But the UK is our biggest export partner!
We know from the director of Better Together that their main strategy was to sell the perceived safety and security of the union to undecided voters. However the uncertainty over Brexit has made it harder to argue that the UK provides more stability for Scotland. One old argument that does on paper still stand up post Brexit is that because the UK is Scotland’s biggest trading partner it would be crazy to leave. Even Kezia Dugdale used that very argument this week to justify why she had commissioned a report detailing the Scottish Labour Party plan to sit on the fence over the EU question.
So, how do we counter the statement that:
It would be madness to leave as 64 percent of our exports go to the UK!
The short answer is that whatever we trade with the rest of the UK now is likely to be similar post independence. I say “whatever” because there are reasons to be sceptical about the 64 percent figure.
We don’t know the true amount Scotland exports to the UK as the treasury doesn’t actually have any official figures for internal trade. It is just not a practicable measure. The 64 percent figure comes from the Global Connections Survey and these figures have to be taken with a pinch of salt as many companies will fail to fill in the form correctly.
The report itself acknowledges:
Forty one companies mentioned how difficult it was to split Scottish sales from UK sales, typically citing accounting practices which meant companies produce consolidated UK annual accounts.
A good example of how hard it is to get these figures correct was explained to me on another forum. Just imagine the problem an accountant may have deciphering the following scenarios:
If you run a hotel in Edinburgh and lease a room to someone coming from Liverpool, does that count as a transfer of money from rUK into Scotland? If you run a haulage company in Manchester and buy fuel in Falkirk does that count? If you produce goods in Edinburgh then ship them to France via an English haulage company and through an English port then how does the profit break down? What happens if a company in Dundee create something but the final packaging and shipping to customers happens in England? Say you run a business in Glasgow but the registered office is still your old address in Bristol?
As it is not a legal requirement to record Scottish exports, as there is much confusion in what would constitute a Scottish export and as the stats are collected via a survey that is not mandatory, then the 64 percent figure is likely to be wrong. It is also important to note that oil and gas export figures are marked down as UK exports and not Scottish exports.
However, lets say that the figure is 64 percent. Probably the best counter argument is to say that this figure will continue to be the same after independence. This is because it is highly unlikely that the EU and the UK will impose any trade barriers on each other as it would be damaging to both parties. This would mean that an independent Scotland would, if sense prevails, have no barriers with a post Brexit UK. There should also still be free movement of people, as the Prime Minister has already committed to free movement between Ireland and Northern Ireland post Brexit. There is no good reason why this same commitment should not be made with Scotland.
Also, the fear-mongering around trade is similar to the fear-mongering surrounding GERS. If the figures are correct they show a Scotland, which is still part of the UK, not trading as much with the EU as we should be given the size of the EU market. Just like the GER’s figures they show a failure of the UK, who control trade, to deliver prosperity outside of the London and the South. They don’t demonstrate an impediment to independence. A Scotland in control of its own affairs would have the power to improve its position with regard to trade.
Of course, there is an outside chance that there will be a hard Brexit and there will be a hard border, customs posts, tariffs and other barriers to trade. However, if this happens we would need to ask ourselves if we really want to be a part of a UK that would inflict such great damage on itself? In fact the scenario where this happens is better for Scottish independence as this is the exact nightmare scenario that Remain voters feared. It would surely be a catalyst for independence, giving Scotland an opportunity to attract lots of Southern based businesses that currently take advantage of being in the single market.
So, to summarise, we don’t know the true trade figure but that figure is unlikely to change much and in the doomsday scenario that it does, the prognosis is actually better for nationalists.
If you have any additional thoughts on Scotland’s exports to the UK the we would love the hear them below.