Conclusions and recommendations
Becoming an EU Member State
1. In
the event of separation, Scotland's future membership of the European
Union, on appropriate terms, would be in the national interests
of the UK. Furthermore, we have heard no evidence that any other
Member State would regard it as contrary to their national interest,
subject to acceptable terms. (Paragraph 25)
2. The
Scottish Government's preferred route to becoming a member of
the EU is through Treaty amendment under Article 48. Under this
process the Scottish Government would depend on the UK Government
instigating negotiations on Scotland's behalf. Not only has the
UK Government described the prospect of using Article 48 as "utterly
implausible" but, in the unlikely event that it is used,
the UK Government could not be expected to raise issues that would
be to the detriment of the citizens of England, Wales and Northern
Ireland. Key objectives identified made by the Scottish Government
in its White Paper would not, therefore, be realised. (Paragraph
26)
3. Under
the Article 49 process Scotland would have to be outside the EU
to apply for membership. For this reason, the Scottish Government
favours Treaty amendment under Article 48 but it is unclear whether
this is permissible under EU law or acceptable to Member States.
There is therefore every likelihood that, in event of a Yes vote,
if the Scottish Government continues to insist on an independence
date of 24 March 2016 Scotland will temporarily be outside of
the European Union - with significant implications for the Scottish
people. However, we can find no evidence that the Scottish Government
has communicated this risk to the people of Scotland. The Scottish
Government should publish the legal advice it has received on
a separate Scotland's membership of the European Union as a matter
of urgency. (Paragraph 27)
4. It
is misleading for the Scottish Government to claim that on 24
March 2016 Scotland could be both a separate state and a Member
State of the European Union. There are a number of clear risks
to the Scottish Government's strategy to gain membership of the
EU, all of which are overlooked in the White Paper, and which
make the 18-month timetable unbelievable. The Scottish Government's
attitude to becoming a member of the EU appears based on the sentiment,
as articulated by Fiona Hyslop MSP, that "where there's a
political will, there will be a way". The Scottish Government
has provided no proof that the will exists across Europe for Scotland's
membership of the EU to be fast-tracked with a timetable of Scotland's
choosing, nor can it be certain that its chosen way of achieving
such a goal is legitimate or would be accepted by all Member States.
To date, not a single Member State has indicated its support for
the Article 48 route. (Paragraph 39)
5. We
do not believe that negotiation and subsequent ratification of
Scotland's membership of the EU could be concluded by 24 March
2016. The Scottish Government have to tell the Scottish people
which of the alternative options available they favour. The alternative
scenarios of Scotland leaving the EU and entering into complex
provisional arrangements or joining the European Economic Area
are neither guaranteed nor satisfactory; they offer little benefit,
but could cause significant harm to Scotland's interests. (Paragraph
45)
6. An
obsession with securing membership of the European Union by a
specific date has significantly weakened the Scottish Government's
negotiating position. It was a mistake to have made such a commitment.
The Scottish Government must clarify for the people of Scotland
whether, in the event of a yes vote, its focus in any negotiations
would be on getting the best outcome for Scotland or meeting an
arbitrary and self-imposed timetable. (Paragraph 46)
Conditions of membership
7. A
separate Scotland cannot be forced to adopt the Euro, but Member
States might well insist on a commitment to do so in the future.
(Paragraph 52)
8. On
joining the EU, the government of a separate Scotland would have
to commit to meeting the EU target of getting national debt down
to 60% of GDP within 10 years. To achieve this the Scottish Government
would have to impose additional spending cuts to those planned
by the UK Government or raise taxes higher, or both. We will give
further consideration to fiscal limitations imposed by the EU
in our future work. (Paragraph 54)
9. The
need to complete negotiations with the UK on key issues before
Scotland can negotiate with the EU is not mentioned by the Scottish
Government in the White Paper, but it is further reason to doubt
the plausibility of the Scottish Government's 18-month timetable
for negotiation and ratification of a separate Scotland's membership
of the EU. (Paragraph 57)
10. The
Scottish Government seems to believe that opting out of joining
the Eurozone and Schengen would be a formality, but Member States
have no reason to give in to Scotland's demands, and they each
enjoy a right of veto over a separate Scotland's potential membership.
The case made by the Scottish Government in the White Paper that,
in the event of separation, it could and should continue to receive
the opt-outs and derogations negotiated by the UK appears to us
based on wishful thinking rather than legal and historical precedent.
(Paragraph 58)
11. No
new Member State has negotiated an opt-out from JHA measures and
it is questionable that Member States would grant Scotland a greater
flexibility than they themselves are able to exercise. The UK
Government claims that a failure to negotiate an opt-out from
EU Justice and Home Affairs measures would have major implications
for a separate Scotland's legal system. This is an important matter
which requires further clarification. (Paragraph 61)
12. A
Scottish EU Member State would be bound by EU legislation on VAT.
There is no guarantee that the Scottish Government would negotiate
the opt-outs that would be required to continue zero-rates of
VAT on items such as children's clothes, food and books. Failure
to secure an opt-out would see costs of these basic items increase
by a minimum of 5%. Like other risks surrounding separation, this
threat to the pockets of Scottish families is overlooked by the
Scottish Government. The uncertainty over zero-rates of VAT does
not exist if Scotland remains part of the UK. (Paragraph 64)
13. If
an Article 48 route to membership were pursued, it seems highly
unlikely the UK Government would seek to negotiate a position
on behalf of Scotland that would see thousands of its own students
disadvantaged. Under an Article 49 accession, while Scotland would
be arguing its own case, it would still have to persuade the other
Member States, including the UK. On this basis, it is surely time
for the Scottish Government to admit that its hopes of discriminating
against students from the rest of the UK on the charging of tuition
fees are dead; alternative plans must now be made. (Paragraph
68)
14. If
a separate Scotland's universities were unable to charge tuition
fees to students from the continuing UK there would be a £150
million funding black hole in the higher education budget. The
Scottish Government has failed to say how, or even if, that gap
in funding would be filled. (Paragraph 69)
Contributions to and receipts from
the EU budget
15. The
Scottish Government appears to misunderstand how the UK's rebate
is calculated. In the event of separation, the UK's rebate would
be automatically adjusted to reflect the change in the UK's circumstances.
There would be no Scottish share to be negotiated as the Scottish
Government erroneously suggests. Instead, Scottish households
would have to make an additional contribution to the EU budget,
some of which would go towards paying the UK's rebate. (Paragraph
73)
16. Separation
poses clear risks to Scotland's farmers. The level of funding
they would receive under Pillar I of the Common Agricultural Policy
is uncertain. In the event that Scotland has to accede under the
Article 49 process then CAP receipts would cease for any period
that Scotland is outside the EU. The Scottish Government has made
no commitment to maintain levels of funding should this scenario
occur. Whatever the route to membership, there are no guarantees
that a separate Scotland would continue to receive the same level
of payments that it does now. For this to happen Scotland would
need to successfully negotiate that it should receive a higher
allocation of receipts than some existing Member States, notably
those that have recently acceded and had to accept the ten-year
phase-in of payments that Scotland would be seeking to avoid.
(Paragraph 78)
17. The
Scottish Government should make clear the potential risks as well
as the alleged benefits of separation. In terms of the CAP, separation
would bring no improvement in funding for Scottish farmers before
the end of this budgetary period in 2020 (anything beyond that
is unknown) and could result in existing levels of funding being
cut or even interrupted. (Paragraph 79)
18. Scotland
currently benefits from a favourable allocation of Structural
Funds by the UK Government that sees it receive an additional
£186 million between 2014-2020. On separation, this uplift
would be lost and, should Scotland's presence within the EU be
interrupted, even temporarily, while negotiations on membership
take place, the payment of any Structural Funds would cease as
there would be no treaty authority to pay them. (Paragraph 80)
19. In
the context of the EU budget, the Scottish Government's plans
for separation, even under the best-case scenario, would leave
Scottish households at least £843 worse off. Under the worst-case
scenario, that of a separate Scotland seeing its CAP receipts
phased in over ten years (as has been the case with the 13 most
recent Member States), then Scottish households would be £1,343
worse off than if they remained part of the UK. (Paragraph 83)
Conclusion
20. We
agree with the conclusion of the House of Commons Foreign Affairs
Committee that the Scottish Government "underestimates the
unease which exists within EU Member States and EU institutions
about Scottish independence". Not only does this mean that
the period required for negotiations is longer than anticipated
by the Scottish Government but, ultimately, all 28 Member States
have the right to veto if they are unhappy with the terms of a
separate Scotland's membership of the EU. That the Scottish Government
does not take this threat seriously demonstrates a lack of understanding
of the realities of international politics. (Paragraph 86)
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