1 Introduction
1. On 18 September 2014, the people
of Scotland will vote in a referendum on whether Scotland should
leave the United Kingdom and become a separate state. As part
of our inquiry into the Referendum, we have taken evidence on
a series of major issues which have been the focus of debate so
far. In this Report we focus on the Scottish Government's aim
for a separate Scotland to become a Member State of the European
Union, and two specific dimensions of this debate in particular.
First, we consider the possible routes by which a separate Scotland
could become a member of the EU and assess whether the 18-month
timetable set by the Scottish Government is realistic. Second,
we evaluate the Scottish Government's position on some of the
key issues, including opt-outs and derogations, that would need
to be negotiated and agreed.
2. The UK is one of the largest Member
States in the European Union. It has the equal highest number
of votes in the Council (29) and the third largest European Parliament
delegation (73 MEPs). The Minister for Europe described to us
the benefits of being a large state:
My experience of the way the EU
works in practice is that the greater leverage, voting power and
representation that the large member states - the UK, Germany,
France, Italy and Poland - have means that they are more able
to make the political weather, and better able to defend and advance
their national interests and set the EU agenda, than are smaller
member states.[1]
3. In the event of separation, Scotland
would lose the leverage it is able to access by being part of
the UK. Scotland has just 1% of the EU's population compared to
the UK's 12%. Up until now, smaller Member States have tended
to have a higher representation per capita within the EU than
larger ones, but changes due to come into force in 2014 will mean
that voting weights will change to favour larger states as from
2014 onwards a Member State's voting weight in the Council will
directly reflect its population size.[2]
4. Scotland directly benefits from the
UK's position as a large Member State. The Minister for Europe
gave us the example of negotiations on financial services, a key
industry for Scotland:
the UK Chancellor can go into a
room with the German Finance Minister or the French Finance Minister
and agree a deal that in practice most of the rest of the EU then
accepts. It is quite difficult to see any small Member State being
able to talk terms to Germany or France in quite the same way.[3]
5. Scotland also gains from the UK's
extensive diplomatic presence in Brussels and the capitals of
other Member States. With more limited resources, a separate Scotland
would lack the ability to create or sustain such a network and
would be unable to maintain the range of access it currently enjoys.
This may limit the scope of Scotland's involvement in the EU as
it might only have the capacity to engage on a narrow range of
priority issues at any one time.[4]
6. As part of the UK, Scotland benefits
from having its views represented by a large Member State that
is able to exercise greater leverage, voting power and representation
than Member States similar in size to Scotland. Under existing
arrangements Scotland can also call upon the support and access
provided by the UK's extensive and experienced diplomatic network.
Both benefits would be lost in the event of separation. Scotland
would have to build up its own diplomatic network and would find
it more difficult to promote and defend its national interests.
7. Legal advice sought by the UK Government
states that in the event of separation the continuing United Kingdom
would remain a member of the European Union on existing terms.
[5] By contrast,
a separate Scotland would have to negotiate to become a member
of the EU because, as the UK Government's Scotland analysis
paper on devolution sets out, "it is not legally possible
for two new states to inherit the international personality of
the former state".[6]
The Scottish Government disagrees and argues that a vote in favour
of separation would leave both Scotland and the continuing UK
as successor states.[7]
The Scotland analysis paper offers four reasons why this
would not be the case:
· the majority of international
precedent, with examples spanning the creation of an Irish state
from within the UK, and the break-up of the Soviet Union;
· the retention by the continuing
UK of most of the population (92%) and territory (68%) of the
UK;
· the likelihood that other
states would recognise the continuing UK as the same legal entity
as before Scottish separation, not least because of the UK's pivotal
role in the post-war world order; and
· the fact that, on the rare
occasions when one state is dissolved and two new states are created
peacefully from it, this tends to happen by mutual agreement.[8]
8. Within the EU, there is no precedent
for what happens when a territory of an existing Member State
becomes independent, and the Treaties do not provide for such
an event. The process by which a separate Scotland may become
a member of the EU is therefore subject to speculation. Much will
depend on the attitude of the EU institutions and of the governments
of the 28 Member States. What is clear, however, as both the Vice-President
of the European Commission and the President of the European Council,
have confirmed, "is that when part of the territory of a
Member State ceases to be a part of that State, e.g. because that
territory becomes an independent state, the treaties will no longer
apply to that territory."[9]
9. The Scottish Government asserts that
the 18-month period between the referendum and its proposed date
for independence, 24 March 2016, would be sufficient for the terms
of a separate Scotland's membership of the EU "to be agreed
and all the necessary processes completed."[10]
10. The Scottish Government's negotiating
position is that a separate Scotland's membership of the EU would
be based on the same terms and opt-outs as Scotland currently
enjoys as part of the UK. Those terms include:
· opt-outs on justice and
home affairs issues;
· remaining outside of the
Eurozone;
· remaining outside of the
Schengen area;
· (a share of) the UK rebate;
· the ability to levy zero-rates
of VAT.
11. The Scottish Government believes
that "ensuring a seamless transition to independent EU membership
will be in the best interests of Scotland, all Member States and
the EU in general."[11]
However, despite the benefits that a seamless transition offers,
there is no guarantee - as the history of the EU shows - that
negotiations at an EU level are straightforward. The Rt Hon David
Lidington MP, Minister for Europe, described to us how a one sentence
amendment to Article 36 of the Treaty took 18 months to negotiate
and implement, despite a consensus amongst all Member States in
favour of the amendment.[12]
12. It is difficult to see why some
Member States would be willing to grant a separate Scotland opt-outs
that they themselves were unable to negotiate on their accession.
Others have their own independence movements which may influence
their approach to the negotiations and the notion of a "seamless
transition" of Scotland becoming a member of the EU. Complex
issues such as funding for Scotland's farmers through the Common
Agricultural Policy (CAP) would need to be negotiated, as well
as Scotland's aim to remain outside of Schengen and the Eurozone.
Furthermore, as we considered in our Seventh Report of this Session,
The Referendum on Separation for Scotland: the impact on Higher
Education, Research and Tuition Fees, the Scottish Government
has already indicated that it wishes to seek an objective derogation
from the EU law governing freedom of movement in order to allow
it to discriminate against students from the United Kingdom in
the charging of tuition fees. It is inconceivable that some Member
States, not least the UK, would not challenge this ambition during
the negotiations.[13]
13. In the chapters that follow we assess
the proposals put forward by the Scottish Government for a separate
Scotland's membership of the EU and consider the likelihood of
it achieving a seamless transition from being part of a Member
State to being a Member State in its own right. We have focused
on areas of the potential negotiations which have been the most
high profile to date. There will be others, such as fisheries,
which are of enormous significance to particular communities and
where negotiations would also be complex. We hope to consider
these in a future Report.
1 Q5182 Back
2
Government, Scotland analysis: EU and international issues,
January 2014, Cm 8765, p73 Back
3
Q5193 Back
4
HM Government, Scotland analysis: EU and international issues,
January 2014, Cm 8765 Back
5
Legal Opinion published in HM Government, Scotland analysis:
devolution and the implications of Scottish independence,
Cm 8554, February 2013, p64 Back
6
Ibid., p7 Back
7
On 3 April 2014 Fiona Hyslop MSP, Cabinet Secretary for Culture
and External Affairs told the European and External Relations
Committee of the Scottish Parliament: "The UK Government
is arguing that Scotland would not be a successor state. Quite
clearly, we think it would be, as would the UK." Evidence
taken before the European and External Relations Committee of
the Scottish Parliament, 3 April 2014, page 1946. Back
8
HM Government, Scotland analysis: devolution and the implications
of Scottish independence, Cm 8554, February 2013, p7 Back
9
Letter from Viviane Reding, Vice-President of the European Council
to the Convener of the European and External Affairs Committee
of the Scottish Parliament, 20 March 2014; Scottish independence:
Scots EU independence plan 'now untenable', BBC News online,
13 December 2013 Back
10
Scottish Government White Paper, Scotland's Future: your guide
to an independent Scotland, November 2013, p220 Back
11
Ibid., p220 Back
12
Q5217 Back
13
Scottish Affairs Committee, Seventh Report of Session 2013-14,
The Referendum on the Separation of Scotland: the impact in
Higher Education, Research and Tuition Fees, HC 1144
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