Today the Scottish Government published a new report detailing Scotland’s export statistics in 2015.
The new figures demonstrate that Scotland, with its well-endowed resources and manufacturing, is exporting to the value of £78.6bn (excluding oil and gas) to countries all over the world. Once you add the latest oil and gas figures – Scotland’s exports of oil and gas were worth £19.4bn (SNAP Commodity Balances and Trade) – this grows to almost £100bn. The oil price drop will lower that figure in the next set of Oil and Gas stats, but will rise again the following year as the oil price has recovered slightly and oil production has increased.
However, Scotland’s export growth to the EU and rest of the world has been damaged for more than 30 years by Westminster’s failed economic policies. The UK government followed a strategy of maintaining an artificially high pound to benefit the financial services sector and the City of London. Although this had the desired effect of significantly growing the financial services and banking sectors in particular, it also meant that countries with a weaker currency could not afford Scottish exports. This decimated Scotland’s industrial heartlands with engineering, shipbuilding, steel and coal jobs becoming uncompetitive versus imports. Germany followed the opposite path and became the manufacturing exporting powerhouse of Europe.
With the rUK sharing our inflated currency, this led to Scotland sending 63% of its exports to the rest of the UK. This is not a benefit of the Union to Scotland. This cost Scottish people their jobs, their homes and forced many to become economic migrants and leave Scotland to find work. Any credibility this strategy ever had was destroyed by the banking collapse.
An independent Scotland, with its own currency, would have enjoyed the opportunity to increase exports to countries outside the United Kingdom, allowing Scotland to achieve its full exporting potential. The recent fall in the value of the pound should also help boost Scotland’s food and drink exports and the value of the oil and gas exports when converted from US$ to GBP.
Scotland’s exports to the UK are essentially maximised and this was referred to by Keith Brown MSP, Cabinet Secretary for the Economy, Jobs and Fair Work, who said today: “The EU market is eight times the size of the UK market”, highlighting the immense potential for Scotland’s exports, but at the same time, the importance of staying in the single market.
Breakdown of exports
Exports (excluding oil and gas) were focused on the food, drink and tobacco sector (at £8.9bn), the financial services (£8.6bn) and the wholesale sector (£8.35bn). Without calculating exports to rUK, whisky exports to the international market was worth £3.8 billion.
Between 2002-2015 the food and drink sector increased by 73%. The 2017 target to exceed an industry turnover of £12.5bn was achieved in the 2011 yearly figures.
The food and drink sector is growing so quickly that it is expected to almost double its number of employees by 2024 to meet the sector’s growing demands. In particular the whisky industry, which opened 9 new distilleries between 2014-2016 and have a further 40 planned for the future. Without the success of Scotch whisky exports, the UK’s trade deficit would have been 12% higher in 2015.
As well as its resources, Scotland also has its connections. Scotland’s top international export destinations in 2015 were the USA (at £4.56bn), the Netherlands (at £2.3bn), France (at £1.8bn), Germany (at £1.75bn) and Norway (at £1.3bn).
Denmark, Ireland, Spain, Switzerland and Brazil all import more than £740 million of Scottish exports each.
Scottish independence will benefit exporters
An independent Scotland – with control over taxation, finance, business regulation and global promotion – would be well placed to fully support Scottish companies in the global market. Scotland has the potential to expand exports. We just need the full autonomy to do so.
The Brexit negotiations in the coming months will determine the way the UK will trade with the EU and the rest of the world, and there are multiple scenarios to be analysed; should tariff-free trade with the EU/EFTA and open borders agreements be agreed as part of the deal, then an independent Scotland with single market access would enjoy massive economic and exporting growth.
Brexit guarantees economic uncertainty whereas, under these conditions, independence offers the ‘best of both worlds’ and the certainty of maintaining trade with the rUK and EU post Brexit.
This article was republished Jan 2017.