Economics of Independence ScotRef

Hard Brexit destroys economic case for the UK

So Theresa May has decided to attempt to block a democratically mandated Scottish referendum being held before the UK leaves the EU. Her logic seems to be that voters won’t know the details of the Brexit deal by then. However, the PM’s thinking is hugely flawed as the two year timescale between a March 31 triggering of Article 50 also includes time for the remaining EU nations to review and ratify the deal though their own parliaments and that may take months. So in effect if the deal is not done by the end of 2018 then no deal will be ratified before Brexit is automatically triggered, and that is the absolute worst case scenario for the Scottish people and for our economy.

Earlier this year the The Fraser of Allander Institute’s Long-term Economic Implications of Brexit Report stated in the event of a worst case scenario of a hard Brexit that (over 10 years): employment in Scotland will be cut by 80,000 jobs, Scotland’s economic growth will be reduced by £8 billion, real wages will fall by £2,000 per person per year, exports will be cut by 11 per cent and the Chancellor has indicated Scotland’s share of the UK debt will increase by £10bn over five years to pay for Brexit a that we wholeheartedly rejected at the polls.

Theresa May’s planned hard Brexit, absolutely and utterly destroys the economic case for Scotland remaining in the United Kingdom.

As I write this the Prime Minister who has no mandate from a General Election to be PM, who is leading us down the road of a hard Brexit that the Leave vote does not provide a mandate for, and that was generated by absolute lies such as the £350m a week claim, said: “I think it wouldn’t be fair to the people of Scotland, because they’re being asked to make a crucial decision without all the necessary information”. Is there such a thing as a criminal level of irony? If so then maybe those twelve police forces across Britain who sent files to prosecutors this week over Tory election fraud in the 2015 General Election would be interested investigating. If the Tories are found guilty before Brexit then surely a legal challenge to the right of May to actually be Prime Minister or even for Cameron to have held the Brexit vote would get a hearing? Once the Scottish Parliment votes to grant the Scottish Government authority to request a section 30 order to make ScotRef legally binding Theresa May will no longer be blocking the plans of the SNP but those of the stated will of the Scottish Parliament. Constitutional crises anyone? So why block it? Well David Cameron agreed to two referendums because he thought that he could win both. Theresa May has decided to attempt to block the Scottish referendum because she knows she can’t win.

The cosy uniformity of establishment Union support of the 2014 referendum is breaking down around her, pro Union but also pro EU newspapers and business people are torn between two equally held but now completely unreconcilable beliefs. Others are openly stating support for the economics of independence, Oxford economics Professor Simon Wren-Lewis, the winner of the New Statesman/SPERI Prize for political economy, has changed sides and writing in the New Statesmen he claims: Brexit makes Scottish independence much more economically attractive and Scotland having a brighter economic future as an independent nation is almost a certainty.

His main train of thought is that the short-term costs of independence are now massively outweighed by the future benefits of staying in the single market. Likewise, celebrated author, chartered accountant, political economist and campaigner against tax avoidance and tax evasion, Richard Murphy wrote an article this week titled “Why GERS might properly be called crap data”. He states that if he were Scottish he would vote Yes and dismisses the Unionist clarion call that Scotland has a weak economy. He says: “This claim is based on four figures. The first is Scottish GDP. The second is Scottish tax revenues. The third is Scottish government spending. The last is the Scottish balance of payments (imports v exports). My contention is simple: all four may be seriously mis-stated, in which case to base debate on them would be a serious mistake”.

Leading economic author and commentator Paul Mason recently urged Scottish Labour to back independence and maintain Scotland’s EU membership. Even the Guardian’s George Monbiot wrote this week “Whenever I visit Scotland, I’m reminded that Britain is politically dead from the neck down”, and that this time Scotland must cut the rope and sail towards a hopeful future. Meanwhile Labour in Scotland ignores the advice given by their economic heroes!

It’s also a huge risk the PM is taking in trying to either block completely or at least delay ScotRef till after Brexit. If anyone senior enough from the EU decides to pipe up that, in order have seamless access to the single market Scotland must vote for independence before Brexit then her argument would fall apart completely.

 

About the author

Gordon MacIntyre-Kemp

Gordon MacIntyre-Kemp is the Founder and Chief Executive of Business for Scotland. Before becoming CEO of Business for Scotland he ran a small social media and sales & marketing consultancy.

With a degree in business, marketing and economics, Gordon has worked as an economic development planning professional, and in marketing roles specialising in pricing modelling and promotional evaluation for global companies (including P&G).

Gordon benefits (not suffers) from dyslexia, and is a proponent of the emerging New Economics School. Gordon contributes articles to Business for Scotland, The National and The Huffington Post.

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