Scottish independentistas have been fairly positive towards the new EU-UK trade deal so far. Their line of thinking seems that the lack of tariffs means there won’t be any restrictions between an independent Scotland and the rUK, and so Westminster won’t be able to play its Project Fear card about erecting a physical border between the nations this time. I’m afraid reality is slightly more complicated than this, however.
It’s not a new version of the Internal Market, but just an ambitious trade deal. It means there won’t be any tariffs on goods moving between the EU and the UK, but those goods will still be inspected in order to verify that they comply with the T&Cs, adding a lot of red tape (and potential delays at the border). It doesn’t include free movement of people. (And Erasmus+ is very sadly and unnececessarily excluded.) Very importantly, it also doesn’t cover services – and most of the UK’s exports fall into this category. (I don’t know the exact figures for Scotland.)
This means that lots of companies and people will lose their livelihoods on Friday.
It also means that Scottish independence will entail a proper border between England and Scotland (but no border between Scotland and Ireland because Northern Ireland effectively will behave as if it’s part of the EU for most purposes). This will for instance mean that Scottish supermarkets will get hard to restock from warehouses in England, but easy from those in Ireland.
The Irish have already realised that the trade deal changes everything, albeit relatively slowly. As a recent article in the Irish Times puts it:
Short or medium-term disruption aside, businesses should not expect trade via Britain to return to what it was before. For the whole island of Ireland, the conditions that determined old supply chain routes have changed, and changed permanently, tipping the balance towards direct links with the rest of the EU. […] Agreed in a rush, the full implications of what the new trade terms with the UK and the the Northern Ireland protocol will mean in practice will only fully emerge in time. But fundamentally, as a small island off Europe we will no longer be an appendage to the UK market, and instead will be an appendage to the continental market. This will change our supply routes, what outlets are straightforward to order from online, the products on our shelves, and ultimately perhaps the shops on our streets.
(And of course, Northern Ireland isn’t a model Scotland can copy. It’s only allowed to have its cake and eat it because of the Good Friday Agreement. Scotland will get the same EU deal as the Republic of Ireland – no more, no less.)
I’m therefore concerned about the effects of a delayed independence referendum. Once the trade deal replaces the transition period on 1st January, lots of Scottish companies will suddenly be unprofitable. Perhaps they’re service companies selling services mainly to EU countries, or they’re exporting such a wide variety of products that the customs formalities effectively will be a showstopper. If the independence referendum was happening very soon (in January or February), these companies could try to cling on, borrowing money to offset their losses until an independent Scotland can join the EU membership holding pen (i.e., a transition period until real membership kicks in). If, on the other hand, there’s no date for a new independence referendum, these companies are likely to shut down or diversify, for instance by finding new customers in England.
When Scottish independence then finally happens, these companies won’t be able to simply restart their old EU trade – their old customers will have found other supplies within the EU – and they’ll face the prospect of losing access to their new clients in England.
In a worst-case scenario, Scotland could lose both those companies exporting to the EU and the ones with English customers.
Unfortunately, the Tories will have figured this out, too, so they must be realising that the longer they postpone Scottish independence, the more difficult it’ll be – so I’m expecting them to do their utmost to prevent it from happening soon.
The SNP will have to achieve independence in 2021. Simply winning the Holyrood election and asking nicely for a Section 30 order simply isn’t good enough at this stage.