Why the Scottish ‘No’ vote makes UK withdrawal from the EU less likely

Steve Peers

Yesterday’s ‘No’ to Scottish independence is obviously significant first and foremost for Scotland itself, and then the rest of the United Kingdom, given the constitutional reforms that have been promised in its wake. But it also has broader consequences for the UK’s relations with the European Union. In short, the ‘No’ vote has, at first sight, significantly reduced the likelihood of the UK leaving the European Union in the near future.

Part of the reason for that is political. Scotland elects very few Conservatives, and is the least favourable ground in Great Britain for the UK Independence Party. So the ‘No’ vote means that the only two parties which (for now) favour an in/out referendum on the UK’s membership of the EU will have a smaller percentage of seats in the House of Commons. In particular, since it is less likely that the Conservative party will have a majority of seats or form the largest party, it is less likely that there will be a referendum in the first place.

In the event that a referendum is held, Scotland’s ‘No’ vote means that the relatively more pro-EU vote in Scotland would be counted in that vote, and the odds on a majority in favour of ‘Brexit’ are therefore reduced a little.  

But there is a further lesson to be learned from the Scottish result. While the ‘Yes’ argument could draw upon the patriotism of the Scottish people, and their antipathy to being ruled by a Conservative government which they had never voted for, the ’No’ side successfully raised concerns about the economic impact of withdrawal from the UK, and questioned whether the assumptions of the ‘Yes’ side about the post-independence scenario were accurate.

There are obvious parallels with the Brexit debate. Of course, some of the specific issues which loomed large in Scotland (currency and the introduction of border controls) would not be relevant to the Brexit debate, since the UK already retains its own powers on these issues. But the underlying economic uncertainty is the same. The debate as to whether Scotland could become an EU Member State if it left the UK would have a parallel in the debate as to whether the UK could obtain a free trade deal with the EU if it left.

While some appear to believe that the Treaties guarantee that a Member State which leaves the EU is automatically entitled to a free trade deal with the Union, this isn’t correct. Article 50 TEU (the rule which governs withdrawal from the EU) states that there must be an agreement between the EU and the withdrawing State ‘setting out the arrangements for its withdrawal’, merely ‘taking account ofthe framework for its future relationship with the Union’. There’s no guarantee as to what form those relations will take.

It’s likely that if a Brexit referendum were contemplated, at least some other Member States would indicate that they were unwilling to agree to a very generous free trade agreement with the UK. Arguably, they would be bluffing, since the UK has a trade deficit with other Member States, and so it would be in their interest to ensure continued access to the UK market. But similarly in the Scottish referendum, the ‘Yes’ side argued that the UK political parties were bluffing, threatening or scare mongering when they refused to agree to a currency union, and that all Member States would quickly agree to Scottish membership of the EU on the terms which the UK currently enjoys. Obviously they did not convince enough Scottish voters of this – and the opponents of the EU would face a similar hurdle in the Brexit referendum.

One feature of the Brexit referendum would have no equivalent with yesterday’s vote: the issue of the UK’s trade with third countries. Undeniably, after Brexit the UK would be free to sign any trade deals it wished with non-EU countries. In principle, then, the UK could sign trade deals with countries which the EU hadn’t signed an agreement with, as well as more favourable trade deals with those countries which did have a deal with the EU (the EU has free trade deals already with dozens of countries, if you count its association agreements, all of which provide for free trade).  

But of course, this would depend on the willingness of those third countries to sign such a deal. It’s hard to see why those third States who already have a deal with the EU would be willing to offer a more favourable version of the same deal to the UK. Those third States which didn’t have a deal with the EU might conceivably be willing to sign one, but they would probably be unwilling to make such an offer in advance of the referendum result, to avoid interfering with the UK’s and the EU’s affairs. So as with the Scottish referendum, the anti-EU side would have to build an argument for withdrawal upon a highly hypothetical set of circumstances.

Moreover, one segment of public opinion – those voters who dislike major free trade agreements, in particular with the USA – would have no real choice open to them. They would have to choose between the EU’s free trade deal with the USA (which would either be in the process of ratification or still under negotiation; the EU doesn’t usually simply cancel trade negotiations) on the one hand, and a UK/USA free trade deal, as negotiated by the Conservative party and/or UKIP, on the other.

One key factor which worked in favour of the ‘Yes’ side in Scotland – although obviously not enough – was the negativity of the ’No’ side. But in a Brexit referendum, the anti-EU side would suffer from this factor. The pro-EU side would (presumably) be able to point to a renegotiated arrangement with the EU, which is essentially a positive argument.

Finally, it might be argued that a crucial difference between the Scottish referendum and a Brexit referendum is the strength of the common bonds which many Scottish people feel that they share with the rest of the UK. Undoubtedly the British public as a whole does not have such warm feelings towards the EU. 

But then again, neither does the rest of the EU exercise as much as power over the UK as Westminster does over Scotland. The EU didn’t drag the UK into an unpopular war – the Blair government did that to itself. The EU doesn’t set tax rates and welfare rates for the UK, as the UK does for Scotland. In particular, the EU has never imposed a law which generated as much opposition as the early imposition of the poll tax in Scotland, when Scots became lab rats to test Mrs. Thatcher’s most unpopular policy. If the ill will created by that decision in Scotland can dissipate, it’s hard to see how a greater degree of anger could be generated against the EU.

Barnard & Peers: chapter 3

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Scottish independence: how would it impact the UK’s relations with the EU?

Steve Peers

With the Scottish referendum on independence now imminent, and a surge in the ‘Yes’ vote now putting the pro-independence side ahead in some opinion polls, it’s a good time to re-examine the impact that Scottish independence would have on the EU – particularly as regards the EU membership of both Scotland and the remainder of the UK (the ‘rUK’).

At the outset, Scottish independence would mean that four important events would happen more or less simultaneously: Scottish/rUK negotiations on their future relationship; Scottish negotiations to (re)join the EU; UK renegotiation of its EU membership; and the UK general election. The first two events are entirely unprecedented, while the third (UK renegotiation of EU membership) has only happened once before (in 1974-5), under rather different circumstances.

The last event (the UK election) is commonplace, but again the circumstances would be profoundly different than usual. In particular the loss of 59 Scottish seats from the House of Commons would likely alter the result of the election, given that Scotland usually votes far more heavily in favour of the Labour Party than the rest of the country. But if the election goes ahead as planned in May 2015, the loss of Scottish seats would not take effect until the following year, if independence goes ahead as planned in spring 2016.

These four events are closely related to each other. For instance, the result of the UK election will determine the rUK’s negotiation position with an independent Scotland. It will also determine whether the UK attempts to renegotiate its EU membership at all. It should be recalled that renegotiation is the position of the Conservative party, but not (as things stand) of the Liberal Democrat or Labour party. So only a Conservative majority would certainly result in a renegotiation.

Further significant developments are possible, too. A ‘Yes’ vote in Scotland might result in David Cameron’s resignation, or attempts by some of his party members to remove him. The UK Independence Party is likely to win its first Commons seat in an October by-election.

So no-one can realistically predict with any certainty how things would develop after a ‘yes’ vote. The key question of whether Scotland could rejoin the EU has already been discussed in a previous blog post (as has the issue of immigration between Scotland and rUK). The focus of this post is therefore on one issue: the impact of a ‘Yes’ vote on the UK’s relations with the EU.

The starting point here is Scotland’s relations with the rUK. Trade with the rest of the UK (as well as the rest of the EU has a whole) is obviously crucial to Scotland. Indeed, a key feature of the ‘Yes’ campaign is the argument that nothing would really change in this regard, whereas the ‘No’ side has argued that relations with the rUK and the EU would likely be jeopardised after independence.

Clearly, the ‘Yes’ side seems to be winning this argument. Apparently they have been able to convince an increasing number of voters that the ‘No’ side argument is a bluff which can be called.

Is this argument a bluff? Dissecting the issue objectively, there is good reason (from its point of view) for the ‘No’ side to refer to the risks of independence up until the referendum date (although politically speaking, making this argument seems now to be backfiring for them).

But in the event of a ‘Yes’ vote, the rUK ought to consider what it in its own best interests. It seems very clear that, given the economic importance of Scotland to the rest of the UK, the rUK ought to seek to maintain as close an economic relationship with the rest of Scotland as it possibly could. That has domestic implications (as regards a currency union), but also implications for Scotland’s relationship with the EU: it will overwhelmingly be in the interests of the rest of the UK to advocate Scotland’s continued membership of the EU on terms equivalent to the UK’s current membership. Indeed, this is the crux of the ‘Yes’ side’s argument on this point: the ‘No’ side is threatening not just Scotland but also itself. That threat just isn’t credible.

It is possible, however, that the rUK will not act in its best interest. Voters in the rest of the UK may be resentful and desire to punish Scotland. Furthermore, those who wish to renegotiate the UK’s EU membership, or withdraw the rest of the UK from the EU, may not have an interest (for tactical reasons) in supporting Scottish EU membership. The first group (the renegotiators) would face a difficult dilemma, because they would have to expend their limited goodwill with the EU not just on one major project (renegotiation) but a second project (Scottish membership) at the same time.

Provided that the renegotiators genuinely want the UK to remain part of the EU, then it nevertheless makes sense for them to push for both at the same time. After all, while the rest of the EU already takes up a large portion of UK’s trade, that portion would be larger still after Scottish independence – if an independent Scotland joined the EU.

Yet this in turn explains why those who wish to withdraw from the EU might seek to block Scottish membership of it, either directly (by refusing rUK consent) or indirectly (by stirring up opposition among countries like Spain, which have their own regional independence movements to contend with). Of course, if the UK does leave the EU, it can no longer block Scottish membership of it. But in that case, Scots would no longer be as keen to join the EU, since joining the EU would then possibly impede its trade with the remaining UK (although this assessment would be depend on the terms of an EU/rUK free trade agreement – if there is one).

Indeed, some English Eurosceptics might well fantasise that Scotland might be the first country to sign a free trade agreement with the newly ‘independent’ rUK. One can only imagine Alex Salmond’s face at that signing ceremony.

Barnard & Peers: chapter 3

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Rebuilding Hadrian's Wall? The effect of Scottish independence on British border control

Steve Peers

It is widely believed that the Romans built Hadrian's Wall to keep marauding Picts (modern day Scots) at bay from civilised Britannia. Certainly the Wall in Game of Thrones is intended to keep out the angry, hairy mutants to the North.

The British Home Secretary, Theresa May, recently revived thoughts of these walls when she suggested that in the event of an independent Scotland, border control would have to be reestablished between Scotland and the rest of the UK. At first sight, this is an extreme and therefore unconvincing threat, reminding me of the sort of threats I sometimes issue to my children in desperation. 

But is this threat actually plausible? In particular, is there any basis to her claim that the rest of the UK would need to erect border controls to protect itself from a highly liberal Scottish immigration policy? This time around, the border would not be there to stop the Picts or the resident mutants, but rather the citizens of other countries using Scotland as a sort of cat flap to gain entry to the rest of the UK.

The starting point when assessing this argument is to examine the two current regimes of multinational border control in Europe: the Schengen system and the Common Travel Area between the UK and Ireland. The Schengn system in principle bans all internal border checks unless there are exceptional circumstances, and establishes common rules on visas and external border controls. It does not establish common rules on longer term immigration or asylum, although the EU is moving to agree such rules gradually. However, third-country nationals with residence permits or long-stay visas have the freedom to travel within the Schengen area for long periods.

In the Common Travel Area, there are in principle no internal border checks, although Ireland in fact applies checks as regards some forms of travel and travellers may need photo ID to prove their identity and nationality. The two countries don't have identical visa lists, and those with residence permits and visas from one country don't have the right to visit the other one. There is also informal cooperation on immigration policy, as examined in detail by Bernard Ryan.

This system has survived for nearly 100 years, with several suspensions and modifications during that period. Indeed, it has survived through the last few decades of increased international travel, not to mention the Troubles. It is hard to imagine that a version of this regime could not be agreed between the UK and Scotland. Moreover, introducing border control as regards Scotland is a more difficult and expensive proposition as compared to Ireland, given that far more of the travellers concerned are crossing land borders.

So it may be concluded that the Home Secretary's threat is unlikely to be carried out. Moreover, her threat breaks a cardinal rule of parenting: only threaten if necessary. Having been told off in turn by a Canadian central banker and a Portuguese former Maoist, the Scots hardly look naughty enough to vote for independence at the moment. Of course, given her emphasis on immigration control, it is clear that the Home Secretary's real objective is not to become the Queen in the North, but rather to bolster her claim to the throne of the Conservative party, if it becomes vacant.


Barnard & Peers: chapter 2

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Would an independent Scotland have to reapply to join the EU?

Steve Peers

There has been extensive discussion, during the current campaign on the referendum on Scottish independence, on the legal issues relating to an independent Scotland's membership of the European Union. Would an independent Scotland automatically be a member of the EU? Would the Treaties have to be renegotiated, with Scotland as a Member State participating fully? Or would Scotland have to apply to 'rejoin' the EU as a non Member State? Would an independent Scotland retain the UK’s current opt-outs from the single currency and Justice and Home Affairs (JHA) matters?

I have looked at these issues before, as part of a longer analysis of the legal issues arising from the EU Treaty amendment process, published in the Yearbook of European Law. However, now that the issue has arisen in practice, it's a good time to revisit the topic.

General points

First of all, as a matter of (non-legal) principle, it's clear what the answer ought to be. If Scottish independence is supported by a majority of Scottish votes, then, given that the legitimacy of the vote is accepted by the rest of the UK, Scotland ought to remain an EU Member State with the same opt-outs that the UK now has. Our views on the desirability of independence (for the record, I would be sad to see Scotland leave the UK) should not influence our interpretation of the legal position, or our recognition of the democratic legitimacy of the process. But nor can we assume that the legal position is aligned with what it ought to be.

Secondly, one aspect of the debate is worth noting: it seems to be taken for granted that Scotland ought to remain an EU Member State after independence. From the perspective of the Eurosceptic Deep South of the UK, this is surprising. There are, of course, some Eurosceptics in Scotland: the Shetland Islands and Western Isles voted against the Common Market in 1975. But polls show 2-1 support for remaining in the EU, so it doesn't seem to be an issue. Perhaps Scots just want to make sure that after separation from England, they would still have something to whinge about.

This raises a further interesting scenario: what if Scotland votes against independence this year, but the UK as a whole votes to leave the EU in a few years' time? Could support for independence then increase, given the link with the more popular (in Scotland) case for EU membership?

Finally, it's worth noting that Scottish independence would redress one 'reverse discrimination' issue in EU law, and exacerbate another one - assuming that both Scotland and the remaining UK were both EU Member States. It would end the anomaly by which students from other Member States have the same generous treatment as regards tuition fees in Scotland as Scottish students, while students from the rest of the UK do not. This might well raise questions about the affordability of this policy.

And it would create a new route for British citizens with third-country national family members to avoid the increasingly obnoxious constraints placed by British immigration law upon family reunion with their loved ones. Scottish politicians have talked about increasing immigration to Scotland; the combination of harsh immigration laws in the remaining UK and the application of EU free movement law would mean that they would get their wish.

The legal issues

Would it be possible for an independent Scotland simply to become an EU Member State without further ado, simply by virtue of its independence? The analogy here would be with Algeria, which technically remained a part of France (as a matter of EU law) until the Treaties were amended to catch up with reality in 1993. However, there is a world of difference between a third country which is no longer part of a a Member State and no longer wishes to remain part of the EU, and a State which, having been part of a Member State, wishes to succeed to that Member State's membership of the EU.

The starting point is that the EU Treaties (unlike the founding treaties of some other international organisations) list the Member States of the EU: see particularly Article 52 TEU, and the other provisions referred to in my Yearbook article. It must follow that to alter the list of Member States a Treaty amendment is needed, even where part of an existing Member State has seceded. It is not sufficient for the Member States to agree informally among themselves to this end, for the Court of Justice of the European Union (CJEU) has ruled that the Treaty can only be amended by using the formal procedures provided for to this end (Case 43/75 Defrenne II).

So which Treaty Article would apply to those amendments? Article 48 TEU provides for the Treaties to be amended by unanimous consent of the Member States, while Article 49 TEU provides for a new Member State to join by means of an accession treaty negotiated between the existing Member States and the new Member State, and then ratified by all of them. The key difference between the two procedures from an independent Scotland's point of view (there are other differences, but let's leave them aside for now) is that it would be in a stronger position as a would-be Member State (Article 48) than as a non-Member State (Article 49). So this is, not surprisingly, the view of the Scottish government.

However, the use of Article 48 has to be rejected. The basic legal problem is that only Member States can be party to a Treaty amendment pursuant to Article 48, whereas Scotland would not be a Member State, since it would not be listed in Article 52. If Scotland were a Member State already, recourse to Article 48 to amend the Treaties merely to confirm that fact would not be necessary. It cannot simply be asserted that the listing of the United Kingdom as a Member State in Article 52 implicitly covers Scotland also, after independence, since the whole purpose of holding an independence referendum is precisely to become a separate State. As others have pointed out: after a divorce, you're single.

Sir David Edward has argued that the drafters of the Treaties did not intend that a portion of a Member State which voted to secede from an existing Member State would have to apply as a new Member State. There is no evidence of what the Treaty drafters thought of this issue (if they thought about it at all), but given that some Member States face secessionist movements or even (in the case of Cyprus) breakaway self-declared States, it's hard to believe that all Treaty drafters took such a view.

Also, it has been argued that depriving Scots of EU citizenship would be a breach of the citizenship provisions of the Treaties, since they would lose that status without their consent. But this begs the question: for the reasons I set out here, a vote for an independent Scotland would be a vote to leave the EU. By the same token, the foundation of the EU on the principles of democracy (Article 2 TEU) is not as such relevant, since the second sentence of Article 2 states that these principles are common to the Member States. The same goes for the principle of sincere cooperation set out in Article 4(3) TEU. This argument essentially boils down to: an independent Scotland would remain a Member State, because it is a Member State. It's entirely circular.

The Scottish government seeks to circumvent this chicken-and-egg problem by stating that the current Member States (ie the 28 Member States not including Scotland) could amend the Treaties by means of Article 48 in the 18-month period before Scottish independence took effect, in order to provide for immediate Scottish EU membership upon independence day. It's not quite clear why, as a matter of politics, the other Member States would wish to do Scotland this enormous favour. Anyway, as a matter of law, they couldn't do it: as Professor Kenneth Armstrong has pointed out, Article 49 is obviously the lex specialis provision regarding the addition of new countries to the list of Member States set out in Article 52. However, it would be possible to use Article 48 to amend Article 49 on this point, at the same time as providing for new rules on Scottish membership. This seems an unlikely scenario, however, since it would encourage secessionist movements in other Member States, even if the amendment to Article 49 were limited to the case of Scotland.

In fact, in my view, Article 49 arguably has to be used in conjunction with Article 48, since any Treaty amendment which gives a permanent opt-out for a new Member State from significant EU policies goes beyond what can be addressed in an accession treaty (see my Yearbook article for elaboration), and presumably Scotland would want to keep the UK's current opt-outs. On the other hand, it might reasonably be argued that an exception to the latter rule might be made here, since the legal position as regards the territorial scope of those opt-outs would not really be changing.

Having said that, I am not convinced that the use of Article 49 necessarily would be that difficult in practice. In principle, it should be possible to draw up a very short accession treaty quite quickly, given that Scotland is already applying EU law by virtue of its integration into the United Kingdom. There would be a technical problem negotiating with a State which does not yet exist, but there could be informal talks during the period leading up to independence, with the accession treaty signed on the day of independence. It would arguably be possible (as Professor Armstrong has pointed out) to apply the accession treaty provisionally, pending full ratification, or retroactively if necessary.

An alternative route is to agree a very far-reaching association agreement between the EU and Scotland to ensure that EU law still applies to Scotland in the interim period before the accession treaty can be ratified or (if need be) negotiated. This treaty could in turn be applied provisionally from the date of independence (there are many precedents for the provisional application of treaties between the EU and third States, and Article 218 TFEU expressly provides for this possibility).

This potentially simple legal process could, however, be complicated by purely political problems, if one or more Member States (and it would only take one) wished to slow down the process for whatever reason. It cannot simply be assumed at this stage that this would (or would not) necessarily happen. While Sir David Edward has argued that there would be an obligation to negotiate in good faith in the event of a Scottish 'yes' vote, it is hard to find a provision in the Treaties which supports that proposition.

So, the bottom line is that when Commission President Barroso and Vice-President Reding argue that Scottish membership of the EU would entail (a) an accession treaty and (b) be lengthy and difficult, they are clearly right on the first point, but wildly speculating on the second.


Barnard & Peers: chapter 2 

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