27 Jul 2016

Scexit? Nixit? Scotland and Northern Ireland in the aftermath of the EU referendum

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Parliament is in recess and Whitehall is moving towards summer mode. This will not, though, be an ordinary summer for the civil service or their political masters. The new Prime Minister will want to have an outline strategy for triggering Article 50 and leaving the European Union in place by the time of the Conservative Party conference in early October. The actual act of invoking Article 50 would then be expected to occur about three months or so after that.

This is a huge enterprise. The basics of a UK approach has to be agreed in relatively short order and a team assembled to conduct those negotiations. While all concerned are aware that the dialogue after Article 50 has been triggered will be inevitably somewhat high-level throughout most of 2017 given the elections in France in April and May and Germany in September or October (and possibly in Italy too if the current administration loses a crucial constitutional referendum), the need for the United Kingdom to know what it wants from the bargaining to come is crucial. Whether it can get what it wants is another matter entirely.

There are so many complexities involved in this unprecedented process that listing them would take an eternity. Many of them are legal and technical but the most awkward ones are political. And if those political challenges between the UK and the other EU-27 were not taxing enough then there is the further difficulty that two constituent sections of the United Kingdom – Scotland and Northern Ireland – voted by clear majorities to remain in the European Union. Theresa May recognised this by making her first visit outside of London on assuming office to Edinburgh to meet Nicola Sturgeon, the First Minister of Scotland, followed by a trip this week to see Arlene Foster, the First Minister of Northern Ireland. In each case she insisted that she would work closely with the leadership of the devolved administration in deciding how to approach both Article 50 and the exit negotiations. In reality, the two nations present Downing Street and the EU respectively with diverse conundrums.

The core differences in the difficulties can be summarised thus. In the case of Scotland, Ms Sturgeon will only be satisfied, it seems, by an outcome which would allow Scotland to remain within the EU while the remainder of the UK departs from it. Theoretically, at least, she would, therefore, be ready to contemplate an outcome in which Scotland stayed in the UK but had its own relationship with the EU. This is just about conceptually possible. The EU has taken a somewhat intellectually elastic line on, for example, what is and is not Cyprus. It is very hard to conceive how it would occur in practice. For Northern Ireland, by contrast, the fact of Brexit is less in dispute than the need to avoid a ‘hard border’ between Ulster and the Republic of Ireland. What would be required here is the consent of Brussels to a special arrangement between the Republic and a neighbour that was not inside the EU.

Scexit scenarios

The challenge for Ms Sturgeon is about timing. Brexit clearly offers the Scottish Parliament a reason to seek a second independence referendum. It is a material change from the circumstances of the September 2014 ballot. A majority for seeking that additional plebiscite exists within Holyrood today as the SNP and the Greens are explicitly in favour of separation while the Scottish Labour Party and even the Scottish Liberal Democrats must be wondering where they stand if they are obliged to pick between a Union with England or one with the EU-27. The Scottish Conservatives, whose leader was very strongly in the Remain camp, has been careful not to dismiss the notion of another referendum.

The big division within Scotland is likely to be when such a decision should be made. The instinct of many in the SNP will be that the act of triggering Article 50, initiating one set of divorce proceedings as it were, should be the moment when Scotland asks whether it wants to continue with its current relationship with the rest of the United Kingdom. The position of Mrs May, and also probably of Ruth Davidson, the Scottish Conservative leader, is that this would be premature and that is only when all the terms of withdrawal are known that Scotland should again look at its own constitutional future.,/p>

This is likely to be an unattractive idea to the Scottish Government. The implications of this on timing are substantial. If the process of moving to a second independence referendum cannot even begin until after the exit terms have been established, then it will almost certainly be true that Scotland will have left the EU before it has even held a vote on whether or not to leave the UK. Even if it had held that vote and opted for independence then the consensus at the time of the 2014 plebiscite was that it would take 18 months to organise the separation of Scotland from the UK. So on this timetable, Scotland would be compelled to leave the EU and it would have then to reapply for membership of it via Article 49 of the Lisbon Treaty. This could be a somewhat lengthy endeavour.

The hardball option for Ms Sturgeon would be to push for a much faster decision. She could bet the farm on demanding an earlier referendum, obtaining it and winning it on a much quicker schedule. If she took this attitude, then an element of luck might allow her to pull off such a gambit. Where she is fortunate is that the whole of Scotland is due to vote in regional councils on 4 May next year. In administrative terms it would be relatively simple to add a referendum ballot to these elections. It would undoubtedly be controversial, with the likes of the Electoral Commission complaining that it was undesirable to mix such different sorts of political contests on the same day, but UK General Elections have often been held on the same day as local government contests have been in England. ,/p>

Such an audacious move offers a narrow path to independence within the EU. If Scotland voted to leave the UK next May, then assuming that the 18-month norm holds then it could become a new nation on, say, 30 November 2018 (St Andrew’s Day). It would almost certainly be viewed by Brussels as now being outside of the Article 50 procedure. It would not leave the EU when the rest of the UK does. It is extremely unlikely that it would have to reapply for EU membership. The danger in all this is that if the second referendum failed to acquire a majority vote for the SNP then Ms Sturgeon would be finished as First Minister and the ideal of independence totally derailed.

Nixit?

The situation in Northern Ireland is different. The option of independence from the UK is not on the table. The prospect of enough former Unionists switching sides to favour Irish unification simply to stay inside the EU is also a fairly remote one. The compelling need instead - politically to uphold the peace process, socially to ensure the harmonious exchange of people, and economically for the sake of their shared prosperity - would be to find a means by which the Republic of Ireland and the six counties of Northern Ireland had a Norway-style EEA-type of arrangement between them even if the United Kingdom as a whole had an arrangement with the EU-27 which was of a different character. It would mean restoring the 1923 Common Trade Agreement between the UK and the old Irish Free State and retaining existing arrangements for free movement between the UK and the Irish Republic.

There is enough goodwill towards Dublin in Brussels for this to be possible. It would create a new set of anomalies for the EU but there are a number of those already. It would require a side agreement alongside Brexit between the UK and Ireland which was accepted by the EU-27 (or EU-28 if the SNP dash for independence transpired) but this is far from implausible. It does not need Northern Ireland either to remain in the EU or depart from the UK, merely to be (once again) a ‘special case’. That an outcome like this might be thought relatively simple speaks volumes for how complex Brexit will be.

Tim Hames, Director General, BVCA

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