HC 643 The foreign policy implications of and for a separate Scotland

Written evidence from the Foreign and Commonwealth Office

1. Thank you for the opportunity to submit a memorandum of evidence for your inquiry into the foreign policy implications of and for a separate Scotland. The evidence below addresses the main areas of interest identified by the Committee in announcing the terms of reference on 18 July 2012.

2. Following the Scottish Parliament elections in May last year, the Scottish Government has made clear its intention to hold a referendum on independence. The question of Scotland’s constitutional future is for people in Scotland to answer, and, recognising the Scottish National Party majority in the Scottish Parliament, the UK Government is committed to facilitating a fair, legal and decisive referendum as soon as possible, to provide clarity about how this will be decided.

3. The UK Government’s position is clear: Scotland benefits from being part of the UK and the UK benefits from having Scotland within the UK. The UK Government is confident that the people of Scotland will choose to remain part of the UK, and is not planning for any other outcome.

4. The UK Government will, of course, provide evidence and analysis to inform the decision facing the people of Scotland. As announced by the Secretary of State for Scotland on 20 June 2012, the Benefits of the UK work programme will assess the benefits of Scotland being part of the UK and address many of the key questions facing the people of Scotland. The analysis will provide clarity and fact in the run-up to the referendum, with the work focusing across a number of themes, including:

· The UK’s position in the world – currency and monetary policy; financial services; and membership of the European Union and international institutions;

· the protection of the UK’s citizens – defence capability and the way we secure our borders; and

· the economic benefits of the UK – economic performance; public services; the welfare system and shared energy sector.

5. It is for those advocating independence to explain the nature and implications of an independent Scotland; it is the policy of the UK Government to maintain the integrity of the existing UK, and it is supporting that position with evidence and analysis. The UK is one of the most successful and long-standing political, social and economic unions in history, with a record of shared achievements across all regions and countries that make up the UK. The close ties and shared history mean the UK can project significant influence in the world and face global challenges and risks by pooling our talents and resources.

6. As the UK Government has said before, it is for those advocating independence to explain what this means and to set out the potential impact. Without such clarity from the Scottish Government, it is difficult to come to any other conclusion than that the impact on Scotland of separation on its place in the world would be significant.

7. To date, the Scottish Government has made a number of claims about the status of an independent Scotland, including its membership of international bodies. Notably, it has asserted that Scotland would continue to be a member of the EU in the event of independence, and would not have to negotiate the terms of its membership as a new Member State. It is not clear on what basis this assertion has been made and no evidence has yet been supplied to support this claim. It is, however, evident that this issue is not straightforward, and that the Scottish Government cannot take for granted the idea that Scotland would secede from the UK but automatically stay in the EU. Decisions about EU membership need the unanimous agreement of all Member States.

8. On this and other critical issues relating to an independent Scotland’s international standing, the Scottish Government needs to be clear on the facts of what independence actually means in practice and provide evidence to support its statements, which takes account of expert opinion and international precedent.

9. The overwhelming weight of international precedent suggests that, in the event of Scottish independence, the remainder of the UK would continue to exercise the existing UK’s international rights and obligations, and that an independent Scotland would be a new state. The UK Government judges that this situation would be recognised by the wider international community.

10. It therefore follows that an independent Scotland would be likely to have to apply for membership of whichever international organisations (including the United Nations, European Union, Commonwealth and NATO) it wished to join, and treaties (such as the European Convention on Human Rights or other international human rights treaties) to which it wished to accede. It would then have to sustain all the related costs and administration of membership. As part of its work on the Benefits of the UK, the UK Government is carrying out further detailed analysis on the benefits of the UK’s international position and its membership of the EU and other international institutions, and these important issues of international law, including with the assistance of external experts. These findings will be published in due course.

11. The question of an independent Scotland’s membership of the EU is of fundament al importance because this would involve detailed negotiation with the remainder of the UK and other existing Member States on the terms of Scotland’s membership, including complex areas such as fisheries quotas and Scotland’s financial contributions. Such negotiations would have far-reaching implications for Scotland and the rest of the UK as they would also need to address Scotland’s position in relation to the European single currency and the Schengen free movement area , which every new Member State since 2004 has committed to joining when they meet the criteria . The impact of an independent Scotland joining Schengen, were it to wish or be obliged to do so, would be significant, creating a UK land border with the Schengen area for the first time (the Republic of Ireland is not a member of Schengen).

12. The UK is one of largest Member States in the EU, which gives us a considerable say over decision-making in support of our policy objectives. However, the influence of small Member States in the EU is variable. In institutional terms, each Member State, whatever its size, provides a member of the European Commission, and a judge in each chamber of the Court of Justice of the EU. The size of an independent Scottish delegation in the European Parliament is difficult to predict. In the Council of the European Union, the main forum for decisions amongst the Member States, smaller countries have tended to have a higher voting weight proportional to their population than the larger ones. This will change in 2014, however, with the introduction of the new voting system agreed under the Lisbon Treaty: legislative proposals will in general need to be backed by over 55% of the Member States, and by countries together representing over 65% of the EU’s population. This will tend to increase the voting weight of the larger Member States, including the UK, relative to the current position, and diminish the voting weight of smaller Member States. Scotland’s place within one of the largest Member States is therefore beneficial in terms of support for economic priorities, such as trade policy, and enhanced influence in areas with particular impact in Scotland, such as regulation of the financial services industry, health and safety regulation affecting the offshore oil industry and reforms of the Common Agricultural Policy and Common Fisheries Policy, amongst others.

13. As a new state Scotland would be entitled to apply for membership of the UN. The accession process would be likely to be quicker and less complicated than that of accession to the EU; the process of joining the UN requires only a short resolution of the General Assembly on the recommendation of the Security Council. However, there would be assessed costs and administrative burdens for Scotland associated with membership of the UN and its Specialised Agencies. An independent Scotland would not be a permanent member of the Security Council; the five permanent members, including the UK, are fixed by Article 23 of the UN Charter. (The USSR is also named in Article 23; the international community recognised Russia as continuing the USSR’s membership in 1991.) Scotland would therefore be less able to play a global role than the UK does in geopolitics, global security and international human rights. An independent Scotland would also not belong to, or be invited to join, the other main international groupings of the most influential and economically significant countries, such as the G8 or G20.

14. Although the Scottish National Party is due to re-consider its policy on NATO membership in the autumn, both its and the Scottish Government’s current policy is to commit to the Partnership for Peace programme. This allows for co-operation between NATO Allies and other countries in the Euro-Atlantic area and many Partners make significant contributions to NATO operations. But it is not the same as full NATO membership. It does not provide a voice in NATO’s senior decision making bodies, nor, because the Washington Treaty does not apply, does it bring with it NATO’s Article 5 collective defence guarantee where an attack against one of the Allies shall be considered an attack against all, if all NATO members agree. The UK Government believes that Scotland is certainly stronger in defence terms as part of the UK within NATO. These questions, and related issues of international defence and security, will be considered more fully in evidence being submitted to the Defence Committee by the Ministry of Defence. It is relevant to note that membership of NATO is also not automatic as this is a matter for the North Atlantic Council to determine.

15. Scotland would have to apply for membership of the International Financial Institutions, including the World Bank and the International Monetary Fund (IMF). There is precedent for a region of an existing member of the IMF declaring independence and applying to become a member in its own right. In Scotland’s case, its voting shares and influence in these Institutions would be reduced from its current position as part of the UK. For example, the UK holds a single seat on the IMF’s 24 member Executive Board, as one of the fifth largest quota holders. Many other IMF members are represented by Executive Directors representing a group of members, and thus the expectation must be that an independent Scotland would not be represented by its own single seat.

16. It is for the Scottish Government to set out how it would go about developing a new network of bilateral relationships, and setting up and financing the diplomatic network it would presumably need to service them. It is difficult to see how those relationships would be more productive for Scotland than those privileged relationships the UK currently enjoys with the rest of the world, and particularly the other major international powers, including the emerging economies.

17. An independent Scotland would, however, face some immediate and complex bilateral issues. One would be the need to agree maritime boundaries and continental shelf questions between Scotland, on the one hand, and the remainder of the UK, Ireland, Iceland and Denmark and the Faeroe Islands. Another would be the status of the nearly 14,000 treaties, multilateral and bilateral, the UK is currently involved in, covering everything from transport and telecommunications to taxation and investment protection.

18. In formal terms, international precedent suggests that the impact of Scottish independence on the international standing and policy of the remainder of the UK would be less significant, as the remainder of the UK would maintain its leading position in the major international institutions and organisations. Thus the remainder of the UK would continue in membership of NATO and the EU – albeit with some necessary adjustments to its institutional position consequent to its reduced population – and retain its permanent membership of the UN Security Council. It would remain one of the largest contributors, in political, policy, capability and financial terms, to all of those organisations.

19. Similarly, the remainder of the UK would maintain its strong network of alliances and relationships, and its global foreign policy role. It would retain 55 million of its current population of 60 million, making it the 23rd largest country in the world (down from 21st now). It is more difficult to say, however, what the effect on the UK’s international influence would be. Traditional allies may seek reassurance that the UK would retain the ability to project influence and military capability in support of joint objectives and there could be a short-term risk of opponents of the UK’s foreign policy seeking to exploit any uncertainty or distraction that could follow a vote in favour of separation for Scotland. But any material impact or longer term trends are harder to predict, and would depend on the policy pursued by the Government at the time.

20. The UK Government is not making plans for independence as it is confident that people in Scotland will continue to support Scotland remaining in the UK in any referendum.

21. There would appear to be no reason why Scottish separation should have any effect on the FCO’s ability to deliver its foreign policy objectives or its public services, such as consular and commercial services. The UK’s diplomatic, consular and UKTI network – one of the largest and most respected in the world – would remain intact and continue actively to promote and protect the interests of the remainder UK, its citizens and businesses. The Scottish National Party in 2009 made clear its intention to establish a diplomatic service and network, should Scottish independence be achieved, on the basis of an existing network of 22 Scottish Development International offices in large commercial centres globally (which are not always capital cities). By contrast, the FCO maintains a global network of around 270 diplomatic posts in 170 countries, employing 14,000 staff. An independent Scotland would have to sustain the relevant costs and administrative burden, and no proposals have been put forward by the Scottish Government to clarify its view on how a Scottish diplomatic and consular service could realistically be funded or staffed. It is clear that no staff could be compelled to join a new service from within the UK Foreign and Commonwealth Office.

22. It is not clear what citizenship rules might apply in an independent Scotland. The number of people in Scotland who would choose to renounce their UK citizenship could impact on UK consular services, which are funded from the consular premium on UK passports.

23. The FCO’s global diplomatic network of around 270 posts is the essential infrastructure for our foreign policy and our influence overseas. This enables the UK to deliver a distinctive foreign policy that extends its global reach and influence on bilateral and multilateral issues such as climate change, human rights and global security, as well as assisting UK nationals overseas. Consular assistance overseas remains a very high priority – during 2010/11, there were over 55 million trips overseas by British nationals and over 43,400 British nationals need some form of consular assistance. During various national disasters and political unrest in early 2011, the FCO helped over 6,300 people with assisted departures or evacuations. Similarly, UKTI assists thousands of businesses to exploit trade opportunities annually, helping them to deliver billions of pounds of additional profit, and supporting hundreds of high value inward investment projects.

24. The loss of coverage from UK consular and trade and investment promotion networks would therefore have a significant impact on Scottish citizens travelling and working overseas. If Scotland was a member of the Commonwealth or EU, the UK, under existing arrangements, could provide some first-line consular assistance to Scottish citizens where Scotland had no diplomatic presence. These arrangements would not extend to those cases that are particularly challenging or sensitive, however, where there is an expectation that assistance would be provided directly by the country concerned. This could have an important impact on Scottish citizens involved in situations such as child abduction, forced marriage or criminal cases in much of the world. An independent Scotland would need to develop its own consular policies to define what services their citizens could expect when overseas to allow the UK (and other EU Member States and Commonwealth countries) to provide consular services on behalf of unrepresented Scottish nationals, and to develop the capacity to provide hands-on consular support in the most difficult cases.

25. There are no such burden-sharing arrangements for business services. An independent Scotland would not have access to UK Trade and Investment networks and resources. As part of the UK, SDI’s own offices in 13 countries are complemented by the extensive UKTI network of 162 offices in 96 countries, and can draw on the UK’s diplomatic representation in the rest of the world. Independence would mean that Scottish companies and potential foreign investors in Scotland would lose access to that global network, and risk missing out on investment in the form of jobs, skills, capital and tax revenue from all over the world. Helping companies increase their exports and attracting foreign investment is, of course, an essential element of achieving growth in the economy, and closing off Scottish companies’ access to this global network could only harm the Scottish economy.

26. It is for the Scottish Government to explain its position on what an independent Scotland’s international relationships would look like. Scotland currently benefits from and contributes to the UK’s global presence which helps to offer stability and influence in an increasingly competitive, globalised world. It is clear that an independent Scotland could not exist in a vacuum, immune from these external forces, and a move to separate Scotland from the rest of the UK’s pooled resources would require change of considerable magnitude. The Scottish Government will want to consider carefully the political, social, defence, security and economic implications of such a dramatic change and to put forward credible information on how such a fundamental shift could be managed adequately.

24 September 2012

Prepared 17th October 2012