Brexit and the case for Scottish independence

OK, let’s all just calm down. Here are some things that we know as fact

• The UK democratically decided to leave the EU. Lots of us don’t like that, lots of us don’t like the way that vote was achieved - but that’s democracy and there’s no point bitching about it now*
  
  * it's pointless but tempting; I might not always resist that temptation


• It was a UK-wide vote for Leave within which Scotland, Northern Ireland and London voted in favour of Remain

• Something has fundamentally changed since Scotland voted to remain in the UK. Many of us voted partly on the basis that we considered the best end-game was Scotland being in the UK in the EU; for us it was rational to vote No because only a No vote made that outcome possible. People struggle to intuitively understand probabilities - but right up until midnight last Thursday that still seemed the most likely outcome


• The SNP manifesto included an explicit option to seek another independence referendum"if there is a significant and material change in the circumstances that prevailed in 2014, such as Scotland being taken out of the EU against our will"

So: in these circumstances it is completely reasonable that the SNP should explore ways of securing a separate EU deal for Scotland, up to and including revisiting the question of Scottish independence.

It's important to consider that some interesting options might be available for Scotland without becoming independent. We will hear much in the coming months about the Greenland and Faroe Island precedents, but frankly these are not overly relevant - the bigger point is that we are in uncharted territory for the EU so precedents are of limited value. At this stage we simply don't know what might be negotiable and it makes sense to explore all options (as Nicola Sturgeon is quite sensibly suggesting).

We live in extraordinary times. As I write this the Tories have a lame duck leader, the chancellor of the exchequer has gone to ground and the Labour party is in melt-down. Meanwhile nobody knows what Brexit is actually going to mean because negotiations with the EU haven't even started yet.

If ever there was a time to pause and reflect and just wait to see how the dust settles, it is surely now.

So let me just park a few inconclusive observations here.

One school of thought I'm hearing on Twitter can be characterised as follows:

• "The UK had the courage to leave the EU, why shouldn't Scotland have the courage to leave the UK?"
• "The economic case didn't stop the UK voting to leave the EU so why should it stop Scotland leaving the UK?"

This is an understandable emotional reaction, but the economic cost for Scotland leaving the UK - if you prefer, the courage required - is an order of magnitude greater than that for the UK leaving the EU.

Scotland currently receives an effective fiscal transfer from the rest of the UK of over £9bn pa (see chokkablogs passim and even the SNP themselves during the fiscal framework negotiations). If we scale that in UK terms it would be the equivalent to the UK receiving £90bn pa or £1.7 billion a week.

If you'd plastered "Vote Leave to lose £1.7bn a week" on the side of a big red bus you might have seen a different EUref result. The economic cases are not comparable¹.

A more rationally structured question might be  

• "Yes it may cost us to leave the UK, but might that be a cost we're willing to pay now if it keeps us in the EU and/or democratically uncouples us from a mass of population with whom we simply don't seem to agree anymore?"

In the immediate aftermath of the EUref result Sturgeon seemed to be framing another indyref as a chance for Scots to vote to "stay in the EU" as much as "leave the UK" -  but we don't yet know whether Scotland staying in the EU is even an option.

Would member states who have independence movements within their own countries want to create this precedent?

Scotland doesn't have its own stable currency and our stand-alone deficit (as % of GDP) would be larger than any existing EU country - so even if the EU made a remain option available for Scotland, it is likely to come with some pretty significant conditions. Are we ready and willing to join the Euro? Would we be willing to slash public spending by over 15% if the EU made this a condition of remaining?

Of course it's also the case that it's not clear what remaining in the UK looks like now. Will the fiscal framework that currently guarantees us that £9bn fiscal transfer survive the repercussions of Brexit?

If we voted to become independent now there can be little doubt that borders would be involved; borders between Scotland and the market where 64% of our exports go.

Currency remains a huge question - what EU deal could we secure if we planned to continue to use sterling? Do we really want to adopt the Euro if one of the implications of Brexit might be the meltdown of the Eurozone - would we be voting to jump out of the frying pan and into the fire?

I gave up fighting the label of being a "Unionist blogger" a while ago, but my position has always been that defending the Union was a position I arrived at, not one from where I started.  So until we know what options are on the table and - is it too much to hope for? - we've heard them honestly presented, I have no idea what my view on a possible indyref2 would be.

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1. It's also worth observing that Scottish trade with the UK represents about 64% of our exports (the UK's trade with the EU represents about 45% of the UK's exports) whereas Scotland's trade with the EU represents only 15% of Scotland's exports. So the UK is four times as important to Scotland as an export market than the EU