Brexit – Scotland, the UK and EU27: Key Issues

23 May 2018

© 2018 SCER

The Scottish Centre on European Relations, in partnership with the European Commission Office in Scotland, organised a public panel discussion in Aberdeen in May hosted at the Aberdeen Central Library. The event considered how the Brexit talks are developing, the possible options looking ahead and the implications for Scotland, the UK and EU27. The panel speakers were Professor Claire Wallace (Professor of Sociology, University of Aberdeen), Liam Smyth (Deputy Chief Executive, Aberdeen and Grampian Chamber of Commerce) and Dr Craig McAngus (Lecturer in Politics, University of the West of Scotland), and the chair was Dr Kirsty Hughes (Director, Scottish Centre on European Relations).

Opening Remarks from the Panel

The panel focused its opening remarks on three main themes: (1) the politics of Brexit in Scotland, (2) the economic outlook around Brexit and (3) the current situation on EU migration. With the June EU summit approaching, it was noted that the question of the Ireland/Northern Ireland border remains a key unresolved matter which could impact on the talks as a whole. The countdown to the autumn, when the Brexit withdrawal agreement must be completed, looks likely to continue to be marked by uncertainty.

Politics in Scotland have been shaped in recent years not only by the EU referendum, but also by the 2014 independence referendum and the 2016 Holyrood election. It was remarked that, while Scotland voted by a large majority to remain in the EU in the 2016 referendum, levels of support for independence have remained largely unchanged since i.e. there has been no Brexit bounce. Instead, the Brexit debate in Scotland has focused significantly on the impact of Brexit on devolution and devolved powers. The continuing dispute between the UK and Scottish governments over the ‘power grab’ of EU powers in devolved areas appeared to be at a stalemate, it was noted – but the situation could change at short notice.

It has been envisaged by the UK government that, after Brexit, some EU-related powers will return directly to Holyrood, while others will be held in Westminster either temporarily or permanently. The aim would be to create ‘common UK frameworks’ in areas such as agriculture and fisheries. It was remarked that the division of devolved and reserved powers is not always clear. For instance, higher education is devolved to the Scottish parliament, but research funding is reserved to the UK parliament. This interconnection of responsibilities requires good intergovernmental relations which have largely continued at technical levels at least, it was suggested. On the question of fisheries, post-Brexit choices will be political decisions rather than dependent on technical issues. More broadly, it was suggested that Brexit looks likely to change the balance of power between Scotland and the UK.

Scotland’s economy, like those of many other parts of the world, depends on international trade. Since the EU referendum onwards, businesses across all sectors have been affected in particular by the uncertainty that Brexit has generated. The lack of clarity from the UK government, nearly two years later, on numerous policy questions has been a source of substantial concern. Currently, it is relatively easy for Scottish companies to export their goods and services within the EU and European Economic Area, compared with the bureaucracy associated with trade with the rest of the world. However, businesses have no clarity on what trading arrangements will look like after the transition period, or indeed immediately after Brexit day for some issues. Rules of origin will be a particular focus, as Brexit will alter what qualifies as ‘UK origin’ and what would have once been ‘EU origin’.

More recently, it was argued, the main priority for some has become the future of the workforce (and therefore migration policy). EU citizens living and working in UK are critical to key sectors, including health, social care and food and drink. Potential changes to the migration path for EU nationals, and the  Brexit settlement for EU citizens already living in the UK, will impact on businesses as well, costing them time, money and effort. These concrete consequences will affect EU citizens as staff, companies as a whole and consumers as higher costs are passed on in retail prices.

The future of post-Brexit migration policy in the UK has been beset by delays. The political debate over who should be entitled to stay in the UK existed before the EU referendum and has carried on and continues to provoke passionate views. It was argued that the UK government in recent years has served to generate a hostile environment towards immigration and citizenship. This attitude is not seen as inspiring confidence for future EU-related arrangements. The UK has in the past decade and a half experienced high levels of EU immigration in absolute terms, but the UK is also a large, populous country – and has certainly not had the highest levels of migration within the EU on a per capita basis. Migration from the EU has fallen since the EU referendum to the lowest levels since 2004. Scotland depends on inward migration, particularly from the EU, for population growth generally and to sustain such sectors as agriculture, tourism and higher education. It was noted that a number of those EU nationals live and work in Aberdeen. The future for UK citizens living in the EU27 also remains somewhat unclear for now.

Questions and Discussion with the Audience

The questions from the audience were wide-ranging and reflected substantial public interest in the Brexit debate. Considering the political uncertainty, questions were raised of whether Brexit might still not happen, whether Article 50 could be revoked, the prospects for the transition and the possibility of another Scottish independence referendum. It was argued that the current UK government appears very committed to delivering Brexit. An early general election might be possible – and, if the government were to change, the approach to Brexit might change as well. Views differ on whether and how Article 50 could be revoked, but it seems possible. To date, the EU has only supported a short transition, but its attitude to extending it might be subject to change as events develop.

The politics of a second independence referendum have been somewhat in abeyance, it was noted, but the debate could begin to resume in the near future. A second EU referendum is also still possible, but it is unclear what the key question and choice would be. It was noted that the UK’s existing membership of the EU already constitutes a ‘special’ deal, and that the UK will be extremely unlikely to replicate all of those benefits outside the EU. The difficulties around finding a solution for the Ireland/Northern Ireland border might also shape Brexit overall. On balance, however, Brexit is still likely to go ahead, it was suggested.

Other points raised focused on EU citizens in Scotland and migration. It was argued that, historically, emigration from Scotland has always been a factor in population levels and that, in recent years, EU citizens coming to the country have reversed population decline. Sectors such as tourism, higher education, culture and the arts have great potential to promote growth in the Scottish economy, but is dependent on continued immigration from the EU – which is currently in doubt after Brexit. Scotland requires talent and highly-skilled migration in particular now, but the Brexit is already deterring some EU citizens from coming to the UK. Future immigration policy for EU citizens could also change depending on the UK government in power.

The type and shape of Brexit remains unclear, and different kinds of Brexit will have varying impacts on the different parts of the Scottish economy. Adapting to Brexit, it was noted, will necessitate costly changes which will undoubtedly impact on the entire economy. Some suggest there has been an improved competitiveness of UK exports following the devaluation of the pound after the EU referendum. However, it was strongly underlined that currency weakness around Brexit cannot be a basis for trade policy or sustainable growth. With the endgame of Brexit unknown, but fast approaching, it was suggested that it will be difficult to avoid damage to long-term economic growth.

The panel discussion at Aberdeen Central Library is pictured above