Scotland & the EU

Potential Brexit bonanza for independent Scotland within the EU

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Every constituency in Scotland voted to Remain

Last week’s Brexit vote in the rUK which runs contrary to Scotland’s conclusive remain vote hasn’t just opened the door to independence, it has opened the door to a massive economic Brexit bonus for an independent Scotland, gifting us the opportunity to attract tens of thousands of high-paying jobs across many sectors.

It has also turned the economics of independence on it’s head – voting to remain in the self-destructing, inward-looking, xenophobic and rudderless UK is now the risky option and those No voters (sorry, potential Yes voters) are so very risk-averse. Brexit is the very definition of economic uncertainty, isolation and chaos that Scottish voters were told would happen if they voted for independence. Many of the 55% who wished to avoid such upheaval must now wonder if independence now offers comparatively more stability and economic opportunity than the political and economic sinking ship that post Brexit UK represents.

In 2014, I campaigned for Scotland within the EU and also for an independent Scotland to have an open market, a shared currency and some shared regulations with the UK. It seemed both logical and desirable, but if the EU referendum had been held first we might have known better how illogical and undesirable Westminster’s political elite can be, and we might have offered a different prospectus.

There are two unions at play but they are very different in nature:

  1. The UK is a political union
  2. The EU is a trading union

The UK political union keeps 100% sovereignty (power devolved is power retained) in the hands of a distant, dysfunctional and uninterested Westminster political elite.  The EU trading union requires that we share 10% sovereignty to facilitate an open market and the promotion of shared prosperity.  The EU isn’t just the lesser of two evils it is the key to prosperity and the key to Scotland achieving it’s independence.

After independence Scotland will have left the failed political union with the UK but will still have a trading union with both the UK and the EU.  Sharing 10% sovereignty on a voluntary basis to maintain a UK common market makes perfect sense to all the UK nations post independence.  The UK will end up doing a deal to access the common market, or EEA, and they will pay through the nose for it, there will be no saving on membership fees, no change to immigration and no votes in the European Parliament, meaning an actual reduction in sovereignty. Let’s be clear the UK has no choice but to do an EEA deal, with a strong growing economy and a strong surplus and no sovereign debt the UK could manage a Brexit  with little pain but from where it is economically right now the UK must deal or crash.  On the one hand a deal would mean no border issues between an independent Scotland and England but on the other it could still be far less beneficial to Scotland than independence and full EU membership.

Scottish voters who voted for the status quo in 2014, often with a heavy heart and often purely due to worries about affordability (the main ones being forced out of the EU, or forced into the Euro with a Yes vote), forwent their national pride for what they saw was “common sense”. Many now look aghast at the narrow-minded, parochial British nationalism that forced a Brexit against their wishes and see that it looks the poor cousin of Scotland’s civic, international, green and equality-led national movement.

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Turns out voting No to independence in 2014 was the process for removing our EU citizenship

The EU scare story meant a lot to No voters in the 2014 referendum: Last week, Labour supporters voted 83 per cent remain, the Lib Dems 84 per cent and even the Conservatives were 73 per cent remain – many of those voters (maybe as many as 500,000) have now moved to supporting independence within the EU but they won’t vote Yes to independence outside the EU. If we leave the EU with the United Kingdom the dream is dead.

So, we are a year or maybe a year and a half away from a second independence referendum, a referendum that can’t be won unless the potential Yes voters from the Unionist parties see independence as the more stable, affordable and economically promising option, and without the safety net of EU membership that’s a huge ask. Fortunately for the Yes movement the mood music from the EU is very supportive of the kind of deal that would show independence to be the solution to the omni-shambles Brexit is and will remain.

Whatever EU trade deal the UK does will include open borders, so don’t worry about that old chestnut (Norway and Sweden have open borders) but it will be very hard for the UK to maintain full financial services market access as a non-member; Switzerland hasn’t managed that. As part of the EU the UK’s finance sector has EU passporting rights, essentially meaning financial services firms based in the UK can operate throughout the EU.

Not only will manufacturers who need to sell in the EU need to consider moving from the UK but so will online retailers of products that are sold with finance deals across the EU. But that’s nothing compared to the UK financial services sector, which desperately needs passporting, something many EU members who want to block the UK don’t. The French, Irish, Dutch and Germans in particular are eyeing the juicy bones that post-Brexit Britain’s European finance business may offer up.

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Ex-Nasdaq traders bid to launch new stock exchange in Scotland by 2017

The UK controls 17 per cent of EU cross-border bank lending compared to France and Germany’s nine per cent apiece, 41 per cent of foreign exchange turnover versus three per cent and two per cent respectively, 49 per cent of interest rate OTC derivatives versus seven per cent and four per cent, and 18 per cent of hedge funds’ assets versus less than one per cent for France and Germany combined.

If the UK is out and passporting rights are suspended at the point of actual Brexit, and for the following three or four years it takes the UK to do a trade deal that includes financial services, then London’s days as Europe’s leading finance sector hub are done.

If Scotland becomes independent within the EU in the next two years then the Scottish Government and Scottish Enterprise need to plan for a flood of jobs relocating from England.

Daniel Broby, director of the Centre for Financial Regulation and Innovation, at the University of Strathclyde’s Business School, said this week that if Scotland leaves the European Union, along with the rest of the United Kingdom, this could see the loss of 5,000 finance sector jobs. However, if we could maintain Scotland’s access to the single market then we “could see 50,000 financial jobs finding their way to Edinburgh and Glasgow”.

Financial services is worth about £7 billion to Scotland’s economy, independence within the EU managed correctly could see that double and along with other relocations create an instant, independence-related finance, exporting, manufacturing and construction/property price-led economic boom for Scotland. This sweeps away the worries about affordability and clears the way for a future oil-price rebound to create a sovereign oil fund so that we don’t waste what’s left of the economic benefit from oil as Westminster has done for generation.

The circumstances have changed so much from 2014 that No voters can now change their votes and still think they got it right both times. No matter what party you vote for, with a clear path for Scotland to be independent and prosperous within the EU, what’s not to like?

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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 Gordon ran a business strategy and social media, 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 Believe in Scotland.


  • Democracy within a nation vs democracy within a union of nations (United Kingdom).
    We know the statement “Brexit is Brexit” and I understand that is what is acceptable in a democratic country, but is it when talking of a union such as the United Kingdom or any other union?
    What is the UK? I was explained that the UK is a “Union” of 4 nations, ie. England, Wales, Scotland and North Ireland. Normally, when nations come together and make an agreement their rights are protected and they (the nations) have the same voting rights.
    In the case of the UK, the 4 nations cannot protect their rights as a nation and have no voting right within the union (see referendum), If, that would have been the case the vote would have been England and Wales on the leave side and North Ireland and Scotland on the remain side or in other words, “status quo” or 50/50%.
    But no, the UK is not a “union of 4 nations, but is considered as one nation and the (sub?) nation(s) with the largest population will always have its/their rights secured as the population is/are dominating (and as such the number of votes), we call this the “lion behavior”, as they can abuse the minorities under the flag of democracy.
    I suppose “they” call that democracy!? Minorities are ignored within the larger groups. Of course they are right as making a mix between the will of the populations of the different nations and going simply by head counts they did win.
    Shame, to use the word “democracy” without taking in account the democratic will of nations within the United Kingdom, which is a union of 4 nations.

  • I can see the English border from my house and essentially it is ignored by many in the Borders who have ties with northern England. Indeed the local radio station broadcasts to, “The Borders and North Neprthumberland.” My concern is that English brexiteers will want a hard border (which means a fence) in order to deter migrants from entering England in the event of independence. If we can keep an open border and be able to trade freely across it, then independence can be a positive development. We need to handle this carefully and get the timing right or there could be more chaos.

  • You assert in your article that the EU is a trading union – as opposed to a political union. Well, yes, that’s what it WAS. It is now more a political Union than arguably the UK but with less democracy.
    What correspondents such as yourselves seem to gloss over is the fact that we voted as a United Kingdom and not as a Scottish bloc – and the result is a UK wide one. We are NOT a special case here in Scotland – despite the pleadings of an FM hell bent on running headlong into another Union – a far more toxic Union – after coming out of a stable political and social Union for nothing other than to achieve her own ends.

    • interesting, you do realise of course that we are already in the “far more toxic union” and have been for 40 years, your “stable political and social union” didn’t have a problem with that until very recently when Nigel (wooosh, where did he go !) thought it might be a bit of a hoot to lie to the electorate while scooping up a damn good wage for not turning up to his job ( see voting record )
      The UK is finished and a Tory infight has finished it, they never expected the electorate to be stupid enough to believe the lies they told, that’s why the campaign on both sides was so terribly terribly awful, it was never meant to happen, it was a lark, a bit of fun and now they’ve been suckered.Britain is now screwed for at least 50 years, get used to it or join the YES side, your pension depends on it !

  • and what about those of us who did not vote remain i for one do not want anything from an eu that is self distructing . also how can scotland be indy if joined to the eu

  • I think this would be an ideal opportunity for Scotland to welcome these businesses to Scotland and create the prosperity that we have so long been denied! I hope that other cities besides Edinburgh and Glasgow will be considered and not just kept to the central belt!

  • Excellent analysis, Gordon, with a lot of justifiable optimism about the prospects for Independence. Many foreign companies (like Toyota) specifically started manufacturing in England in order to get access to the EU, so they might just move a hundred miles north!

    Is there not going to be great pressure from the EU to join the Euro (or at least undertake to do so in the future?

  • Sounds good. What we would be well advised to do then would be to ensure beforehand that there are sufficient direct air and sea links to Europe. Although I suppose they will follow in any case.

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