It has now been almost seven years since the UK voted to leave the European Union and three years since the UK left the EU in direct conflict with the stated democratic will of the Scottish people. The Scottish electorate was ignored and Scotland was ripped from the European community against what has now been proven to have been Scotland’s better judgement.
62% of Scottish voters voted to remain in Europe but we are part of an unequal ‘Union’. Three years on from the UK’s exit, the UK economy is failing and not only growth but living standards are falling behind all comparative nations. The UK remains the only major economy not to have recovered to pre-pandemic levels of growth, other than internationally sanctioned Russia. The new UK-EU relationship has negatively impacted UK trade volume and business investment into the UK and the flow of skilled EU workers has flat lined since the referendum.
Three years on many issues still remain unresolved. The Northern Ireland Protocol continues to be a constant source of tension between the UK and EU and could yet lead to the hardest of all Brexits and sink the UK economy. In addition to this, the promised benefits of Brexit have not materialised and never will. The current UK economic and political climate is the antithesis to everything promised by Brexiteers during the referendum. The UK is simultaneously suffering from an economic crisis, a cost of living crisis and a political crisis and the root cause of those is no longer fogged over by the pandemic, or the war in Ukraine – because other nations are suffering less and recovering faster.
Now the International Monetary Fund (IMF) has forecast that the UK economy will perform worse than all other advanced economies and that includes internationally sanctioned Russia!
It is clear that if the Scottish economy is to return to a path of growth and prosperity, then independence within the EU is necessary. Scotland needs to unshackle itself from the broken UK economy that is holding it back, and rejoin the European Union.
Brexit’s impact on the UK economy
The economic fallout from the rest of Britain’s decision to leave the European Union is just now fully coming to light, in the past these have been partially masked by the effects of the pandemic, the war in Ukraine and global economic challenges. It is becoming increasingly clear that Brexit has been the slow-motion car crash that Business for Scotland predicted and campaigned against in 2016. If we liken the UK economy to a Formula 1 racing team, Britain is a car with outdated technology, unqualified drivers and the team managers have deliberately selected the wrong tyres for the weather conditions and so it is losing ten seconds a lap on the competition. Strangely all parties vying for control of the team want to continue with the same disastrous strategy called Brexit.
Brexit has caused a slow erosion of people’s living standards and quality of life, compared to how much better off we could have been had the UK voted to remain or accepted that every nation of the Union had to agree to leave.
Six years on from the referendum and three years since the transition period ended, the economic impact of Brexit and it is clear, it has been an unmitigated disaster for the UK economy, and by extension the Scottish economy. Scotland exports twice as many goods per head than the rest of the UK, with Scotland exporting £19,934 of goods per head versus only £9,270 in 2018 (the latest available data). So the damage of Brexit has hit Scotland harder than the rest of the UK.
Doppelganger analysis performed by the Centre for European Reform which created a model of the UK economy which never left the EU and compared it to the current UK economy, shows that Brexit has caused a contraction of 5.5%, equivalent to £33bn. The UK Government’s own Office for Budget Responsibility has said that Brexit, and the new trade deal, will reduce long-run productivity by 4% relative to remaining in the EU.
A gap of this magnitude has been driven by a fall in investment of 11%, a 7% fall in total goods trade and no growth in services trade.
Although the UK did sign an exit agreement with the EU and a subsequent trade deal through the Trade and Cooperation Agreement (TCA), which maintained most UK-EU trade as tariff -and quota- free, the UK is no longer part of the single-market or customs union. This means border checks, which add paperwork, which adds time, which adds costs.
This is most notable for small to medium sized businesses who, prior to Brexit, did a lot of their business through the EU. Since Britain left the single-market and customs union this business has become increasingly challenging. In a survey by the British Chamber of Commerce, of which 97% of those surveyed were SMEs, 77% of firms say the Brexit deal is not helping them increase sales or grow their business. More than half have faced difficulties in adapting to the new trading rules for goods and almost half have faced the same issues for trading services. Alongside issues with rule changing trade restrictions, 80% of firms reported that they had seen the cost of importing increase since January 2022.
UK trade has been the undeniable loser in the Brexit process. Brexit was falsely promoted as an immense opportunity for the UK to forge its own trading relationships around the world. However, in the time since the UK was legally allowed to sign its own agreements, almost all of the 71 that have been signed are simply rollover agreements with nations the UK already had agreement with under the EU. This week, the Department for International Trade estimated that the UK has been knocked 15 years off its course to meet the Conservative government’s target to reach £1 trillion of exports by 2020. Exports are set to fall from £739 billion in 2022 to £707 billion in 2023.
Many Brexiteers may be tempted to attempt to cover the failures of Brexit by shifting blame onto other global economic issues such as the war in Ukraine pushing up wholesale energy prices or persistent supply chain issues as a result of the pandemic. However, these arguments can be easily nullified by looking at the UK in comparison to other developed nations, who are also experiencing the same global issues.
As we can see, the UK is the only major developed economy that has not seen a significant recovery since the COVID-19 pandemic. All of these nations are dealing with the same global economic challenges as the UK. However, only one of them has recently removed itself from a mutually beneficial relationship with its closest large trading block.
Business confidence and investment
The overall consensus of businesses regarding Brexit around the time of the referendum and the negotiating period was one of uncertainty. Uncertainty over what a new relationship would look like and uncertainty over the direction of the UK economy following a Leave vote.
Due to this, many businesses put the brakes on investment in the UK. Both businesses and investors were worried- the former about the economic outlook and the latter about diminishing returns from further investing. As a result, business investment flat lined following the referendum and has not recovered.
The confidence of businesses in the UK economy plunged after the referendum and has since, (other than a short period when businesses began to open again after lockdown) failed to recover. Business confidence and business investment in an economy are the keys to economic growth and societal prosperity. Brexit has stolen that from the UK’s and by extension Scotland’s economy.
The curtailing of free movement has removed the UK and Scotland from a talent pool of roughly 500 million people and businesses are now reaping the ‘rewards’ of that decision. Research by the Centre for European Reform estimates that the UK currently has a labour force shortfall caused by Brexit of 330,000 people, or about 1% of the UK’s total workforce.
Brexit has also drastically reduced opportunities for young people, both within and outside of the UK. Data from the Higher Education Statistics Agency has shown that numbers of EU students in Scotland have plummeted by 50%, with a similar massive drop being seen across the UK. The ending of the Erasmus study abroad scheme means that students in Scotland can also no longer travel abroad with as much ease. The UK’s replacement Turing Scheme is severely lacking, with Scotland receiving a cut of £14 million in funding compared to what it was allocated under Erasmus+.
There can be no doubt and no argument that Brexit has caused long lasting damage to the UK and Scottish economies. After a campaign shrouded in lies and false promises, Brexiteers have left the UK economy in shambles for future generations.
What more should we expect when the process of Brexit between 2016 and 2020 spanned 3 Prime Ministers and just as many Secretaries of State for Exiting the European Union.
The Northern Ireland Protocol
Perhaps the most spectacular failure of the Brexit saga has been the UK’s inability to square Northern Ireland with the Brexit process. Northern Ireland presents what is known as the Brexit ‘trilemma’. This is the problem of trying to unite Brexit with the ‘Good Friday Agreement’. For the UK to truly leave the EU it must exit the single-market.This requires a border either between Northern Ireland and the Republic of Ireland (which goes against the GFA) or alternatively in the Irish Sea between NI and the UK (which means the UK will not have fully left the single-market). Presented with this Gordian-knot of a problem, the UK has chosen to totally ignore the protocol altogether and bury its head in the sand. This non-action sparked legal proceedings by the EU, as the protocol was previously signed and agreed upon by both sides – making it international law.
However, as we have seen through the ‘Internal Markets Bill’, the UK government is willing to break international law when it comes to the NI Protocol, with the UK government puerile claim it only intended to break international law in a ‘specific and limited way’.
The UK government’s tactic of playing fast and loose with international law has significantly undermined relationships with Brussels, with the UK-EU relationship at its frostiest in a half century. Diplomatic relations are so tense that – just before her departure from NO.10, Liz Truss questioned whether French President Emmanuel Macron was a ‘friend or foe’, stating that ‘the jury is still out’ on the matter. Perhaps it is Britain who has lost its way if it can no longer tell its greatest international allies from its enemies.
The missing promised benefits of Brexit?
So where are the supposed benefits of Brexit that staunch Brexiteers promised us? Looking at all that was promised in the run up to the 2016 referendum, we can compare those promises to the reality we now find ourselves in. Each of these key promises are taken as direct quotes from a Leave.EU campaign video about the benefits Brexit would bring. We have listed six from just one video but there are dozens more from multiple campaign materials.
1) The broken promise on the NHS:
“You will benefit from better care provided by our NHS thanks to the reallocation from the EU budget.”
The NHS is generally seen as a vital national institution in the UK. Its popularity cuts across ideological lines, with a majority of all groups regardless of Leave or Remain and left or right-leaning preferences fiercely defending its nature as a public (non-private) healthcare provider. It is therefore perhaps unsurprising that amid concerns surrounding healthcare funding, the Leave campaign in 2016 used the NHS as a point of contention, arguing that more money could be allocated towards the health service that was previously destined for Brussels. Unfortunately, the NHS is still experiencing a funding and staffing crisis, which has worsened in recent years. According to research by The Health Foundation, the UK has spent around 20% less per person on health each year than in similar European countries (including EU member states) in the past decade. This adds up to a yearly shortfall of around £40 billion. Clearly the promised funds that Brexit would provide immediately after leaving the EU have not yet materialised.
Amidst widespread industrial action by rail workers, the postal service, firefighters, teachers and many other groups of workers, December 2022 saw the first strike action carried out by the Royal College of Nursing in history. According to polling by YouGov, nurses and ambulance workers enjoyed the highest level of public support among all groups that were on strike that winter. A former Conservative health adviser has argued that the UK Government’s commitment to pay cuts and increased workloads for nurses during a cost of living crisis has left the NHS unable to retain vital workers, with increased threat to the health of patients as the result.
Business for Scotland claimed in the run up to the EU referendum that Brexit would lead directly to the privatisation of parts of the NHS and the opening up of the NHS to US health conglomerates as part of any trade deal done with the USA. Last week the former UK Health Secretary Sajid Javid said (in a blatant kite flying exercise) that “Patients should be charged for GP and A&E visits to ease waiting lists”.
“Controlled immigration will lead to reduced waiting times for you and your loved ones”
The Leave campaign also emphasised leaving the EU as an additional solution to the NHS staffing crisis as well as the funding crisis. This argument appears to be based on the premise that lower immigration in busy areas will reduce issues of pressure on hospitals in those regions, particularly in accident and emergency departments. It is true that Brexit has been accompanied with stricter immigration controls but these have also been coupled with a reduction in immigration from vital healthcare workers. In 2022, The Nuffield Trust found that the UK has a shortfall of around 4,000 EU doctors compared to the trajectory before the 2016 Brexit vote. A survey by BMA Scotland of EEA-trained doctors working in Scotland found that a third of respondents were considering leaving due to uncertainty caused by Brexit. It is difficult therefore to argue that Brexit has reduced pressure on hospitals through lower immigration, with this pressure being redirected to staffing.
The NHS staffing crisis has had a knock on effect on hospital waiting times, with this getting worse, not better since the referendum. According to NHS England statistics on waiting times, in December 2022 to January 2023, over 25% of ambulances were waiting for over an hour outside hospitals to hand over patients. This coincides with estimations that around 300 to 500 people a week are dying due to delays to emergency care. While Scotland already spends £100 more per head on healthcare than England, even the Scottish Government’s best efforts to mitigate UK cuts to the health service cannot fully mitigate the impact of Brexit. In the final week of 2022, over 2,500 people in Scotland were waiting for more than 12 hours to be seen in Accident and Emergency. The current crisis that is being experienced by the NHS is a complex one but Brexit has demonstrably worsened, rather than improved, the situation.
2) The broken promise on education:
“Excess funding, that would otherwise be sent to Brussels could also be directed to education meaning better prospects for your children”
Brexit seems to have made little impact on education spending across the regions of the UK which voted for it. The Institute for Financial Studies found that while there has been an increase of 8% in spending per pupil in Scotland compared to 2009-10, spending in England, Wales and Northern Ireland has been consistently lower. In fact, in these three countries, school spending in 2021-21 was projected to be around the same as it was in 2009-10, more than ten years previous. Brexit has not set off a huge exodus of funds from Brussels back to pupils in the UK and it is unlikely to do so in the future. In fact, Scotland- the only nation of the UK which voted against Brexit- is also the only one which has increased spending per pupil.
Adding to this, teachers have become the next group to participate in the widespread action by various occupations across the whole of the UK. The UK government has argued that it provided a 5% pay increase for teachers but in the context of rampant inflation, this actually amounts to a 5.5% pay cut in real terms. In Scotland, schools in ten council areas will see closures for at least a week due to strike action at the beginning of 2023.
The redirection of education funding does not seem to have improved the situation in UK higher education in the immediate aftermath of leaving the EU. Brexit has reduced opportunities for young people, both within and outside of the UK. Leaving the EU means that EU, EEA and Swiss students no longer have access to funding and fee support at UK universities. In Scotland in particular, this means that these students have gone from having all of their fees covered by the Scottish Government to having to pay tens of thousands of pounds for higher education.
However, it is important to note that income from international students does not just come from tuition. A study from Oxford Economics found that international students contributed over £11bn in subsistence expenditure to the UK economy in 2014-15. Students in Scotland contribute around 10% of this total. Discouraging EU students from coming to Scotland by drastically increasing the cost of tuition means that Scotland could also lose out on this additional benefit to its economy.
Data from the Higher Education Statistics Agency has shown that numbers of EU students in Scotland have plummeted by 50%, with the same massive drop being seen across the UK. These outcomes will also be unequally distributed, with ‘less prestigious’ universities suffering more from a drop in foreign student enrollment than ‘top tier’ universities like Oxford and Cambridge. The ending of the Erasmus study abroad scheme means that students in Scotland can also no longer travel abroad with as much ease. The UK’s replacement Turing Scheme is severely lacking, with Scotland receiving a cut of £14 million in funding compared to what it was allocated under Erasmus+.
3) The broken promise on wages:
“Your wages will rise thanks to better controlled immigration which will lead to less competition for jobs”
Analysis from the Trade Union Congress has found that real wages fell by an average of £76 per month in 2022. This is due to wages not keeping pace with rapidly rising inflation. Brexiteers promised us that workers would see increases in their wages due to lower immigration numbers leading to decreased competition for jobs. However, as laid out previously, Brexit has caused nothing but a shortage of workers in key industries such as health care. Nurses’ real pay fell by £1,800 in 2022, while paramedics’ real pay fell by £2,400. These are jobs previously reliant on EU workers that now do not wish to work in the NHS due to Brexit. According to statistics from the Royal College of Nursing, a record 9.5% of registered nurse posts in Scotland were vacant as of the 31st of March 2022. Scotland, which has an ageing population and lower immigration rates than the UK as a whole will suffer due to the tightening of immigration laws.
4) The broken promise on prices:
“Your weekly food shop will become cheaper, food prices will no longer be inflated by agricultural policies controlled by the EU”
In 2020 (the latest available data), the UK imported 46% of the food it consumed, 28% of this came from the EU. When the UK made the decision to leave the EU, the value of Sterling dropped by roughly 10%, this increased the cost of importing goods into the UK and as a result the price of foods imported into the UK rose. Since the Russian invasion of Ukraine global food prices have been on the rise, however, the UK has been acutely vulnerable to this. As a result, food inflation in the UK hit 16.5% in November 2022 and has remained stubbornly high. Food inflation is plaguing many European nations at this time, however, analysis by the London School of Economics found that Brexit had already cost UK households £210 extra in food costs by the end of 2021. These increases have been felt most significantly in basic items such as pasta and bread, leaving those on the lowest incomes the worst off due to poorer households spending a higher proportion of their income on basics like food.
5) The broken promise on housing:
“With less pressure on housing, younger generations will also find it easier to get on the housing ladder”
Since the late 1980s homeownership in the UK among young people has fallen off a cliff. A combination of exponentially rising prices and low supply. Home ownership among 25-34 years olds has risen slightly between 2016 and 2019 (the most recent data). However, this is during a period of exceptionally low interest rates due to low inflation. In the coming years it is expected that these rates will drop further again as the rampant inflation of the current period ripples through mortgage markets pushing many young people further from the housing ladder.
While ownership rates have risen since 2016 so have housing prices. Prices are up 38% since the referendum and as we have previously seen wage growth has remained weak, with real wages falling for many. If this trend continues there is no doubt home ownership among the young will begin to decline.
6) The broken promise on politics:
“Politicians, both local and national, will become more accountable helping to strengthen your community”
Brexiteers promised that leaving the EU would make the UK’s politicians more accountable to the British public. Let us take a look at the numerous scandals involving UK politicians since Brexit was finalised.
Johnson was finally forced to resign as Prime Minister following a slew of scandals involving himself and ministers in his cabinet. The final straw that broke the camel’s back in the many scandals surrounding Johnson’s premiership was the numerous sexual harassment allegations made against MP Chris Pincher which No.10 said the PM’s office had been unaware of when they appointed him deputy chief whip. However, it was later revealed that a former senior civil servant had written a letter saying he had investigated the allegations in 2019. This sparked a wave of cabinet resignations.
These resignations came in addition to those triggered by Johnson’s involvement in the ‘partygate’ scandal, in which government departments were found to have held parties during the pandemic which violated COVID-19 restrictions. Johnson himself was fined by police for attending a birthday party and was forced to apologise to the Queen after it emerged that Downing Street staff attended a party the day before Prince Philip’s funeral. Surely this alone would force any previous Prime Minister to step down but Johnson was adamant he was remaining.
Johnson once again found himself in the centre of a political scandal when it was revealed he had used Conservative party donations to renovate his official residence, with some estimates putting the renovation costs in the hundreds of thousands of pounds. Johnson was then criticised for failing to disclose messages between himself and the donor and the Conservative party was fined £17,800 for failing to accurately report the donations.
The most notorious episode from Liz Truss’ short time as Prime Minister was the unveiling of her ‘mini budget’ in September 2022, which set off a financial crisis in the UK, sparked an IMF intervention and led to her resignation only a few weeks after she had become PM. The budget proposed the largest cuts to tax since 1972, eliminating the top 45% income tax rate in England, Wales and Northern Ireland altogether from April 2023 and proposed borrowing on a massive scale to fund it and boost economic growth. Rather than the swift recovery she and Chancellor Kwasi Kwarteng hoped for, international markets panicked, with the pound plummeting to its lowest level against the dollar in history. The British public was also unimpressed, with the Conservative Party dropping by over 30 points behind the Labour Party in opinion polls. A poll conducted by The Observer also showed Liz Truss with an approval rating of -47, their worst rating for any sitting Prime Minister.
Following the disastrous announcement of the mini budget in September, Liz Truss desperately attempted to backpedal on the political and economic crisis that was threatening to cut short her time as Prime Minister. In response, she summoned Kwasi Kwarteng back to Westminster from a meeting of finance ministers in Washington in order to fire him, appointing previous Conservative Secretary of State Jeremy Hunt as his replacement. This was not enough to save Liz Truss however and the pressure mounted from Conservative MPs urging her to resign, citing a loss of public trust. Despite Truss protesting that she was ‘not a quitter’ during Prime Minister’s Questions, a day later on the 20th of October, 45 days into her term in office, she resigned, with Rishi Sunak eventually being appointed as the new UK PM.
The scandals surrounding Rishi Sunak began before he was ever appointed Prime Minister. While Chancellor it was revealed that his wife had avoided paying as much as £20 million in UK tax by being registered as being non-domiciled.
Sunak’s premiership kicked off in scandal after one of his first cabinet appointees was forced to resign following bullying allegations. It was revealed that Gavin Williamson, while at the Ministry of Defense, told various civil servants to “jump out of the window” and told another to “slit your throat”. He also sent expletive-laden messages to the former conservative chief whip Wendy Morton after not being invited to the Queen’s funeral.
The most notorious and widespread case of bullying in the current Conservative Government has come from deputy prime minister Dominic Rabb, who is facing formal complaints of severe bullying by perhaps as many as 30 civil servants across multiple offices. In response to these allegations, Rabb stated that he made ‘no apologies for having high standards’, while a third of staff in his department claimed to have been bullied or harassed.
Sunak is also racking up criminal fines. He was charged this month for failing to wear a seatbelt while travelling in a government car having already been charged prior to becoming Prime Minister for attending lockdown parties during the ‘partygate’ scandal.
The most recent scandal under Sunak’s leadership has come just this past weekend, as the chair of the Conservative Party, Nadhim Zahawi, was fired due to failure to disclose an investigation into his tax affairs. Zahawi failed on seven separate occasions to declare the HMRC investigation, eventually incurring a £5m settlement and denounced factual reporting on the issue as ‘smears’, threatening to sue the lawyer who exposed the scandal. The number of occasions at which this could have been declared, as well as the attempts to silence reports which were in fact true could seriously further undermine public trust in the government at a moment when Sunak needs to appear to be dealing with corruption within the government.
The list above is by no means exhaustive and covers only Prime Minister’s, their cabinet ministers or family members, since the UK left the EU. We should expect of our public servants that any one of the scandals mentioned above should be enough to end their career in public service, with many of them bringing criminal charges down on the individual. However, we have become numb to this type of political outrage, we see it as commonplace and par for the course of UK politics. This is the true change Brexit has wrought. Brexiteers rode the wave of a changing media landscape where ‘alternative facts’ give rise to ‘untruths’ and political ‘doublespeak’ of an almost Orwellian nature. From this our politicians realised that scandals no longer need to be career ending, if you simply ignore the scandal it will go away, but if the pressure of the media weighs too heavily on you, you can simply resign and pick up another role in a few months time.
Where do we go from here?
With both major parties in Westminster committed to making Brexit work (at which they will fail), the only path Scotland can take to a brighter future is through independence and being welcomed back into the European community. An independent Scotland must and will rejoin the EU.
By rejoining the EU, Scotland will be back in the world’s biggest single market. We will regain access to the highly skilled workers from Europe and see freedom of movement restored. Quickly we will see European workers who are essential to the NHS, hospitality, and construction sectors return, filling the labour shortages left behind by Brexit.
At this very moment, the UK Government is hard at work making this as difficult as possible. The Brexit Freedoms Bill will sunset all EU-related law still on UK statute books on December 31st 2023. While claiming to allow the UK to replace these laws with their own, this act can be seen as a deliberate attempt by Westminster to make it more difficult for an independent Scotland to rejoin the EU. It is a cold and calculated action aimed at Giving UK Ministers unheard of powers to change laws without democratic oversight and hamstring Scotland when it inevitably achieves its independence by forcing unwanted divergence of Scottish laws from EU laws and regulations for zero benefit.
An independent Scotland inside the EU will free itself from the unequal, unfair, high-cost, failing, Brexit-based UK economy and we can thrive through the creation of an inclusive, wellbeing-based economic approach.
Scotland can no longer afford to be shackled to the UK political and economic system which has failed time and again. Independence offers us the opportunity to fully realise our true potential and the sooner we achieve it, the better. It is time to give up on Broken Britain and believe in Scotland.