Brexit might trigger Scottish independence

Headline UNITED KINGDOM: Independence vote outcome uncertain

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 UK economic prospects against the backdrop of the Brexit negotiations Significance The March purchasing managers' survey showed manufacturing expanded for an eighth month while services also grew steadily. However, productivity growth remained below the 1994-2007 average in the final three months of 2016, and risks to the economic outlook rose on March 29, when the United Kingdom notified the EU of its intention to leave. Last month, the Office for Budget Responsibility (OBR) surveyed UK economic prospects, forecasting economic variables to 2021 without directly assessing the likely impact of Brexit. The gravity model can be used to assess its impact on trade prospects. Impacts If US President Donald Trump follows through on his most extreme trade threats, this would dwarf the Brexit disruption. Difficult Brexit negotiations and slower UK GDP growth could fuel support for the Scottish independence movement. The United Kingdom is ranked relatively low globally for its physical infrastructure, offering large scope for improvement.


Significance Depending on the outcome, the United Kingdom's relation with its largest trading partner may be at risk, together with the City of London's role as a financial hub and the ability of EU citizens to work freely in the United Kingdom. Impacts In the event of Brexit, the pound could fall to 1.3 against the dollar and towards parity against the euro. Despite having sold off already, UK bank stocks could fall further in the case of Brexit. Given Scotland's pro-EU stance, an 'out' vote could reopen the debate about Scottish independence.


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.


2015 ◽  
Vol 24 (1) ◽  
pp. 1-21
Author(s):  
Eberhard Bort

The decisive No vote in the Scottish independence referendum on 18 September 2014 was not a vote for the constitutional status quo, although it confirmed that Scotland would remain part of the United Kingdom. The referendum outcome is likely to have far-reaching consequences for the power relations between London and Edinburgh and, perhaps more than expected, for the constitutional future of the entire UK. A tight timetable for the delivery of extra powers for the Scottish Parliament is in place, and the ‘elephant in the room’, the constitutional status and governance of England, is now firmly on the agenda. There is also pressure for decentralisation in Scotland itself. And the huge ‘democratic awakening’ which characterised this ‘national conversation’ about Scotland's future, with massive democratic participation and a record turnout, demands that these changes will have to be brought about in a participative way – and not ‘top-down’, as a Westminster or Holyrood ‘stitch-up’.


Significance The differing perspectives of unionists and nationalists on the creation of Northern Ireland as a political entity within the United Kingdom, together with Brexit and tensions over the Northern Ireland Protocol (NIP), have brought the contentious issue of Irish reunification onto the political agenda in Northern Ireland and the Irish Republic. Impacts Scottish independence would likely increase momentum for a referendum on Irish unity. Successful implementation of the NIP, giving firms access to EU and UK markets, may support arguments for maintaining the status quo. If the UK government abandons the NIP, the adverse trade impact on Northern Irish firms could increase support for unification.


Headline UNITED KINGDOM: England reopening carries major risks


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Headline UNITED KINGDOM: CPI upgrades signal earlier tightening


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