What does the EU referendum mean for Scotland's place in the world?

EU referendum - Photo credit: iStock

With the vote over whether to remain in or leave the EU now upon us, the sounds of the 2014 independence referendum seem to echo through to the present.

The two votes may be quite different, but from the accusations of ‘project fear’ levelled at Remain to the claims of recklessness aimed at those campaigning for a Leave result, the sense this referendum has summoned up the ghosts of indyref arguments past – though paler and more distant – is uncanny.

What the vote means for Scotland and its place in the world is still hotly disputed, even if polls suggest a higher proportion back the Remain side north of the border than in the rest of the UK.

For the UK campaigns, a vote to leave the EU would either weaken the UK’s international clout, or free it up from unwanted restriction.

In Scotland, though, the campaign seems to have been quieter, and less fractious.

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In fact, the two official campaigns – Scotland Stronger in Europe and Scottish Vote Leave – have been at pains to try and learn lessons from the independence vote.

For a start, neither opted to mimic the cross-party campaigns constructed, somewhat precariously, in the fight over the UK’s future.

Kevin Pringle, director of communications for Scotland Stronger in Europe, says the campaign made a deliberate effort to do things differently

“We’re different in that Britain Stronger in Europe is clearly cross-party, and Scotland Stronger in Europe is non-party. There are a few reasons for that. First the fact that 2016 was so dominated by party politics up until May, for the Holyrood election, that there was limited appetite to have a formal cross-party organisation, and secondly, in the aftermath of the independence referendum there was limited interest in it anyway, even if there hadn’t been elections this year.

“The reality was there wasn’t going to be a genuine cross-party campaign so we took the view that it was better to make a virtue of that and have a non-party campaign. And anyway, the parties are all doing their own campaigns.”

He adds: “We want to appeal across the spectrum, and across the debate about Scotland’s constitutional future, on the basis that if you go back to the independence referendum, both sides, yes and no, were from very different perspectives, but they both focused on the importance of Scotland remaining in the EU.”

The arguments, too, are different. While the UK Leave campaign has sought to capitalise on concerns over EU immigration – most recently pointing to Turkish migrants as a potential threat to British jobs – north of the border the campaign has taken on a more Scottish accent.

Focusing on recent demands for greater devolution to Scotland, the Scottish Vote Leave campaign argues that a Brexit would bring new powers over areas like fishing and farming to the Scottish Parliament. If a power is not specifically mentioned in the list of reserved powers in the Scotland Act, the campaign argues, then it would be transferred by default to Holyrood. Vote Leave, they say, and Scotland will become more powerful.

Former Labour MP Tom Harris is campaign director of the Scottish Vote Leave campaign. He told Holyrood: “If you vote to remain and we still leave, then even as you are sobbing into your handkerchief, those new powers for the Scottish Parliament must be devolved, and will be devolved to Scotland by default. So there is a genuine opportunity there for the fishing industry to completely transform and rejuvenate it. The extra powers have focused largely on the fishing industry, but there are others, including agriculture, which would see less change but it would still be an important one. There would be some environmental powers too.

“It is quite difficult if you are a nationalist or an arch-devolutionist, if you genuinely believe that more powers are a good thing of themselves, to then argue that Scotland shouldn’t get more powers,” he says.

Harris adds: “Another argument, which you have to use with some sensitivity, is the situation with EU students getting free tuition. So what we are pointing out is that we spend £80 million per year giving free tuition to EU students and outside the EU we could choose to continue that situation, but if we chose not to fund free tuition for EU students, that is an £80 million immediate saving.

“Then if you chose to charge EU students what regular oversees students already pay, you could make another £120 million a year. So that is a £200 million windfall for universities once we leave the EU, if that’s what ministers chose to do.”

Scotland Stronger in Europe too has put a more Scottish focus on arguments, with the Remain camp seeking to highlight the environmental rights and workplace protections brought by EU membership.

As Pringle puts it: “Our message is very much that, if you value the sorts of protections we get at European level, if you value the rights you get from the EU, particularly rights in the workplace and environmental improvements, then the only way to safeguard them is to vote for them.

“So we are saying the vote on the 23rd of June is really a vote to protect our rights in the workplace, the improvements that benefited our environment – our water, our air, our beaches – our access to the single market, our freedom to travel. These are our rights; they are not coming from somewhere else. Elections will come round again but this is not the time to get voter fatigue because this issue only comes round once.”

Implicit in this argument is the idea that a Brexit would mean leaving these benefits – things like workers’ rights and environmental protections – in the hands of a Conservative Government. Is there a danger that leaving, and putting those rights in the hands of the Tories, would put them at risk?

Not according to Harris. “Absolutely not at all. First of all, the UK within the EU is one of the least regulated workplaces in the EU. This idea that there is the same level of regulation all over the EU is absolutely not true. It is not a boast but there is less regulation in the UK than in most other EU countries. So we are already at the level where it doesn’t cause too much concern to bosses.

“The second thing is that all of the major improvements that have been made in the working environment for working people have come at a UK level, not from the EU. The EU didn’t legislate on a national minimum wage, and it certainly didn’t legislate on the living wage. The protection against discrimination on the grounds of sex and race were decided by the UK parliament before we went into the EU.

“They say it’ll be in the hands of the Tories, and certain people on my side of the campaign have been making unhelpful comments, but the fact is the Tories do want to get re-elected. There aren’t that many Tory MPs putting out leaflets saying ‘vote Tory, get rid of workers’ rights’. Maternity leave could have been cut already by the Tories if they wanted to. The Tories could have cut the minimum wage but instead they increased it, and then introduced the living wage. Now this isn’t a case of saying ‘vote Tory’, but political reality kicks in at some point and if you want to get elected, you don’t start mucking about with people’s workplace rights.”

Meanwhile some of the wider UK arguments, namely, the economics of the debate, still apply to Scotland. One inescapable point has been the effect leaving the EU single market would have on Scotland’s international trade.

Currently, the country performs well. In 2015 Scotland retained its position as the most attractive place in the UK, apart from London, for generating Foreign Direct Investment (FDI), according to the most recent EY report. The level has been steadily increasing. In 2005, 5.9 per cent of UK FDI went to Scotland. Ten years later, the most recent figures showed that proportion had risen to 11.2 per cent.

EY found Edinburgh, Glasgow and Aberdeen scored in the top ten for UK cities. Edinburgh almost trebled the number of FDI projects, whilst Glasgow’s more than doubled. But critically, the highest level of investment came from the US, followed by France, Germany, Norway and Canada.

The question then is whether leaving the EU would put that position in jeopardy. Treasury analysis suggests the shock from losing access would mean 520,000-820,000 more people unemployed in two years, with a 6.2 per cent fall in UK GDP. It also suggests £250bn of UK trade would be at risk.

A report from the IFS, meanwhile, suggests that even the most optimistic forecasts following a Brexit would mean big falls in GDP.

The report, based on figures from the National Institute of Economic and Social Research, found that, although leaving the EU and halting the UK’s European budgetary contributions could directly free up about £8bn a year, the move would mean GDP in 2019 could be between 2.1 per cent and 3.5 per cent lower.

If national income was just 2.1 per cent lower in 2019 – the study’s most optimistic scenario – borrowing would be more than £20bn higher than currently planned. In that scenario, achieving the Government’s aim of creating a balanced budget by 2019-20 would mean the equivalent of an additional £5bn of cuts to public service spending, an additional £5bn of cuts to social security spending and a tax rise of more than £5bn.

The most pessimistic scenario – a 3.5 per cent fall in GDP following a Brexit – would mean a £40bn rise in borrowing.

Releasing the report, IFS director Paul Johnson said: “These are real costs, but they are costs we could choose to bear if it was felt that they – and other costs – were outweighed by advantages from Brexit in other realms.”

Harris rejects the idea that an EU exit would hurt Scotland’s trade.

“In the British context, 44 per cent of our trade goes to the single market, which is ten per cent less than it was ten years ago. It is the view of many economists that the EU will become a less important market for us in due course, but still an important one.

“From a Scottish perspective, we only export 15 per cent of our exports to the EU. We export 21 per cent of our goods to outside the EU – the biggest is America – and we export 64 per cent of our goods to the rest of the UK. So that 15 per cent we export to the EU is vitally important, and we will still continue to do that, I believe, when we leave the EU, but people have to get this in context. Only 5 per cent of firms export at all, to anywhere.”

He says: “For me, trade is a big draw. The Remain camp use it as a threat, they say if we leave the EU we will need to negotiate our own trade. But that is not a threat – that is the opportunity, that is why I am voting Leave.”

Economics aside, the international ties built up over centuries will not simply disappear. In Europe old relationships like the Auld Alliance with France, lasting 250-years, or newer ones, such as the ties built between Scotland and Malawi in recent decades, stand as testament to the bonds forged between Scotland and the rest of the world.

Justifying his plea for the UK to stay in the EU, Barack Obama had said “part of being friends is to be honest”, and yet clearly the links between Scotland and the US would remain, even following a vote to Leave. In fact with Donald Trump winning the Republican nomination the next US president could be the son of a woman from Lewis in the outer Hebrides.

And so whatever way the vote goes, there are some aspects which will not change. Scotland will still be in the same position it was, sitting somewhere on the northern edge of a continent it has always felt physically distant from, if closer to in terms of culture.

Clearly international considerations are at play, with Pringle pointing to history as a reason support for the EU has tended to be higher in Scotland.

He says: “If you look at the sweep of Scottish history then as a nation we have been more involved in European affairs, and European alliances, than tended to be the case south of the border. So over a long period of history, Scotland has had extensive involvement in European affairs and I think that is an underlying factor.”

Harris suggests more recent influences may be at play. “My own view is that partly, the obsession with leaving the EU has been identified, often rightly, as a Conservative Party obsession, going all the way back to Thatcher and Major. And I think that because the Tory party brand is, despite the recent election, still largely toxic, that has had an effect on the attitude towards the EU and Brexit.”

Whether lower levels of Euroscepticism in Scotland will carry through in the results remains to be seen. The referendum has not stirred up the same passion in Scotland as the independence vote, but while both relate to Scotland’s place globally, they are still fundamentally different questions.

The 2014 referendum related to more visceral feelings of identity, asking a simple question over the future of the state, while the EU referendum, in contrast, feels further away.

And so although for some, on the more extreme side of the Leave campaign, the decision seems to stir up memories of days past, with talk of the UK striking out on its own and reigniting Commonwealth relationships, in Scotland, the echoes which reverberate through the debate are much more recent.