From fishing to farm payments (and free migrant movement), the REAL cost of an EU Scotland revealed
Nicola Sturgeon is determined that Scotland will break away from the UK and take its place in the EU as an independent, member state. But what will this mean for Scotland? What are the rules, regulations, costs and structures that Scotland will have to abide by? HAmISH mACdONELL explains.
FREE MOVEMENT OF PEOPLE
most of Europe has signed up to the Schengen agreement which allows the free movement of people across borders without checks or border patrols.
The UK has a partial opt-out from the Schengen agreement but if Scotland were to join the EU without the UK it would almost certainly lose this British opt-out.
This would mean that Scotland might lose all control of its borders with the EU, that EU nationals could travel freely to Scotland – by air or sea – and not have to worry about having their identities checked.
The Schengen agreement has come under pressure recently from countries worried about their inability to check people crossing their borders. It is nevertheless a central part of the EU’s make-up and an independent Scotland would probably have to sign up to this.
What it would mean would be the construction of a ‘hard’ border between Scotland and England – one in the EU and one outside.
The Tweed would no longer become a historic border between two ancient countries on the same land mass but a real border with fences, border posts, customs officials and border guards.
THE EURO
The SNP’s plan for an independent Scotland to share the pound is now dead in the water: senior Nationalists have already acknowledged as much.
There are other options. Scotland could create its own currency and have that pegged to the pound, but this is unlikely given the difficulties this would cause with Europe.
Scotland could have its own currency and have that pegged to the euro, as denmark does, but this would mean joining the Exchange Rate mechanism and would be similar to joining the euro anyway.
As a result, the most logical option for an independent Scotland would be to join the euro, completely and wholeheartedly – as Ireland did.
This would see Scottish banknotes disappear, it would mean an end to the pound in Scotland and the adoption of a currency which has had massive problems over the past decade.
However, it would also mean an almost total surrender of monetary policy to Europe.
The 19 countries currently in the Eurozone have their interest rates set by the European Central Bank and they have also had to bail out countries which have run into difficulties.
If Scotland joined the Eurozone, it would be expected to do all that too.
FINANCIAL CONTRIBUTIONS
If Scotland remains in the EU, it will have to pay its way.
Every country in the union contributes to the EU coffers depending on its size, how well its economy is doing, its VAT receipts and any additional revenues it receives.
The UK has long been a net contributor to the EU but has also benefited from the famous ‘rebate’ secured by margaret Thatcher during the 1980s.
That rebate will disappear when the UK leaves the EU and Scotland would not get it back.
In 2013, the UK contributed £17 billion to the EU. So Scotland can expect to have to contribute about £1.5-£2 billion a year as the price of membership to the EU club: about the same as Ireland.
Scotland may get more than that back, depending on the health of the Scottish economy, but that money would have to be found first and handed over to Brussels before it became clear how much was returned in various ways to help jobs, industry, agriculture and development.
If the Scottish economy improves, then its contributions to the EU would go up. The overall aim of the union is to take money from those doing well to help those – particularly in Eastern Europe – who are not doing so well.
FISHING
Once the UK leaves the EU, it will take back control over fishing policy which is currently set by Brussels for the whole of the EU.
If Scotland were to remain inside the EU but outside the UK, it would have to abide by EU fishing rules and quotas – which limit the catches boats can land.
However, Scots would then be competing against English fishermen who would not have to abide by the same rules. If the English have more favourable rules, then the Scottish white fish fleet could simply disappear, with all fish being landed in English ports and simply transported north of the Border for sale.
With the Scottish and English fleets fishing the same waters at the moment under the same rules, there is a real danger that an advantage for the English could cause serious problems for what remains of the Scottish fleet.
The SNP has long argued that the EU’s Common Fisheries Policy needs to be reformed, but it is inconceivable that Brussels would let Scotland opt out from what is a core function of the union.
FARMING
At the moment, farming in the UK is dependent on the EU’s Common Agricultural Policy for its subsidies.
It is hugely expensive and the EU spends more than a third of its budget on agriculture.
However, if English farmers were released from the restrictions of the policy and had more freedom to grow what they liked, where they liked and were able to access better subsidies, this could have a hugely damaging effect on Scottish agriculture – if Scotland stayed in Europe.
Scottish farmers currently do well out of Europe but would find it difficult to cope if their neighbours over the Border were given a clear advantage by their government in London, with which they could not compete.
If Scotland stays in the EU then the subsidies will remain in place, but so will the rules. Farmers have to respect tough environmental, animal welfare and food safety regulations which England could relax for farmers south of the Border.
LAW
When the UK withdraws from the EU, it will not be withdrawing from European human rights legislation.
That is because the European Human Rights Treaty is a separate agreement, signed by a number of countries, some of which are in the EU and some of which are not.
So the existing framework for human rights will exist in Scotland and in the rest of the UK, even if Scotland becomes independent.
It would therefore still be possible for someone to complain about a potential violation of human rights in England or Scotland, whichever way Scotland goes in the future.
However, other legal matters are dealt with within the EU.
The Scottish Government’s proposals to introduce minimum alcohol pricing, for example, have bounced back and forward from various courts but have been hugely influenced by Europe, which has not allowed the plans to be implemented.
This part of the legal framework, involving the European Court of Justice, would still act as an arbiter of such disputes so any future Scottish governments would be bound by it, as the SNP administration is now.
TRADE
If Scotland remains part of the EU and the rest of the UK is outside, there may well be different trade agreements and tariffs in place for companies on either side of the Border.
Scottish companies would benefit from being able to sell, unhindered, to the single market of 28 member states.
They would also be able to use all the international trade agreements the EU has negotiated with countries and blocs outside the EU, from the United States to China.
However, Scottish companies would also have to abide by the strict product standards insisted upon throughout the EU, which means that everything sold in the EU has to adhere to rules on everything from packaging to the way the instructions are written.
Companies in the rest of the UK would lose these restrictions and they may get to benefit from better deals with the rest of the world.
But there is also a danger that the rest of the UK will not be able to negotiate deals as favourable as the EU has done, placing new tariffs and barriers in the way of UK exports.
Either way, there are likely to be different trade regimes in place north and south of the Border, which might mean some problems for those hundreds of Scottish companies which currently export to England, including everything from smoked salmon to steel plates.
The remaining parts of the UK would have to negotiate a new trade deal with the EU – and that would include Scotland.