The Scottish Government’s new paper on Brexit choices – ‘Scotland’s Place in Europe: People, Jobs and Investment’ – makes an important contribution to the UK political debate. It argues that, if the UK is not to follow the best option of staying in the European Union, it should stay in the EU’s single market and in a customs union with the EU.
But what this in-depth 54 page paper does not do is either directly make a case for halting Brexit nor for holding a second independence referendum. The detailed economic analysis in the report shows that a ‘soft’ Brexit of staying in the EU’s single market and customs union is significantly better than a free trade agreement with the EU, let alone simply trading on WTO rules. And it does show that even staying in the European Economic Area (EEA) would have costs compared to staying in the EU (less so if also in the customs union). But its purpose is to promote the single market option, not to argue to halt Brexit.
A Political Challenge
The paper provides a robust analysis and estimation of how staying in the EU’s single market and customs union would benefit trade, growth, foreign direct investment, productivity and jobs compared to a Canada-style free trade deal. This then throws down a political challenge to both the UK government and to Labour. The Scottish government has provided a serious in-depth analysis of the costs of different types of Brexit. So where, in that case, is the UK government’s and Labour’s estimates?
The analysis shows – similarly to other independent research – that the costs of having a Canada-style trade deal are substantially higher than staying in the EU’s single market. So while the UK government talks of having a ‘Canada plus plus plus’ deal – to the EU27’s general bemusement – where is its analysis of the costs of either a ‘Canada-dry’ deal or a ‘plus plus plus’ one? So far it doesn’t exist.
And while Labour continues to prevaricate, with Brexit shadow minister Keir Starmer calling again, last weekend, for a deal that has the ‘exact same benefits’ as being in the single market, where is Labour’s detailed analysis showing what that would look like and how it could be achieved?
Special Deal for Scotland?
The Scottish Government’s paper puts much less emphasis, than its first paper in December 2016, on the differentiated option for Scotland of staying in the EU’s single market and in the UK, if the rest of the UK leaves the single market. It does reference this – not least in the context of the EU-UK provisional deal on Northern Ireland and the fact that one option could still see Northern Ireland having a differentiated deal. But it is dealt with briefly.
What the paper puts much more emphasis on is the goal of devolving immigration policy to Scotland, allowing mitigation of the damaging impact that ending free movement of people will have. An astute UK government, looking to build more positive relations with the Scottish Government, might consider some version of that – but there is little to suggest Theresa May’s government might head in that direction.
There are other Scottish twists here. The UK, the paper argues, should stay outside the EU’s common fisheries policy as the EEA countries do. But would the EU accept this – if the UK asked for a closer relationship than any other third country of being in both the single market and customs union? The EU will drive a hard bargain at least on access to fishing waters. The paper is also rather uncertain on what it wants on agriculture – emphasising the benefits to rural communities and agriculture of being in the EU but not quite arguing to stay in the common agricultural policy.
Politically Sustainable or Democratic?
The key questions in the face of this report are whether its preferred solution is feasible, sustainable or desirable. The Scottish Government suggests the whole UK could join/stay in the EEA. The EU27 – and EEA members – would be open to this in some form, though given the UK’s size, it might be that a separate arrangement would be proposed not to unbalance the EEA as it stands. This might anyway be necessary if the UK wanted to be in the EEA and a customs union with the EU (since the EEA members – Norway, Iceland and Liechtenstein – have their own trade policies, sometimes coordinated via EFTA).
But the real challenges here are political and democratic. For the UK to stay in the single market and customs union while giving up its vote, its presence in all relevant EU meetings, and having just a small voice with minimal influence (as Norway has), is the opposite of taking back control. It would create a major democratic deficit. Beyond that, the EU would be bound at times to take decisions on trade policy and on new EU laws and regulations that went against UK and Scottish interests.
These issues are rather glossed over in the paper – though the Scottish Government argues that the UK would at least retain some influence in a single market Brexit deal compared to a Canada-style one.
Where Now?
Recent polls suggest Scottish support for ‘remain’ is now at 68% while, in England and Wales, opinion is almost 50:50 on ‘remain’ and ‘leave’. The Scottish Government’s new paper gives it plenty of political ammunition for debates at Westminster. And, if the UK government does end up with a Canada-style deal, it will also give the Scottish Government plenty of room for manoeuvre to demand a second independence referendum if, come the autumn, that is what Nicola Sturgeon decides she wants to go for.
What this paper doesn’t do is give any lead to the 68% who would like to ‘remain’ in the EU. The LibDems – and English and Welsh Greens – remain the only parties calling for a second EU referendum. For now, there is no Scottish Government strategy to push the UK towards halting Brexit – which would be in Scotland’s interests even if it did choose independence in the coming years.
To argue for the UK to stay in the EU’s single market and customs union is to argue to stay as close to the status quo as possible while giving up vote, voice and a seat at the table. Faced with a more damaging type of Brexit, it sounds sensible – until you look at the democratic cost. Compared to being an EU member state it is surely absurd.
First published by the Scottish Centre on European Relations
John Stuart Wilson says
I’ve read the report, and unlike this author, I found that it said nothing new. It was a rehash of all the same data from 2016 that we’ve all seen before. And, despite the misleading headlines it inspired, it does not predict economic Armageddon. Or even Depression. Or even Recession. It simply rehashes the 2016 claim that growth will be slower than it would have been otherwise.
She’s claiming that she can credibly chart out the course of the economy to 2030. Given that she was co-architect of the Independence White Paper, I find that improbable.
It also says that EEA membership is the solution. However, Sturgeon is also the sponsor of a report that savages EEA membership as a undemocratic option that emasculates the voters, burdens private enterprise with unproductive costs, and makes us unattractive to foreign investors because we can’t make our own laws.
As for this author’s support for “a second EU referendum”. What is the point? Did the 2014 Scottish independence referendum or the 2016 EU referendum settle anything? Are we suddenly going to change our natures and accept the result even if we are on the losing side of it?
It is instructive to read what this author wrote about the EU before the referendum. https://www.opendemocracy.net/can-europe-make-it/kirsty-hughes/uk%27s-eu-referendum-and-eu%27s-legitimacy-crisis
Given that this condemnation is the production of a committed europhile, surely it is obvious that neither Leave or Remain is an attractive option. What we have before us is two bad options. A second referendum will do nothing but drag out the uncertainty longer, and in the end – we will end up with a bad option, no matter who “wins” the second, third or fourth referendums.
Keith Macdonald says
A good summary of the current position. The central dilemma is that all the arguments for staying in the EU single market apply, with four times the force, to the proposition that we should leave the UK, which Nicola Sturgeon still says she supports, though I have my doubts about that.
A second referendum on the terms negotiated is entirely justified in the context of the EU referendum. The Brexiteers made explicit promises that Britain would develop a cooperative relationship with the EU after Brexit and that, in particular, full market access would be obtained. Shortly after the referendum, when talk of “no deal” suddenly started, it became clear that many of them had no intention of delivering on that promise.
The problem for the SNP is that this argument applies just as forcibly to another Scottish referendum on leaving the UK. In 2014 Alex Salmond promised that Scotland’s economic and social relationship with the UK would be unaffected by destroying its legal basis in the union. This is strikingly similar to the Brexiteers promises in 2016 and is equally unlikely.
Some nationalists have spotted this and are now urging Nicola to oppose a second referendum. Effectively this means they would rather see the UK get into an economic war with the EU (that is what a lot of the Brexiteers really want and is the likely consequence of no deal). This ignores the fact that Scotland would be right in the middle of that economic war and would suffer horrendous casualties.
This exposes the fatal flaw of all nationalism – its backward looking and short term perspective. How different from true patriotism which would pull the real interests of the British and Scottish people first and recognise that international cooperation and the legal and constitutional structures that support it are the way forward.