Full English Brexit

In 1705 the English parliament passed the Alien Act. This penalised Scottish trade with England, and included a trade embargo that impacted about half of Scotland's trade at the time, since around around half of Scotland's trade was with England and her colonies (which at that time included colonies in North America and the Caribbean), while the other half was with Europe (which was unaffected). The act allowed for the suspension of its provisions should Scotland enter into negotiations for a union of the parliaments of Scotland and England. It was therefore one of the main inducements for the Treaty of Union that led to the Acts of Union of 1707, resulting in the formation of a single trading bloc, the United Kingdom.

Why is this relevant today? Our trading relationships with Europe and England are once more up for discussion as a result of Brexit. Ever since the 24th of June, Nicola Sturgeon and the Scottish Government have been leaving no stone unturned in an attempt to "square the circle" and explore every option that preserves Scotland's interests in the Brexit negotiations and respects the choice of the Scottish people to remain in Europe short of Independence.

For example, the possibility of Scotland having a separate relationship with Europe to the rest of the UK, sometimes referred to as the "reverse Greenland" option (while being a Danish possession, Greenland is not a member of the EU while Denmark is), or other arrangements that allow Scotland to remain in the Single Market (the EEA) through membership of EFTA (like Norway and Iceland), while following the rest of the UK out of the EU, have been discussed.

However, it is reported today that the Chancellor of the Exchequer, Philip Hammond, has ruled out a separate arrangement for Scotland. There will be a single UK-wide negotiating position. Nicola Sturgeon is to accept "the will of the people," by which he presumably means the British, rather than the Scottish, people, in principle, which is the will of the English in practice, as starkly illustrated by the outcome of the referendum on the 23rd of June.

We are no longer being told to "eat your cereal." Now the cereal has been replaced by a full English breakfast.

Hammond points out that Scotland currently exports four times as much to the UK as it does to the rest of Europe, and claims being outside the UK’s arrangement with the EU would “be a disadvantage overall to Scotland”.

But this is a gross and deliberate distortion that defies logic. When you consider the options, there is no scenario that places Scotland at a disadvantage with respect to its trade with England, and only scenarios that place Scotland at a disadvantage with respect to its trade with Europe:

(1) Trivially, if no separate arrangement is made for Scotland to remain within the Single Market, and Scotland remains instead within the UK as a distinct trading bloc, Scotland's position in relation to trade with England remains unchanged (although her position in relation to trade with Europe is changed). This is the UK-wide approach favoured by Hammond.

Otherwise, if Scotland is allowed either a (2) separate arrangement enabling it to be a member of EFTA while remaining within a UK that has left the EU, or indeed (3) retains full EU membership by the simple expedient of Independence, then the trading relationship Scotland will have with England will be the exactly the same as the trading relationship of the rest of EEA with England. There would be no tariffs applied to Scottish imports to England that are not also applied to imports from everywhere else. There would be no competitive disadvantage in relation to Scottish exports to England. There would only be the competitive advantage that Scottish exports to Europe would have over English exports to Europe.

Indeed, given most of Scotland's current imports to England are subsequently exported on anyway (e.g. Scotch whisky, which comprises fully one quarter of total UK food and drink exports, having first been imported to England from Scotland), options (2) and (3) provide an opportunity for Scotland to avoid the penalising tariffs that will be imposed on the basis of option (1) by directly exporting to the destination market instead.

So option (1) disadvantages Scotland with respect to Europe, but not the rest of the UK. Options (2) and (3) do not disadvantage Scotland with respect to Europe, nor the rest of the UK. But options (2) and (3) potentially offer Scotland advantages not available to the rest of the UK. Therefore Hammond prefers (1).

He justifies this position by suggesting that in fact options (2) or (3) would disadvantage Scotland with respect to England. There is only one scenario in which this would be the case.

(4) Scotland would only be at a disadvantage if the rest of the UK made different arrangements for trade with Scotland than with the rest of Europe. Scotland would have to be singled out, to be treated differently to Ireland, for example. In effect, England would have to punish Scotland, to apply some sort of special, differential penalty to Scotland relative to everyone else, for Scotland to be placed at a disadvantage.

What would be required is a new Alien Act.

So when Hammond claims Scotland would be at a disadvantage, he must be asked how? On what basis? What is the mechanism for this disadvantage? How would Scottish trade be affected differently from trade with anywhere else in Europe? Is he proposing a new Alien Act to punish Scotland and force it to comply? Even though singling out Scotland like that would leave any arrangement with the rest of the EU in tatters? Because that is the only basis on which Scotland can now be placed at a disadvantage.

No, I haven't forgotten about the position that an Independent Scotland would not be allowed into the EU or EFTA and would therefore not benefit from the uniformity of any arrangement that applied to members of the EEA. On numerous occasions senior European politicians and officials have made clear the ease with which Scotland remains in the EU, potentially as the successor state to the UK, in the event of independence.

However, would unionists really want to rely entirely on a position where, having said in 2014 that we must remain in the UK if we want to stay in the EU, they now say we must remain in the UK because we are leaving the EU? Which is tantamount to saying it doesn't matter what you want, which is really no basis for staying in the UK at all.