Category Archives: Brexit

Repopulating the Highlands will be necessary after Brexit and ScotRef

Durness
Durness.
In her speech to the SNP’s spring conference yesterday, Nicola Sturgeon said:

Scotland isn’t full up. If you are as appalled as we are at the path this Westminster government is taking, come and join us.

Come here to live, work, invest or study. Come to Scotland and be part of building a modern, progressive, outward-looking, compassionate country.

I think this was a wonderful thing to say. Firstly, it’s true, and secondly, it shows the world that Scottish nationalism (or sovereigntism or independentism as I prefer to call it) isn’t racist in the slightest, but progressive and open to the world.

If the rUK continues moving towards a hard Brexit, and Scotland as a consequence votes for independence within Nicola’s window of late 2018 to early 2019 to escape the madhouse, I find it quite likely that many people from the rUK (both natives and EU citizens desperate to remain within the Internal Market), will take up the offer to join us in Scotland. They’ll be joined by many companies that need to remain within the EU and reckon the move to Scotland is easier than moving to a place outside the old UK.

As a consequence, Scotland's population might grow rapidly soon, perhaps by 10% in less than a decade.

That’s great in a lot of ways, but where do we house them? The Central Belt is already busy and congested, and although I'm sure there'll be space for a few more, I think a more radical solution will be needed.

At the same time, the Highland Clearances were a horrible and dark part of Scottish history, and it would be nice to right the wrong by reversing them in some way.

So I'm thinking we should start planning for a few new towns and cities in the Highlands. In some cases, existing towns can be expanded a bit, but sometimes it’d be good to think big.

For instance, I was looking at a map, and I thought Durness would be a nice candidate for expansion: It’s a beautiful place, there isn’t any large town in the vicinity, and from a historical point of view, it was the location of the Durness Riots of 1846 (when the women of Ceann na Beinne area defied the Sheriff's Officer sent to deliver the summons of eviction as part of the Clearances).

If we built a new town there the size of Milton Keynes (population 230k), the Highland council area would double in size, practically overnight (the current population of the whole area is 230k, too).

A new town could be built in a modern way, incorporating the area’s stunning nature as green areas, and building modern infrastructure such as trams at the same time as everything else. The houses should be built to environmentally friendly standards, and of course every house should have ultra-fast Internet as standard. The city should also be designed to be carbon-neutral from day one.

There has been a lot of talk about English universities setting up campuses abroad to maintain a presence within the EU, and Durness could become the best location for them, because their campuses could be designed and built at the same time as the rest of the city.

Given that Durness is almost as close to Reykjavík as it is to London (1050km vs 900km as the crow flies), it could also easily become a very attractive location for American companies needed a foothold in the EU if it had its own airport.

Some people would perhaps say that Durness would be a ridiculously northern location, but of course it’s further south than both Oslo and Stockholm.

If done right, the City of Durness could become one of the most attractive places to live in Scotland, and a real magnet for people moving to Scotland after independence.

Independence changes everything. We need to think big.

This time it’s personal

IMG_20160730_102409
Selfie with weans.
I was a keen and eager participant in the first independence referendum campaign, and I was as devastated as everybody else on Friday the 19th when we realised we had lost.

Campaigning was about creating a fairer Scotland that would be a great place for my weans to grow up in, but I didn’t really expect the result to have massive implications for my family and myself in the short to medium term.

This time it’s different, however: My family depends on this country remaining in the EU (or at least in the EEA) because we are a truly European family. I am a Danish citizen, my wife has a UK passport, the kids we have together are Danish/UK and the kids from my wife’s previous marriage are French/UK (however, for the under-18s getting a French passport might depend on cooperation from her ex, and this might not be forthcoming).

Brexit means that I could lose my right to live here (or at least lose some rights, such as access to the NHS and getting a pension), but at the same time my wife could lose the right to live in the EU. There could also potentially be problems moving my stepkids to the continent if their father doesn’t cooperate. Furthermore, my parents would lose the right to come and a live with us in Scotland when they get frail, and the same would happen to my mother-in-law if we move abroad. Furthermore, permanent residence gets nullified after more than six months abroad, so I would also lose my right to work abroad temporarily, or to spend more than six months with my parents if their health requires it (they’re staying in a tiny village in the mountains of Italy). It could also make it financially impossible for the kids to study abroad if they so desire. Retiring abroad together would probably also become an impossibility for us.

My wife and I have thus been feeling utterly distraught because of Brexit (and not least because of the UK government’s decision to use me and others in my situation as bargaining chips), and if it hadn’t been for Nicola Sturgeon’s wonderful speech the morning after Brexit, we might have left for the continent already.

I therefore felt absolutely delighted that Nicola yesterday announced that the new Scottish referendum will be held before the UK leaves the EU. Finally somebody is offering us a solution to our worries.

This might be our last and only chance to keep our family together, so it’s hard to describe in words how important it is for us to win this. All I can say is that if we lose, the consequences are too horrible to contemplate.

So it’s no game. We have to win it. Scotland in Europe has to happen before the Tories wreck our family.

This time it’s personal.

Delaying the new independence referendum will help the Unionists

Delayed Departure
Delayed Departure.
There are two groups of people who want to postpone a new Scottish independence referendum till after Brexit: Yes–Leave voters and Unionists.

Many Yes–Leave voters (the Yellow Tribe, as I’ve described them in the past), such as Jim Sillars, want to postpone it because they hate the EU at least as much as the UK, and they hope Scottish EU membership can be averted by waiting till Scotland has fully left the EU together with the rest of the UK.

They might sing a siren song about needing more time to prepare a Yes majority, but when you dig a bit deeper, their main focus is clearly to prevent Scottish membership of the EU, and they dismiss any concerns that Independence Outwith Europe will attract much fewer voters than Independence In Europe

I’m finding it curious why they had no problems voting Yes last time, given that there clearly was an expectation that Scotland would apply for continued EU membership immediately. I guess they might have been hoping Project Fear were right that Spain would veto it.

It’s clear this group will do everything they can to delay the next independence referendum. What is less clear is whether they’ll actually vote No or abstain if it does happen sooner rather than later.

On the other hand, the Unionists clearly want to postpone the referendum because they think they will lose if there’s any prospect of uninterrupted EU membership for Scotland, but that their chances of keeping Scotland on board are much better once Brexit has happened. I tend to agree with them. It’ll be much easier to organise Project Fear II if Scotland has to spend years after independence re-harmonising its laws with the EU before membership becomes an option. Let’s face it – if Theresa May wants Indyref2 after Brexit, it’s not because she wants to help us

What is clear is that the two groups can’t both be right. Either holding Indyref2 after Brexit will increase the chances of a Yes, or it’ll do the opposite. My money would be on the Unionists here; after all, they just want to prevent Scotland from leaving, whereas the Yes–Leave crowd have two conflicting priorities: Obtaining independence and staying out of the EU.

We therefore have to dismiss the Leave–Yes plea for postponing next new independence referendum. Our best chance is to hold it before Brexit becomes a reality, for instance in the autumn of 2018.

UK vs EU

People who voted Yes and then Leave (the Yellow Tribe, as I’ve described them in the past) often talk of the UK and the EU as if they were almost the same, and they’re thus often keen to postpone Indyref2 till Brexit is done and dusted. “Why leave one union just to join another?” as they like to say.

However, is this fair? To what extent are the two unions alike? I thought it’d be useful to compare them topic by topic:

UK EU
The Houses of Parliament consist of two chambers. In the House of Commons, 59 out of 650 MPs are representing Scotland (9%). It’s hard to calculate the equivalent for the House of Lords because they don’t represent constituencies, but the Scotsman put the number at 61 out of 760 (8%) in 2015. This should be seen against the fact that Scotland makes up slightly more than 8% of the population of the UK. The European Parliament consists of 571 members. As an independent country, Scotland would probably have 13 MEPs (like Denmark), rather than the current 6, because small countries are over-represented. That would mean that Scotland would have 1.7% of MEPs on a population share of 1%. In the European Council, Scotland would have equal representation with all other member states (1 out of 28), so the same as Malta, Denmark and Germany.
There isn’t a specific number of Scottish ministers in the UK government. At the moment there is only one (David Mundell), but even that isn’t guaranteed (for instance, the Secretary of State for Northern Ireland isn’t Irish). The European Commission consists of one commissioner from each member state, so Scotland would always have one.
Westminster is sovereign, so if they want to change Holyrood’s powers, they can do so without consulting Scotland, although in the past they have done so. For instance, abolishing Holyrood altogether would be entirely within their powers if they thought that would be a good idea. The powers of the EU are described in the Treaty of Lisbon, and it requires unanimity to change it. This means that Scotland as a member state would have to agree before handing over any more powers to Brussels. There is absolutely no way that the EU could get rid of Holyrood.
Using the Pound Sterling is obligatory. In theory, Scotland would be required to adopt the Euro, but in practice it would be easy not to fulfil the criteria and thus stay out indefinitely, like Poland and Sweden.
It would be politically difficult for Westminster to refuse a new Scottish independence referendum, but they would be entitled to do so. The EU allows any member state to leave using Article 50. As we’re finding out at the moment, this is not easy, but at least it’s a guaranteed right.
The UK has one single foreign policy, and Scotland is not allowed to have its own. EU member states have their own foreign policy, but they have lots of meetings to coordinate their efforts. The EU has a nascent foreign policy, too, but this is in addition to the member states’ own policies, not instead of them.
The UK hasn’t negotiated its own trade agreements for many years and will have to do this from scratch after Brexit. The EU has great trade agreements with most of the world, and these apply automatically to all member states.
Westminster raises most taxes in the UK and then sends block grants to the devolved administrations. Each member state raises its own taxes and pays a membership fee to the EU.
The military is a British institution, and it’s completely controlled by Westminster. NATO membership is very important to the UK. As an EU member state, Scotland would be responsible for its own military forces. EU countries cooperate a bit. NATO membership is not obligatory.
The Tories are talking about walking away from the European Declaration of Human Rights and the jurisdiction of the ECHR. EU countries have to sign up to the ECHR, and the European Declaration of Human Rights forms part of the EU treaties.
The UK has over the centuries invaded most countries of the World. The EU hasn’t invaded any countries at all.
The UK used to do its best to get rid of Welsh, Gaelic, Scots and the other indigenous languages of the British Isles. It seems to have been mainly European influence that has led to improved support for minority languages. Linguistic diversity is in the EU’s DNA. As a full member state, Scotland will be able to designate either Scots or Gaelic as a full working language of the EU with translation of all texts and interpretation of all speeches in the European Parliament.
All oil revenues go straight to Westminster. EU member states keep their own energy revenues, and the EU might help member states build energy infrastructure, such as pipelines between member states.
British citizenship completely replaced Scottish citizenship in 1707. EU citizenship is additional to citizenship of a member state.
Anthem: God Save the Queen. Anthem: Ode to Joy.

If I’ve forgotten anything, please leave a comment underneath, and I’ll add it.

Scottish independence can still happen before Brexit

Scottish euro coin
Scottish euro coin.

During the first independence referendum campaign, the Scottish Government announced that Scotland would become independent 553 days after the referendum (on 24th March 2016). This was widely criticised at the time for leaving too little time for all the negotiations.

Most people seem to assume that would be the case this time as well. For instance, in an article by STV News about fast-tracking Scotland’s EU membership application, they suggested the following possible EU membership timeline:

  • Autumn 2018 – Scotland votes Yes to independence
  • March 2019 – Scotland, along with the rest of the UK, leaves the European Union
  • 2020 – Scotland becomes an independent nation
  • 2020 – Scotland applies to join the EU
  • 2021 – The European Commission and the Council give the green light and negotiations begin
  • 2023 or 2024 – Majority of MEPs, all EU member states and Scotland ratify the treaty of ascension and the country joins the EU

And yet, if we look at other countries that have gained their independence recently, they have invariably become independent much more rapidly. As Alister Rutherford has pointed out, “Slovenia held a referendum on 23rd December 1990 and declared independence on 25th June 1991. Montenegro needed even less time. The referendum was held on 21st May 2006 and independence was declared on 3rd June of the same year. Some countries moved to independence without a referendum. Slovakia for example passed an act of independence in their parliament on 17th July 1992. There followed five months of negotiations which ended with the dissolution of Czechoslovakia on 31st December 1992. Slovakia then became formally independent on 1st January 1993.” The longest delay I’ve found so far was the 260 days it took Georgia to gain independence from the Soviet Union.

Of course it’s impossible to sort out very much during such a small amount of time. Lots of questions would remain unresolved for a while and would get settled later. The time before independence would be spent putting in place sensible transitional arrangements. For instance, Scotland and the rUK might decide that Scotland will continue to use the Pound Sterling for two years after independence day, and the EU might agree that we’ll remain within the EU’s Customs Union until EU membership has been agreed on (or rejected).

It actually makes sense if you think about it. Why should Scotland be dragged out of the EU for a year only to join immediately afterwards? Potentially this would involve setting up a new customs regime only to revert to the previous on as soon as it’s been implemented. It’s much more straightforward to become independent sooner rather than later and then sort out the details afterwards. It’s just like a divorce: People normally separate first and then sort out the details of the divorce afterwards, rather than staying together until they’ve divorced.

I therefore imagine a more sensible and realistic timescale would be as follows:

31 March 2017 Theresa May triggers Article 50
30 August 2018 Second independence referendum
28 February 2019 Scottish independence day
4 March 2019 Scotland sends a membership application to the EU and asks to remain within the Internal Market and the Customs Union in the interim.
4 March 2019 Scotland sends a letter to the Secretary General of the United Nations expressing the intent to remain a party to all treaties signed and ratified by the United Kingdom.
14 March 2019 The European Commission and the European Council agree that Scotland can remain within the Internal Market and the Customs Union without voting rights while the membership application is processed.
31 March 2019 Brexit takes place – the rUK leaves the EU. Scotland is not yet a member state but remains within the Internal Market and the Customs Union.
26 September 2019 Formal EU membership negotiations begin.
28 February 2021 The new Scottish currency is launched, linked to a basket of Euro and Pound Sterling.
9 May 2021 (Europe Day) A majority of MEPs, all EU member states and Scotland ratify the treaty of ascension and the country joins the EU. Alex Salmond becomes Scotland’s first ever EU Commissioner, and 13 Scots are elected to the European Parliament (not 6 as before independence, but the same as Denmark).
28 February 2024 The rUK leaves Faslane, taking their nuclear weapons with them.
28 February 2034 The last of many independence treaties between Scotland and the rUK is signed (this one finalising the maritime border).

The Scottish export conundrum

It’s becoming abundantly clear that the Unionists’ main argument in the next independence referendum will be that if Scotland has to choose between being in the UK’s and the EU’s Internal Markets, the former wins hands down. Here’s for instance David Mundell’s take on it:

Our own domestic market in the UK is far and away the most important market for Scotland’s businesses.

The Scottish Government’s own figures show our trade with the rest of the UK is worth four times our exports to the EU.

Businesses in Scotland sold £37.5bn more in goods and services to their own market in the UK than they did to all 27 EU countries put together.

Today’s figures show the UK is the vital union for Scotland and highlight the importance of maintaining the UK market and preventing any new barriers to doing business across the UK as we leave the EU.

We must therefore find a convincing answer to this question. Wings over Scotland has provided one, but it’s making certain assumptions about the deal Westminster will achieve.

I therefore think it might be useful to examine the various scenarios systematically:

The (r-)UK remains with the EEA and the EU’s Customs Union

This scenario could happen either because Brexit never happens due to a second referendum, or because a new government decides to apply for continued membership of both the EEA and Customs Union (which basically would be membership without voting rights).

Would Scottish independence be good or bad for different types of businesses in this scenario?

  • Exporters to the rUK: Not a huge difference. Some companies might decide to set up a separate Scottish HQ if we are independent, which will increase employment and domestic demand, but that’s about it – the EU will ensure that the rUK doesn’t discriminate against Scottish businesses.
  • Exporters to the EU: Very little difference, but independence will be preferable, because there might still be small bits and pieces that Westminster will not take part in.
  • Exporters to the rest of the World: Very little difference, because participating in the Customs Union means that Westminster can’t make their own trade deals.
  • Other businesses: Very little difference — the main difference will be that independence will lead to a rise in the number of Scottish HQs and government agencies, which is likely to lead to a general rise in economic activity in Scotland.

Verdict: Under this scenario, independence is economically the best option, but the difference isn’t great.

The (r-)UK gets a really good trade with the EU

In this scenario, the (r-)UK does leave the EEA and the Customs Union, but manages to negotiate a really good trade deal. There will be some restrictions on the free movement of people, and there will be customs checks at the borders. The (r-)UK will make separate trade deals with the countries of the world (but because the EU is a much bigger trade block, these deals will typically the worse than the one they replace).

Would Scottish independence be good or bad for different types of businesses in this scenario?

  • Exporters to the rUK: Independence won’t make much of a difference with regard to trade, but the customs checks will make it a bit of a hassle, so some of these companies will relocate to the rUK.
  • Exporters to the EU: Independence is much better because of the lack of customs checks, and because companies can send key personal back and forwards between Scotland and the rest of the EU freely.
  • Exporters to the rest of the World: Independence is preferable, because the EU’s trade deals will be better.
  • Other businesses: My guess is that more companies will move from the rUK to Scotland to remain within the EU than the other way, so it’s likely the overall effect will be positive. It’s really an unknown at this stage, though.

Verdict: Mixed, with independence being better for some companies and worse for others. On average, I think independence will be somewhat better for the Scottish economy.

The (r-)UK gets a limited trade deal

This scenario is of course rather vague – a limited trade deal would necessarily prioritise some products or sectors over others, and there are infinite possibilities. What is certain, however, is that it will be somewhere between the preceding scenario and the following one. This scenario is likely to be accompanied by a recession (but a smaller one than in the next scenario).

Would Scottish independence be good or bad for different types of businesses in this scenario?

  • Exporters to the rUK: If Scotland is independent, some companies will not feel much of a difference, while others will struggle badly, depending on whether they’re included in the trade deal. If Scotland remains within the UK, things won’t change much at first for these companies, but any supply chains depending on EU links could break, and the general recession is likely to affect them.
  • Exporters to the EU: If Scotland is independent, nothing will change (and companies from the rUK will move to Scotland to remain within the EU). Without independence, some sectors will struggle while others are OK, but worse than they would have been.
  • Exporters to the rest of the World: Scottish independence is a lot better, because Scotland then keeps the EU’s great trade deals.
  • Other businesses: Independence is likely to be better, because of the increased economic activity caused by companies and people moving north; furthermore, the rUK recession can hopefully be avoided.

Verdict: Independence is better on average, even though a few companies who focus solely on exporting to the rUK in sectors not covered by the trade deal will struggle.

WTO terms

In this scenario, the (r-)UK leaves the EU without any agreement and has to trade on WTO terms, which means there will be tariffs on lots of exports, and no free movement of people. There will also necessarily be a hard border in Ireland. In this case, there is broad agreement that the economy will take a severe hit, with many companies and people fleeing the country. Things might improve eventually, but the economy will first experience a severe recession for several years.

Would Scottish independence be good or bad for different types of businesses in this scenario?

  • Exporters to the rUK: If Scotland is independent, these businesses will suffer, but people will still want their whisky to forget their worries, and they’ll still need energy produced in Scotland, so the exports won’t collapse. If Scotland remain within the UK, these exporters will still suffer because of the UK recession.
  • Exporters to the EU: Scottish independence is a hundred times better for obvious reasons.
  • Exporters to the rest of the World: Scottish independence is a lot better, because Scotland then keeps the EU’s great trade deals.
  • Other businesses: If Scotland isn’t independent, they’ll suffer because of the recession. If Scotland is independent, it’s likely the rUK recession will be felt north of the border, so things will still be bad, but much better than it would have been without independence.

Verdict: Companies focused on exports to the rUK will struggle after independence, but they’d struggle anyway because of the severe recession. For other companies, independence is much better.

Conclusion

Interestingly, independence seems to be better in all scenarios, but in some of them, the difference is much bigger than in others.

The Unionists going on about the amount of Scottish exports to the rUK compared with the rest of the World seem to be overlooking two big issues: (1) The more the UK cuts itself off from the EU, the more the economy will suffer, and that will hurt also those companies exporting to the rest of the UK; (2) the UK is likely to get trade deals that are much worse than what the EU has already negotiated, and that will be bad for lots of companies if we remain within the UK.

It’s really misleading to look at the size of the exports without looking at what will happen to them in the future, especially if Theresa May manages to shoot the UK in the foot. The more the rUK cuts itself off from the EU, the more we’ll need Scottish independence.

Retailers and the customs union

Stillorgan Shopping Centre - South Dublin (Ireland)
Stillorgan Shopping Centre - South Dublin (Ireland).
There was an interesting article in The Irish Times today about the consequences for Ireland when the (r-)UK leaves the EU’s customs union:

Even if there were a free-trade agreement, allowing free movement of goods between the UK and the EU, this will not apply to imports from countries outside the EU. Thus border controls will be essential to ensure that imports from third countries, such as China or India, comply with EU regulations.

This will have huge implications for the retail sector, much of which currently operates on a British Isles basis. Goods travel from warehouses in the UK to the Republic without problem. After Brexit, this will require new bureaucracy and customs duties, entailing a major increase in cost.

That could raise prices significantly for Irish consumers, posing serious competitiveness problems for the wider economy. Because of the small size of the Irish retail market, going it alone is a high-cost option.

Although they don't mention it, this is likely to be a much bigger problem than most people realise because of the way modern businesses depend on just-in-time manufacturing and low stock levels. What this means is that shops tend to get new deliveries all the time instead of having a lot of stock, and this will lead to huge problems if the over-night deliveries sometimes get disrupted by customs checks.

It's possible some companies will start treating Ireland as part of their French operation rather their British one (for instance, Kellogg's might prefer to sell the products made for the French market in Ireland instead of the British ones to avoid the customs checks). That would definitely make Ireland feel less British over time.

From a Scottish perspective, it means that if we leave the UK at the same time as Brexit in order to remain in the EU, and if the rUK proceeds with the harmful policy of leaving the EU's Customs Union, retailers are likely to start treating Scotland and Ireland as one market (which again might been seen as a subdivision of the Scandinavian or the French one), whereas the rUK will be seen as a rather distinct one. It would make the products in Scottish and Irish shops more similar over time, and less similar to the ones found in England and Wales.

It's worth bearing in mind that the EU's Customs Union is almost ten times as big as the rUK's one, so although it will be annoying to lose some of the English and Welsh products in the supermarkets, the consequences for Scotland will be much worse if we leave the EU together with the rUK.

I'd much rather Westminster decided to remain in the EU's Customs Union, but if they really are hell-bent on leaving it, it's yet another argument why Scotland should become independent within the EU.