendum prior to that canvass will result in using an out-of-date register which could lead to subsequent challenge and devalue the result of the referendum.

8. Who should be allowed to Vote - Franchise 8.1 We think that the most straightforward franchise is the residency requirement as used in Scottish Parliament Elections. We acknowledge the interest of Scots or recent Scottish residents who now live outside Scotland in the referendum, but to change the definitions at this moment would mean re-assessing the franchise nationwide. For instance, given the impact on decisions made in the UK capital of London, should all UK voters be able to vote in the mayoral elections?

8.2 We support the extension of the franchise to 16 and 17 year olds for all UK elections. Why should this group not be allowed to vote? Most politicians support universal suffrage - for this section of the citizenry not to be offered representation that they can vote for is in our view a democratic deficit.

8.3 We see no reason why, given the importance of this referendum vote, that the franchise should not be extended in time for the referendum. The debate has been had, representatives of most major parties in Scotland are in favour, and this is an ideal time to make it happen. We

are clear however, that this should not be done only for the referendum but for all public elections in Scotland. Additionally, we would not wish to see a ‘false franchise’ established by only allowing ‘attainers’ to vote rather than all 16 and 17 year olds. Given the franchise is a reserved matter we would hope the UK Government would work with the Scottish Government to provide for this. As there will be a UK wide household canvass now in early 2014 as part of the Individual Electoral Registration reforms, we would suggest this could be an ideal opportunity to extend the franchise. Regardless, it is vital this canvass be as complete as possible in order that as many people as wish to be are registered to vote in the referendum.

8.4 Why not use the Westminster Franchise? We feel that the Scottish Parliament franchise is more complete and this is franchise from which the mandate arose to hold this referendum, and is the franchise that was used for the 1997 devolution referendum. The Welsh referendum on more powers also used the assembly franchise.

8.5 Finally, we would point out that the franchise should certainly not be decided on the basis of how voters might use their vote. Written evidence submitted by Ipsos MORI

When the Scottish National Party won an overall majority of seats in the Scottish Parliamentary election of May 2011, it was clear that there would be a referendum on Scotland’s constitutional future at some point in the current Holyrood term.

It was the intervention of the Prime Minister in early 2012 which brought the issue into sharp focus in the media and public consciousness. While the UK Government accepts that the referendum should take place in accordance with the manifesto promise made by the SNP, it is clear that there is very little agreement between it and the Scottish Government about any element of the process involved in holding the ballot.

The governments have disagreed on a range of issues. On timing, the Scottish Government has stated its preference for holding the referendum in the autumn of 2014 while the UK Government prefers an earlier ballot. The Scottish Government is open to the inclusion of an additional question in the ballot about what has become known as ‘Devo. Max’, affording substantial new powers to the Scottish Government while Scotland remains in the UK. The Scottish Government also wants consideration to be given to extending the franchise in the referendum so that those aged 16 and 17 are also eligible to vote while the UK Government does not support this idea.

So, there are a range of issues to be decided at the outset of the referendum process. Of all these issues of current disagreement, the wording of the referendum question itself is likely to be the most contentious. On January 25th 2012 the Scottish Government published its referendum consultation paper, “Your Scotland, Your Referendum’1 which included its proposed question for the ballot: “Do you agree that Scotland should be an independent country.” The publication of a preferred question was instrumental in moving the debate forward and was an important moment for those of us in the research industry with an interest in question design and the impact it can have on results obtained.

In any referendum the question and the preamble to the question provide the focal point for the debate, which usually involves groups coalescing around either a ‘Yes’ or ‘No’ campaign in favour of, or opposed to, the proposition being put forward. The question itself can set the tone and context for the campaign, allowing both sides to put their case to voters.

Our view is that the referendum question must satisfy two key criteria, it must be clear so that voters know exactly what they are being asked and it must be fair so that the results of the referendum are undisputed.

The question must be clear and easy for voters to understand. This means that it should be short and straightforward and should not be open to legal or political challenge after the result of the referendum is known. The Scottish Government’s proposed referendum question has generally been accepted as being clear. However, it does assume that voters understand exactly what is meant by ‘an independent country’, including, for example, questions of currency, borders, the military and nuclear weapons. The importance of voters understanding these issues would be heightened if a second question on ‘Devo. Max’ were included and also needed to be defined for voters.

Previous referenda in the UK have highlighted the importance of simplicity and clarity, ensuring that all sections of the electorate are clear on the question being asked; indeed the Electoral Commission insisted on a change to the question originally proposed by the UK Government

1 http://www.scotland.gov.uk/Publications/2012/01/1006/0

ahead of the 2011 AV referendum because they considered that "particularly those with lower levels of education or literacy, found the question hard work and did not understand it".

The question must also be deemed to be fair and objective, ensuring that the final result is accepted by all sides without accusations of bias in terms of the question wording. Before explaining why this is so important and what can be done to mitigate against question bias, it is worth pointing out the difference between referendums and the opinion polls we regularly conduct.

We know from years of experience, backed up by academic research, that even subtle changes in the wording of an opinion poll question can affect the answers we get, creating a bias in one direction or the other. The effect would normally be much less in a referendum because voters already know what they are going to be asked and have decided which side they are on, so you would not expect the exact way the question is asked (providing it still has the same meaning and is not in any way confusing) to change many people’s votes. The same would apply in a poll about how people will vote in the referendum, once they are aware of the issue and have had a chance to think about it, and even more so once the campaigns have got going. There is much less chance of the wording affecting the outcome of a referendum than of an opinion poll when the question has been sprung on a respondent who is not expecting it.

However, this does not affect the fact that the wording may be biased, only whether that bias will have a big practical effect on the vote. Since it is a fundamental part of the legitimacy of a referendum that the whole process should be fair and should be seen to be fair to all sides, you should therefore avoid using a question wording that tends to persuade people more to vote for one side than for the other, even if that bias is so subtle that it may not have a major effect in practice.

The Scottish Government’s proposed question has been subject to much stronger criticism on grounds of bias, with critics suggesting that the question statement goes only in one direction and invites voters to agree with it.

One key point here is to consider what responses would be if the question was asked the opposite direction, such as ‘Do you agree that Scotland should stay in the United Kingdom?’ Previous referenda have resolved this issue by offering the two alternatives on offer and giving them equal weight; the 1997 devolution referendum provides a useful example as voters were asked to choose between the statements, ‘I agree that there should be a Scottish Parliament’ and ‘I do not agree that there should be a Scottish Parliament.’ Some argue that this type of approach makes the question more balanced, giving voters ‘equal’ choice between the two sides of the debate.

There are a number of practical ways we would recommend of ensuring the referendum question is both clear and fair. These include making sure the question has few words, avoids ambiguous words or statements and steers clear of loaded, leading or double-barrelled questions. Judging whether proposed questions satisfy these criteria is a more lengthy and difficult process. Both the Scottish and UK Governments have established public consultation exercises so that voters can have their say about all matters to do with the referendum. There will also be debates in Holyrood and Westminster where MSPs and MPs can contest different options for wording the question as well as widespread media comment on the issue, all of which can aid voters in understanding the issues.

There will clearly also be a role for the Electoral Commission in ensuring clarity and fairness, as was the case in the most recent UK-wide referendum on the voting system for Westminster. Our view is that there also needs to be significant testing of different question options before a final decision can be made.

This testing can be done in a number of ways. Polling is one way. In our most recent poll, at the end of January 2012, we used the Scottish Government’s preferred question to measure support for independence and found 39% agreed that Scotland should become an independent country.2 This represented an increase of just 1% from our previous poll in December 2011 when we measured support for independence using a different question.3 This suggests that the question wording has not made a huge difference to support for independence although we’ll have a better idea of whether a question is clear and fair once different options have been tested rigorously and analysed against differently-worded questions, with robust sample sizes.

In addition to using evidence from polling, we believe that a phase of ‘cognitive testing’ of various question options would be useful. Cognitive testing is an approach we use to assess how questions are understood and answered by respondents. After a respondent has answered the question, a researcher interviews the respondent to explore how they went about answering it. This process can be used to refine questions before further testing. We have successfully used cognitive testing techniques in a range of settings including testing the question on ‘national identity’ before the 2011 census. In this case our testing informed the wording of the final census question, ensuring that respondents were clearer about what was required and better able to express their identity/identities fully. In the case of the referendum debate, this would be extremely helpful in providing evidence from voters about the wording of different question options.

So, the wording of the referendum question is vital. It can frame the terms of the campaign for all sides of the argument. It must avoid ambiguity to ensure that there is no ambiguity in the result. It must be clear to voters so that they know exactly what they are voting to accept/reject and understand the impact of the result. And it must be seen to be fair so that the losing side in the ballot does not try to discredit or challenge the result on the basis of the question wording.

There are likely to be a range of alternative questions proposed before the referendum is held. Each will be debated vigorously and will be subject to media scrutiny and comment. However, it is important that each is also tested thoroughly and independently, including the use of cognitive techniques, before the final decision is made.

April 2012

2 http://www.ipsos-mori.com/researchpublications/researcharchive/2912/Four-in-ten-Scots-back-independence.aspx 3 http://www.ipsos-mori.com/researchpublications/researcharchive/2891/Scots-support-early-referendum-as-support-for- independence-increases.aspx

Written evidence submitted by Ruth Stevenson

EXECUTIVE SUMMARY

Ruth Stevenson is an experienced researcher and methodology expert based in Scotland. In this paper Ruth sets out the professional standards of questionnaire design outlined in good practice guidance provided by the Market Research Society, and provides commentary on how these standards should be applied to the Scottish referendum question.

In order to ensure that the results to the Scottish referendum are conclusive and stand up to scrutiny, Ruth proposes that the final referendum question(s) should be:

Short, straightforward and clear so as to be accessible to the full spectrum of Scottish adults. Balanced so as not to lead voters towards a particular response. Presented in a manner that does not introduce bias. Reflective of the intended use and outcomes of the referendum, so that voters can give honest responses and the results are conclusive.

This will ensure that the referendum provides a useful foundation upon which to make a genuine evidence-based decision about Scottish independence.

Context

1. I am an independent research expert with ten years of experience in research attained through my consultancy roles at global market research agencies (TNS and MORI) and managing research departments at charities (The Audience Business and Scottish Development Centre for Mental Health). In 2010 I set up Ruthless Research to provide high quality research services for public and voluntary sector organisations, which is something that I am passionate about.

2. I am a full member of the Market Research Society and an award-winning researcher (Royal Society for Public Health), with a thorough grounding in research methodology through a degree in Sociology (University of Edinburgh), the MORI graduate scheme, and the Diploma of the Market Research Society.

3. As an expert in the methodology of questionnaire design and a resident of Scotland, I have a professional and personal interest in the methodology used to collect Scottish referendum responses. At the time that the SNP proposed an initial referendum question in 2007 I managed the Scottish omnibus population survey for global research agency TNS, where I polled the proposed question to track voting intentions over time. When another referendum question was proposed in early 2012 I prepared an article critiquing the methodology which featured on my research methods blog1 and was syndicated by Research Live, Research Magazine and the Huffington Post.

4. As a result of my specific expertise outlined above, I have been asked to present written evidence for the Scottish Affairs Select Committee giving my professional opinion on the referendum question, and the mechanics of this.

5. As a professional researcher I abide by the Market Research Society Code of Conduct2 – a set of ethical standards of good practice developed by the Market Research Society over the last 50 years. As the Code states, “The Code of Conduct is designed to

1 http://ruthlessresearch.wordpress.com/ 2 http://www.mrs.org.uk/standards/code_of_conduct/ support all those engaged in market, social or opinion research in maintaining professional standards. The Code is also intended to reassure the general public and other interested parties that research is carried out in a professional and ethical manner.”

6. As the Scottish referendum is a form of social or opinion research, I believe that it makes sense to judge its methodology against the professional standards of the research industry. I have therefore focused the following paper around relevant elements of the MRS Code of Conduct (specifically section B14 relating to questionnaire design) and provided commentary on the application of these when framing the final referendum question(s).

Key points

B.14: Members must take reasonable steps to ensure that the design and content of the data collection process or instrument is appropriate for the audience being researched.

7. By its very nature, it is intended that the Scottish referendum question will be answered by all adults in Scotland. This means that the audience being researched is very wide and diverse, and comprises people with varying degrees of literacy and people whose first language is not English. It is thus vital that the question is worded in such a way that it can be read and understood by the full spectrum of voters in Scotland. Alex Salmond was reported to say that the early 2012 question was ''short, straightforward and clear'' and I concur that ensuring that these parameters are applied to the final question(s) should be a priority.

B.14: Members must take reasonable steps to ensure that Respondents are not led towards a particular point of view.

8. Questions can be written in such a way that they lead respondents towards particular responses, however doing so is inethical and therefore would be inappropriate for a Governmental exercise which is subject to public scrutiny.

9. The early 2012 question asks us whether we agree that Scotland should be an independent country. This is an unbalanced question, as it leads the voter towards the agree response because it assumes a particular value position. It is essentially asking Do you agree (with us) that Scotland should be an independent country? A more balanced question would be Do you agree or disagree that Scotland should be an independent country? as this question gives equal weight to either potential response and does not assume a value position.

10. However, although marginal, it is also my opinion that the inclusion of the word should also potentially leads respondents towards a positive response as it is not counterbalanced by should not. Furthermore, the use of should may even be considered inappropriate emotive language in this context, as in combination with the assumed value position its inclusion implies that independence is a patriotic duty. This wording may therefore provoke feelings of nationalism, which could in turn inflate the agree response.

11. Linked to this, as well as considering whether the question wording is biased in favour of nationalism, it is also vital to ensure that the ballot paper is free from patriotic imagery that could influence the voter – and that includes the Scottish Government logo because it is a Saltire. It is acknowledged that it will be impossible to remove influences in in campaigning and at the polling station, but influencing elements should be removed from the process where possible.

12. The final question(s) must therefore be balanced and unbiased, and presented in a format that has no intrinsic value position.

B.14: Members must take reasonable steps to ensure that Respondents are able to provide information in a way that reflects the view they want to express

13. It is implied in the process of the referendum that a yes vote is a vote for independence, and a no vote is a vote against independence. Voters will cast their votes based on this knowledge. It is therefore essential that the question wording reflects this.

14. In the early 2012 question voters are asked whether Scotland should be an independent country. Voters are not asked to judge when independence should happen, or whether it will work. Instead they are asked to say if, in an ideal world, Scotland ought to be independent. This is not the same as asking voters whether they would support the SNP immediately pursuing independence. Consequently, voters who do agree that Scotland should be an independent country but don’t believe that independence will work in practice will be forced to lie with a no vote. This is inethical, because it means that the process prohibits some voters from adequately expressing their views.

B.14: Members must take reasonable steps to ensure that responses are capable of being interpreted in an unambiguous way

15. Linked to this, as far as is possible it is important to ensure that the results to the referendum cannot be subject to multiple interpretations. The results from asking whether Scotland should be an independent country give us a view of what the nation would prefer in an ideal world, which has limited use as it would be open to criticism around the practicality of the result. A yes result following this question does not technically answer the implied question would you like us to go ahead and do it? Even so, it is likely that a yes result would be used to proceed with independence negotiations. I would not consider this to be a fair interpretation of the result. The question wording therefore needs to link directly and logically with the intended use of the data.

16. Both of the above points could be addressed by wording the question in such a way that it reflects the intended use of the referendum results, and/or by introducing a second question or more response options to ensure that all potential viewpoints are covered.

Recommendations

17. In conclusion, it is my professional opinion that the question proposed in early 2012 should be improved by taking on board lessons from the good practice guidelines provided in the MRS Code of Conduct.

18. I propose that the final question(s) selected for the Scottish referendum should be:

19. I propose that the final question(s) selected for the referendum should be checked against the MRS Code of Conduct, and endorsed by a representative of the industry to ensure that high ethical and professional standards are upheld.

20. In combination, this will ensure that the results to the referendum are conclusive and hold up to scrutiny, thus providing a useful foundation upon which to make a genuine evidence-based decision about Scottish independence.

April 2012 Supplementary written evidence submitted by the Electoral Commission

1.0 This note provides additional information to supplement the Commission’s oral evidence to the Committee on 21 March 2012. It covers:

• The Commission’s comments on proposed changes to the PPERA referendum rules set out in the written evidence submitted by No Campaign Limited • Regulated periods at elections and referendums • Designating lead campaigners at multi-option referendums • North East of England referendum

The Commission’s comments on proposed changes to the PPERA referendum rules in the written evidence submitted by No Campaign Limited

1.1 As the Committee requested, we have set out below our comments on the points made by No Campaign Limited in their written evidence under the heading “PPERA should be revised before any future referendum is held”.

Generic conduct rules

1.2 Our 2011 referendum report1 recommended that for all future referendums held under PPERA the detailed rules for the administration of the poll should be set out in a single generic order (recommendation 3). This would enable those running and planning to campaign in the referendum to prepare with confidence. No Campaign Limited appear to support this recommendation.

Shared expenses calculation rules

1.3 The PPERA rules on campaigning at referendums do not include restrictions on campaigners working together. People wishing to exceed the spending limits could therefore set up multiple campaign groups which could work together, pooling their spending limits to promote a joint campaign. The legislation for the 2011 referendum on the UK Parliamentary voting system dealt with this by providing that where different campaigners campaign together, all the spending they incur counted separately against the limit of each campaigner involved (so if two campaigners each spent £50,000 on a joint campaign, each had to count £100,000 against their spending limit). These anti-evasion rules were modelled on the PPERA rules on third-party campaigning at elections.

1.4 These rules did not apply to campaigners working together with designated lead campaign groups - so as to allow scope for ‘umbrella’ campaigning co-ordinated by a designated lead campaigner. Our report on the 2011 UK referendum noted2 that if we had been unable to designate lead campaigners at the referendum, these anti-avoidance provisions could have artificially constrained the ability of a group of campaigners who all support the same outcome to put their arguments to voters. We therefore recommended that at future

1 2011 referendum report - parliamentary voting system: http://www.electoralcommission.org.uk/__data/assets/pdf_file/0019/141328/Final-PVS-report.pdf available at http://www.electoralcommission.org.uk/__data/assets/pdf_file/0019/141328/Final-PVS- report.pdf 2 Ibid, paras 5.75-5.83

referendums, the anti-evasion provisions should be relaxed in the event that it was not possible to designate lead campaign groups. We also flagged this issue in our March 2012 response to the UK Government and Scottish Government consultations on a Scottish referendum3.

1.5 The written evidence of No Campaign Limited suggests an alternative approach, which would require those registering a campaigner to declare that it is “genuinely independent” and to show that its bank account, payroll arrangements and administration are separate from those of other campaigners. This may be an administrative burden on campaigners, particularly given the relatively short timetable for registration - the PPERA requirements for registering a campaigner are deliberately quite straightforward. However, a greater concern in our view is this approach would not adequately manage the risk of evasion. Any campaigner well-funded and motivated enough to wish to circumvent spending limits by setting up multiple campaigns would have no difficulty in setting up the separate administrative arrangements proposed by No Campaign Limited. The making of a false declaration as to a campaigner’s independence could be made an offence - but enforcing this would be complex, and probably impossible to resolve before the referendum took place.

Control of loans

1.6 No Campaign Limited share our view (most recently restated in our March 2012 consultation response on the Scottish referendum4) that loans to campaigners should be subject to the same restrictions and reporting requirements as donations.

Grants to campaigners

1.7 At referendums held under PPERA, the Commission has discretion over the level and scope of the grant available to designated campaigners up to a statutory maximum of £600,000 for each campaigner. As set out in our report on the 2011 UK referendum5 when setting the grant value and terms and conditions for future PPERA referendums we will take into account feedback from campaigners at the 2011 referendums, including No Campaign Limited’s written evidence to the Committee as well as the feedback they provided to us after the 2011 poll.

1.8 Given the Commission’s discretion over referendum grants, PPERA would not need to be amended to enable grants to be made on different terms to those used at the 2011 referendums. At any future referendum where the Commission makes grants available to campaigners we will provide advance notice of the proposed main terms of the grants and the rationale for those terms, as we did at the 2011 PPERA referendums.

1.9 We note that the Scottish Government’s consultation on for a Scottish referendum proposed that no grants should be made available to designated lead campaigners.

Misuse of public funds

3 March 2012 response to referendum consultations paras 10.43-10.44, available at http://www.electoralcommission.org.uk/__data/assets/pdf_file/0011/146927/The-Scottish-referendum- Response-to-consultations.pdf 4 Ibid, para 10.51 5 2011 referendum report - parliamentary voting system para 5.66

1.10 We recommended in our report on the 2011 UK referendum6 the current PPERA provisions on publicly funded bodies and the sanctions applying to breaches of the rules should be clarified. We have also flagged this issue, and commented on the Scottish Government’s proposals on this subject, in our March 2012 consultation response7.

1.11 We therefore share the view expressed in No Campaign Limited’s written evidence that the current PPERA rules need to be changed. However, we do not accept No Campaign Limited’s version of the enforcement issues at the 2011 UK referendum described in paragraph 4.22 of their written evidence, which conflates two separate alleged breaches of the rules. As we described in our report on the 2011 UK referendum8, we concluded that the first allegation did not indicate a potential breach of the rules. The second allegation was only made on the day before polling day.

Regulated periods at elections and referendums

1.12 The regulated periods for campaigning by political parties and non-party campaigners at elections are specified in PPERA, and differ from the regulated periods for candidate spending which are set out in the Representation of the People Act 1983 and in secondary legislation. The standard PPERA regulated periods (which can vary if the regulated periods for different elections overlap) are:

• for UK Parliamentary general elections, the 365 days before polling day

• for elections to the European Parliament, the Scottish Parliament, the National Assembly for Wales and the Northern Ireland Assembly, the four months before polling day.

1.13 The regulated period for a referendum held under PPERA is specified in the enabling legislation for each referendum. PPERA provides for a minimum referendum period of 10 weeks, but this can be reduced by an Order by the Secretary of State. The regulated periods for the referendums held in 2011 were:

• for the referendum on the powers of the National Assembly for Wales, the period began on the day after the enabling Order was made. In the event the regulated period began on 16 December 2010 and ended on 3 March 2011, so covered a total of 11 weeks.

• for the referendum on the UK Parliamentary voting system, the period began when the enabling Act received Royal Assent. In the event the regulated period began on 16 February 2011 and ended on 5 May 2011, so covered a total of 11 weeks.

1.14 However, in our report on the 2011 referendums9 we recommended that the regulated period for future PPERA referendums should be a minimum of 16 weeks, in order to enable designated lead campaigners to make use of the benefits available to them, such as free mailings. This recommendation reflected points that the lead campaigners at the 2011 UK referendum had put to us about their experiences.

Designating lead campaigners at multi-option referendums

6 Ibid, paras 5.101-5.104 7 March 2012 response to referendum consultations paras 10.45-10.48 8 2011 referendum report - parliamentary voting system paras 5.100-5.104 9 Ibid paras 5.13-5.21

1.15 Our March 2012 response to the Scottish referendum consultations10 summarised the PPERA provisions on designation at referendums with more than two outcomes, and highlighted the possible implications for a Scottish referendum of our experience of designation at the 2011 referendums.

1.16 For referendums with more than two possible outcomes, the number of outcomes for which it will be appropriate to designate lead campaigners will depend both on how the question is structured, and on how campaigners are likely to structure their arguments in respect of the possible outcomes. In many cases these will be not just regulatory questions, but also political ones. As we have said in our March 2012 consultation response, it is vital that the legislation for a Scottish referendum sets out unambiguously both the outcomes for which lead campaigners may be designated, and what is to happen if suitable campaigners do not apply in respect of all such outcomes.

1.17 At the point when the legislation for any multi-option referendum is being developed, the Commission will take a view on which outcomes should have designated lead campaigners on a case by case basis, taking into account the principle that there should be no barriers to campaigners putting forward arguments for any of the possible outcomes. We will only be able to reach a firm view when the referendum question is finalised. We will then offer our view to the Parliament that is responsible for the relevant legislation. The final decision on which outcomes should have designated lead campaigners will of course be for that Parliament to take.

THE NORTH EAST OF ENGLAND REFERENDUM

Two referendum questions

1.18 In November 2004 people in the North East of England voted in an all-postal referendum on the establishment of an elected regional assembly. In two-tier local government areas (areas with both district and county councils) an additional referendum was held on the potential structure of single-tier local government should there be a ‘yes’ vote in the regional assembly question. Voters in the counties of Durham and Northumberland were asked to choose between two options (A and B) offering different structures of local government reorganisation.

1.19 In areas where two referendums were held, there were two separate ballot papers, each containing one question.

10 March 2012 response to referendum consultations paras 10.30-10.39

Regional assembly referendum ballot paper (n.b. not actual colours)

Local government referendum ballot paper

CAMPAIGNING

1.20 In relation to campaigning and media focus on the local government referendum question, we reported11 the following:

The local government options campaign

1.21 ‘The local government question created a different dimension to the campaign and the designated organisations[12] chose largely to remain neutral on the issue. Both saw the local government question in two-tier areas as secondary and as a distraction from the regional assembly question. Four permitted participants registered to contest the local government question in Northumberland and County Durham… The campaigns undertaken by these groups consisted largely of the production and distribution of leaflets. These campaigns did receive media coverage, particularly in local weekly newspapers, although it was considerably less than that of the regional assembly question.’

Voter understanding

1.22 Following the referendum we commissioned qualitative research based on in-depth interviews with voters to explore their use of and reaction to the postal ballot packs. The research showed that, in areas where there were two referendums, most respondents had assumed they would be asked to vote ‘yes’ or ‘no’ to a regional assembly and were surprised to find themselves faced with a second question.

We reported that:

‘In two-tier areas, many of those interviewed were unclear about what they were being asked regarding the creation of single-tier authorities and the choices [available].’

1.23 The research found that the confusion with the local government referendum question was caused partly by a lack of prior knowledge or understanding about the proposed reorganisation of local government (if a regional assembly was established), and partly by voters failing to read the information provided prior to the ballot or engage with the explanatory information provided in the ballot pack at the time of voting.

April 2012

11 The 2004 North East regional assembly and local government referendums, The Electoral Commission, November 2005. 12 The lead ‘yes’ and ‘no’ campaigners on the regional assembly question.

Written evidence submitted by Professor Denis Mollison, Heriot-Watt University

A FAIR THREE-OPTION REFERENDUM?

Summary How can the questions for a three-option referendum be put fairly and decisively?

To be the clear winner of a three-option referendum, one of the options must have a majority over each of the alternatives.

The most general way of doing this, a method that will work for any set of three options, requires either preferential voting or asking three questions.

But where the options have a natural order, as in the Scottish referendum case, a sequence of two simple Yes/No questions should be equally satisfactory. These could be asked either “forwards”, in the direction of increasing change, or “backwards”, where the first question is on independence.

A recent YouGov poll asked questions on voters’ second as well as first preferences, as between the three options of “no change”, “more powers” and “independence”. Its results confirm that the public view these options as ordered.

A crucial implication of this is that it makes barely any difference which way the referendum is structured: any of the three reasonable ways of asking the questions should give the same outcome.

Preferential: If the three options are thought of as on an equal footing, it is reasonable to demand that the winner must demonstrably command a majority when considered against each of its rivals in turn. The winner can be found through preferential voting – the voter is invited to give their first and second preferences – or by asking three questions. The latter may be thought rather long-winded, but is perhaps clearer for establishing the validity of the result.

Forwards: If we think that “devolution is a process”, then it is natural to ask two questions, the first comparing no change with change, and the second (valid only if the first yields a majority for change) comparing more powers with independence.

Backwards: If we think the most important divide is between devolution and independence, then it is natural to ask two questions, the first on independence, and the second (valid only if the first yields a majority against independence) comparing no change with more powers.

The choice between these ways of framing the questions is political, except that it would be good practice to ask an independent body such as the Electoral Commission to test whether there are significant differences from the point of view of voter understanding.

1. Which ways of putting the questions are fair?

We shall consider three ways of voting on the options. First, they can all be considered together, in a genuine three-option referendum; I shall refer to this structure as “preferential”, because in this case we need to consider voters’ second as well as their first preferences. Alternatively, the questions can be put in what is in effect two simple referendums in sequence – as was done in the two-question devolution referendum of 1997. There are two ways of doing this, which I shall distinguish as “forwards” and “backwards” – see below.

The three options we are considering have a natural order, from (A) no change through (B) more powers to (C) independence. So we should expect there to be few voters whose first preference is at one extreme and whose second preference is at the other. If that is true, we can think of voters as spread over a range, from the most unionist (ABs, meaning their first preference is no change and their second more powers) to the most separatist (CBs, with first preference independence and second more powers), as illustrated, with the length of each coloured bar indicating the proportion of voters with those preferences.

Figure 1: The range of expected preferences

It then follows that all three ways of asking the questions will give exactly the same result: namely, the winner is the voting preference at the midpoint of the range, where 50% want less devolution, and 50% want more ( in Figure 1).

So an important practical question is: do voters’ preferences follow this expected pattern? A recent YouGov poll suggests that the answer is broadly Yes.

Preferential

If the three options are viewed as on an equal footing, then it seems reasonable to require that the winner demonstrably commands a majority when considered against each of its rivals in turn (i.e. is the Condorcet winner). This rules out using simple plurality (“first past the post”), the alternative vote, or the Borda count.

Perhaps the clearest way of finding the Condorcet winner is to ask three separate questions: A v. B, A v. C, and B v. C. In Peter Kellner’s graphic comparison, we can think of this as a mini soccer league. The overall winner is the option that wins both its matches.

The more usual way of finding the Condorcet winner is through preferential voting. For example, if a voter has order of preference ABC, this indicates that they prefer A to B, A to C, and B to C; if they just give a first preference A, this indicates that they prefer A to B and A to C, but abstain as to B v. C. We can thus determine the ma jorities for each of the three comparisons, A v. B, A v. C, and B v. C.

An obvious objection is: but what if each option wins one match? Fortunately this is extremely unlikely to happen in the present context, essentially because very few whose first preference is “no change” have second preference “independence”, or vice versa (see Appendix); but if it did happen, it seems reasonable that the winner should be deemed to be “no change”.

Forwards If you take the view that devolution is a process (as Donald Dewar said), in which the voters are on several occasions asked if they wish to go further, then it seems reasonable to structure the referendum as though it were two referendums telescoped into one. Thus the first question asks whether more powers are wanted, and the second, valid only if the answer to the first is Yes, asks if the voters wish to take the further step to independence.

This is the same structure as in the 1997 referendum, when the second question related to adding tax-raising powers; and is what was proposed by the SNP in their 2009/10 consultation.The first question in this structure is sometimes referred to as a “gateway” question.

Backwards If, instead, you take the view that the key division is between independence and the other two options, then it can be argued that the first (“gateway”) question should ask whether independence is wanted, and the second, valid only if the answer to the first is No, should ask if voters want more powers.

2. Evidence from the YouGov opinion poll

A recent YouGov opinion poll (based on questioning between 22-24 February 2012) asked a sample of 1053 voters to give their first and second preferences as between three options:

A – Keeping the powers of Scotland’s Parliament as they are (“no change”)

B – Scotland’s Parliament having full responsibility for all taxes and spending, but within the UK (“more powers”)

C – Full independence (“independence”)

Figure 2 shows the results of this poll. As in Figure 1, the lengths of the coloured bars indicate the proportions of the sample with each combination of preferences; thus AC indicates first preference “no change” and second preference “independence”, while A indicates those with first preference “no change” and no second preference.

The great majority have preferences consistent with the ordered-options hypothesis. There are less than 1% whose first preference is at one extreme and whose second preference is at the other (AC or CA). The main difference from the expected pattern shown in figure 1 is that about 9% of those polled did not express a second preference.

Figure 2: Distribution of voting preferences in YouGov poll, Feb 2012

For this particular snapshot of voter opinion, the median vote ( ) is firmly in the BA region, suggesting that B (more powers) should win under any of the three ways of structuring the referendum.

This is confirmed when we consider each of those ways in detail, as is shown in Figure 3. Here the top bar simply repeats Figure 2, showing the distribution of preferences in the poll. The remaining sets of bars then show how these preferences translate into majorities for or against the various questions that might be asked.

Figure 3: Referendum results for each of the three ways of structuring the questions, using YouGov poll data of Feb 2012

As expected, for each of the two-question formats the first question, which eliminates (at least) one of the three options, is very close to one of the preferential questions; while the second question is exactly the same as one of the preferential questions. Thus it is not surprising that all three structures lead to the same outcome, with, on these data, B winning (and the preferential format reveals that A is runner-up).

A nice irony is revealed by inspection of the detailed results. The referendum format preferred by most unionists, which keeps B off the ballot, gives the best result for independence, losing 36.8 to 59.7 %. While the format (c) preferred by most nationalists gives the worst result for independence, losing 25.7 to 74.3 % in the first round.

3. Conclusions

The YouGov poll data provides strong confirmation that all three ways of structuring a three- option constitutional referendum should yield closely similar outcomes. These three different ways correspond to different, all reasonable, ways of looking at the decision to be made; so there is no strong philosophical case for a strong preference between them.

It would therefore seem reasonable to allow the body calling the referendum, in this case the Scottish Parliament, to choose which format to adopt – with one important practical caveat. This is the question of which format is likely to be understood best by voters. An independent body, such as the Electoral Commission, could be asked to test possible question formats, and advise on whether there are significant differences in public understanding.

Appendix: Condorcet cycles?

In general, there can be a problem with the preferential method, namely that there is no overall winner, because (using “A > B” to mean A has a majority against B) either C > A > B > C or A > C > B > A.

We need to explain why this cannot happen, or is at least very very unlikely, when the options have a natural order.

In A v. B, A is supported by those with AB, AC and CA preferences. In A v. C, A is supported by AB, AC and BA; we see that A has gained the support of the BAs and lost that of the CAs. But when options have a natural order, as explained in the main text, there should be a fair number of BAs but very few CAs (23.3 % and 0.5 % respectively in the YouGov poll). Hence if A > B, we may expect A > C by a larger margin; so we can’t have C > A > B.

Similarly, exchanging C and A in the argument, we can’t have A > C > B (this time the appropriate poll figures are BC 10.9 %, AC 0.5 %). This rules out both the possibilities for a Condorcet cycle.

April 2012