Scenario analysis re UK, Scotland & Ireland re #brexit & #indyref

Summary

After assessing the various likely sequences of events, the following three scenarios appear realistic final outcomes (highlighted in red below).

Note, every scenario ends in the rest of the UK leaving the EU!

1. That Scotland leaves the EU as part of the UK.
2. That Scotland becomes a separate region of the EU, with its own currency. That may occur either as a result of UK leaving, or UK may leave after Scottish separation, but in either case the end result is that the rest of the UK exits the EU
3. That Scotland gets independence as separate country with own currency – that in turn will result in rest of UK being independent. Scotland will probably agree a loose informal trading union with England (WNi)** and in turn with EU

In terms of the impact on Ireland, there seems to be little difference between the various outcomes as Ireland does not have a border with Scotland nor will it be able to have unilateral agreements with the rest of the UK from within the EU. It therefore seems likely pressure will grow within Ireland to leave the EU.

** where England is mentioned on its own it is likely it means “England WNi” (England + Wales + Northern Ireland)

Assessment

There are obviously two possible outcomes of the #brexit vote. UK independence or a vote to be a region of the EU.

1. UK region of the EU.

Assuming brexit vote is to stay shackled to the EU, it is inevitable that there will be another vote … taking us back to a choice of (1) or (2). Inevitably as problems in EU grow, the UK will leave the EU at some point. So, the big question is in the time that the UK remains in the EU would Scotland separate (there is no independence in EU).

1.a Scotland votes to remain part of UK region of EU

Just as the UK remaining part of the EU cannot be permanent, so if Scotland is part of the UK within the EU, it will constantly demand separation. So, this option is not permanent.

1.b Scotland votes to be own region of EU (UK then exits)

As long as England, Wales and NI, remain part of the EU, there is no reason (except barnet) for Scotland to remain in Union with them. So, the longer the UK stays in the EU, the more likely it is that Scotland will leave to form its own region.

But by voting to leave the UK (region), because England has support to leave EU, Scotland will only hasten the exit of England(+WNi). This will leave Scotland as a region of EU and the rest of UK independent outside. This is  equivalent to  2.a.ii.β

2. UK Independence

It has been stated many times that if the UK votes for Brexit, then the SNP will demand another #indyref referendum. This may be difficult given their reduced majority in Scotland and political suicide if they lose.

Based on some recent opinion polls, the outcome of such an #indyref vote would be to exit.

However … faced with the prospect of border controls between with both England and Northern Ireland it seems more likely that the SNP would again lose such an #indyref vote – at least until voters had had a chance to see how England would behave after #brexit.

However for the sake of analysis, assuming #indyref goes ahead there are obviously two possible outcomes:

2.a UK Independence + Scottish Independence (outside EU)

If I understand the SNP correctly, they have no intention of asking the people of Scotland who would so recently gained independence, whether they were then prepared to lose it all to the EU. However, assuming the Scottish people were allowed any choices after voting for independence about losing is so quickly in the EU, there would be two outcomes to a vote for Scotland to join the EU:

2.a.i England+Wales+NI as one independent country and Scotland as another independent country outside the EU

In this scenario, EngWNi would be free to negotiate its own trading arrangements with Scotland. And, so long as both agree on common arrangements with international trade (immigration taxes etc.) then there is no reason why there cannot be an open border. This would effectively be an informal “federation” which would undoubtedly negotiate joint trade agreements with the EU. However, what currency would Scotland have?

2.a.i.α Pound

As a separate country outside the EU, but part of an informal political alliance with the rest of the UK, it might be possible for Scotland to retain the pound as its currency.  However this would only be possible if Scots accepted very different wages and/or imposed harsh economic control to keep the economies aligned (which would cause much social unrest). As Scotland has more of a “welfare culture” than England the necessary controls would be difficult to implement, so whether intentionally or not the value of the “pound” in the Scottish economy would float away from that of the English pound.

2.a.i.β Scottish “Mark” (UK Independence + Scottish Independence)

The alternative is for Scottish independence and a separate currency by intention. This would create a viable sustainable economic unit – which although it fall behind England in the first decades, may well grow faster in the long term.

2.a.ii England_Wales_NI to be free outside EU, Scotland to lose its independence and become a region of EU.

Unfortunately, this scenario will be a disaster for Scotland with its main border become a customs border. But now there is yet another question: will Scotland join the Euro. Again it is doubtful the Scots will be asked about this – and even if they were, the SNP have a history of telling lies so it is very likely they will do whatever they want which is likely join the Euro.

2.a.ii.α Join the Euro (Greek letters not intentional but funny)

Now, not only is there a border between England and Scotland, but the hatred of the English means the SNP have forced the Scots to take a currency which would be on the verge of failing. So, even if the SNP were stupid enough to join the Euro, it this position would at best this would be a temporary.

2.a.ii.β Scotland, region of EU, customs border with independent England (WNi) and own currency

This seems like the worst possible outcome, but the most likely one if Scotland were to leave the UK given the impending collapse of the Euro. Scotland would not be able to form any unilateral trade arrangements with England. Because Scotland does not have the muscle of the UK, Resources such as fisheries will be plundered by bigger countries. The EU imposed policy of wind power would be a disaster as it would rely on English power. Scotland would be cut off from its “master” in Europe – so effectively back to the old “absentee landlord” rule that was so hated by England. In short, largely ignored and forgotten. There would certainly be economic decline relative to England (WNi) making it very difficult to ditch the EU and rejoin EWNi without a humiliating climbdown by those like the current SNP administration. So, this would be stable only in the sense of “until everyone who should be blamed is dead and the country can move on” … by which time voting to leave the EU may would be banned.

2.b UK Independence with Scotland part of Union.

If UK gains independence and Scotland chooses to remain part of the UK, then there will be no border issues. But the problem of London dominance will continue. This may be reduced by the removal of the “floozy EU” from the “marriage bed”, in that a lot of legislation now being forced on Scotland “by Westminster” actually comes from Brussels.

However, whilst it would seem unlikely that Scotland would immediately vote to leave the UK after UK independence (preferring to see what happens), it does seem likely this would occur eventually unless England does something to stop the dominance of London – and particularly to stop spending so much key job-creating government money in the SE.

Ireland

There are too many scenarios to assess the potential impact on Ireland for each one, but taking the main ones:

1. That Scotland leaves the EU as part of the UK.

This will put enormous pressures on Ireland and when the Euro collapses this pressure will grow. I therefore seems likely this will lead to calls for Ireland to leave the EU.

2. That Scotland becomes a separate region of the EU, with its own currency. That may occur either as a result of UK leaving, or UK may leave after Scottish separation, but in either case the end result is that the rest of the UK exits the EU

From an Irish point of view, there doesn’t seem to be much benefit in having Scotland in the EU as there are no direct land borders.

3. That Scotland gets independence as separate country with own currency – that in turn will result in rest of UK being independent. Scotland will probably agree loose informal trading union with England (WNi)** and in turn with EU

Likewise, there is little benefit to Ireland if Scotland is an independent country because Ireland can’t have any unilateral trade agreements with Scotland.

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