Steve Peers

As the Scottish independence referendum approaches, with the “Yes” campaign gaining momentum and even leading some polls, it’s crucial to analyze the potential impact of Scottish independence on the European Union (EU). This analysis will focus on the EU membership of both an independent Scotland and the remaining UK (rUK).

Scottish independence would trigger four significant, near-simultaneous events: negotiations between Scotland and rUK about their future relationship; negotiations for Scotland to rejoin the EU; renegotiation of the UK’s EU membership; and a UK general election. While the first two events would be entirely new, the third, UK renegotiation of EU membership, has only occurred once before, in 1974-5, under different circumstances.

Although UK general elections are routine, the context of this particular election would be extraordinary. The absence of 59 Scottish seats in the House of Commons, with Scotland typically favoring the Labour Party, would likely affect the election outcome. However, if the election proceeds as scheduled in May 2015, the loss of Scottish seats would only take effect the following year, assuming independence occurs in spring 2016.

These four events are interconnected. For example, the UK election results will influence the rUK’s negotiation stance with an independent Scotland and determine if the UK will even attempt to renegotiate its EU membership. Renegotiation is a Conservative Party position, not currently supported by the Liberal Democrats or Labour Party. Therefore, a Conservative majority is likely required for renegotiation.

Further significant events are also possible. A “Yes” vote in Scotland could lead to David Cameron’s resignation or attempts by his party members to oust him. Moreover, the UK Independence Party is well-positioned to secure its first Commons seat in an upcoming by-election.

Predicting the aftermath of a “Yes” vote with certainty is impossible. While the crucial question of Scotland’s EU re-entry and the impact of immigration between Scotland and rUK have been previously explored, this post focuses on the impact of a “Yes” vote on the UK’s relationship with the EU.

The foundation of this analysis lies in Scotland’s relationship with the rUK. Trade with the rest of the UK, and the EU as a whole, is vital for Scotland. The “Yes” campaign asserts that little would change in this regard, while the “No” side argues that independence would jeopardize relationships with both the rUK and the EU.

The “Yes” campaign appears to be prevailing, convincing a growing number of voters that the “No” side’s argument is a bluff. While it may have been strategically beneficial for the “No” side to highlight the risks of independence leading up to the referendum, despite current drawbacks, their argument’s credibility is questionable.

In the event of a “Yes” vote, the rUK must prioritize its own interests. Given Scotland’s economic significance, maintaining the closest possible economic relationship with an independent Scotland is paramount. This has implications domestically, particularly regarding a currency union, and for Scotland’s EU relationship. It would be overwhelmingly beneficial for the rUK to support Scotland’s continued EU membership under terms equivalent to the UK’s current membership. This is central to the “Yes” campaign’s argument: the “No” side’s threat harms not just Scotland, but also the rUK, making it implausible.

However, the rUK might not act in its best interests. Resentment from voters in the rUK could lead to a desire to punish Scotland. Additionally, those seeking to renegotiate the UK’s EU membership or withdraw completely might strategically oppose Scottish EU membership. Renegotiators face a dilemma, as they would need to leverage their limited influence with the EU on two major projects simultaneously: renegotiation and Scottish membership.

If renegotiators genuinely support continued UK membership in the EU, pursuing both objectives concurrently is logical. Assuming an independent Scotland joins the EU, the proportion of UK trade with the EU would increase after Scottish independence.

This explains why those advocating for EU withdrawal might attempt to obstruct Scottish EU membership, either directly by withholding rUK consent or indirectly by fueling opposition from countries like Spain, which face their own regional independence movements. Should the UK leave the EU, it can no longer impede Scottish membership. However, in that scenario, Scottish enthusiasm for joining the EU might decrease, as it could potentially hinder trade with the remaining UK, depending on the terms of any EU/rUK free trade agreement.

Some English Eurosceptics might envision Scotland as the first country to sign a free trade agreement with an “independent” rUK. One can only imagine Alex Salmond’s reaction at such a signing ceremony.

Barnard & Peers: chapter 3