Economics of Independence Scotland's Economy

10 important points on independence, trade and borders

Written by Michael Gray
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EU membership safeguards open borders

Independence will benefit trade and co-operation across Britain and further afield. The establishment of an independent Scotland provides opportunities for the development of stronger economic performance not just for Scotland but also for England, Wales and Northern Ireland. There are numerous examples of how partnerships between independent nations operate across Europe at the present time.

Cooperation is at the core of how mature people, economies and nations operate in global trade. It is how politically independent but economically interlinked countries like Germany, France, Belgium and the Netherlands or Norway, Sweden, Finland and Denmark all interact on a practical basis. It is also a great model for how Scotland and the rest of the UK will cooperate closely after independence.

Here are 10 reasons and examples for why an independent Scotland will strengthen trade and cooperation.

1) Open borders and trade benefits both parties

Trade and freedom of movement is crucial to everyone across Europe. Within Britain and Ireland this is no different. After independence, all parties will benefit from continued trade links. Businesses in England carry out £4 billion worth of trade with Scotland every month. It’s in their interest, as well as Scotland’s, that trading links are maintained with their most important partner. This applies to travel arrangements too.

2) Real barriers don’t apply!

Business for Scotland previously set out the real barriers to trade that can exist. These include language, culture and geography. Independence is an opportunity to improve Scotland’s economy and change many of the inadequacies of our political and social system. However, separation of language, culture and geography isn’t on the ballot paper! The vast majority of people across Britain share a common language and have cultural and family connections. This won’t change with political autonomy. The shattering of the tectonic-plates by Gretna is equally unlikely, although it’s the last remaining scare story available to the No campaign!

3) Real barriers don’t apply in Europe either!

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Next year Scotland can become another independent European nation. So how do independence, trade and borders relate in Europe? Very well! Germany and Belgium; Switzerland and France; Spain and Portugal – all have close relationships with free, open travel and trade. This is normal. Scandinavia also has a common travel arrangement. As our graphic demonstrate, friendly neighbouring nations get on fine.

And the whole of the EU has dramatically reduced barriers to the movement of capital, goods and services. EU law now requires open trade. Having independence from Westminster does not prevent Scotland’s businesses from participation in this market. In fact, with continued membership of the EU confirmed, Scotland can play a full part in this market across national borders.

4) The Edinburgh Agreement has already established cooperation and agreement

The Edinburgh Agreement – signed between the Scottish and UK governments – has already confirmed that both parties will recognise the result of the referendum and then negotiate the outcome in mutual best interests. After a vote for independence, there will be a transition period where a new structure of equal cooperation is agreed. The Edinburgh Agreement demonstrates how an independent Scotland can cooperate closely with the rest of the United Kingdom and secure agreements that suit both parties.

5) Scottish independence will benefit the North of England

A strong Scottish economy – with full fiscal powers – is an opportunity for the North East of England. 12 councils published a joint report called ‘Borderlands’ considering the benefits of greater economic, social and cultural partnerships after independence. Scotland, with increased influence and financial control, will change the UK’s previously London-centric economic structure. As South Tyneside council leader Iain Malcolm said “We have to start looking north. It is increasingly clear that we cannot just look to London for growth.” Scottish independence is therefore a great opportunity to increase cooperation with the North of England.

6) The UK is dependent on Scottish exports

Any barrier to trade in Britain would hit the rest of the UK hardest. Scotland is a net exporter of energy, food and water – all precious commodities in an age of global scarcity. Furthermore, it is Scotland balance of payments that provides security for the UK economy as a whole, and especially the pound Sterling. After independence, there will be a great deal of business support from outside Scotland in favour of maintaining these vital trading links.

7) Westminster supports open borders with Ireland

Ireland successfully became independent from Westminster. This provided Ireland with political autonomy, while maintaining certain links with the rest of the islands. One of these agreements was over common travel. Today you can travel from Ireland to the UK without a passport and without any form of ‘border check’. Even when ‘The Troubles’ raised security concerns, the borders stayed open. They are even taking this cooperation further towards a common visa system. It was mutually beneficial to have this flexible arrangement. It will be similar for Scotland after people vote for independence.

8) Scotland will maintain its opt out from Schengen

The UK currently has an opt out from the Schengen EU travel zone. So does Ireland. This is because UK and Irish travel is closely linked through a common travel area. Politically, it would make no sense to force Ireland into the Schengen arrangement when it would cause difficulties for themselves and the UK. As Business for Scotland discussed recently, EU positions are as much political as legal. A central pillar of the EU is to support and maintain trade and open borders. No campaigners claim that only the UK is big enough to negotiate an opt out from Schengen. Then how did Ireland get an opt out? Politically it would have made no sense to force Ireland into Schengen. Scotland will be in the same position and maintain open borders.

9) The UK government supports open borders – from Ireland to Gibraltar

For all the scaremongering of Westminster officials in Scotland, the UK government firmly supports open borders. This isn’t only clear in the case of Ireland. When the Spanish government placed border checks on Gibraltar a diplomatic row exploded. David Cameron threatened “unprecedented” legal action through the EU. It was an affront to EU laws and principles. In reality, Westminster wants as many open borders as possible. After a ‘Yes’ vote, all parties will cooperate to ensure this happens.

10) Scotland can think and trade globally

While links with our nearest neighbours will always be significant, independence is an opportunity for Scottish business to go global. With full fiscal powers and representation in international institutions, there will be greater opportunities for business and government to increasing Scottish exports. The Scottish Council for Development and Industry already leads regular Scottish trade exchanges and has a presence across Europe. This will increase.

And finally

But don’t just take it from Business for Scotland. Even Tory MPs in England are saying that trade and cooperation will continue after independence. Recently Conservative MP Richard Bacon said,

“I mean pull the other one, is it suddenly going to get more difficult to get on a train?

“There are of plenty parts of Europe where there are no passport checks, when you go from France to Germany, or from Luxembourg to Belgium and I see no reason why that should necessarily happen within this Island.”

Conclusion

Scottish independence, therefore, is an opportunity to build stronger ties across Britain, Ireland and the rest of the world. Having a fair distribution of political and economic power benefits everyone – business, citizens and customers. The only may to achieve such a reform is by voting ‘Yes’.

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About the author

Michael Gray

Michael is Head of Research with Business for Scotland.

A graduate from the University of Glasgow, he has carried out a series of interviews with academics, politicians and the public in Denmark, Iceland and Ireland. Michael's on twitter @GrayInGlasgow.

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