An independent Scotland would never join the EU

 

Since 2016 the SNP has consistently hoped that Brexit would make it easier for Sturgeon to argue for Scottish independence. Scottish opinion was in favour of remaining in the EU, so disappointed Remainers would support the SNP’s argument that the only way to have EU membership would be to leave the UK and join the EU. Many Pro UK Remainers argued and some still do that Brexit was folly for this reason as it made it more likely that the UK would break up.

I argued instead that Brexit would make the case for Scottish independence harder. While it is true that some angry Remainers have moved towards Scottish nationalism the SNP still has to win the argument because it has never addressed the consequence of Brexit for independence. If there were ever to be a proper campaign every aspect of the SNP’s case would be scrutinised. What we learned with the SNP’s latest plan is that the case for independence is not only worse than it was in 2014, it is much worse. So much so that it is hard to imagine Scottish voters choosing it.

The issue has never been EU membership itself. There are good arguments for and against the EU. But what matters for Scotland is having the same EU status as the other parts of the UK. If the UK were a member like it was in 2014 it would be difficult for Scotland not to be a member. But if the UK is not a member, as now, it would be difficult for Scotland to be a member.

Like it or not we have been part of the UK for 300 years. The parts of the UK are closely aligned socially and economically, much more so that we are with the EU. It is little bother to any of us if we have to show our passports when going on holiday to Spain or change pounds into Euros, to have to do the same while travelling from Edinburgh to Newcastle would be intolerable. No one wants lorries travelling from Scotland to England to have to pass through customs or to switch currency if we buy something from Amazon.UK.

But we learned something much worse than this on Monday when Sturgeon presented her latest plan. Scotland on becoming independent would not immediately be able to apply for EU membership. It would be years if not decades before it could do so.

Sturgeon admitted that Scotland would need its own currency before it could apply for EU membership. I don’t think Scottish nationalists have quite grasped why or what this would involve.

The reason Scotland would need its own currency is that there are rules for new member states. They have to adopt the Copenhagen Criteria which involves the Euro convergence criteria and then the Exchange Rate Mechanism (ERM).

At this point Scottish nationalists point out correctly that there are lots of EU countries that still have their own currency. This is true. Some have opt outs. Some simply choose not to go to the next step of joining the Euro. The EU for political reasons allows them to do so. It is perfectly possible that Scotland too would be allowed to never actually join the Euro. But the Euro is a vital part of the EU’s plan for ever increasing integration and it is going to become ever harder for new member states to promise to join the Euro without meaning it.

The idea for instance that the UK could rejoin the EU without joining Schengen or the Euro and keep Thatcher’s rebate is to misunderstand how the EU negotiates.

But this in a way is beside the point. Whether you intend to join the Euro or not you still have to prepare your economy to be in a position to join the Euro before being able to join the EU. This is why the UK joined the ERM.  It is for this reason also that Scotland would need its own currency before even applying.

Well let’s say we have a referendum in 2023. The SNP wins. How long would it take for Scotland to become independent. In 2014 the SNP thought it would need a year and a half. But it took the UK nearly four years to leave the EU, so that might prove optimistic. But Scotland could not even begin the process of applying for EU membership until it became an independent sovereign state and at that point the EU would tell it, you need your own currency and to be ready to join the Euro. So how long would that take?

The SNP plans to use sterling unofficially after independence. This has nothing whatsoever to do with whether the pound is Scotland’s or whether Scotland is entitled to use it. Mali, Myanmar and Mongolia are entitled to use the pound if they wish to. It is a freely traded currency. But while the Bank of England can print pounds these countries cannot and nor could a Scottish central bank.

We don’t know how well sterlingisation would work. If the Bank of England and the former UK failed to cooperate it might work very badly indeed. If there were any sort of economic crisis Scotland might have to move towards its own currency very quickly indeed. No advanced economy has ever tried using a currency unofficially. But who knows it might work well for Scotland.

The SNP says it might use the pound unofficially for some years. But clearly moving towards our own currency would depend on economic conditions that cannot be predicted now. So how long before we can apply for EU membership? We’d be lucky to do so even ten years after a referendum and then we’d have to fulfil the criteria of EU membership. How long would that take? Another five years?

But this is the SNP’s problem. After independence it could choose two routes. It could choose to align as closely as possible with the former UK or it could choose to align as closely as possible with the EU. But it would begin life both outside of the UK’s internal market and outside of the EU’s Single Market. This would mean in theory that Scotland would face tariffs on both our trade with the former UK and the EU.

Depending on how negotiations went with the former UK it might be possible for Scotland to negotiate a very close relationship with the former UK. Using sterling would imply this. The former UK might treat Scotland similarly to how it treated the Irish Free State after independence. Irish pounds and sterling had a one to one exchange rate until 1978.

The SNP would doubtless welcome a similar relationship, open borders, mutual benefits, the right to live and work freely. Perhaps the former UK would too. But after a few years the SNP would face a choice. Do we give up our close relationship with the former UK in order to join the EU?

The benefit for Scotland of not being in the EU would be that, depending on negotiations it could maintain open borders and free trade with the UK. But as soon as Scotland applied for EU membership that close relationship would begin to end.

This was the dilemma Ireland faced when joining the EC. It joined with the UK in order to avoid a differing EC relationship damaging its close alignment with the UK.

So, Scotland after a few years would face the choice of going down the EU route or staying closely aligned with the former UK. But the EU route would potentially involve the following:

 

1 Setting up a Scottish currency.

2 Applying for EU membership.

3 Promising to join the Euro.

4 Fulfilling the Copenhagen Criteria.

5 Joining the ERM.

6 Joining Schengen.

7 Adopting the Euro.

8 Applying customs and excise at the border with England.

9 Introducing passport controls.

10 Giving up economic alignment with the former UK.

So how long would all that take? My guess is never. An independent Scotland would never join the EU, because public opinion would oppose the steps necessary to do so. The best option for an independent Scotland would be to remain closely aligned with the former UK. This is implied with using the pound unofficially. But if that is the best option, a still better one is to remain a part of the UK, where we have fiscal transfers and currency union.

But the logic of this is that Scotland would never join the EU because doing so would be politically, economically and socially damaging if not impossible.

I think the SNP is trying to kid disappointed Remainers into thinking that Scottish independence is the easiest route back into the EU. It isn’t. It’s far more likely that the UK as a whole would vote to rejoin the EU than that Scotland would join if the former UK did not.

The Conservative Party has just been taken over by Remainers. If Labour wins the next election there would be no opposition at all to the UK going as a penitent to the EU saying we are the prodigal son have us back. But I don’t think the UK would get a fatted calf rather it would get Schengen, open borders and the Euro.

It would be amusing indeed if the SNP voted for independence and found the former UK back in the EU while Scotland wasn’t.