Thursday 25 May 2017

Scottish leader's brave stance on the folly of hard Brexit has done us all a big favour

Independence supporters gather in George Square Glasgow, after Scotland’s First Minister Nicola Sturgeon announced she will ask for permission to hold a second Scottish independence referendum. Photo: Jeff J Mitchell/Getty Images
Independence supporters gather in George Square Glasgow, after Scotland’s First Minister Nicola Sturgeon announced she will ask for permission to hold a second Scottish independence referendum. Photo: Jeff J Mitchell/Getty Images
Richard Curran

Richard Curran

Scotland's First Minister Nicola Sturgeon may have done all of us in Ireland a big favour by putting it up to Downing Street with a second independence referendum.

I don't believe a second referendum will result an independent Scotland, no more than Brexit will lead to a United Ireland. If anything, a hard Brexit makes it more difficult for Ireland to re-unite or for Scots to have the economic confidence to vote for independence.

However, by putting a possible break-up of the Union on the table with a referendum, Theresa May might tread a little more carefully in the EU talks over the next two years. It could contribute in some way towards a softening of her government's Brexit stance.

That would be good for Scotland and good for Ireland, the Republic and the North.

The economic case for an independent Scotland has been weakened by the Brexit vote. Many Scots, probably a majority, want an independent Scotland on cultural, historical and political grounds but the last referendum didn't pass because nationalists could not win the economic argument. Going it alone was seen as economically too risky for too many Scots.

After the Brexit vote, that argument has been strengthened. Oil prices have fallen dramatically since the last independence referendum, but more importantly, Scotland's economy could be crippled if there was an economic border with England and Wales.

Exports from Scotland to the rest of the UK are worth around £48.5bn per year. Exports to the EU are worth less than a quarter of that at £11.6bn. Exports to the EU support around 250,000 jobs, while one million jobs are linked to Scotland's trade with the rest of the UK.

Just as we in Ireland are worried about tariffs to trade and hard borders with our exports to the UK, the problem would be magnified in the case of Scotland.

Then there is the question of currency. The nature of Scotland's currency position after independence was never fully resolved in the last campaign. Currency would have mattered less where an independent Scotland was sharing a single economic market with its neighbour across Hadrian's Wall.

If they no longer shared a single market, currency would be a major factor, unless and until Scotland joined the euro. But would they want it? 'Project Euro' is not a club many countries are falling over themselves to join at the moment.

It will be nearly impossible to convince a majority of Scots to make that financial leap into the unknown in an independence referendum.

However, even the possibility of losing that referendum will at the very least sharpen the minds of the British government and one would hope, inform the path it takes in its Brexit negotiations with Brussels.

At home there hasn't been so much talk of a united Ireland in decades. Fianna Fáil is even putting together a position paper on what form or structure it could take. The emotional pull of a united Ireland clearly remains very strong but it is hard to make the leap from a Brexit vote, to a majority of people in Northern Ireland and the Republic voting to re-unite the country.

The best way to bring about a united Ireland would surely be to make it as desirable as possible for as many people as possible through enhanced interaction, trade, communication, social and sporting links, cultural exchange and movement of people. Brexit makes those things more difficult, not easier.

Take the Northern Ireland economy. Total sales by companies in the North were estimated in 2015 to be worth £66.7bn. Of that, the vast majority, as you would expect, were sales in Northern Ireland, amounting to £43.7bn.

External sales to the Republic amounted to £3.4bn, while sales to the rest of the EU came in at £1.9bn. But sales to Britain from Northern firms amounted to £13.8bn in 2015. So, the economy is much more heavily skewed towards England, Scotland and Wales than it is in terms of trade southwards or even to the rest of the EU.

Of course, sales to Britain would continue but they could be greatly hampered if there were suddenly trade barriers, different sets of regulations and of course currency differences.

Then of course there is that minor matter of the level of public services in the North, which have been cut back in recent years, but nevertheless are funded through a £9bn annual subvention from London.

The North has run up a fiscal deficit every year since 1966. It peaked in 2010 at £11.5bn but reduced to £9.1bn in 2014. That is more than double what the Irish Government takes in USC every year.

Since the success of the peace process, there have been enormous benefits. The movement of goods and people freely across the Border has increased dramatically. Yet, much of that movement seems to have been from North to the Republic, more than the other way round, which might reflect the attitude of many people south of the Border towards the North.

In the last 20 years, Irish exports to the UK have grown by 100pc. But exports to Northern Ireland have grown by 54pc in the same period. Certainly Northern Ireland is a smaller population market for business but nevertheless the growth has not kept pace.

Back in 2002, Intertrade Ireland and the ESRI surveyed businesses on both sides of the Border. They found that a greater percentage of Northern-based firms (34pc) were exporting manufactured goods south, than the other way round.

But the closer businesses were to the Border, the more inclined they were to trade. A massive 67pc of businesses surveyed located less than 10 miles south of the Border were exporting to the North. The figure fell sharply to just 39pc when that broadened to a 60-mile radius.

Tens of thousands of people are crossing the Border every day for work. It is one of the great benefits of the peace process that this has been able to happen. But when it comes to tourism, an interesting picture emerges.

In 2000, northerners made 465,000 tourist trips south. Trips in the other direction were just 189,000.

In 2012, tourist visits from the North hit 1.2m, but visits up North were just 430,000. Trips in one direction nearly tripled in the 12 years, but only doubled when it came to people in the Republic heading up North.

The economic, political and diplomatic bridges that have been built between Dublin and London over several decades have yet to be fully realised when it comes to the North/South paradigm.

A hard Brexit will actually set back the long-term gradual consensual achievement of Irish nationalist goals. When it comes to talk of a United Ireland, there is a very, very long way to go.

A slow bicycle race between Brussels and London will begin when Theresa May triggers Article 50 within the next two weeks. At least there will be some time in which the British public might realise that its politicians cannot deliver on the economic promises of the Leave campaign. There will be a Brexit but we can only hope that it ends up being a lot softer than the early rhetoric of the post-referendum British government.

The old divisions in the North, and the DUP in particular, have paralysed the place from fully making its voice heard in that process.

But Nicola Sturgeon has at least found a way of making sure her point and that of most Scots, is heard.

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