According to reports, Prime Minister Theresa May has told First Minister Nicola Sturgeon that she is “willing to listen to options” on Scotland’s future relationship with the European Union.
With only a month passed since the EU referendum, so much has happened that I have to remind myself that Scotland, as well as Northern Ireland and London did not vote to Leave.
Let me say at the outset that I voted No in the IndyRef in 2014 and voted Remain in the recent EU Referendum. Nationalism as a political force has seemed at odds with my perspective as a committed European and internationalist.
If nothing else, business is pragmatic. Since we woke up in shock on 24 June, we have been through two of the five stages of grief – denial and anger. Now we are in the third stage – bargaining. In dealing with personal grief, this is the stage where we look for comfort in return for a reformed lifestyle.
In business, we are looking for ways in which an accommodation can be reached which will mitigate the impact of the decision to Brexit on the Scottish economy. But is there a way in which rather than just dilute any negative impact, we can improve our prospects?
Is it viable for Scotland to remain in the EU with greater access to the single market than the rest of the UK? I am no constitutional lawyer, but given the EU’s ability to write the rulebook as it goes along, let’s assume for present purposes that despite what James Brokenshire and others have said, it would be possible. After all, Greenland did it in reverse – it left the EU but remained within the kingdom of Denmark.
While I don’t think I could bring myself to vote to break up the UK, I would not find it difficult to support moves by Scotland to remain in the EU even if other parts of the UK chose to do something else. My guess is, given the results of the 2014 and 2016 referenda, most Scots would do the same thing.
Such an outcome could put Scotland in an emphatically strong place. If, as a result of the City of London being denied full access to the single market, financial services companies were no longer able to “passport” their services to the rest of the EU from the City, where would they head?
The usual assumption is that their destination would probably be Frankfurt. But wouldn’t an Anglophone destination with an infrastructure effectively identical to London’s be more attractive? Ironically, after years of gradual leakage of financial services activity from Scotland to the City, Edinburgh and Glasgow could see a renaissance as centres of the financial services sector. They have the expertise, the heritage and capacity to do so – and from a cost base that is a fraction of the norm in the Golden Mile.
This may sound like wishful thinking, but I don’t think it’s necessarily fantasy league politics. As we have witnessed recently, the global political landscape changes at such incredible speed that it would be unwise to be unimaginative.
What would this model look like? There would have to be a federal deal where each devolved region could negotiate their own membership while staying in the UK. Not an easy solution, I accept, Hardly an elegant model. Likely resistance from Spain and no exact precedent. But, on the other hand, this is a two-way street and significant parts of the EU would like access to the UK one way or another. As the saying goes, necessity is the mother of invention.
For this to be viable, Scottish business needs to show serious commitment. Brussels, which appears well-disposed to Scotland and its pro-EU sentiment, has given an early hint that it would support it. If the momentum built up, surely a structure could be created to fit?
The stark predictions from the International Monetary Fund (IMF) that following the Brexit vote, “the UK will be worst affected of all the advanced economies” are concerning. The IMF says the decision to leave the EU has “thrown a spanner in the works” of its global growth forecast. Some would suggest it’s not just a spanner, but the whole tool kit.
This is not a time to wallow in our Brexit grief, nor meekly to accept the repercussions of our being ostracised by the EU. We owe it to Scotland’s business, legal, commercial, cultural communities and to our children and their children to explore every avenue, every boulevard, every calle out of this mess. UK and Scottish business ministers need to engage (as the UK business minister has already done in London) and listen to our concerns and reflect on the strategies available.
This is not a problem of Scotland’s making. It’s not a political problem. It’s much more important than that. No partisan sat nav will find a way out of the current mess. What we need is a broad church of people prepared to put political ideologies aside and willing to explore every option to retain a bridge into Europe.
My father used to tell a joke about a girl who woke up on her 10th birthday to find her bedroom full of manure. “Terrific!” she exclaimed. “There must be a pony in there.”
Perhaps we will find our pony over the next few months. I hope so.
Philip Rodney is the chairman of Scottish law firm Burness Paul
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