In putting the EU first, Sturgeon has chosen the wrong horse

In putting the EU first, Sturgeon has chosen the wrong horse

by Brian Monteith
article from Tuesday 6, September, 2016

WHAT IS HAPPENING following the vote by 17.4 million people in favour of the UK leaving the European Union? How will the negotiations take shape and what are the implications for Scotland? The following thoughts formed the basis of my talk at the Festival of Politics, held at the Scottish Parliament on Saturday 20th September.

There are essentially two negotiating positions evolving; the first is to spend an inexorable amount of time analysing all of the complexities and consulting on what the responses to them should or should not be. The argument goes that the UK would not rush into anything in the belief that a considered approach will provide the best deal possible.

This position leads to all manner of obstacles being suggested that might delay the arrival of Brexit, from the German and French elections next year, to the actual legal process in the UK and the possibility that the Scottish Parliament, the Lords and even the Commons could and should vote against the will of the people. Another suggestion is the need for the EU Commission to take at least three months to consider and then answer the UK’s position before negotiations begin in earnest.

A week does not pass without a further interminable delay being proffered that could prevent the triggering of the Article 50 mechanism to leave until late 2017.

Unsurprisingly this is the position most favoured by remainers that have not accepted the referendum outcome and hope to frustrate Brexit so that it never happens, or becomes meaningless by failing to deliver what can be described as Brexit.

Their strategy is to delay “B-Day” any until late into 2019 so that it becomes the focus of the general election due in June 2020, forcing Brexit to be suspended until after those parliamentary elections. There are many in the Labour Party in particular that hope that they could then defeat the Conservative Government on anti-Brexit sentiment.

The second position is to recognise that “No deal is better than a bad deal” and that all that is required for “Leave to mean Leave” is for us our government to identify the goals it aspires to and what its non-negotiables are – then trigger Article 50.  No later than the end of Q1 2017, preferably sooner, should be enough time for that process to be completed.

The UK can then offer a deal based upon our current position of zero tariffs that allows EU members to enjoy their larger trading surplus in return for us ending freedom of movement of labour. This would mean B-Day would happen at the beginning of 2019 – well before any general election momentum builds up.

If the resulting two-year long negotiations look likely to become prolonged or fail to meet the Government’s red lines – such as passporting is covered under the new Mifid 2 equivalence regime ­– the UK can announce it is simply walking away from any trade deal and will operate under World Trade Organisation rules. The EU would see its exporters suffer the greatest, making an eventual deal very likely.

Concurrent with that position Free Trade Agreements would be negotiated informally. At the last count there were over twenty nations that had signalled an interest in agreeing an FTA, if there’s a problem it is in consummating the deals in time rather than finding willing partners. On the morning the UK leaves the EU – 2 years plus 1 day – we would celebrate our global Britain FTA signing day.

It is between those two outline positions that the UK Cabinet will have to decide. The question of denying free movement of Labour with EU states will non-negotiable, payments for membership and in support of programmes such as the CAP and CFP will be ended and the UK will operate outside the EU customs union external tariff barrier. Access to the single market will be at least on the same basis as the US, China and Japan, so we can trade freely without tariffs with the developing nations that are desperate for our business.

These two likely scenarios provide the parameters within which any response of the Scottish Government must operate. For the SNP to try and create a different scenario by grandstanding in the ante-rooms of Europe without a locus in the real negotiations and outside the scope of the Scotland Act is to put party before country.  Scotland cannot be a member of the EU so long as it is a member of the UK and the UK has left the EU.

The reason I say this is simple; the EU will only deal with the UK and will only consider an application for Scottish membership of the EU once Scotland is independent but following the UK’s departure. The order has to be Scotland either leaves the UK before the UK leaves the EU – and has to then wait for the UK to leave the EU before applying to join – or the UK leaves the EU, Scotland then leaves the UK and then applies to join the EU. A number of countries such as Spain and France have made it plain that concurrent negotiations with the UK and Scotland (independent or not) will simply not be tolerated.

The first scenario of a second indyref before 2020 is highly unlikely because the SNP leadership fears losing – and the polls suggest this would be the outcome. In addition a second indyref before Brexit would be highly problematic as what Brexit will actually mean will not be known and what EU membership for Scotland will mean cannot be known. Using Brexit as a pretext for independence would therefore be highly risky.

So, for Scotland the priority should be how can we maximise the opportunity that Brexit presents us with irrespective of whether we are unionist or nationalist – in other words for everyone. The possible benefits were outlined in the paper Democratic, Prosperous and Free that I authored for during the referendum, based upon the division of reserved and non-reserved responsibilities laid out in the Scotland Act.

Initiatives that could be taken include establishing Scottish government teams to focus on: a) the detailed changes in UK spending that could and should bring over a billion for Holyrood to disburse as it sees fit; b) the confirmation of which competencies will be devolved to Scotland; c) which trade deals will be most important to Scotland and require our input; and, d) what regulatory changes will be possible after Brexit that could allow particular Scottish policies to be introduced.

Such teams should be identifying the Barnett consequentials that will follow Brexit – and the value of budget funds, such as CAP and CFP financial support that will come to Holyrood.

The Scottish Government should be lobbying at Westminster – not Brussels – for the Scotland Act to be followed and for devolution of agriculture, fisheries, and aspects of employment law, industrial strategy, environment, energy and higher education to be further devolved as already allowed for.

While pressing for further devolution the Scottish civil service should be formulating detailed plans on how to manage agriculture and fisheries, and researching what new powers in employment law, higher education, environment and energy will mean and can make possible. Discussions between Scottish and UK officials should begin in Whitehall to explore the beneficial opportunities that could be exploited, such as which Free Trade Agreements (FTAs) should be prioritised to help Scottish commerce. For instance an FTA with India that could remove its 150% tariff on whisky – or with North America to open up financial services – such deals could be prioritised ahead of FTAs with other countries.

Of course none of this is yet happening, as the Scottish Government focus is on using the Brexit vote to generate enough sense of grievance to justify a second independence referendum.   Furthermore, the EU-supporting SNP leadership cannot admit to any positives that might come out of Brexit for they would have to be given up if an independent Scotland were then join the EU, an outcome that would undoubtedly make the case for independence less popular.

Nicola Sturgeon has let her enthusiasm for the EU get the better of her. She has chosen the wrong horse. At some point within the next six months the Scottish Government shall have to face up to the reality that the UK is leaving the EU and has a choice between forcing a second independence referendum or getting the best Brexit deal for Scotland. My money is on it choosing the latter.

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