Reports of the UK’s Demise are Greatly Exaggerated

Brexit Rally outside Parliament November 23, 2016
Brexit Rally outside Parliament November 23, 2016

The challenges ahead to unity are real. But Scottish independence and Irish unification aren’t foregone conclusions.

In the pages of some U.S. based foreign policy publications, it has become in vogue to predict the imminent demise of the United Kingdom (UK) and to place the blame for this “inevitability” and the rise of nationalism on Brexit. Both sentiments betray an overly simplistic understanding of existing trends and developments. There are challenges to the status quo, but economic circumstances and COVID-19 (and the European Union’s (EU) failings), mean the UK will likely go on being united.

The Scottish Question. The Scottish independence movement is top of mind for any discussion of a potential breakup of the UK. Anyone familiar with the Quebec Referendums in Canada could have predicted the Scottish National Party (SNP) was never going to adhere to their promise of a “once in a generation referendum” after they lost. Brexit is just a convenient excuse. While a range of arguments have been floated over the last two decades (e.g. the Celtic Tiger, banking & oil, etc.), the SNP’s post-Brexit push is based on the supposition that the EU is a better, more capable partner for Scotland than the UK.

Reality has not borne that out. The difference in outcomes during the COVID-19 vaccine development and rollout could not be starker for instance. Not only did a UK company rapidly develop one of the first vaccines, the country is close to world-leading in their vaccination rates. As of February, they have more than doubled the per capita vaccination rate of the highest EU nation (Malta), and are over 4.5 times of Germany’s, and almost 6 times that of France. Unsurprisingly, the UK economy is also rebounding faster than that of the EU, providing relief to businesses across the nation.

Since the start of the vaccine rollout, polling winds have (slowly) begun to shift in Scotland. While the SNP is currently polling at 52 percent in the upcoming Scottish Parliamentary election, this is actually down from almost 55 percent this time last year, and is also mirrored by a small, but steady decline in support for independence over the last few months. This is exacerbated by growing cleavages within the SNP, between the former First Minister Alex Salmond and current First Minister Nicola Sturgeon wings of the party. These wings are increasingly at odds, across the grass roots, members of Scottish Parliament, and even in the courts.

But could the SNP still push ahead? At the end of the day, Scottish Parliament lacks the authority to hold another referendum without Westminster’s approval, which both the current Tory Government as well as the opposition Labour Party have ruled out. In response, some grassroots SNP activists have suggested they could hold a wildcat referendum, but that has been consistently shot down by the First Minister herself. Suggestions that the SNP could be kingmakers have no basis in polling or Westminster reality, and no Unionist party leader will risk being the one to allow it.

Finally, despite the SNP’s ever-changing, overly-optimistic financial predictions, the economic circumstances that would allow for an independent Scotland have grown increasingly dim. Prior to the 2014 referendum, then-First Minister Salmond predicted oil would be critical for Scottish finances. At the time oil hovered around $100 a barrel, and the SNP predicted this could rise to over $150 a barrel by 2020. Even with these high oil prices, there was an over £7.6 billion annual spending deficit in the Scottish budget. When combined with increased SNP spending, this doubled to over £15.1 billion per year in 2020 and as we now know, oil prices have fallen off a cliff and are unlikely to reach even $60 per barrel for the foreseeable future. Translating macro to micro, the per-resident basis of the SNP’s spending is, at best, an ignorance of basic accounting or at worse, a preparedness to not “balance the books” today for ideals based on macro optimism related to tomorrow that plainly does not pan out near, medium, or long term according to any reputable economic analyst. In simple terms, the per-person spending in Scotland is £1,633 higher, while tax revenue is £308 lower than the rest of the UK, a net deficit of almost £2,000 per resident.

In addition to all of these issues, the SNP’s independence plans are predicated on rejoining the EU immediately and receiving access to EU funding to try and shore up their spending chasm. This would require major concessions from the Scottish Government, consensus among EU countries on Scottish accession, and, most damaging, a likely 4-5 year wait. In the first instance, currency becomes a significant issue. Joining the EU would require Scotland accepting the euro, which is deeply unpopular (a mere 18 percent of Scots support it), and adhering to the EU’s Common Fisheries Policy, which is responsible for decimating Scottish fishing communities in the decades after the UK joined the EU. In the second, despite some conflicting reports, consensus for accepting Scotland to the EU is far from guaranteed. Third, even if they are successful, in the years it takes Scotland to rejoin the EU, its economy will be in freefall. It will not have the contribution of the rest of the UK to meet its £15.1bn per annum (and rising) funding gap, it will lack a currency, and its revenues from oil will be squeezed by declining oil prices and output. A recent study from the London School of Economics’ Centre for Economic Performance starkly highlighted these impacts. Principally, Scotland’s trade with the rest of the UK is 4 times that of Scotland’s trade with the EU, and independence could add 30 percent to its trading costs. This would result in a potential 8.7 percent further reduction of Scottish incomes. This would exacerbate the already widening annual funding gap, resulting in an independent Scotland becoming the sick man of Europe.

Northern Ireland. Shifting to Northern Ireland, a recent article in Foreign Policy chose to cite a single 2019 poll as evidence for Northern Irish support for Irish unification being ascendant. It is strange that the author did not cite the myriad of other, more recent polls that show that pro-unification has actually fallen over the last year and that, statistically, support for it is overestimated. Indeed, the EU has managed to unite Northern Ireland, and not in the way they would hope. The abortive, vindictive attempt by the EU to exercise of Article 16 without warning to London or Dublin, let alone Belfast, in February has caused an anti-EU backlash across Northern Ireland. This adds to the continued expectation that the stridently unionist DUP will remain the largest party in the Northern Irish Assembly. Northern Ireland continues to have its internal issues; the most recent three-year Stormont suspension, which lasted until January of 2020, did not help matters.

In all, the COVID pandemic has put the relative responsiveness and dynamism of a post-Brexit UK and the EU in stark contrast, one in which the EU has come off decidedly worse. And while one must concede that the UK and its constituent nations no doubt face an uncertain future, and that unity may very well not be fully assured, pundits would do well to look at the data rather than sensationalist headlines.

February 10, 2021