SNP to bide time on independence from United Kingdom

Significance With the 2014 Scottish independence referendum and 2015 UK general election behind them, parties in Scotland are starting to focus on the May 2016 Scottish Parliament elections. Impacts The Conservatives' Scottish Parliament vote share is likely to rise at Labour's expense, through an appeal to hardcore unionists. In the UK EU membership referendum, the SNP will run its own campaign against leaving the EU ('Brexit'). A UK vote for Brexit, with Scotland voting for continued EU membership, would trigger a second independence referendum. The likely renewal of the Scotland-based UK Trident nuclear system, which the SNP opposes, could also be a pretext for a second referendum. Given the 2014 'no' vote, a second Scottish referendum could be more constitutionally controversial than the first.

Subject The package of reforms on a new EU-UK relationship. Significance The agreement between the United Kingdom and its EU partners sets the stage for the UK referendum on EU membership, which Prime Minister David Cameron has set for June 23. Cameron said he had negotiated new terms that would allow the United Kingdom to remain in the EU. Impacts The deal bolsters the campaign to remain in the EU, but the referendum outcome is still highly uncertain. The deal will only come into effect if the outcome is for remaining, forestalling a second referendum for better terms. If the outcome is for leaving, a new relationship with the EU would have to be negotiated during a two-year transition period. It would also probably lead to a second Scottish independence referendum and UK break-up.


Subject How the UK business community views the UK-EU relationship. Significance Many believe that the intervention of the business community was important in shaping the outcome of the Scottish independence referendum. However, this diverse group remains divided in its attitude towards EU membership and is likely to maintain a 'wait and see' approach until after the general election. Impacts Those in the business community that favour staying in the EU still argue that the UK-EU relationship should be reformed. Despite the wishes of some politicians, it is highly unlikely that business will stay silent on the question of a referendum. Nevertheless, they will most likely wait to ramp up their lobbying until after the May 2015 general election.


Significance The process has been plunged into further uncertainty by the outcome of the June 8 UK general election, which has sparked renewed debate about what kind of Brexit the United Kingdom wants and what kind of future economic relationship with the EU it should seek to negotiate. Impacts The UK government’s weakness is a cause for concern elsewhere in the EU, raising fears that it may not be able to compromise on key issues. Many businesses will begin implementing strategies for dealing with Brexit early next year, before knowing the outcome of the negotiations. Pressure for a lengthy transition period will continue to build. The political turmoil and slowing economic growth in the United Kingdom may increase support for EU membership elsewhere in the bloc.


Significance Johnson's cabinet overhaul is the largest in decades, replacing 17 cabinet ministers from the previous government mostly with individuals who support Johnson’s hard-line stance on Brexit. Impacts Brussels could offer London a ‘Northern Ireland only’ backstop, but this will be rejected by the UK government. The government will likely pass legislation to protect EU citizens’ rights in the United Kingdom if there is a no-deal Brexit. The EU will only grant another extension if a deal is almost agreed, or if there is a UK general election or second Brexit referendum.


Significance Cameron is gauging his counterparts' positions before presenting his reform agenda at the June 25-26 EU summit. He seeks the other EU states' support for a package of reforms that will enable him to claim that he has secured a better deal for the United Kingdom in the EU, and thus campaign for an 'in' vote in the EU membership referendum he has promised by end-2017. Cameron is seeking to build backing for some reforms that would apply across the EU, rather than only seek special treatment for the United Kingdom. However, some of the reforms he has mooted are unacceptable to many other EU states. Impacts The greatest impact of the reforms that Cameron secures could be on the scale of the split in the Conservative Party over EU membership. Some of Cameron's reforms could bring important changes across the bloc, as well as set precedents for other member states. The UK renegotiation will generate bargaining between member states that will affect their negotiation of other issues.


Subject The impact of Brexit on the UK agricultural and food and drink sectors. Significance Agriculture and the food and drink sector will be among those industries most affected by Prime Minister Theresa May’s decision to pursue a ‘hard’ Brexit. It is uncertain to what extent domestic agricultural policies will replace the support and funding mechanisms of the EU. The food and drink sector will have to adjust to the possibility of future tariffs. Impacts Scottish independence would hit the drink sector, with Scotch whisky alone accounting for almost one-quarter of UK food and drink exports. The burgeoning UK wine industry could be damaged if the informal knowledge transfer from French wine experts slows down. The United Kingdom and the EU will need to cooperate on the issue of access arrangements for fishing.


Subject The government's preferred timetable for the UK referendum on EU membership. Significance The EU membership referendum will be a major event in both EU and UK political and commercial life. Prime Minister David Cameron's official position is that the poll could take place any time before end-2017. He is less concerned about the likely outcome of the referendum, which he is confident will produce an 'in' result, than about achieving a margin in favour of membership that decisively settles the question and minimises the damage to the Conservative Party arising from the process. Impacts The most likely referendum date is September 15, 2016. This timetable would make the key renegotiation period the first half of 2016, when the sympathetic Dutch government chairs the EU Council. The German government would also prefer the UK referendum to be dealt with relatively quickly.


Subject Shale gas in Europe. Significance Companies in England are preparing to recommence fracking at several sites with the enthusiastic support of the UK government. However, the Scottish Parliament on October 24 voted to ban fracking, underpinning the opposition to the exploration and development of shale gas in Europe. Impacts The Scottish government’s decision may damage its relationship with some of the country’s few remaining industrial players, notably INEOS. Even if English projects are successful, it will take years for the industry to make a significant contribution to UK energy needs. The EU could take greater responsibility for regulating shale gas development after Brexit.


Significance This comes after the Telegraph reported last week that Soros had donated 400,000 pounds to the group. There is an ongoing debate as to whether the United Kingdom will in fact leave the EU. Central to it is the question of whether the UK government can unilaterally revoke its decision to trigger Article 50 in March 2017. Impacts Voters would be less likely to support the revocation of Article 50 if the Council imposed conditions that made membership less attractive. Revoking Article 50 and remaining in the EU would reduce damage to the UK economy. If Article 50 is revocable, Eurosceptic governments could be tempted to use the prospect of triggering it as leverage in EU negotiations.


Subject Final stages of Brexit negotiations. Significance There has been much talk of the possibility of extending the Article 50 process to allow more time for further negotiations, and possibly a second referendum or a general election. With under 150 days to go until the United Kingdom is due to leave the EU, there is much debate about the circumstances under which a delay might be required and, if so, how it could be achieved. Impacts A new government may use an extended transition period to change or prevent Brexit. Calls of a second referendum will deeply polarise UK political opinion. The EU could decide to block an extension to the transition, heightening fears of a no-deal Brexit.


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