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Why Scotland Would Be Foolish To Leave The United Kingdom

16/03/2017 16:25

The United Kingdom economy is far from perfect but the Scots would be fools indeed to leave it.

Yes, the United Kingdom has structural economic imbalances that are troubling: persistent budget deficits; an increasingly unsupportable health system; an over-reliance on foreign workers; a massive trade and current account deficit that will be next to impossible to finance in a post-Brexit world without a further significant devaluation of the pound.

But the United Kingdom at least excels in one thing: it operates as a near-perfect common market. The four entities within the United Kingdom share a common language; a common currency; there is free movement of goods and labour within the United Kingdom; and we have a federal transfer system that moves funding from the wealthier parts of the United Kingdom to the poorer parts. The vast majority of Scotland's trade is with the United Kingdom. Scotland is also a major beneficiary of the fiscal transfers - handouts - from England.

To want to leave the United Kingdom to preserve access to the European common market is ludicrous economically. The EU is a minor trading partner for Scotland. Nor does it operate as an effective common market in the way that the United Kingdom, or the United States, operates. It doesn't have a common language. It doesn't have a common currency. There is a partially free movement of goods across the EU and much less free movement of services. The federal transfer system is a quagmire of parochial national interest riddled with financial corruption. As a result of which, The EU's accounts have not been approved in well over a decade.

Nor is Scotland guaranteed a place within the European Union. Why would the EU want to take on a country that is too small and insignificant to represent any real value to the EU; that economically is likely to be a net drain on its finances, and politically is likely to encourage further political separatism and fragmentation within an already fractious Union?

By all means the Scots are entitled to leave the United Kingdom. They might not feel like equal economic or political partners but as a matter of reality they are not! At least they have a devolved framework which grants them considerable political and social autonomy within a larger union. It is a political, social, economic and cultural construct that should be the model for the European Union to emulate. It would be a real waste, and an exercise in pure political vanity, to want to exercise that political freedom in such a self-destructive manner.

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