Brexit and the waning days of the United Kingdom

[garbon]

So I don't think we'll see any actual movement on Scottish independence for years. Rajoy is basically saying he will not even consider a discussion of any kind with Scotland about a special deal to either remain in the EU as a part of Britain (a sort of reverse-Greenland) or to give Scotland any kind of assurances or special path to membership once Brexit is complete. Basically Scotland would probably be looking at a 5-7 year process to get admitted into the EU, and this article suggests there would be serious questions about whether Scotland could even prevail in its efforts in its current economic condition:

Scotland is better off in the UK than on its own in the EU

Brexit could spell the end of the United Kingdom as we know it. After the majority of Scots voted "remain," but the rest of the country opted for "leave," Scotland's leaders suggested the divergence justified another referendum on independence from the UK.

The Scottish National Party (SNP), which is the dominant political player in the north, explicitly states in its manifesto that grounds for another referendum include "Scotland being taken out of the EU against our will." In 2014, 55% of voters in Scotland opted to stay in the UK. But in a post-Brexit poll, 60% of Scots said they'd choose independence if another vote was held.

They may want to reconsider. There is more to lose from leaving the UK than there is to gain from staying in the EU.

Granted, a major benefit of being part of the UK is membership in the EU. Indeed, retaining EU membership became a big part of the 2014 referendum campaign. Back then, it wasn't clear whether the EU would let an independent Scotland into the EU without a lot of hassle, lest it encourage other separatist movements on the continent. Spurned by Brexit, the EU now may be more inclined to offer an expedient path membership to Scotland. But the economic case for Scottish independence is worse today than it was two years ago.

First off, an independent Scotland may not qualify for membership because its deficit-to-GDP ratio is nearly 10%. The EU demands 3% of its members, and even though it gives countries a fair amount of leeway, Scotland's deficit is off the charts.

Scottish consultant Kevin Hague estimates that Scotland receives £9 billion ($12 billion) a year from the UK, or about £1,700 per capita. Scotland spends £1,500 more per capita on its residents than the rest of the UK, in part because of the age structure and rural make-up of the population. Over the past two years, dwindling North Sea oil reserves and falling energy prices have increased Scotland's deficit, increasing its dependence on UK subsidies. Unless prices go back up or more oil is discovered, odds are that an independent Scotland would have to hike taxes or slash spending severely to qualify for EU membership.

That would imply Greek levels of austerity for Scotland, Hague says. It is possible, out of spite for the UK, that the EU would offer Scotland some concessions, but this is unlikely. Going easy on Scotland would be a bitter pill for the countries that have been through wrenching austerity and are already disenchanted with the EU.

The Scottish economy is also more integrated with the UK than the EU. In 2013, about 63% of Scottish exports (excluding oil and gas) went to the rest of the UK (pdf). Only about 17% went to the EU. The UK is arguably a healthier economy (although after Brexit it's hard to predict the impact on growth for both the UK and the EU). Perhaps the UK will remain part of a free-trade zone with the EU and a newly independent Scotland that's an EU member could continue to trade freely with UK, as it does now. But in that case there's no real point, economically speaking, for Scotland to declare independence in the first place.

Money matters

There is also the question of the currency. During the 2014 referendum, the EU may have tolerated Scotland keeping the pound if it joined, even if the rest of the UK insisted that a formal currency union with Scotland was not an option. This time, neither the UK nor the EU would probably want Scotland to stay on sterling. Launching its own currency would be a huge gamble for such a small and vulnerable economy, and joining the euro wouldn't be much better. Adopting the euro would mean losing control of monetary policy tailored to Scotland's circumstances, which could worsen the likely austerity (just look at Greece). Hague says the prospect of adopting the euro "may be jumping from the frying pan and into the fire."

The UK will surely pay a price for leaving the EU, but in relation to Scotland it is a larger economy that's more resilient to negative shocks. Its economy is more diversified than Scotland's and it can finance deficits by borrowing relatively cheaply in international capital markets. Scotland's energy-dependent economy is shakier, the country has less clout on the world stage, and takes a bigger gamble by leaving the UK.

A passionate supporter of the UK staying in the EU, Hague says he is undecided about Scottish independence. His decision will depend on many things: the conditions of EU membership for Scotland; whether a post-Brexit Britain can still afford to subsidize Scotland; and the relationship between the UK and EU once divorce negotiations are over. In spite of the enthusiasm for independence today, Hague says, "it still far from clear that it will be a sensible in light of day when faced with stone hard facts."

Well it isn't like Brexit occurred because voters took an analytical look at the economic impact.

[Tamas]

Also I think recent political happenings in the developed world confirm something about the Left's main support group the proletariat: they never cared about the progressive, political side of the left: they just accepted it as part of the package with the economic portion.

Now that welfare handouts are the standard for all political parties with the extent being the only difference, they are free to indulge in all the xenophobia and other prejudices they could only voice among themselves without being able to vote on it.

[Richard Hakluyt]

The proletariat has changed over time though. In the UK it lost many of its best and brightest (to the middle class) in the period 1945-75, a process that continues in a diminished way even today. I think it is true to say that most of the Languish Brits have proletarian roots for example.

[Valmy]

Big Business  =  Government

Sure big business is a huge interest that the government has to listen to and whose interests sometimes overlap. However, a big international corporation is going to have interests that diverge from the government quite a bit. If it didn't they wouldn't need to lobby so hard.

yeah. Why assume that the most powerful interest group would be able to extort the most influence over the most influential institution, i.e. the government.

Well of course they will. And more to the point in today's current situation where the interests of the international corps and the national common people diverge, the most powerful interest group needs to flex its muscles even more to keep the government on its side. And hey vice versa.

But the issue is, what to do about it? Breaking apart big business is not going to help anybody.

[Gups]

Your understanding is incorrect--the Leave side represented a coalition of views among people who wished to leave the European Union. To my knowledge there is no consensus among them as to what form the post-leave relationship should be. There are definitely some in that camp who view Norway status as desirable, while it is functionally the same as being in the EU, they ascribe to a view where the formal "political independence" is important.

You're arguing that a minority of the majority equals the democratic mandate. The democratic mandate is to leave the EU, there is no known democratic mandate on in what manner Britain should leave.

It wasn't even really a coalition. There were several organisations on both sides campaigning, each with different media campaigns, messages etc.

However, when any were asked about psot-Brexit strategy, they all parroted platitudes e.g. German carmakers won't allow the EU to deny free trade or the UK exports more to the UK than the other way round or we need to pivot to Asia and the US as Europe is in decline. Switzerland and Norway were initially trumpted as models to follow but less so as the campaign went on.

[Sheilbh]

Give isn't supporting Boris anymore. He's running for the leadership himself

Really, really doubt Boris will win now.

Edit: He said that while he initially supported Boris and wanted to back him, Boris can't provide the necessary leadership.

[Richard Hakluyt]

Who can trust Boris now? Former London Mayor stabs it in the back.

Boris has amused me a lot over the years, though it has always been pretty clear he is a bounder; but he has gone too far with his greed for power....................would hate for him to be PM.

[Tamas]

Give isn't supporting Boris anymore. He's running for the leadership himself

Really, really doubt Boris will win now.

Edit: He said that while he initially supported Boris and wanted to back him, Boris can't provide the necessary leadership.

I think there is nothing Boris wishes more than NOT becoming PM right now. PMing through the mess that is to come will be the end of the career of anyone who takes the job.

[Sheilbh]

I think you overestimate Boris.

[Tamas]

I think you overestimate Boris.

Could be!

[Richard Hakluyt]

He'll be our first Turkish PM if he gets in 

[Agelastus]

Boris is either being tactical by leaving the announcement of his entry into the leadership race until the last minute (thus grabbing the leading headlines on the lunchtime and probably evening news) or he's on the verge of chickening out.

He's actually got a fairly good excuse under normal circumstances ("While I have been the Mayor of Europe's greatest city I feel that I lack ministerial experience in central government.")

But these aren't normal circumstances.

[Josquius]

I think Boris is playing the long game.
He didn't expect leave to win though he knew he would build up excellent political capital with the right by supporting it.
His intention was then to take over in 2020.

Now with how messed up things are... he isn't interested. He can wait. Probably not until 2020. Probably some time into the 2020s.  But eventually.

[Richard Hakluyt]

I dunno. With no opposition one could equally argue that this is a great time to become a Tory Prime Minister, nearly 4 years till the next election after all.

[Sheilbh]

Robert Preston reporting Boris may pull his leadership launch.

Incidentally it's in a fairly glitzy location, all chandeliers, mirrors and light walls. Theresa May announced hers in a sombre looking library.