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The Uncertain Overhang on Scotland of the Brexit Process

Gautam Sen is ex-Additional CGDA and had served in the High Commission of India in Colombo during 1988-1990. Presently he is serving as Adviser (Finance) to Government of Nagaland.
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  • April 03, 2017

    After triggering the Brexit process by invoking Article 50 of the Lisbon Treaty governing the functioning of the EU, British Prime Minister Teresa May`s Conservative Party government may now be gradually moving the United Kingdom of Great Britain and Northern Island (UK) to an uncertain phase, both politically and economically. Nowhere is this uncertainty more apparent than in the relations between England and Scotland which have already been frayed by Scotlands attempts at full independence from the UK. In July 2014, when the referendum on Scotland`s independence from UK was held, 55% of the electorate including EU citizens, nationals from Commonwealth countries and Scottish voters, had voted against Scotland`s separation. The voting pattern in Scotland was different in the Brexit referendum of June 2016 when, the Scots had voted overwhelmingly by a 62% - 38% majority, for UK`s continuation in the EU as distinct from the overall opinion of the UK electorate supporting Brexit.

    There was a leadership change in the ruling Scottish Nationalist Party (SNP) after the referendum on Scotland`s independence with Nicola Sturgeon assuming first ministership of Scotland. Sturgeon had adopted a more decisive albeit strident posture than her predecessor, Alex Salmond, on Scotland`s economy and its trade, industry and employment within Britain and vis-à-vis the EU. After the Brexit referendum, the SNP leaders, while expressing disappointment on the outcome, had not ruled out a demand for a further referendum on independence, if the situation did not evolve suitably in relation to Scotland`s interests as perceived by them. Nicola Sturgeon has now articulated a demand for another referendum by the spring of 2019, which British Premier May has promptly rejected. Before the formal letter to initiate the process for working out the terms and conditions of UK`s withdrawal from the EU, was issued by May on 30th March, 2017 to the European Commission, Sturgeon, with the support of a 69-59 majority in the Scotland national parliament, has formally placed on record her political position. Sturgeon has demanded of Westminster that, if devolved administrations ie. of Scotland , Wales and Northern Ireland, are not consulted – particularly when Scotland had overwhelmingly opted to remain in EU, while developing UK`s negotiating positions vis-à-vis the EU on Brexit, and constructive internal discussions are not possible, she will perforce set out to Scotland`s National Parliament the steps her government intends to take to ensure that progress is made towards a second referendum. The implication of Sturgeon`s demand was that the political and economic and interests of Scotland have to be protected in course of the Brexit process.

    At present, both British Premier May and Scotland`s first minister Sturgeon seem to be talking past each other rather than adopting an assimilative approach in the matter of evolving a consensus based approach on Brexit. The political spectrum in both UK and in Scotland is such today that, a consensus can only be adopted through painstaking negotiations. Though there is, for the present, no immediate challenge to Teresa May`s leadership of the British government, some of her Conservative Party leaders may be desirous of keeping her under pressure within the party and government to retain their political relevance. Conservative Party leaders in Scotland like Ruth Davidson, a regional parliament member, are also working to confront Sturgeon, both within Scotland`s parliament and outside. Though the Labour Party`s influence is on the wane in Scotland, Labour member of the regional parliament, Kezia Dugdale is also taking a similar approach. In this competing milieu, it is possible that Sturgeon and her SNP would not relent on the referendum demand and also raise issues in respect of the `hard Brexit` negotiating position of UK, which they consider detrimental to Scotland`s interests.

    While huge uncertainties are on the horizon over the prospective Brexit dialogue process and its impact on the politico-economic scenario in Scotland, all those concerned with the evolving situation should keep in mind the realities of the prevailing economic and commercial trends. Total exports by Scotland on an `on-shore` basis to the rest of the UK was 49.8 billion pounds in 2015, constituting more than 55% of its exports. Exports from Scotland to the EU internal market were much less at 12.3 billion pounds in 2015, with exports to the three largest EU export markets as follows : Netherland 2.3 billion pounds, France 1.8 billion pounds and Germany 1.8 billion pounds. Scotland`s exports to the USA, its largest international trade partner, was also relatively less at 4.6 billion pounds than that with the rest of UK. In this backdrop, Scotland may not stand to gain by converting itself into an entity independent of UK and re-negotiating its participation in EU which will be inescapable, to become an EU member state. Moreover, if the prospect or threat of Scotland`s independence from UK looms before finalisation of the Brexit process, the UK `s negotiating position will be considerably weakened vis-à-vis the EU. This may not be in the interest of either the UK in its present incarnation, or of a future independent Scotland.

    In the context of the above-mentioned scenario, there are various options which could unfold, to serve the interests of both UK and Scotland, with Scotland remaining within UK`s constitutional structure. An arrangement which encompasses Scotland within EU but excludes UK (with its English, Welsh and Northern Irish territories) may be an expedient. Such an arrangement would be akin to Denmark`s inclusion within EU with the former`s territories of Greenland and Faroe Islands in the northern Atlantic, excluded. The difference between the two examples is that, in case of Denmark, the main territory of the EU member country is within EU though not its primary resource base or major part of its territory. However, in case of UK, a substantial portion of its territory ie. Scotland, as well as the productive capacity, infrastructure and resources there would be within EU with the other principal regions excluded. Such unconventional arrangements may not be easy to adopt, given the pulls and pressures within EU and the fear of unexpected fallout of such expedients among the long-time members of the group. Furthermore, the repercussions of such unconventional arrangements on the Scotland`s internal political milieu and economy and also on the UK cannot be comprehensively visualised today.

    The political headwinds blowing throughout Europe do not seem to hold much hope for an easy, early and amicable resolution to the Brexit process. The outcome of the Brexit referendum was itself a result of the misplaced apprehensions of sections of British society and its failure to take what former US president Barrack Obama had advised, a `long view of the future`. The Scottish government is presently functioning with a substantial deficit budget and its working class is not exactly in a robust economic position. In the Brexit negotiation process, perforce the entire political class in Scotland and the Scottish government have to be taken along by Westminster for optimum outcomes for the UK and its people as a whole. Sturgeon may be prudent enough not to ignore history. The Edinburgh Accord of 2012 between former British premier David Cameron and then Scotland`s first minister Alex Salmond, had set the roadmap for the referendum on Scotland`s independence. The two-year lead-time culminated in the referendum. At present, the scenario is much more complicated. The apparently `hard` Brexit dialogue is about to begin with an outcome which is not easy to predict now. In this backdrop, if Sturgeon tries to build up political pressure for a second Scottish independence referendum, it may only be counterproductive. The continued union of UK and Scotland, which has spanned over 300 years will however, hinge on the political accommodation premier May is able to achieve with Sturgeon and the broad spectrum of the Scottish polity and the public.

    The author is a retired IDAS officer, who has served in senior positions of Government of India and a State Government. The views expressed are the author`s own.

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