Brexit and Scottish Independence: Two Sides of the Same Coin?

Kirsty Hughes | 22 February 2019

© 2017 SCER

Some argue that the complexity and challenges – one might add chaos and damage – of the UK leaving the EU shows how hard it is to leave a union. Hence, so the argument goes, Scotland leaving the UK will be at least as difficult. I explore this in detail in a new policy paper and summarise some of the key points from that paper here.

Comparing Brexit and independence is not straightforward as we still don’t know if Brexit will happen, when and in what form. Likewise we don’t know if and when there will be another independence referendum, the result, or the form of the future UK-Scotland relationship if Scotland chose independence.

But we do know, on Brexit, that Theresa May still aims to get a version of her deal through the Commons, including the backstop – which would imply the UK potentially being indefinitely in a customs union with the EU. And on independence, we know that the Scottish government aims at independence in the EU.

So if we compare Brexit happening, with a deal that includes an indefinite customs union, with an independent Scotland being in the EU – and the paths to both – we can make an initial comparison of whether leaving the EU and leaving the UK are the same or different.

Across nine different issues, it seems that the answer is complex – some similarities, many differences, not least the likely different political dynamics that would unfold in each case. With Brexit we already see a chaotic, divided politics facing stalemate in the Commons, that some suggest starts to look like a failed state. It’s not obvious that such a political dynamic would be replicated on independence.

(1) Sovereignty

The UK is a sovereign state whether inside or outside the EU. It chose to share and pool sovereignty in the EU in various ways and it can choose to take that back (as it currently is doing under the Article 50 process). In contrast, Scotland is a country but not a state – it’s a sub-state. Scotland has no automatic right to a section 30 order – it needs Westminster’s agreement. If it became independent it would clearly gain sovereignty, making the choice (if it still wished to) to apply to join the EU and pool aspects of sovereignty in doing so. So on sovereignty there are clear and distinct differences on leaving the EU and leaving the UK.

(2) Democracy

While closely linked to sovereignty, there is a similarity in rhetoric between aspects of Brexit and independence, notably the emphasis on ‘taking back control’. But looked at more closely, this similarity mostly disappears. The UK did not stop being a democracy while participating in the EU – it had a voice and a vote and a seat at the table both at the Council of Ministers and in the European Parliament. Ironically, if the UK ends up in an indefinite customs union with the EU it will become a rule-taker on trade.

In contrast, Scotland, if independent, would gain many more powers for the Scottish government and Scottish parliament, compared to the current range of devolved powers. And as an EU member state, it would have a democratic say at the EU council of ministers that it doesn’t currently have other than via the UK government (though it does have MEPs in the European Parliament).

There are some similarities here as well with the UK leaving the EU – depending on the nature of independence (and whether and in what ways it was ‘independence-lite’), Scotland could become a rule-taker in some areas, for instance if it adopted the pound as its currency (whether with or without UK agreement). Overall though the outcomes in democratic terms look rather different.

(3) The Divorce Process

There would probably be more differences than similarities here. There would be discussions – on independence – around money and assets. But these would be rather different discussions to the Brexit talks. Splitting assets and liabilities such as oil and gas, pension liabilities, debt, defence assets and more would require major negotiation for which there’s no parallel in the Brexit talks. The bulk of any transition to independence would quite likely take place while Scotland is inside the UK (though possibly not on currency), while the UK’s transition would take place once it had left the EU since the EU only negotiate trade deals with third countries.

Nor is there any equivalent to the Northern Ireland backstop in the case of independence. There’s no region of Scotland that would need a different and special relationship to the UK.

There would be some parallels on citizenship but more differences. With Brexit, UK citizens lose their EU citizenship and keep their UK citizenship. Scottish citizens would lose their UK citizenship – but quite likely keep rights to live and work in the UK under the Common Travel Area. They would gain a new Scottish citizenship and regain EU citizenship. EU citizens in the UK lose their free movement and EU citizenship rights in the UK and get instead settled status. EU citizens in an independent Scotland in the EU would regain the rights they had pre-Brexit (in Scotland not in the rest of the UK).

(4) Political Divisions

There could be some similarities to the Brexit vote, in terms of political divisions after an independence vote – and as seen after 2014. If there was a narrow win for independence, as on Brexit, this could risk a divided nation and pose challenges. But it’s hard to imagine direct political parallels for Scotland to the fact that both main UK parties – Tories and Labour – support Brexit and are split internally (and with 9 Labour and 3 Tory resignations of the whip), even though the then Tory prime minister and Labour leader in 2016 argued for remain. The extraordinary crisis convulsing UK politics is a cautionary tale but beyond that does not offer any particular insights on future Scottish political dynamics around independence. Scottish independence talks are unlikely to be led by a politician who campaigned for ‘no’ while the Brexit talks are indeed led by a prime minister who campaigned for remain.

(5) The Future Relationship

The Conservative government has been and remains deeply divided over the nature of the future UK-EU relationship to an extent that has stalled the talks and threatened a no deal Brexit, delay or even no Brexit. A future Scottish government and parliament could well have different views over the desired future UK-Scotland relationship too.

But if Scotland was to join the EU that would determine one main part of the future UK-Scotland relationship i.e. one part would be determined by the UK-EU relationship. If the UK is in an indefinite customs union with the EU that would give clarity on one key aspect of the future UK-Scotland deal – they would both be within a customs union.

Those range of issues not covered by Scotland being in the EU – from currency to defence to public services and more – would form the heart of the UK Scotland talks (and the independence debate). In the face of Brexit, the EU offered a range of choices to the UK which baulked at choosing between them given the UK government’s own red lines and internal splits. It is to be hoped that both sides in a future UK-Scotland negotiation would have greater clarity on options, and fewer internal divisions.

(6) The Relationship to the EU

The UK, given its red lines, will become, on Brexit, a third country vis-a-vis the EU. But if Scotland is in the EU then it will be part of EU trade policy, the single market and so forth. So it will not become a third country vis-a-vis the UK and it will be part of a trans-national regional body. There will also be a power imbalance in Scotland’s favour. If Scotland is in the EU it will have a voice and vote on EU laws and on trade policy – the UK will be a rule-taker where it follows EU rules including on trade policy if it’s in a customs union.

There are certain similarities beyond this difference. The UK, eventually, will have to negotiate its future trade and security relationship with the EU – any deal could be vetoed (as the Canada-EU trade deal was briefly by the Walloon parliament). Scotland will have to apply to join the EU. The EU’s accession processes are tried and tested – unlike the Article 50 procedure – so the huge uncertainty hanging over the Brexit talks would not be the same for accession talks. But Scotland could face a veto given that accession has to be agreed unanimously. If Scotland went independent in a constitutionally and legally valid way, such a veto is unlikely but cannot be ruled out.

(7) New Laws and Regulatory Bodies

The UK has passed the EU Withdrawal Act to take EU laws into UK law on Brexit. That Act and Holyrood’s own continuity bill show how this can be done and many of the associated pitfalls – and provide food for thought for the independence process.

However, some part of an independent Scotland’s laws and regulatory bodies would be determined by joining the EU. So while the UK may choose to diverge from EU law and Scotland could diverge from UK laws in non-EU areas, Scotland would keep or converge back to EU laws in all relevant areas (depending on the timing of independence and on when the UK ended its transition period after Brexit and whether it then diverged from the EU).

(8) Relationships with the Rest of the World

The Brexit/independence comparison is not particularly pertinent here – for reasons to do with the earlier sovereignty discussion. The UK has an independent foreign policy – it did within the EU and will continue to do so after Brexit. Scotland will need to develop its own foreign policy on independence and would also participate in the EU’s common foreign and security policy on joining the EU (largely determined through unanimity).

Arguably, the UK will need to develop an independent trade policy on leaving the EU, although if it’s in a customs union (covering goods) then that trade policy could at best only focus on services, while an independent Scotland in the EU would be part of EU trade policy. So the comparison here is more of opposites than similarity. Ironically, on trade, both countries could end up part of EU trade policy – but one, the UK, being a rule-taker.

(9) Border Issues and Economic Impacts

If both the UK and an independent Scotland were in the EU, there would be no border issues – any more than there are between Ireland and the UK at present. So it is Brexit that drives the border issues but if Brexit goes ahead, an independent Scotland in the EU would have to deal with that.

Through being outside the EU’s single market, the UK will face regulatory checks on its products exported to the EU – borders will no longer be frictionless. Similarly, if Scotland and the UK diverge – whether in EU regulations or in other areas – there will be frictions too.

Frictions at the UK/Scotland border would certainly have some negative economic impacts. But these need to be costed in terms of the extent of the frictions and the potential benefits to Scotland: of remaining in the EU and so avoiding some of the disruption of Brexit, of having no frictions in trade with the EU, benefiting from EU trade deals around the world, attracting foreign direct investment and benefiting from free movement of people. There would also be a question of how fast Scotland re-oriented and expanded its trade (including whether into high productivity and fast growth sectors). There would then need to be in-depth economic analysis of how much these factors and dynamic effects would counterbalance Scotland’s current position of trading three times more with the rest of the UK than with the EU (though its EU and non-EU international trade is two-thirds of its trade with the UK).

Overall, there are unsurprisingly similarities and differences between leaving the EU and leaving the UK. The above analysis suggests there are, though, more differences than similarities both in terms of the issues, the process and the politics.

Kirsty HughesKirsty Hughes | Twitter

Scottish Centre on European Relations

Dr Kirsty Hughes is Director of the Scottish Centre on European Relations. She is a researcher, writer and commentator on European politics and policy, and she previously worked for a number of leading European think tanks.