BREXIT -V- SCEXIT
As a member of the EU, the UK was in a customs and economic union, where there was free movement of people, goods and services. In Scotland, many remain supporters, who voted ‘No’ to independence in 2014, regretted Brexit and contemplated switching to the SNP. They are attracted to the nationalists’ policy of an independent Scotland re-joining the EU. It is worth examining the implications of that objective.
While the UK was a member of the EU economic and customs union for 47 years, Scotland has been a member of the UK economic and customs union for the past 313 years. We have enjoyed the free movement of people goods and services throughout the UK during all of that time. We have also enjoyed the benefits of being a member of the UK monetary union, social union, political union, cultural union, common security union and everything else that goes with our long-standing partnership over the past three centuries. If some people think that Brexit was a mistake, surely Scexit will be a thousand times worse?
Following the Act of Union in 1707, the parliaments of England and Scotland combined at Westminster, while we retained our own legal, education and religious systems. In every other respect, coinage, taxation, sovereignty trade and even flag, we were united. Scotland did well out of the partnership. By 1850, more than 40% of world trade was being conducted through and by the UK, turning our country into the most successful economic union in history. Glasgow grew from being a small market town on the River Clyde to the “Second City of the British Empire.”
While oil was booming, Scotland was a net-contributor to the overall UK economy. That was the case throughout the 1980’s and again for a short spell in 2007-2008. The collapse in oil prices saw Scotland become a net-benefactor from the UK’s sharing fiscal union. Scotland’s deficit is now more than £15 billion. Despite the fact that the SNP government levy the highest taxes in Britain, there is a yawning gap between how much we spend on public services and debt repayment and total tax revenues. The SNP government has chosen to spend high by providing free university tuition fees, free prescriptions, free care for the elderly, free women’s period products, free baby boxes and a host of other freebies not available in England. While we were net-contributors to the UK budget, the SNP were in full grudge-mode, shouting “It’s Scotland’s Oil” and resenting every penny paid into the UK coffers. Now that the boot is on the other foot and we are net-benefactors, the SNP have, bizarrely, ramped up their grudge and grievance rhetoric, claiming ludicrously that Scotland’s economic dependency proves the UK system is broken and that independence would bring miraculous prosperity. The fact that for centuries we have thrived in a system that levels out the economic asymmetries across the UK is an inconvenient truth to the partitionists.
For the past 5 years, expenditure in Scotland has consistently been higher per person than the UK average. Under the Barnett Formula that difference is smoothed out by the UK Treasury, to the tune of £2,000 more per man, women and child in Scotland, than our neighbours south of the border get. We’ve also benefited from almost £10 billion emergency Covid funding. The SNP have to explain how all that would be funded after independence. Where would we find the additional billions? Would taxes soar? Would pensions crumble? Would mortgages rocket? Would council house rents escalate to help fund local government? Scotland would face austerity on steroids and our inflated public sector would suffer. Doctors, nurses, teachers and thousands of public sector workers would face a wage freeze or even pay cuts. Those separatists who decry these facts as “project fear”, have to answer the question, where will the money come from? We need answers before we plunge into the unknown.
Scots also deserve honesty about Europe. With our current deficit at 8.6% of GDP, we would not be welcomed back into the EU. The rules state that deficits must be 3.0% or less for EU membership. It would take years of savage cuts to achieve 3.0%. What about the currency? We’ve had at least three different versions of a post-independence Scottish currency floated by the SNP. The current favourite seems to be sticking with the pound, in or out of a currency union. Either way, it kind of defeats the idea of independence, as the Bank of England would continue to rule the roost and indeed it is extremely doubtful that it would be a sustainable option. And if we keep the pound Scotland would not be able to join the EU. New EU member states must adopt the Euro. How would our huge financial services sector deal with the shockwaves of a new currency or joining the Eurozone?
And what about the border? An independent Scotland as a member of the EU would have to establish border controls with the rest of the UK, where we do 60% of our business. As a member of the EU, Scotland would see the full restoration of freedom of movement of people from the rest of the EU. But Brexit England, with its tough new controls on immigration, will have to work out a way of stopping tens of thousands of immigrants flowing south across the border from Scotland. We’ve seen how difficult border negotiations with Ireland have become during the Brexit talks. It would be ten times worse between Scotland and England and the disputes with England and Northern Ireland over fishing grounds would make the current Brexit fishing wrangles look like a playground spat.
It's typical, as we face the worst recession in our 300-year history, for the SNP to focus on another divisive referendum on independence in 2021, instead of concentrating on economic recovery and jobs. But the people of Scotland deserve more than empty promises. We need to know the truth. It is simply illogical for those Scots who thought Brexit was a bad idea, to think that Scexit is a good one!