Wednesday, 13 January 2021

Should Britain pay the SNP Billions in compensation for Brexit?


The SNP have demanded billions in compensation from the UK Government because of Brexit. But this is the same SNP that is demanding an independence referendum takes places this year. If the SNP won such a referendum would it expect the former UK Government to continue paying compensation? If not, why is it asking for something that it hopes will cease in a few months? If it is expecting compensation to continue post-independence this would mean that the SNP expects the Britain to pay reparations like Germany after the First World War.

The truth is that this is just another made up SNP grievance. No one knows what will happen to the economy in the next decades. Because no one can predict the future and it depends on decisions made not just in the UK but in Scotland. What we do know however is what would have happened if the SNP had been successful in its bid for independence in 2014.

If Yes had won in 2014 or at any other time when Nicola Sturgeon demanded a second go, then Scotland would have gone into the 2020 pandemic either as a newly formed independent state or in the process of becoming one. We know that there would have been start up costs and there would have been disruption and uncertainty. How much would this have cost the Scottish economy?

We don’t know for sure if Scotland would have been able to join the EU. While the EU has appeared more sympathetic to the SNP since 2016, it is unclear if this is just part of its bad cop revenge attitude to Britain, or whether it would genuinely look favourably on Scotland’s joining the EU. There have been mixed messages, but it is clear that certain member states would be dubious about importing secession.

Still let’s assume that Scotland was right now in the EU. This would mean that instead of getting furlough and business support from the UK Government, Scotland would now be reliant on itself or the EU. But the EU’s Covid support package comes with political strings and anyway is not simply a fiscal transfer from the Treasury, but rather an IOU.

Worse than that Scotland has now vaccinated approximately 3.22% of our population. This is a bit behind Northern Ireland and England but massively ahead of the EU which has vaccinated just 0.65% of its population. The reason for this was that the EU was slow in making the various vaccines available, inefficient in administering them, and didn’t order enough of the vaccines that are available now. How much compensation would the SNP pay to those Scots who would not have been vaccinated, some of whom would have died, if we had done what the SNP had wished and voted for independence?

But Scotland anyway was never a member state of the EU, but only a part of a member. We were part of that member only because the UK joined in 1973 and then voted to stay. The SNP has a guilty secret about this. It opposed staying in the EEC in 1975. How much compensation should the SNP pay for the fact that Scotland would never have been in the EU at all if the whole of the UK had followed the SNP lead?

But perhaps most importantly the SNP ignores the fact that Scotland already receives billions from the Treasury. The SNP and its supporters are of course in denial about this, but Scotland lately has been running a very large nominal deficit. It is nominal because Scotland is part of the UK. It would be actual if we were on our own. This year in addition to all the money we get allocated by the Barnett formula, we have been given billions by Rishi Sunak. He hasn’t asked for any of it back and the SNP do not intend to pay a population share of the National Debt if Scotland became independent so we wouldn’t pay it back anyway.

So, despite receiving billions each year and this year even more billions than usual, the SNP wants still more billions in compensation for the economic damage that the SNP predicts Brexit will to do to Scotland. So, they want real money for a theoretical loss because of leaving an organisation that they campaigned not to join. This is like demanding money for leaving a golf club you were not a member of and didn’t anyway want to join. This is not merely corrupt and dishonest, it amounts to extortion.

What is the cost to the Scottish economy of the SNP’s never-ending campaign to leave the UK? If Scotland’s ceasing to be a part of the EU is worthy of compensation, then we should charge the SNP because this would have been the result if it had succeeded in 2014. But just as no one predicted the economic damage of Covid, because no one could predict that there would be such a pandemic, so the value or lack of it of EU membership depends on what happens to the UK and the EU over the next decades.

It is impossible to calculate the cost of partitioning Britain, because we don’t know what damage it would do to economic confidence in the British economy. On SNP logic it would be just for the former UK to charge Scotland reparations for this. If leaving the EU is worthy of compensation, then why is Scotland leaving the UK not worthy of compensation? It’s the same argument. Why should Scotland alone be allowed to decide to leave the UK if it would damage the economic prospects of all British citizens?

But let’s say that the SNP fails in its goal of destroying the UK. Will the UK be doing better than the EU ten years from now? I have no idea. No one does. But its worth remembering that only a few months ago there were people complaining about Britain not being part of the EU’s vaccination programme. We were told that this would be disastrous for Britain and how this was just another example of the damage that Brexit was causing.

It is already obvious that the scare stories about Brexit were overdone. We have left the transition period with a deal. The Dutch may be stealing ham sandwiches, but other than pettiness trade is going on quite normally. Shops are full, the lights have stayed on. The danger was never Brexit, it was something that no politician predicted. Covid.

Let’s imagine that the UK Government decided to give the SNP extra billions because of Brexit damage and it turned out that contrary to SNP expectations, Scotland was doing rather better than the EU, as we are with the vaccine, after a few years of this it would be reasonable to ask for these billions back, because the basis on which they were demanded would have turned out to be false.  But unfortunately, the SNP would have spent them already and anyway has a policy of not paying its debts.

But let’s think about this. If the SNP thinks Scotland needs billions from the UK and if not, why is it asking for them, this rather undermines the argument that Scotland could manage just fine outside the UK.  You can’t keep demanding ever more money from the Treasury for every grievance and then demand independence too. You have to give up one demand or the other.