Will Scotland face a ‘hard Brexit’ choice?

  • Insight

02 November 2016

Over the last few weeks the Scottish Government has sought further engagement with, and clarity from, the UK Government in relation to Brexit negotiations, but has also published a consultation on legislation for a second independence referendum. This briefing examines the terms of the consultation and the implications for the UK and Scotland of what is being called a ‘hard Brexit’ approach.

Consultation on legislation for a second independence referendum

The Scottish Government launched a consultation paper in October 2016 on proposed legislation for a second referendum on Scottish independence (the first referendum on Scottish independence having been held on 18 September 2014). The consultation paper, which includes a draft Scottish Independence Referendum Bill (“draft Bill”), seeks views on how such a referendum would be run, rather than on the principle of having a second referendum.

The background to the publication of the consultation paper is a pledge contained in the SNP’s Manifesto for the Scottish General Election of 2016 (p24), in which it stated that the Scottish Parliament should have the right to hold another referendum on whether Scotland should be an independent country “if there is a significant and material change in circumstances that prevailed in 2014, such as Scotland being taken out of the EU against our will”. In the EU referendum on 23 June 2016, whilst a majority of voters in England and Wales voted to leave the EU, a majority of voters in Scotland (62%) voted to remain.

Launching the consultation, the First Minister Nicola Sturgeon noted that the consultation was taking place from October 2016 to 11 January 2017, to ensure that the Bill would be ready for introduction if the Scottish Government concluded that seeking the view of the people of Scotland on independence would be the “best or only way to protect Scotland’s interests in the wake of the EU referendum”. The draft Bill contains provisions which would provide the legal framework for Scotland to reconsider the question of independence before the UK leaves the EU.

The First Minister has indicated that “Any decision on holding a referendum, including the timing of it, would be for the Scottish Parliament to take having considered all the options for Scotland’s future relationship with the EU and the associated impact of being forced to leave against our will.” The Scottish Government also appears to anticipate the passage of a section 30 Order under the Scotland Act 1998, before the Scottish Parliament would pass the legislation necessary for a second Scottish independence referendum. The UK Government has not yet given a clear view on how it would respond to a request for such a section 30 Order; but it might find it hard to justify obstructing such a process, given its own arguments in relation to the EU referendum about legitimacy conferred by electoral mandates arising from manifesto commitments.

The First Minister has nonetheless stated that the Scottish Government “will continue to work UK-wide to seek to avert a hard Brexit and we will also bring forward proposals that seek to protect our place in the single market, even if the rest of the UK leaves”. This indicates that the Scottish Government has not, as yet, reached a final decision on whether there will be another referendum on independence and that it is still open to considering other options.

The draft Bill provides for an electoral franchise that matches the Scottish Parliament’s electoral franchise. This means that two groups of voters who were not permitted to vote in the EU referendum would have a right to vote in a second Scottish independence referendum, namely 16 and 17 year olds and citizens of EU countries who are resident in Scotland. The argument made by those opposing Scottish independence in the 2014 referendum that a vote for independence could lead to Scotland losing its EU membership and having to reapply to join, can now be turned into an argument by those in favour of Scottish independence that continued EU membership may only be possible if Scotland votes for independence. A copy of the consultation paper and draft Bill can be found here.

‘Hard Brexit’?

The Scottish Government has said it considers that a ‘hard Brexit’ would be damaging to Scotland. A number of sectors across the Scottish economy appear to be expressing support for that view, with the most recent concerns being expressed within the higher education sector, particularly in relation to free movement of persons and to EU research funding and collaboration.

In written evidence to the Scottish Affairs Select Committee of the UK Parliament in October 2016, Universities Scotland highlighted the risks arising if the immigration status of EU national university staff and students are not confirmed well in advance of Article 50 being triggered, stating that:

Urgent assurances need to be given to EU nationals that their right, and that of their dependents, to continue to live and work in the UK will not change in the future. It is also important that they, and their dependents, continue to be able to access public services. The current uncertainty puts the careers and personal lives of 4,595 highly valued staff in unnecessary doubt. Early confirmation of the immigration status of EU nationals already working in the UK could prevent an exodus of talent that would be greatly to the detriment of Scottish higher education, Scotland and the UK.”

US’s evidence also provided an illustration of the potential lost investment to Scottish higher education institutions if Brexit results in a loss of access to EU research funding, including funding from EU Commission programmes, EU charities and businesses, Horizon 2020, EU structural funds and other EU research fellowship schemes.

In terms of what a ‘hard Brexit’ means, it might best be described as involving a complete break from the EU, with no compromise on free movement of persons and no membership of the EU single market, leaving the UK in a position whereby it must trade with remaining EU member states as many other countries outside the EU already do. It would potentially have to rely, as least initially, on existing World Trade Organisation (WTO) rules if a bespoke agreement cannot be reached in the Article 50 negotiating period between the UK and EU member states.

The UK’s Secretary of State for International Trade, Dr Liam Fox MP, in what appears to have been an indication of his vision for the terms of the UK’s exit from the EU, noted in a speech to the WTO’s annual forum in Geneva a few weeks ago that the UK is a “full and founding member of the WTO” and that: "We have our own schedules that we currently share with the rest of the EU. These set out our national commitments in the international trading system. The UK will continue to uphold these commitments when we leave the European Union." He noted that: “the decision of the British people to leave the EU is not symptomatic of looking inwards but a people who want to take more control over our laws, our money and our borders. We are a proud and outward-looking trading nation. We want Europe to succeed and be a vibrant partner in global affairs, economics and security. But in the era of globalisation we want to be free to help shape an even more transparent, more open and more liberal trading environment.

What it interesting about Dr Fox’s speech is that it differs in tone quite significantly from some of the statements made by other UK Government Ministers about Brexit. The speech starts by quoting Scottish philosopher and economist Adam Smith and goes on to state that:

“I believe as much in the moral case for free trade as I do in its economic benefits. People should be able to exchange their hard work for goods at mutually agreed prices – without the shackles of artificial barriers being placed on them by governments or market distorting practices such as dumping, export subsidies or state aid. Trade should be fair as well as free.
I am therefore delighted to be speaking here at the WTO – the institution that is the bedrock of the international trading system: underpinning fundamental trade rules and providing the means through which these can be enforced. You have facilitated negotiations that have taken an axe to red tape across borders, phased out distortive export subsidies and scrapped trillions of dollars’ worth of tariffs. It is an agenda that not only needs to be continued but revitalised.

Liam Fox’s speech can be read in full here

UK and Scottish Government engagement

Given the recent statements emerging from those in the UK Government who are in key positions and tasked with leading negotiations on EU withdrawal, it is difficult to envisage a happy medium being found between the priorities of the Scottish Government for a continued relationship between Scotland and the EU and the possibility that the UK Government’s vision leans towards a ‘clean break’ or ‘hard Brexit’.  

Following a recent meeting of the Joint Ministerial Committee comprising the UK Government and the devolved Governments and Administrations of the UK, continued calls were made for greater clarity from the UK Government about what it will seek from negotiations with the EU and meaningful discussions and consultations between the UK Government and all the devolved Governments and Administrations across the UK.

First Minister, Nicola Sturgeon has stated that:

The Scottish Government is fully committed to engaging with the UK Government and we will seek to use our influence to ensure that the UK does not pursue a hard Brexit. However it is clear from today’s discussions that we must also continue to pursue alternative options, including bringing forward proposals to protect Scotland's place in the single market even if the rest of the UK leaves, and continuing to prepare for the option of a referendum on independence if that is what is necessary to prevent the UK taking Scotland over a hard Brexit cliff edge.

In a speech given at the start of the EU referendum campaign in April 2016, the then Home Secretary, Theresa May, presented a range of strong arguments for the UK to remain in the EU but pull out of the European Convention on Human Rights (ECHR). In that speech, she also appears to have anticipated what might happen in the event of a vote by England and Wales to leave the EU but a vote by Scotland to stay in the EU. Warning of the dangers of a vote to leave the EU, she said:

But if Brexit isn’t fatal to the European Union, we might find that it is fatal to the union with Scotland. The SNP have already said that in the event that Britain votes to leave but Scotland votes to remain in the EU, they will press for another Scottish independence referendum. And the opinion polls show consistently that the Scottish people are more likely to be in favour of EU membership than the people of England and Wales. If the people of Scotland are forced to choose between the United Kingdom and the European Union we do not know what the result would be”.

The full text of her speech can be read here

Going forward

Subject to the decision of the High Court in England in the current legal challenge to the UK Government’s intention to trigger Article 50 using Royal Prerogative powers alone, without recourse to Parliament, and depending on the outcome of any appeal to the UK Supreme Court, the choice to be made about Scotland’s future position within the UK and within the EU will be brought into sharper focus in the coming months, once greater clarity is provided by the UK Government. If the UK Government pursues a Brexit vision that is more of the ‘hard’ than the ‘soft’ variety, this is likely to be unpalatable to the Scottish Government. Given that the UK Government has indicated that it will seek to negotiate the same Brexit arrangements for Scotland as for the rest of the UK, the UK Government may find that Theresa May’s predictions earlier this year about the possible choice facing the people of Scotland are borne out in reality. The UK Government, if it pursues a unified ‘hard Brexit’ approach across the UK could, in so doing, also be said to be making a choice in terms of the relationship between Scotland and the rest of the UK.

Further information

For further information on this topic, please contact Fiona Killen or Ailidh Callander in our Parliamentary and Public Law Unit.