As I write this week’s column it is four years since the independence referendum took place, but there are times when it feels like the campaigning has never stopped. The demands for a rerun have seen to that, as have the two general elections and the Scottish elections that have given us earache in 2015, 2016 and 2017.
It’s no surprise then that the anniversary was marked by a report from a new group launched last year to give business leaders and entrepreneurs a voice – Scottish-Business UK. It has made the bold but carefully evidenced claim that if you think Brexit will be bad for Scotland’s economy then independence will be eight times as bad.
If you voted “No” to independence and “Remain” to EU membership then it is probably telling you what you already expect and believe. If, however, you voted any other way, Yes-Remain, Yes-Leave, or No-Leave you might wonder if the comparison with Brexit matters. After all, are these doom-laden economic claims we keep hearing nothing other than scaremongering?
The answer is it does matter and its not scaremongering because independence and Brexit are different. The point of the report’s comparison about Brexit is to expose the SNP’s hypocrisy in saying how bad Brexit will be for Scotland but not accepting that independence – by the party’s own measurements – must therefore be worse, indeed, far worse.
Brexit is not the same as independence for it will not change our currency – we currently use the pound and after leaving the EU it will stay that way. If, however, Scotland were to become independent we would have to either use a new currency that would take tens of billions to establish, or use the euro (after first establishing our own currency on a temporary basis) or use the pound unofficially, which would be seriously damaging for those with pensions or mortgages and leave us unable to influence interest rates.
Remaining in the United Kingdom means keeping the “Union Dividend” – whereby the UK treasury finances the spending gap between what Scotland contributes in taxes and what it spends on services directly from Holyrood (like the NHS) or indirectly from Westminster (like defence). This is no small sum, being £11.1 billion last year. Since 1980 that union dividend has actually been worth £160bn in money transferred from the UK Treasury to support public services and welfare benefits in Scotland. That’s including accounting for the oil revenues in that time.
When we leave the EU at the end of March next year the UK will save £10bn a year and Scotland’s share of that, after allowing for the taxes it pays towards that membership – set against the farming subsidies, science grants and regional development it receives via the EU – is £500 million. So, again Brexit is different, with Brexit we financially gain but with independence we would have a huge shortfall we would have to find a way to pay.
The one way that Brexit and independence are comparable is that if we risk Scottish exports to the EU by being outside its single market then the same risk must apply to our exports to the UK if we go outside its own single market. As Scotland sells more than four times the amount of goods and services to the UK than it does to the 27 other EU countries that has to be seen as a risk from independence.
The combination of that potential risk to our trade to the UK and the loss of the union dividend would hit our economy by eight times as much compared to only the potential loss of trade to the EU.
Of course it may not come to that – the risks might work out less, but the idea that leaving the UK would be easier than leaving the EU just does not stand up to scrutiny for it is simply not the same.