House of Lords urges differentiated solution for Scotland in Brexit

From “Chapter 5: Scotland” of the UK parliament’s House of Lords European Union Committee report on Brexit and devolution, published today:

We conclude, on the basis of the weight of evidence submitted to this inquiry, that the Scottish Government’s further proposal, for continued Scottish membership of the Single Market, through the European Economic Area, while the rest of the UK leaves the Single Market, is politically impracticable, legally highly complex and economically potentially disruptive to the functioning of the UK single market.

Nevertheless, we urge the Government to respect the particular circumstances in Scotland. While we acknowledge that the referendum was a UK-wide vote, giving a UK-wide result, the Government needs to recognise the fact that the vote to remain in Scotland, at 62%, was the largest and most decisive (either in favour of remaining or leaving) in any nation of the UK.

We therefore consider that, in the event that the UK Government does not secure a UK-wide agreement that adequately reflects Scotland’s specific needs, there is a strong political and economic case for making differentiated arrangements for Scotland.

The Scottish economy has particularly pressing needs, including its reliance on access to EU labour, which is acute in sectors such as health and social care, agriculture, food and drink, and hospitality. We also note Scotland’s demographic needs, and its reliance upon EU migration to enable its population (and in particular, that of working age) to grow. Scotland’s more sparsely populated regions are disproportionately reliant both on EU migration and EU funding. Many of our witnesses argued that the most pressing case, in view of Scotland’s economic and demographic circumstances, would be for a standalone approach to immigration policy. We address this issue in the next chapter.

Our witnesses have also suggested that differentiated arrangements could be reached in fields such as energy policy, justice and home affairs cooperation, participation in Europol, access to EU structural or research funds, participation in such programmes as Horizon 2020 or Erasmus, reciprocal healthcare provision, workers’ rights and working hours, and agriculture and fisheries.

Finally, we reiterate that maintenance of the integrity and efficient operation of the UK single market must be an over-arching objective for the whole United Kingdom. But that objective does not preclude differentiated arrangements for Scotland in some areas, and nor does it justify excluding the Scottish Government from the Brexit process. […]

Theresa May ditches manifesto pledges to clear decks for Brexit: Legislative battle ahead to clear hung Commons and Scottish Parliament

FT.com, today, in an article on the UK government’s legislative agenda announced in the Queen’s Speech:

There were growing fears in Whitehall that the Scottish nationalists could hold London to ransom by voting down the Great Repeal Bill—which puts EU law into British law.

Britain’s devolution settlement was developed under the auspices of the EU single market.

The government now believes that the relevant framework should be reset at a UK level, in particular for devolved policy areas such as agriculture, fisheries and environmental protection.

But that requires the authorisation of all the devolved administrations in Cardiff, Edinburgh and Belfast through “legislative consent motions”.

A Conservative official said that there was likely to be sabre-rattling by the SNP during the process, which could take eight weeks, but said there were hopes that Holyrood would not stand in the way. “It’s common sense. There would be major consequences for Scotland if this wasn’t passed, there would be holes in the law,” he said.

The Guardian’s Andrew Sparrow, earlier this evening:

This is a consequence of what is known as the Sewel convention, which says the Westminster parliament should not legislate on matters devolved to Scotland without the Scottish parliament’s approval.

As we learned earlier in the year, the Sewel convention is just that—a convention—and is not (as far as I believe) enforceable by the courts1. The UK Government, however, has thus far not (as far as I’m aware) overridden a vote in the Scottish Parliament. It seems that it could legally do so but in such a scenario we would be in uncharted constitutional waters.

Update: The Guardian has published an article looking in more detail at this issue. The piece includes quotes from Mike Russell, the Scottish Government’s Brexit minister, and Graham Matthews, president of the Law Society of Scotland.

Immigration and the UK Economy

Professor Jonathan Wadsworth, senior research fellow at the Centre for Economic Performance, LSE—Immigration and the UK Economy, published today:

  • Much of the recent falls in net immigration are driven either by a rise in emigration or a fall in the number of Britons returning to the UK—things over which the government has very little control.
  • Immigrants do not take most new jobs. The immigrant share in new jobs is—and always has been—broadly the same as the share of immigrants in the working age population.
  • Areas of the UK with large increases in total or EU immigration have not experienced greater falls in either jobs or pay of UK-born workers. The big falls in wages observed after 2008 are more closely associated with the fallout from the global financial crisis than immigration.
  • There is little effect of immigration on inequality and the relative pay and job prospects of less skilled UK workers. Changes in wages and joblessness for less educated UK-born workers show little association with changes in immigration.
  • Immigrants pay more in taxes than they take out in welfare and use of public services. UK-born individuals, on average, take out more in welfare and benefits than they pay in taxes. So immigrants help to reduce the budget deficit. There is little evidence that immigrants have negative effects on crime, education, health or social housing.

On productivity and GDP growth:

Migration acts much like trade in capital, as people tend to move to countries where they can be more productive and earn higher incomes. This increases welfare through greater efficiency in labour allocation across the world. Immigrants also fill the gaps in the skill composition of the national workforce. This fosters specialisation, increases productivity and raises the wages of national workers with complementary skills.

Recent work by Boubtane et al (2015, Table 3) finds that a 50% decrease in the net immigration rate would reduce UK productivity growth by 0.32% per annum. Since EU immigration is half of the current UK total … cutting EU immigrants to 80,000 per year is likely to shave 0.16% off productivity growth. So about a decade after Brexit, UK GDP per capita will be about 1.6% lower than it would have otherwise been.

Roundup, Wednesday 10 May 2017

4 May local election results

Party Seats +/- Votes Vote % % +/-
SNP 431 6 607,747 32.3 0.0
Conservative 276 161 477,124 25.4 +12.1
Labour 262 -132 376,799 20.0 -11.4
Lib Dem 67 -4 130,018 6.9 +0.3
Green 19 5 75,669 4.0 +1.7
UKIP 0 0 2,869 0.2 -0.1
Independents/other 173 -31 209,131 11.1 -2.6

Source: Britain Elects

Former ECJ Advocate General: Post-Brexit, Scotland could be in both the UK and EU

Miguel Maduro
Miguel Maduro at The State of the Union 2013, European University Institute. License: CC BY-SA 2.0.

Professor Miguel Poiares Maduro, former Advocate General at the European Court of Justice, giving evidence today to the Committee on Constitutional Affairs (AFCO) in the European Parliament:

“There is one other possibility, that is to have that some UK citizens may maintain citizenship of the European Union and others won’t. And this is a bit of a provocation… It is… Nothing prevents a part of the United Kingdom to stay and another part of the United Kingdom to leave. We have a precedent with that; it’s called Greenland. We have the case of one member state where part of its territory left the European Union and another part stayed. So, in principle, nothing will prevent for the territories, for example, of Northern Ireland and Scotland to stay in the European Union, and for the rest of the territory of the United Kingdom no longer to be part of the European Union.

“Of course, this will be complex to organise in practice, it will require a border inside a member state, because it will basically mean that Scotland and [Northern] Ireland will remain part of the European Union and part of the United Kingdom. But it will not be impossible.

“Still, it will be again very problematic in political terms, and the consequences of it will make it difficult. If we think about it… I think, on the one hand one risk will be economic—for the UK—because naturally you will have… I will say for Scotland and Northern Ireland, it would be extremely positive. They will attract lots of investment and companies that will locate in those territories because they could benefit from both those markets. But of course for the rest of the United Kingdom it will be even more dramatic because there will be economic mobility to that part of its territory.

“For the European Union, the difficultly will be that if this will take place without the UK formally leaving as a state—because part of its territory will stay, in the same way that happened with Denmark and Greenland—it will mean that the representation of that part of the territory would be made by the UK government; not by the Scottish and the Northern Ireland governments. For this to be done, without leaving and then coming in as Scotland and Northern Ireland to be then in terms of state secession, the representation of this part of the territory will have to continue to be done by the United Kingdom central government.

“Of course, there will be the possibility to leave as [the] UK and come in as part of the UK. That will be another alternative.”

The Scottish Government made proposals along these lines in the paper Scotland’s Place in Europe, published late last year. David Davis, the UK Government’s Brexit secretary, rejected the proposals.

Roundup, Wednesday 3 May 2017

Scotland’s Brexit Choices

Dr Kirsty Hughes, Director of the Scottish Centre on European Relations, 17 April:

The Article 50 clock is ticking, but talks are not likely to start until the end of May or early June. The two year deadline to conclude exit talks means, barring a change of heart, the UK will be out of the EU by March 2019 but with most of its future EU-UK trade deal still to negotiate.

First Minister Nicola Sturgeon has asked for a second independence referendum, and a Section 30 order, so that Scottish voters can have a choice on independence or not before the UK finally leaves the EU. Theresa May has said, for now, she won’t go along with that. However this political stand-off develops or is resolved, Scotland will have to make its Brexit choices amidst considerable uncertainty – unless it gets no choice, with May turning ‘no, not now’ into ‘no, never’.

If Sturgeon and May resolved their disagreement so that a second independence referendum could be held by March 2019, what might Scottish voters know by then, and what will still be uncertain?

In-depth, must-read analysis from the recently launched SCER think tank.

Sources of data and statistics

We’ve added a page linking to various sources of data and statistics relating to Scotland and the wider world, including GDP of Scotland and its regions, trade, population, politics, energy, health, and the environment. Check it out here and let us know if we’ve missed anything.

Roundup, Sunday 9 April 2017

Noteworthy news, analysis, and commentary from the past week or so…

Standard Life Considering Dublin Hub After Brexit

Bloomberg, 5 April:

Standard Life Plc, which is merging with Aberdeen Asset Management Plc to create an $810 billion giant, is considering making Dublin its new hub inside the European Union as it prepares for the U.K. to lose easy access to the single market, the firm’s chairman said.

Barring “something miraculous” happening, the Edinburgh-based money manager will no longer be able to service its 500,000 Austrian, German and Irish clients from the U.K. after Brexit, Gerry Grimstone said in an interview Tuesday in Delhi. Standard Life is weighing turning its Dublin branch into a subsidiary from which it can “passport” into the rest of the EU, he added.

The firm would then “make the German business a branch of the Irish business,” said Grimstone. “All of us are preparing road maps like” that.