The Problem with Brexit and Scottish Independence

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The Scottish nationalist’s grievance arsenal is being loaded with a new theme should Brexit materialise.  In their minds, a Brexit would be the silver bullet that demonstrated the unbridgeable chasm between Britain and Scotland, triggering a new referendum, and a replay of the 2014 Referendum. But a Leave vote is potentially loaded with dangerous ultimatums for the SNP. The British people would have decided to create their own unique economic system that works in their best interests, an incredible political action that would raise the economic stakes and may leave Scotland with two blunt choices: the Union or the EU.

Post-Brexit the currency union becomes a critical debating point. During the Scottish Referendum, this was an emotive topic, as was membership of the EU; Salmond never convinced on both. Should a Brexit materialise these will become key talking points. In 2014, Salmond’s currency union was predicated on both Scotland and England being in the EU, a shared currency linked Scotland’s powerful financial sector to the City of London, ensuring co-operation, and safe-guarding the important financial hubs of Edinburgh and Glasgow. Post-Brexit a currency union becomes impossible as Scotland and England will be operating in two completely separate markets. In these circumstances, Salmond’s currency vision vanishes; you cannot have an EU member state with the same currency as a non-EU member state.  A Brexit kills Salmond’s position on currency and raised deep questions about what separate Scotland’s currency would adopt; Scotland would be forced towards the Euro.

Trade becomes a Gideon Knot, an intractable economic problem that works against Scottish separation. The UK and America are by some distance Scotland‘s most valuable trading partners; they out-strip the EU and provide the vast majority of our exports. According to the Scottish Government, Britain comprises of £48.5 billion (64%) of our total exports; the rest of the world accounts for £15.2 billion; and the EU, £11.6 billion. Our prosperity is more dependent on Britain than the EU by a considerable distance. This raises profound questions for the SNP. Should this be 2014 and Scotland voted to Leave, the EU would have secured trade between Scotland and Britain. A Brexit would irrevocably alter this reasoning; the island of Great Britain would be comprised of two completely separate markets. Our biggest trading partner would be alien.
This raises important questions and brings forth the striking hypocrisy of the second referendum proposal. A UK referendum is bringing us out the EU, one of our key markets (15%  of trade). This has a major effect on our material circumstances. Therefore we must have a referendum to come out of our largest market, the UK (70% of trade) an act that would be severely detrimental to our material circumstances. An incredible proposition, really. Do we opt out of Britain, our most valuable market, diminishing our relationship with our largest trader to integrate with the EU? Do we create an island comprised of separate markets? Do we hanker so hungrily for the EU? Brexit is a perfect fiasco that alters the calculus of the constitutional question profoundly.

With Britain deciding to go it alone to create its own economic model, Scotland would have to decide between Europe and the Euro or Britain and Sterling. This is nowhere near as smooth as what was proposed in 2014; Brexit would result in greater risk and higher stakes. This time you are not leaving your biggest trading partner – Britain – and then working with them in the same market, the EU. But you would be abandoning your biggest trading partner for another trading partner, the EU. In this scenario, a second independence referendum would be based on two choices: do you want the European Union or do you want the British Union; the Euro or the Pound; Westminster or Brussels. Should Scotland be independent and join the EU there will be no currency union and no free trade with Brexit Britain.
In this case “Project Fear” may become a reality. Scots will squirm at the prospect of Euros being deposited into their bank accounts instead of  Sterling. According to polls, the Union will survive a Brexit, there is no hunger for independence. Paint this picture – the Euro or Sterling – and independence becomes more difficult. Scotland loves Britain, but does it love Europe more? In the last election Scots voted Tory to bolster the strength of the Union. This time the SNP will not have the fantasy oil figures to rely on. Serious questions will also be asked about the public purse. Not mention that entry into the EU demands that you balance your budget, neoliberal talk for austerity. This is a potentially toxic cocktail.
Politics is the art of controlling your environment; for the SNP a Brexit flares up too many unknowns. Ideally they want Remain to win; the implications would be more favourable. Britain may have a rejuvenated UKIP, the positions of Cameron and Osbourne will be insecure, with the possibility of a right-wing coup in the Conservative Party. This is familiar terrain, the nationalist movement is defined against the Tories, these factors you can control and exploit; it’s a chaotic right-wing government run by a platoon of usurping bandits, running head-long to oblivion. Critically, however, Scotland would still be able to trade with its biggest trading partner, the UK, under the EU umbrella. That’s the SNP’s best option, and probably the likely outcome. However, should a Brexit materialise, the UK would have emphatically rejected the EU model. Current polls suggest Scotland will vote Remain. Sturgeon will rightfully make hay out of this outcome and raise the possibility of a second referendum. But with that comes a host of potential, unprecedented problems.  The labyrinthine constitutional question would take another unexpected turn.

 

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