In a move that – for a long time – seemed unlikely, the Scottish government has signalled its intention to hold a second independence referendum, just two and a half years after the first. The country’s first minister, Nicola Sturgeon, said that the vote would take place before the spring of 2019, but Prime Minister Theresa May has said that it won’t happen.
Here we take a look at what Scottish independence would mean for the food industry of Scotland, the UK, and Europe.
Salmon and whisky – heavily associated with Scotland – are among the UK’s biggest exports.
It was announced yesterday that the value of Scotland’s food and drink exports was £5.5 billion last year – over a quarter of the record £20 billion that the whole of the UK exported in 2016. By far the UK’s largest food and drink sector– six times that of the next biggest, chocolate – is Scotch whisky, which would be a big loss for the UK economy. It’s fair to assume, too, that Scotland is contributing its fair share to UK exports of beer (£595 million in total last year), salmon (£579 million) and beef (£446 million).
So the effect of Scottish independence on the UK economy would certainly be felt. There are risks associated with independence, but it’s simply not true that a country of Scotland’s size couldn’t stand on its own two feet – take for reference Serbia or Portugal, with larger populations than Scotland but less productive economies. That’s bad news for the rest of the UK.
David Williamson, the Scotch Whisky Association’s director of public affairs and communications, said: “With Scottish food and drink exports reaching a record high in 2016, it’s clear that the sector is leading the way in terms of the country’s economic and export performance. And Scotch Whisky continues to be the most significant part of this success, with overseas shipments making up around three-quarters of total food and drink exports.”
Scotland would benefit from retaining European farming subsidies.
The independence debate has been renewed because of the UK’s decision to leave the European Union (EU) last June. Unlike the rest of the country, Scotland overwhelmingly voted to stay in the EU – 62% opposed to leaving, compared to just 46.6% in England. So a second independence vote is seen by the Scottish government as a way of securing Scotland’s national interests, and a revolt against what is seen in Edinburgh as Westminster-dominated politics.
The public consensus in Scotland is against a second independence referendum, but if it did pull away from the rest of the UK it would almost certainly choose to re-apply for EU membership.
It would then be eligible once again for everything that it will lose through Brexit. That includes £450 million of EU farming subsidies – almost a fifth of Britain’s share, despite Scotland only accounting for 8% of the UK population – including some payments made to protect against price-related decline in Scotland’s farming industry.
It will also ensure that Scotland regains tariff-free trade with the EU and ready access to seasonal workers; the UK government has already conceded that it will lose access to the single market, and it will become harder for Scottish employers to recruit migrant workers after Brexit.
Scotland would have to face life outside the UK and the EU.
After the first independence vote in 2014, the Scotch Whisky Association’s then-chief executive, David Frost, ‘welcomed the stability that this choice brings’. Scotland leaving the union would bring untold instability and uncertainty for the food industry. FoodBev warned in 2014 that it would take at least 18 months before the process of independence could be realised, with further time necessary before Scotland could rejoin the EU.
The reintroduction of trade barriers – both with the UK and the remainder of the EU – would cost the sector millions of pounds in duty charges and taxes if negotiations are delayed or, at worst, fail.
In the period between independence and EU membership, Scotland would have to organise its own protection for prized food and drink assets or threaten their prosperity altogether. Assurance schemes for meat and dairy, a common fisheries policy with its neighbouring countries, as well as European Protected Designation of Origin (PDO) or Protected Geographical Indication (PGI) status would all have to be replaced by an independent Scotland.
And renewed uncertainty around the pound – and whether, as was suggested three years ago, Scotland would lose the right to keep it as its currency – would hit business hard.
Erna Solberg has warned against going it alone. © Kjetil Ree/Wikimedia
Before the Brexit vote in June, Norwegian prime minister Erna Solberg warned that the UK “won’t like” being on the outskirts of the European decision-making process. Indeed, isolation is an important concern for both Scotland and the UK as a whole, given the increasingly competitive and global nature of the economy.
In the first instance, Scotland will have to contend with being part of neither the UK nor the EU. In terms of its trade agreements with the rest of the world, it will have to start anew from the very bottom.
But even in the event that it manages to rejoin the EU quickly, the question of Scotland being able to market its own products abroad as effectively as the UK can collectively, is an entirely subjective one. Should a second referendum take place, Scots erring on the side of caution will be wary of their changing relationship with the EU, and the UK – and more so now than three years ago, their mind could be made up on the argument of ‘plucky little Scotland’ against the world.
© FoodBev Media Ltd 2017