Threat of UK/Scotland trade barriers improve the case for independence
Has anyone seen this UKGOV facebook video on Scotland/UK trade?
The aim of the video is to reinforce the perception that leaving the UK would be a bad idea as it would jeopardise the rUK/Scotland trade relationship.
It is common sense that rUK and Scotland have a substantial and very important trading relationship.
Yet the video doesn’t mention that this relationship would continue after Scottish independence. Not least because the EU is the UK’s biggest market accounting for 45 percent of exports. If an independent Scotland were in the EU then that figure would be at least 10 percent higher. Incidentally, I find it strange that the UK exports 45 percent to the EU but we are told Scotland’s exports to the EU only tally up to 15 percent. If this figure is correct then Scotland’s economy is being seriously mismanaged.
At the same time that the UK has been threatening Scotland, it has been telling Ireland their trading relationship might improve post Brexit.
However lets think about the situation the video wants us to fear. There is a small chance that serious trade barriers could come between an independent Scotland and rUK if the UK fails to negotiate a post Brexit free trade deal with the EU.
In my mind that situation is one where there is a stronger case for Scottish independence.
Firstly, in this hard Brexit situation, Scotland would be able to attract a substantial amount of business from the UK as businesses want access to the single EU market. You don’t need to take my word for it. Oxford economist Simon Wren Lewis, who in 2014 advised us to vote No, also makes this case.
The economic cost to the UK of leaving the EU could be as high as a reduction of 10 per cent in average incomes by 2030. If Scotland, by becoming independent, can avoid that long-term fate then you have the prospect of eventual economic gain right there. But it is more than that. If Scotland can remain in the single market it could be the destination of the foreign investment that once came to the UK as a gateway into the EU. By accepting free movement, it could benefit from the immigration that has improved the UK public finances over the last decade.
More importantly, this unlikely doomsday scenario is one that Scotland has little control over. If it happens it will have been caused by a massive UK blunder.
We voted to stay in the EU and we don’t have the power to shape the type of Brexit that will occur. The logic of the trade argument in the video is that we should stay with the cause of our current problems because the alternative option, of making our own decisions, can never be better. The video is saying a UK decision may well have made things bad for Scotland but Scotland will always be better off as a passenger not a partner.
I can’t imagine many situations this argument would be acceptable in other areas of life.
You probably wouldn’t stay on a sinking ship because the drunk captain who drove you into the rocks warned you might get eaten by a shark. You would be unlikely to stay with your abusive partner because they warned you that the world can be a violent place for a singleton.
You probably wouldn’t, so why would you want to stay in a union that is causing the trade barriers that they are telling you to fear? Especially if those barriers are unlikely and pro union economists are telling you a hard Brexit improves the economic case for Scottish independence.
The video also states things as facts which are categorically not facts.
It is wrong to say without caveat that Scotland trades four times as much with the UK as with the EU.
The source of this material is the Global Connections Survey 2015. It is a voluntary survey and, in the year that the data in the video was collected, only 26 percent of the companies that received the form actually filled it in. So we have a relatively small data set. The survey is not very accurate. You don’t need to believe me on that either.
The survey itself contains the following disclaimer.
Exports to the rest of the UK relate to trade from Scotland to either England, Wales or Northern Ireland. These estimates should be treated with some caution. It is more difficult to ascertain the final destination of sales within the UK as companies have no statutory requirement to collate financial information below UK level. Furthermore, particular sectors face challenges in determining what constitutes an ‘export’. In an intra-UK situation, this is particularly the case in the service sector where output is more difficult to quantify and the residence of the final consumer may be less clear.
David Bell, Professor of Economics at Stirling University has stated in the past that these figures shouldn’t be used for political gain:
So, what we have is a video that uses dodgy data in order to make Scots think twice about leaving the UK. However, the exact unlikely situation the video wants you to fear would actually be representative of a scenario in which Scotland would have a stronger moral and economic case for independence.
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