Friday, 26 February 2016

Don't Ignore the Price

This letter was published in The Falkirk Herald yesterday.

There are people who desire Scottish independence at any price. That is their right. Those who take a more pragmatic approach should think twice about demanding a second independence referendum in the event of the UK voting to leave the EU.
It may well be that, offered a choice between leaving the EU and remaining, a majority of Scots would vote for Scotland to remain, but that is not on offer. Scotland as such is not a member of the EU and thus cannot remain a member if the UK leaves.
A subsequently independent Scotland would have to negotiate for admission as a new member and our application would be subject to veto by Spain and other existing members worried about their own separatists. The likelihood is we should end up outside both the UK and the EU.
However, suppose that, against the odds, we were to gain admission. The result would be the erection of an EU border between Scotland and England. Since a major reason for the UK's exit would be to cut EU immigration, there could not be freedom of movement across that border.
As an EU member Scotland would not be allowed to negotiate a bilateral trade agreement with the UK. The EU would negotiate for us and whatever deal they negotiated would apply to all EU members. There could be no special deals for Scotland.
EU rules require all new members to join the Eurozone. Even if the UK government were willing to allow a sterling monetary union to continue after independence, it would not be allowed. How many Scots really want to give up the pound and join a currency system that has strangled economic growth, plunged its poorer members into impossible debt and obliged its richer members to bail them out?
Given that the 2013 White Paper Scotland's Future looked forward to an oil price of $113 per barrel and still managed to show a projected fiscal deficit of £4.4 billion in the first year of independence, (in other words around £1,000 per adult member of the population), we may conclude that with oil prices currently in the region of $33 the Scottish fiscal deficit would now be eye-wateringly large. The present UK government's austerity would look like a spending spree by comparison with the cuts that would be required.
Unless the Scottish government reckons its people cannot do sums, the threat of a second independence referendum can be little more than a paper tiger designed to scare up extra votes for staying in the EU.