Building a New Scotland: an independent Scotland in the EU

This paper sets out the Scottish Government’s vision for an independent Scotland in the EU.

A better relationship: EU membership for an independent Scotland

Key points

Through membership of the EU as an independent country Scotland would regain the many economic, societal and cultural benefits and opportunities lost through Brexit.

As an independent nation in the EU, Scotland would, for the first time, be able to represent the interests of its people and influence decision-making directly in the EU. And Scotland would have the opportunity to contribute directly to the broader aims of the EU and to shape the future of the EU.

The EU’s core values, based on human dignity, equality, rule of law, freedom, democracy and human rights, are also Scotland’s values.

Membership of the EU would give Scotland the opportunity to contribute to a shared agenda – for example, promoting social justice and human rights and tackling global challenges, such as climate change and global health.

Scotland would be part of the world’s largest single market – almost 450 million consumers compared to the UK’s 67 million – and would benefit from favourable trading terms and contribute to setting global standards.

EU membership would make trading cheaper and quicker, and would be an important factor in attracting foreign direct investment to Scotland.

As a member of the EU, an independent Scotland would be able to attract and retain people from across the EU to sustain competitive businesses, world-leading universities, dynamic communities and efficient public services.

Scottish citizens would once again be able to move freely within the EU to work, study, live and do business. And they would once again benefit from equal access to healthcare should they fall sick or have an accident while travelling in the EU.

This section outlines how re-joining the EU would promote Scotland’s place in the world, deepen our relationships with others, and play a valuable role in addressing global challenges and providing aid and support to developing countries. We would regain the benefits that have been lost through Brexit, and gain the opportunity to contribute to promoting peace, democracy and human rights globally as a sovereign nation.

Through membership of the EU, an independent Scotland would, for the first time, be able to represent Scotland’s interests directly in the EU and have a direct role in decision making at the EU level. Participating alongside 27 other European states, an independent Scotland would directly represent Scotland’s interests and operate as part of a powerful bloc on the wider international stage.

Membership of the EU as an independent country would restore Scotland’s place in the EU and the many opportunities and benefits it offers. Returning to the European single market would allow for the free movement of goods, services, capital and people throughout the EU (see Annex 2). And for the first time, Scotland’s government would be able to ensure that Scotland’s interests were fully represented in the EU as a full and equal partner.

After centuries of conflict, for more than 70 years the EU and its predecessor European communities have been fundamental to an unprecedented era of freedom, peace, prosperity, openness and stability for its member states across a growing area of the continent of Europe. Like-minded, independent, sovereign states co-operating for the common good, staying united, looking for joint solutions and promoting fairness, protecting democracy and the rule of law have demonstrated that we can achieve far more and wield far greater influence when we work together, economically and politically on a basis of equality.

Through the four fundamental freedoms, the EU helps people improve their lives. It helps businesses to innovate and grow. And it helps governments in member states to achieve economic prosperity and security for their citizens. It protects valuable and hard-won social protections like employment rights, maternity leave and the right not to be discriminated against on the grounds of age, gender, disability, race or sexual orientation. EU membership also enables member states to work together across the continent to tackle pressing global challenges, such as Russia’s attempts to destabilise security, climate change, energy security and providing sanctuary for refugees.

This section therefore outlines a vision for building a better, stronger and more influential country. This is a vision for EU membership for an independent Scotland.

Benefits of EU membership for an independent Scotland

EU member states, and many aspiring member states, place immense value on being part of the EU.[136] This is both from a peace and security perspective, as in the response to Russia’s invasion of Ukraine, as well as for the benefits of the European single market including the freedom it affords their citizens to travel, work and reside throughout the EU.

A number of studies have attempted to quantify the impact of EU membership on income. Studies that focus on the EU as a whole generally show a positive impact on aggregate GDP in the long run, with some estimates showing a 2% to 9% boost to GDP.[137] Other studies have explored the impact on GDP per capita and find that EU membership increased income per head by 10% to 22% in the long run, with small economies benefitting more from EU integration.[138] EU membership has also been shown to increase investment and foreign direct investment, and benefit economies through the free movement of people.[139]

As set out in ‘Building a New Scotland: A stronger economy with independence’,[140] EU membership would be central to Scotland’s future economic and social success, with independence the only constitutional route to securing EU membership again in the future.

Shared values are at the heart of membership. But the benefits to Scotland would extend to the economy, society, culture and Scotland’s future.[141] Here are just some of the major benefits of EU membership for an independent Scotland:

  • being part of the world’s largest single market, with free movement of goods, services, capital and people, and access to the EU’s suite of trade deals with third countries around the globe
  • being part of an organisation with global reach, with the opportunity to contribute with our EU partners to tackling global challenges such as climate change and global health
  • a shared agenda to promote social justice across the EU and protect the rights and interests of workers and families
  • the opportunity for citizens to move freely within the EU to work, study, live and do business, gaining experience they can share on their return. This helps ideas and expertise to be shared, promoting innovation and increasing productivity
  • the ability to attract and retain people from across the EU to sustain competitive businesses, world-leading universities, dynamic communities and efficient public services. This is especially valuable for smaller countries, such as Scotland, facing demographic challenges
  • the opportunity to contribute directly to the policies of one of the most influential actors in global trade negotiations, and to benefit from being represented by the collective weight of the EU in international trade negotiations and disputes. Because it negotiates as the world’s largest single trading area, the EU is able to secure better terms of trade for its member states than they could achieve negotiating on their own. The EU also exerts wider influence in both setting standards and in requiring that they be observed – for example by ensuring that human rights and environmental standards are reflected in trade deals
  • an equal voice in the development of the EU’s common foreign and security policy, the importance of which has been underlined by events in Ukraine. This includes contributing to future debates on the EU Strategic Compass, which sets out the EU ambition to strengthen collective security by 2030, and enhancing each member state’s contribution to international development and environmental protection, including the Sustainable Development Goals
  • a partnership approach to freedom, security and justice: working with EU partners to combat organised crime, terrorism, cybercrime, drug and people trafficking and money laundering
  • the ability to influence key decision making with a seat at the European Council table, Scottish MEPs in the European Parliament, a Scottish member of the College of Commissioners in Brussels. EU policies and standards are increasingly adopted as global standards in international trade. As an EU member state in its own right, Scotland would be able to influence their development and design to ensure that they optimise Scotland’s trading potential
  • the same opportunities as other member states to access EU funding streams such as support for more sustainable agriculture, infrastructure, regional economic development, and guaranteed participation in programmes such as Horizon Europe, which supports research and innovation
  • the opportunity for our universities and small and medium-sized enterprises to benefit from risk capital and guarantees from the European Investment Bank and European Investment Fund
  • mutual recognition of professional qualifications across the EU allowing firms and individuals in Scotland to offer their services in the EU within a common set of rules and source professional services from the EU
  • access to consular services around the world through the embassies or consulates of other EU member states, helping provide support to Scottish citizens overseas when they need it

With membership of the EU Scottish citizens would once again be EU citizens, able to live, study and work in any EU member state with equal treatment in working conditions, mutually recognised qualifications and protected social security rights. Not only does this guarantee minimum working conditions and standards in the workplace, it also opens up opportunities and more job choices for workers and brings a rich social and cultural diversity to our communities.

EU membership would mean that artists and creative professionals could move freely between Scotland and the rest of the EU, without barriers like visa and customs requirements when working in other countries. Freedom of movement makes activities – such as touring, collaborating with artists in other countries, and taking part in cultural productions and festivals – much smoother and less expensive.[142] Cross-border collaboration and partnerships help to drive knowledge exchange, innovation and skills development, while expanding audiences. They are key to building a more vibrant and diverse sector, while supporting social inclusion and community cohesion.[143]

As a member of the EU, Scottish firms would be able to trade freely with more businesses and sell to more customers. Scotland would re-join the world’s largest single market for goods, which accounts for almost 450 million consumers[144] compared to the UK’s 67 million,[145] 26.3 million businesses[146] compared to the UK’s 5.6 million,[147] 16.2% of global trade compared to the UK’s 4.1%,[148] and 47% of Scotland’s international exports.[149] There are no tariffs or duties for goods, and significantly lower levels of non-tariff barriers in comparison to the Westminster government’s EU trade deal. This makes trading cheaper and quicker.[150]

Companies – such as those working in the digital economy, financial sector, energy sector and the green economy – would be able to set up branches throughout the EU, providing access to more customers, and to compete directly from Scotland. And through independence and EU membership Scottish businesses – particularly data intensive service industries such as accounting, banking and telecommunications – would follow the same rules as others operating in the EU. This includes state aid rules which ensure that companies compete on an equal footing across the EU.

The benefits EU membership would provide to Scottish businesses are continuing to develop. For example, with a focus on artificial intelligence (AI),[151] digital transformation and the service economy[152] the EU is continuing to strengthen and deepen the single market whilst making the transition to a green and digital economy. This will ensure the EU remains globally competitive, clamping down on anti-competitive abuses by the world’s largest technology platforms and protecting consumers’ rights,[153] as it recovers from the COVID pandemic, and builds resilience in response to the invasion of Ukraine.[154] Scotland would also be part of new developments that will affect global trade, such as the Carbon Border Adjustment Mechanism.[155]

The development of the EU digital single market is making it easier and safer for EU citizens and companies to access and sell goods and services online across national boundaries. Free mobile roaming across the EU has been extended until 2032 and now covers 5G and provides better information and protection for customers.[156] Work is underway to further improve the free flow of data and unlock the opportunities of AI, the ‘Internet of Things’ and other emerging technologies whilst protecting people’s privacy.[157]

With membership of the EU, Scotland’s digital and service economy would benefit from these current and future developments through better regulation, innovation opportunities, increased choice, lower prices and better protection of consumer rights and privacy. Scotland would automatically benefit from the free flows of data between all member states, reducing time and cost to consumers and businesses. There would also be no need to receive, and renew every four years, a data adequacy decision to allow personal data to be exchanged, as is currently the case between the UK and the 27 member states.[158]

Membership of the European single market also plays an important role in attracting foreign direct investment to Scotland. In 2019, there were 1,225 EU foreign-owned registered private sector businesses in Scotland, which supported approximately 132,000 jobs.[159] Scotland’s natural capital, infrastructure, skilled graduates, quality of life and membership of the EU’s single market would make an independent Scotland attractive for foreign direct investment as an EU member state.[160]

By participating fully as an independent state in EU judicial cooperation and information-sharing involving member states’ police forces and public prosecutors, we would also equip Scotland’s police and prosecutors with more tools to better combat increasingly sophisticated criminal networks – including access to the Schengen Information System, and European Arrest Warrant.

EU membership also brings benefits to the daily lives of EU citizens. For example, holiday-makers are fast-tracked across EU borders and are able to use their driving licences throughout the EU. There is equal access to healthcare for all EU residents if they fall sick or have an accident while travelling in the EU. And there is a guarantee of no additional mobile phone roaming charges for EU residents travelling in the EU.

Where would that take Scotland?

Re-joining the EU would provide opportunities for an independent Scotland’s economy to grow. Using the levers afforded through independence, re-joining the EU would reverse some of the detrimental impact of Brexit[161] and restore the benefits EU membership affords.

An independent Scotland would benefit greatly from EU membership, but our ambitions are not just about recovering lost ground or advancing our own interests. As an independent nation in the EU, Scotland would have the opportunity, for the first time, to contribute directly to the broader aims of the EU and to be a voice helping to shape the future of the EU.

Case study: Ireland and the European single market

Membership of the European Economic Community (EEC) and EU has played a pivotal role in diversifying Ireland’s economy. Ireland joined the EEC in 1973 (when the UK also joined) and this quickly led to the geographic diversification of Irish exports. However, even as late as 1979 the UK accounted for about a half of both exports to and imports from Ireland.[162] The subsequent period brought further diversification, which coincided with accelerated trade liberalisation in both Europe and globally.[163]

Over the period following the establishment of the European single market in 1992, the EU’s share in Ireland’s imports of goods increased.[164] Over the same period Ireland reduced its reliance on the UK economy, in both imports and exports of goods.

The Irish performance has also been characterised by a significant diversification beyond its traditional UK markets over time. In this respect, the assessment and arguments presented by Professor Kevin O’Rourke discussing Ireland’s economic development as an independent country is of interest. Professor O’Rourke argues that “a plausible candidate” for Ireland’s economic underperformance in the period between 1954 and 1973 (when Ireland joined the then EEC) was “excessive reliance on the sluggish British economy.”[165] Exports from Ireland to the UK fell as a percentage of Ireland’s total exports from 66% in 1970 to 10% in 2019 due to even faster growth in other markets. The UK share of Irish imports fell from 53% to 23% over this period.

In addition, Ireland’s global services exports and imports both increased by more than 260% between 2005 and 2019. Over this period, Ireland’s reliance on services exports to the UK fell from 16% to 12% of total exports, and imports from the UK decreased from 17% to 8% of total imports.[166]

Over the period since Ireland became a member of the EEC, its population, GDP and national income per head have grown (see table 2 and figure 1).[167] Part of the growth can be explained by the fact that, once the Irish economy was opened up to trade and capital inflow, the conditions for rapid growth were right.

Professor O’Rourke argues: “underpinning everything was two crucial factors: our political independence, which allowed us to adopt a policy mix well suited to our own circumstances; and our membership of the European single market, without which none of this would have worked. Political independence and EU membership were never fundamentally at odds with each other in Ireland; both were required to give full effect to the other. Our independence would not have worked as well as it did without the EU; our EU membership would not have worked as well as it did without independence.”[168]

Table 2: Ireland and the UK’s GDP and net national income per head, Ireland’s trade patterns with the UK and EU, and Ireland’s population[169]
1973 1979 2000 2019 2021
Population of Ireland (millions) 3.09 3.37 3.81 4.93 5.03
Ireland – GDP per head (USD, current prices, current PPPs) 3,149 5,935 30,219 89,847 106,879
UKGDP per head (USD, current prices, current PPPs) 4,785 8,105 26,544 49,318 49,815
Ireland – Net National Income per head (USD, current prices, current PPPs) 3,025 5,322 22,882 47,004 53,009
UK – Net National Income per head UK (USD, current prices, current PPPs) 4,572 7,474 23,149 41,969 42,193
UK share of Ireland’s goods exports (%) 55 46 22 10 11
UK share of Ireland’s goods imports (%) 51 50 31 23 19
EU share of Ireland’s goods exports (%) 24 35 40 35 34
EU share of Ireland’s goods imports (%) 26 26 22 33 30

Sources: See endnote[170]

Figure 1: Ireland and the UK’s GDP and net national income per head, Ireland’s trade patterns with the UK and EU, and Ireland’s population up to 2021

Sources: Ireland’s Net National Income is viewed as a more reliable estimate of the economic activity generated and retained in Ireland due to the influence of multinational corporations in the estimate of GDP. See endnote[171]



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