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What is the best Brexit outcome for the SNP?

Summary:
There are still multiple possible outcomes of the ongoing Brexit process.  The UK could revoke our A50 notice to leave the European Union and remain members.  We could seek a Brexit In Name Only solution, retaining freedom of movement and membership of the single market.  We could ratify the Draft Withdrawal Agreement and negotiate a harder Brexit involving an end to freedom of movement, and a departure from some elements of the single market, depending on efforts to obviate the backstop.  Or we could crash out of the EU with ‘no deal’. We can presume that the overriding objective of the Scottish National Party [SNP] is to secure independence from the rest of the UK [RoUK].  Despite losing the referendum in 2014, the SNP cannot give up its reason for being.  Which Brexit outcome

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There are still multiple possible outcomes of the ongoing Brexit process.  The UK could revoke our A50 notice to leave the European Union and remain members.  We could seek a Brexit In Name Only solution, retaining freedom of movement and membership of the single market.  We could ratify the Draft Withdrawal Agreement and negotiate a harder Brexit involving an end to freedom of movement, and a departure from some elements of the single market, depending on efforts to obviate the backstop.  Or we could crash out of the EU with ‘no deal’.

We can presume that the overriding objective of the Scottish National Party [SNP] is to secure independence from the rest of the UK [RoUK].  Despite losing the referendum in 2014, the SNP cannot give up its reason for being.  Which Brexit outcome serves this ultimate aim best?

It strikes me that Brexit In Name Only is best for the Scottish independence campaign.  This would leave the SNP able to amplify the political benefits of leaving the RoUK to join/rejoin the EU and get a ‘seat at the table’ deciding on the rules governing the single market, [rules which the RoUK will have to take].  While at the same time there would be no economic cost caused by erecting trade barriers at the RoUK/Scotland border.

The RoUK remaining the EU deprives the SNP of the opportunity to big up the political benefits of leaving.  A harder Brexit generates a trade-off.  Political benefits ensue from leaving, but, absent unlikely major reconfiguration of trade flows, net economic costs would flow from erecting trade barriers at the RoUK border, despite ensuring frictionless trade with the EU.

I haven’t detected this nuance in SNP interventions in the debate.  But perhaps I have not been listening closely enough, or I have missed some element of the calculation being made.

If the SNP were making more of a push for this outcome, they might find common cause with Labour and Conservative moderates, looking for an outcome that avoids ‘no deal’ and can be presented to some as at least symbolically respecting the 2016 referendum result.

If we enter Galactic brain level strategic calculation, we could note that aside from the issue of what end state Brexit produces, there is the issue of how we get there.

Another attractive proposition for the SNP might be perpetual transition and RoUK internal strife over Brexit.  This would generate political benefits from leaving RoUK and re-designating a Scottish membership of the EU:  Scotland secures its political say in the running of the EU for the future, and insulates itself from the political struggles in the RoUk over EU membership.  There would be no economic costs from new trade frictions with RoUK at the borders [RoUK is perpetually stuck in limbo, in the single market].  And there would be the ability to secure some economic benefits from the certainty over politics and an ability to refocus on domestic problems that are ignored while RoUK fights over Europe.

Throughout, I’ve assumed that the SNP care about the economic costs of corroding trade through trade frictions, or at least cannot neutralise economic analyses of these costs circulating in the media.  These assumptions are both moot, as an intervention by one reader, Lap Leong, prompted me to remind the rest of you!

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Tony Yates
Economist. Consulting, lecturing, a book. Ex Prof at Bham, Ex BoE staffer. Macro, policy, monetary econ, occasional nonsense.

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