Building a New Scotland: an independent Scotland in the EU

On the outside: Scotland’s relationship with the EU

Key points

The majority of people in Scotland, the Scottish Parliament and the Scottish Government never wanted to leave the EU. After the Brexit referendum, the Westminster government ignored their views and made a deliberate policy choice to seek a ‘hard Brexit’.

Scotland has lost out economically, socially, politically and culturally as a consequence.

Consumers are having to pay higher prices for food, exacerbating the cost-of-living crisis.

Brexit has reduced the UK’s ability to influence many policies which impact Scotland’s economic and social prospects and affect its businesses.

As a nation within a non-EU state, Scotland’s influence on global issues has been significantly diminished since Brexit.

Rather than choosing a close and cooperative relationship, the Westminster government negotiated an agreement with the EU that has raised barriers to trade, added bureaucracy and increased costs for businesses.

Opportunities for our citizens to live, travel, study, visit and do business in the EU are narrower, with poorer prospects for us all.

We are no longer part of the world’s largest single market and have lost access to the EU’s multiple favourable trade deals with other countries.

Some victims of crime might find justice harder to achieve now the UK has left the EU. This is because several member states will no longer surrender their nationals to face justice in Scotland.

Even where it is in Scotland’s best interests – and should be a choice for the Scottish Parliament – to align closely to EU regulations on issues such as environmental protection, Westminster legislation is undermining the Scottish Parliament’s ability to do so.

Independence offers Scotland the chance to reverse these losses, and to do so with the promise of our voice being part of the decision-making process. Independence is the only way to guarantee that Scotland can avoid a race to the bottom in standards.

The Westminster government’s determination to distance itself from the EU ignored the views of the people of Scotland,^[62] disregarded Scottish interests, and has been hugely detrimental to Scotland.^[63] In many areas a different approach could, to some extent, mitigate the damage – for example by seeking a veterinary agreement which could improve market access for Scotland’s farmers, or collaborating with the EU so that Scotland’s musicians and other artists could travel and perform.

But rather than choosing a close and cooperative relationship with our nearest neighbours, the Westminster government made a deliberate policy choice to negotiate a distant relationship with the EU, which pales in comparison to the benefits of EU membership.

The EU plays a critical role in shaping legislation and regulatory standards that affect businesses across the world. Yet by leaving the EU, the UK has lost its seat at decision-making tables and removed itself from influencing circles (see below). In the words of Bobby McDonagh, a former Irish Ambassador to the UK:

Europe will be the poorer for the loss of British influence. But Britain itself will be diminished even more. It is important that our British friends understand the influence they once had in Europe so that they also know what they are giving up.^[64]

Because the Westminster government chose to distance themselves from the EU, the UK’s ability to influence many European and international policies which impact directly on Scotland’s future economic and social prospects has in effect disappeared. With no UK ministers attending European Council meetings, important decisions that impact directly on Scotland are being taken without our voice being heard. Equally we no longer have representatives from Scotland in the European Parliament.

The UK no longer has any say on the content of the EU’s bilateral agreements with other countries and regions, let alone access to their benefits. The importance of the European single market and the experience and expertise of the EU make it a far stronger trade negotiator than the UK can ever be. This is demonstrated by the UK’s failure to secure a good deal for itself in the Brexit negotiations,^[65] and the better terms the EU secured in its Free Trade Agreement (FTA) with New Zealand as compared to the UK-New Zealand FTA.^[66] The Scottish Government has also expressed its concern that the UK-Australia FTA will facilitate the mass import of Australian agri-food produced to lower production standards.^[67] By re-joining the EU Scotland will be able to benefit from the negotiating strength of the EU in relation to market access and production standards.

The UK and Scotland are now outside key aspects of the EU’s sophisticated system of cross- border cooperation, and unable to shape and influence the future direction of how Europe will combat international criminality to make EU law enforcement cooperation work for our interests. People in Scotland are inevitably less safe as a result.^[68]

Many EU regulatory requirements effectively become global standards. This is known as the ‘Brussels Effect’.^[69] Indeed Westminster’s recent decision to recognise, indefinitely, the EU’s CE (Conformité européenne) mark for some goods placed on the UK market, which is used to certify that certain goods meet appropriate health, safety and environmental requirements, is a clear demonstration of the importance of EU regulations and standards.^[70] Losing the ability to influence development of these global benchmarks (for example on data protection, safety and environment) has implications reaching far beyond the EU market. The EU’s approach is of particular importance to the chemicals and manufacturing sectors in Scotland, which are highly integrated in EU supply chains with products moving back and forth many times between Scotland and other EU countries. We now have no opportunity to influence the development of these requirements.

Leaving the EU has also substantially reduced the influence the UK has on improving standards to protect the rights, safety and interests of workers and families without stifling labour markets or undermining economic competitiveness. Being outside the EU also leaves Westminster free to reduce those protections in Scotland.

The UK’s role in shaping how EU financial support is targeted, including support for research and innovation, is lost. This will be compounded by our reduced participation in collaborative networks, with fewer opportunities to share expertise and data, fewer student and staff exchanges and lost access to EU funding.

The UK is also no longer able to contribute to the EU’s approach to global challenges and the Sustainable Development Goals or to rely on the collective weight of the EU in international negotiations and disputes.

The UK-EU relationship: what Scotland has lost

The basic reality of Brexit is that the relationship between the UK and EU, governed by the Withdrawal Agreement and the Trade and Cooperation Agreement, is no substitute for EU membership. The UK’s hard Brexit has introduced a range of new frictions and barriers^[71] and ended freedom of movement.^[72] It also fails to make good on the promises made in the run up to the Brexit referendum.^[73]

Whilst the conclusion of negotiations on the Windsor Framework is a long-overdue and sensible step towards an improved UK-EU relationship, Scotland has already suffered from Westminster’s approach to Brexit.^[74] And even when fully implemented, the Windsor Framework leaves Scotland firmly outside the EU market.

Instead of benefitting from free, unfettered trade in goods and services with the whole of the EU, the UK’s trade performance post-Brexit has suffered badly, as new barriers have taken effect.^[75] Scottish Government modelling shows that the value of Scotland’s total trade in goods with the EU (imports plus exports) was 12% lower in 2021 than it otherwise would have been under continued EU membership.^[76] Much of this decline is driven by a reduction in EU imports. The food and drink sector in Scotland and the UK has been constrained by the hard Brexit pursued by the Westminster government, particularly through the loss of free movement and free trade.^[77]

The Trade and Cooperation Agreement has resulted in additional costs for businesses and contributed to less choice and higher prices for the food we buy. A report published by the London School of Economics highlighted that post-Brexit trade barriers drove one third of the increase in food prices between December 2019 and March 2023, raising food price inflation by eight percentage points.^[78] These higher food prices are hitting the poorest families in Scotland the hardest as they spend a higher share of their income on essentials,^[79] exacerbating the cost- of-living crisis.

Scottish workers have lost income. Modelling by the Resolution Foundation shows that the loss in earnings will be equivalent to real wages falling by 1.8% over the next decade, a loss of £470 per worker every year.^[80] John Springford, deputy director at the Centre for European Reform, estimates that a full-time worker with average earnings will be about £1,300 worse off a year as a result of Brexit.^[81]

Scotland has lost access to the EU’s network of highly favourable trading relationships across the world. Although the Westminster government has rolled over the majority of the EU’s existing deals with other countries, new agreements are unlikely to generate any significant positive impacts on the Scottish (and the UK) economy as a whole. For example, UK Government modelling of the UK-Australia and UK-New Zealand trade deals project that they will increase UK GDP by just 0.08% and 0.03% respectively in the long run,^[82] while the Office for Budget Responsibility estimates that Brexit will reduce long-run productivity by 4% compared with remaining in the EU.^[83]

Scottish businesses have lost the freedom to trade without customs or border checks for goods destined for the EU market. Businesses are now subject to costly trade barriers.^[84] Seafood often takes longer to get to market and fresh produce fetches a lower price or loses value entirely due to delays.^[85] In some cases, businesses have said that exporting to the EU is simply no longer viable.^[86] In other cases, such as Scottish seed potatoes, specific Scottish products are no longer able to be exported into the EU.^[87] Supply chains are being disrupted by bureaucracy inflicted by the Westminster government’s decision to withdraw from the European single market and customs union.^[88]

Scotland’s service sector has lost market access. Services are an important part of Scotland’s economy, with service exports to the EU totalling £5.5 billion in 2019.^[89] Brexit has increased barriers to exporting services and resulted in the loss of market access. The financial and business services sector, one of the biggest sectoral contributors to Scotland’s economy,^[90] has lost ‘passporting rights’ which enable EU businesses to provide their financial services across the EU. UK exports of financial services to the EU have underperformed since Brexit.^[91] UK imports of services from the EU have also underperformed by as much as 30%.^[92] Since the EU referendum, 24 UK firms have declared they will transfer over £1.3 trillion of UK assets to the EU risking the loss of talent, investment and growth.^[93]

Scotland has lost mutual recognition of professional qualifications with the EU, which previously allowed both manufacturing and services firms in Scotland to offer their services throughout the EU within a common set of rules. Scottish professional qualifications are no longer automatically recognised in the EU and professionals, such as architects,^[94] need to apply to have their qualifications recognised in every member state where they intend to work.^[95] This adds to the costs of Scottish businesses.^[96] It also affects the ability of Scottish firms to source professional services from the EU.^[97]

People in Scotland have lost the right to move freely in the EU for work and leisure. Additional controls, conditions and documents are required to make simple business trips, receive medical care abroad or study at a European university. The increased cost and administrative burdens associated with touring have already put working in the EU beyond the reach of many of Scotland’s artists.^[98] Academic staff and research students have also been affected by the loss of free movement and decreased mobility between Scottish and EU institutions.^[99] Even holiday visits will soon require electronic pre-travel authorisation requirements^[100] and the impact of the requirement for enhanced passport checks was apparent in the miles of family cars queuing to board ferries at Dover.^[101] The opportunities lost and the costs incurred by this additional bureaucracy will only grow over time.

Leaving the EU has impacted heavily on the workforce in sectors such as agriculture, fisheries, food manufacturing, social care, haulage and hospitality amongst others.^[102] For example data from the Business Insights and Conditions Survey indicated that in August 2023, 34.4% of businesses with over 10 employees faced recruitment difficulties, with 41.1% of affected businesses in Accommodation & Food Services citing fewer EU applicants as a factor as of June 2023.^[103] Official population projections produced by National Records of Scotland and the Office for National Statistics in January 2023 show both that Scotland’s population is projected to begin to decline in the next decade, and that Scotland is the only nation of the UK where population is projected to decline over the next 25 years.^[104]

Free movement helped address the demographic challenge Scotland faces.^[105] As set out in ‘Building a New Scotland: Citizenship in an independent Scotland’,^[106] by re-joining the EU Scottish citizens will regain the benefits of free movement. EU citizens living in Scotland bring skills and expertise to the workforce. They contribute to the delivery and funding of public services, enrich social and cultural life, and help to sustain diverse and vibrant communities the length and breadth of Scotland.^[107] The end of free movement, and the imposition of restrictive immigration rules on EU citizens have put all of this at risk.^[108]

Scotland has lost out on access to the Erasmus+ programme.^[109] Membership of the EU transformed the lives of thousands of our students, schoolchildren, teachers, adult learners and young people through participation in Erasmus+.^[110] Through Erasmus+, students, staff and young people outside traditional education pathways get to experience other cultures and life abroad, improve their language and soft skills, expand their social networks, improve their career opportunities and enhance their personal development. Participating in an Erasmus+ exchange also increases people’s employability.^[111] This is most pronounced for participants coming from the most deprived areas and those furthest removed from traditional education.

Erasmus+ participants get to study or participate in vocational training and professional development in other countries in the EU and worldwide, travel, volunteer and create strategic partnerships, share ideas and best practice. Erasmus+ also provides support for individuals from disadvantaged socio-economic backgrounds to travel and study abroad, an opportunity which they might not otherwise have. Erasmus+ removes barriers and encourages diversity and contributed to our economy, culture and environment. It was not just participants from Scotland who benefited from Erasmus+; proportionally more participants from the rest of Europe came to Scotland than anywhere else in the UK in return.^[112]

In 2020, Scottish organisations received €27.8 million in Erasmus+ grants (around £24.2 million,^[113] and equal to 12.2% of the UK’s total share). In 2022 to 2023 Scotland secured just £9 million from the Westminster government’s Turing Scheme alternative (an 8.5% share). The Erasmus+ budget is €26.2 billion from 2021 to 2027.^[114] The Westminster government’s Turing Scheme is currently funded at £110 million per year.^[115]

Unlike Erasmus+, Turing offers no funding for young people to come to Scotland. Nor does it provide support for inward or outward staff mobilities, adult education or youth work or sports sectors, and no support for strategic partnerships which help to build relationships with partners in Europe. Support for our colleges, schools, vocational education and training sectors has been significantly reduced.^[116] In doing this the Westminster government has taken away opportunities that EU membership provided our learners. In doing so it has reinforced pre-existing inequalities within sectors excluded from the Turing Scheme.^[117]

Scotland has lost out on access to almost three years of the Horizon Europe programme, damaging the reputation and competitiveness of our colleges and universities.^[118] The scope, scale and prestige of the European Research & Innovation Framework programme, Horizon Europe, is globally unparalleled yet the Westminster government has taken two and half years to recognise the value of participation.^[119] Before Brexit Scotland benefited greatly and performed extremely well in Horizon initiatives: Scotland received funding of approximately €870 million^[120] from Horizon 2020 over the period of 2014 to 2020 (based on a budget of €79 billion for Horizon 2020, which covered 2014 to 2020).^[121] The Horizon Europe programme budget for 2021 to 2027 is €95.5 billion.^[122] Rather than the peripheral role in decision making that comes with the UK’s associate membership, EU membership would give Scotland the opportunity to be directly represented and actively participate in the European Council and European Parliament meetings which decide the overarching rules for Horizon Europe and have a formal vote in the Horizon Europe programme committees which decide the priorities for the calls for proposals.

Scotland has lost out on access to EU structural funds. Scotland benefited from these to the tune of €941 million from 2014 to 2020.^[123] Although UK ministers pledged that the replacement UK Shared Prosperity Fund would at least match the size of EU Structural Funds, the Westminster government is only allocating £212 million to Scotland until March 2025.^[124] This falls far short of the EU funding.

Scotland has lost out on investment. Leaving the EU has already had a negative impact on investment to the UK and Scottish economies.^[125] For example, a study by Springford (2022) estimates that the combination of the 2016 referendum and Brexit has reduced investment by 11% and GDP by 5.5%.^[126] The Bank of England has also attributed slow business investment growth since 2016 to the impact of Brexit, with the British Chambers of Commerce highlighting that the UK economy remains very weak.^[127]

But the impact of loss of EU membership is not only economic. Scotland has lost out on access to one of the world’s most developed and integrated international justice and crime-fighting ecosystems. For example, the loss of the European Arrest Warrant means many EU member states will no longer surrender their nationals to face justice in Scotland. As a result, some victims of crime in Scotland may have to travel abroad and take part in foreign criminal proceedings in the hope of obtaining justice. Others may not see justice done at all.

And Scotland has lost out on access to real time Europe-wide alerts and notices about wanted or missing persons through the EU’s Schengen Information System. Police Scotland has instead to use slower, less effective systems to check if people are wanted in the EU for serious crime.^[128] Re-joining the EU would allow Scotland to take full advantage of EU law enforcement cooperation and technology to keep Scotland safer.

Where does this leave Scotland?

As covered in ‘Building a New Scotland: Renewing democracy through independence’^[129] the United Kingdom is a voluntary union of countries. Scotland is not a region of a unitary state, but a nation. Independence provides the opportunity for a better relationship with the UK on the basis of an equal partnership. It also provides the opportunity to return to EU membership.

Rather than benefitting from, and contributing to, the world’s largest single market, Scotland has been relegated to the side-lines by the Westminster government’s negotiation of a much-reduced relationship with the EU. Instead of free movement of goods, services, people and capital, we are being subjected to a trade agreement that has increased barriers to trade and added bureaucracy.^[130]

Even where it is in Scotland’s best interests – and should be a choice for the Scottish Parliament – to align closely to the EU, decisions made in Scotland in areas of devolved responsibility can be undermined by Westminster legislation, passed in clear breach of the Sewel convention. This convention is supposed to provide a non-legal safeguard for the devolved institutions,^[131] as set out in Box 3 below, yet the Westminster government has proceeded with legislation, having been refused the consent of the Scottish Parliament, on 11 occasions since 1999.^[132]

Box 3: The Sewel Convention

The Sewel Convention is a constitutional convention that describes how the UK Parliament will act when legislating on devolved matters (matters within the competence of the Scottish Parliament, Senedd Cymru/Welsh Parliament or the Northern Ireland Assembly), or changes to the powers and responsibilities of the devolved institutions.

Under the Sewel Convention, the UK Parliament will “not normally legislate with regard to devolved matters in Scotland without the consent of the Scottish Parliament.”

The Sewel Convention was observed from 1999. Although the Scotland Act 1998 was amended in 2016 to mention the convention, in 2017 the UK Supreme Court ruled that that this did not convert the Convention into a judicially enforceable or legally binding rule, but rather that it remained only a ‘political convention’ which the Westminster government could set aside without the risk of legal challenge or any binding sanction or remedy.

See Cabinet Office (2011) Devolution Guidance Note 10

As shown above, the Trade and Cooperation Agreement is no substitute for EU membership. Moreover, the UK Government’s Retained EU Law (Revocation and Reform) Act 2023^[133] is designed to enable deregulation and divergence from EU laws. This:

• risks a race to the bottom in standards, potentially removing 47 years’ worth of progress on environmental protection, workers’ rights, food safety, animal welfare, consumer protection and much else
• risks increasing barriers to trade by distorting the level playing field on which the Trade and Cooperation Agreement is based
• applies to devolved matters in Scotland, despite the clear desire of the Scottish Parliament to maintain EU standards
• further undermines devolution as it was passed without the agreement of the Scottish Parliament

Brexit has severely reduced the opportunities for Scotland to collaborate with European partners on cross-border challenges. For countries outwith the EU, neither national nor sub-national governments have formal locus to influence EU laws and policies. Even if the Westminster government were to listen to, and fully represent, the views of the people of Scotland, we would have substantially less opportunity to contribute to global and societal challenges such as climate change and a healthy marine environment, to influence international human rights and equality policies, or to shape food standards in one of our largest markets, alongside many other things.

As shown above, the Westminster government’s decision to ignore the views of the majority of people in Scotland and take an ideological approach to leaving the EU has resulted in Scotland losing out economically, socially, politically and culturally.^[134] Independence offers Scotland not only the chance to recoup these losses, but to do so with the promise of our voice being heard in the future. Independence is the only way to guarantee that Scotland can avoid a race to the bottom in standards – which is an approach the Westminster government appears to be taking.^[135]