Scotland & the EU

Brexit supporters will be disappointed even if they win

Screen Shot 2016-04-01 at 13.53.58

Ukip MEP Coburn bizarrely claimed EU regulations meant his toaster didn’t work.

I have been saying for months that the EU Stay camp’s lead in the UK wide polls looks shaky and that the direction of travel in surveys will be towards an exit. In England we have several influential newspapers (Mail, Express, Telegraph) all sounding Eurosceptic alarms, the Labour leader is the invisible man on Europe and Cameron is undermined by Cabinet rebels. Add to this the No Campaign is led by two big beasts in Boris Johnston and Nigel Farage and the fact that the leave side is motivated and dedicated when no one is really flag-waving passionate about the EU. In Scotland all the party leaders and the old and new media outlets are pro EU. The Scottish Leave campaign will be led by Ukip’s David Coburn who can’t work his toaster and blames it on the EU. In the Stay corner he will face Nicola Sturgeon. I hope there is a one-on-one debate hosted by Rona Dougall, don’t you?

This week has seen a significant shift toward Leave in the polls, with ORB (internet poll) finding Leave in the lead, up four per cent to 45 per cent, and Remain down three per cent to 41 per cent while an Ipsos Mori telephone poll put Leave up five per cent to 41 per cent and Remain down five per cent to 49 per cent. Online polls have consistently shown better results for Leave than phone polls but the truth lies somewhere between the two methodologies. In other words, in England the EU referendum is now too close to call. It’s too early to say what the longer term effect of terrorist atrocities will have on the polling but I disagree with those who suggest it’s just a knee-jerk Leave boost response to terror, as both sides claim voting their way will keep you safe from terrorism.

The next major poll in Scotland will be fascinating as the prospect of a UK Brexit against the will of the Scottish people seems more likely than ever. Fortunately for the Stay campaign there is a huge flaw in the Leave campaign’s thinking, in that a Brexit won’t actually solve any of the leave campaigns goals of more sovereignty, savings on membership and curbed immigration. The UK Stay campaign favours scaremongering on job losses and access to the Common Market but let’s get realistic, a deal would be done to avoid tariffs and give UK companies access. The worst that could happen is that new jobs and economic growth will slow over time creating a two-speed Europe with the UK getting sick of Scots telling them “we told you so”.

Screen Shot 2016-04-01 at 14.05.09

Scottish independence would result in a 100% increase in sovereignty for Scotland, Brexit would return only 7% of UK sovereignty for very little gain

Whereas Westminster controls 100 per cent of Scotland’s sovereignty (power devolved is power retained) the EU only has seven per cent of UK sovereignty shared with it so whereas Scottish independence would result in a 100 per cent increase in sovereignty for Scotland, Brexit would return only 7 per cent of UK sovereignty. In order to continue to have access to the European Economic Area (EEA) from outwith the EU, you need to again share that sovereignty and apply the same EU regulations anyway.

There are only only three realistic trading options: the Norwegian, Swiss and Canadian options. Under the Norway option the UK would join the EEA, which would allow for tariff free access to the EU market (23 per cent of global trade). However, the UK would have to adopt EU standards and regulations and have no influence, with no votes in the European parliament – allowing Germany and France to dominate the regulatory culture we would still be subject to. We would still have to make a contribution to the EU budget (Norway pays 95 per cent of the UK membership calculated on a per head basis but gets no CAP or Regional Development funding in return). Add to that the fact that the UK currently receives a £5 billion rebate on its membership fee; that would not apply once the UK sits outside the EU, so the UK non-member contribution could be a significantly financially worse situation than as a member. We would also have to accept freedom of movement and EU immigration rules. So the Norway model (often suggested for an independent Scotland) does not meet the money-saving, immigration and EU regulation-curtailing objectives of Leave voters whilst actually decreasing UK sovereignty through a lack of representation.

The Swiss model would see the UK and the EU negotiate a series of bilateral accords to govern UK access to the European market. This would be piecemeal in implementation, take many years and only apply in specific sectors as the EU members may individually see it as tactically advantageous to refuse to do a deal in sectors where the UK dominates (finance, for example). Once again the UK would become a follower of EU regulation as EU members can’t open the back door to the EU through bilateral trade deals with nations that don’t match EU standards. There would be a smaller contribution to the EU budget but any advantage would be wiped out by the downside of not having full EU market access. The UK would also have to accept most migration rules and the time taken to reach bilateral agreements with all the members we want to trade with could create a decade of trade disruption.

The Canada model (favoured by Boris Johnson) effectively means the UK would do a TTIP-style Free Trade Agreement (FTA) with the EU (and Canada, the USA and China, etc). Tariff barriers would mostly disappear but, again, with all FTAs there is a negotiation of applying common standards and regulations. As the UK currently meets all EU regulations and standards, the EU would likely insist that we continue to do so or there would be penalties. There is no membership fee or contribution here but not every sector is included in such deals – for example, the EU/Canada deal does not include financial services and the UK couldn’t live with that. Also, it has taken seven years to get the Canada FTA ready to sign and Article 50 of the EU Treaty states that a leaving nation has two years to negotiate a deal to leave or membership automatically ceases without a deal, so an extension would have to be negotiated.

To cut a long story short, all of the motivations for Brexit voters are undermined by the solutions for trading with the EU that the Leave campaign are suggesting. There would be no financial saving that wasn’t matched by extra costs, no immigration benefit on any of the realistic options and no additional control over EU rules and regulations. However, there is some good news for indy supporters – if there is a Brexit against Scotland’s wishes, an independent Scotland could then be seen as the successor state and maintain its EU membership with minimum disruption as the UK leaves.

Business for Scotland – Prosperity for Scotland – Join us now

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.

1 Comment

  • David Coburn may not be able to work his toaster, but it is his problem and not the EUs.

    There is to be a directive on kettles and toasters, but it is NOT YET law (or to be pedantic), it is not yet a directive. Moreover, it will NOT apply to domestic appliances.

    Mr Coburn would have done better to pay attention to the vote at the time he tweeted this nonsense. It was the embargo on weapons sales to Saudi Arabia.

Leave a Comment