30 December 2020

The Brexit Endgame Concludes: Where Next for Scotland?

Anthony Salamone on the announcement of the new EU-UK relationship and the challenges ahead for Scotland

Anthony Salamone

The Christmas Eve conclusion of the EU-UK future relationship negotiations brought long-awaited clarity and a degree of finality to the arduous saga of Brexit. After months of uncertainty and trepidation, and only days to spare, we now know that the UK will exit its post-Brexit transition on the basis of a deal.

The Trade and Cooperation Agreement (TCA), as the EU and the UK have decided to call it, alongside its associated texts, will form the basis of their new relationship. As both sides work expeditiously to provisionally apply the treaty from January 1st 2021, initial feelings of relief have given way to rapid assessment of the approaching practical consequences.

Considering all the challenges, foreseeable and otherwise, it is in fact quite remarkable that a new EU-UK relationship was constructed in just nine months. Ultimately, a collection of factors expedited the negotiations. The EU published a full draft treaty at the start in March, which provided a basis for the less contentious issues. The agreement is relatively basic, compared to EU or EEA membership, so fewer matters were the subject of discussion. Fundamentally, however, an agreement was possible because the UK accepted most of the EU’s demands – as it has invariably done throughout the Brexit process.

On January 31st 2020, ‘political Brexit’ saw the UK lose its role in the EU institutions and EU decision-making, while otherwise operating as a shadow Member State for its transition period. Once this suspended animation ends at the turn of the year, ‘total Brexit’ will have arrived and we will, for the first time, experience the full reality of the UK being a third country to the EU. The new TCA will only somewhat mitigate the consequences. Yet, the dynamics between the EU and the UK have materially evolved over the past year – to the point where it is becoming difficult to imagine that the UK ever was an EU member.

The EU viewpoint of the Brexit resolution

While this post-Brexit agreement is crucial for the UK, it is also significant for the EU. The partnership set out in the TCA, despite being remote compared to membership of the Union, is the most extensive which the EU has concluded with any third country – that is, outside the EU, EFTA and the EEA. Since the 2016 referendum, the EU has been adjusting to the implications of having a large non-EU state on its doorstep – frankly, one of much greater political and economic weight than Norway or Switzerland.

The EU did not choose for Brexit to happen, or for the UK to opt for such a distant relationship. All things considered, however, the EU can be quietly content with the present Brexit resolution. In what could have been an unpredictable, disordered and acrimonious disintegration of the UK’s membership, the EU established degrees of clarity, order and amity. The Union secured its major objectives in both the withdrawal negotiations (on citizens’ rights, finance and Northern Ireland) and the future relationship negotiations (on the integrity of the single market and the unity of the 27).

The UK Government’s extraordinary threat to break the letter and spirit of the Withdrawal Agreement, through the UK Internal Market Bill and potentially further legislation, was managed and resolved. In the end, the UK left the EU in an orderly way, on the basis of the Withdrawal Agreement, and the UK will exit the transition in a managed way, moving to the relationship established under the TCA.

Beyond the substance, the EU exercised powerful command over the procedure of Brexit. From the principle of sequencing of the negotiations to Michel Barnier’s fabled ‘staircase’ slide of future relationship options, the EU side set the terms and the definitions to a remarkable extent. Faced with a UK that was confused, disorganised and rudderless throughout most of the Brexit process, the EU in large part established the parameters which the UK, often after fruitless prevarication, ultimately accepted.

One of the great follies of the UK Government’s approach to Brexit is that, having resolved to leave the EU, it did not set out its detailed prospectus for the new EU-UK relationship at an early stage. In the absence of the UK taking any degree of initiative, the EU had an additional advantage in setting the starting points.

Although the future relationship negotiations have concluded, the subsequent process is of course not yet over. The provisional application of the TCA is temporary and the Union must complete its full EU-level ratification procedure for an international agreement. The European Parliament will need to give its consent to the treaty, and such a plenary vote will follow scrutiny and debate. Provided that the Parliament approves the agreement, the EU Council will have to take a final decision to fully apply the TCA.

Managing the EU’s interinstitutional dynamics at the final stage of the negotiation endgame was a substantial challenge for the European Commission – but one that was ostensibly satisfied. The acute and particular circumstances around Brexit, and the imperative to avoid a no-deal outcome, are well understood across the EU institutions. Nevertheless, many elements of the European Parliament will be displeased at the chamber’s relative sidelining on the conclusion of the agreement.

It is perfectly conceivable that the Parliament may decide to exact a political price, perhaps on a completely separate issue, at some point in the future. Moreover, it would not be surprising if parliamentary actors soon call for the procedure on international agreements to be changed, at the next revision of the treaties, to the give the Parliament a greater role. That demand could well become an output from the Conference on the Future of Europe, potentially in the frame of more powers overall for the Parliament.

Having reached a point of relative resolution, the EU will now want to retire the word ‘Brexit’ from its vocabulary. As Ursula von der Leyen argued in her Christmas Eve press statement, it is time for the EU to move on. The Union’s relations with the UK will be structured through the Partnership Council and the other institutions created under the TCA and the Withdrawal Agreement.

An early priority for the EU, after the 2016 referendum, was to contain the issue of Brexit and ensure that it did consume the EU’s attention. Except for the predicable decision moments, the EU arguably succeeded in that effort as well. As a non-member, the UK will have to compete for space in the EU agenda, which was already replete before the coronavirus pandemic and its health, social and economic challenges. In reality, the EU has multiple priority issues to address – and relations with the UK is not one of them.

The evolution of the Westminster debate on Europe

The transformation of the UK’s relationship with the EU, resulting from the Brexit process as it was conducted, will be one of the defining elements of British politics in this century. While its full consequences will only be known over time, Brexit is likely to be viewed, in the future, as a landmark event in the UK’s relative geopolitical decline. The Brexit populism which has powered the UK Government since the EU referendum has created a lamentable state of affairs.

It is thoroughly depressing to witness the extent to which the European Union, to this day, is so poorly understood in Westminster politics. Carefree assertions that the UK is somehow ‘regaining’ independence or sovereignty through leaving the EU and the transition are in equal measure absurd and the product of unreality. The UK was a sovereign state when it joined the EEC and continued to be one throughout its time as a member of the EU – and it remains one now having left the EU.

As an EU Member State, the UK voluntarily shared elements of its sovereignty with its closest neighbours to confront common challenges and to achieve greater peace and prosperity in Europe. Through its withdrawal, the UK signalled clearly to the world that it no longer shares the foundational values of the European Union.

In supreme irony, the UK will in fact have less effective sovereignty in its newfound position as a European third country to the EU. Under the TCA, the UK will in many respects continue to follow current and future EU standards which it will have no role in creating. In relation to the level playing field of fair competition, the UK has agreed to maintain existing EU rules and to match new ones, or else potentially lose market access or face tariffs, subject to the procedures set out in the agreement.

Moreover, regardless of treaty obligations, the UK will remain subject to the EU’s gravitational pull. The importance of the EU market for the UK’s imports and exports will create strong natural incentives to maintain regulatory alignment. The actual degree of regulatory divergence pursued by the present UK Government after the transition remains to be seen. In practice, the UK will now reside in the EU’s outer orbit.

The regrettable advent of the Brexit era will not end the Westminster debate on Europe. The UK will forever need some form of relationship and continued dialogue with the rest of Europe. While Brexit has profoundly altered the parameters, those facts persist. Instead of being an influential member, the UK will be an external observer as the European Union sets the political, economic and strategic directions of our continent.

Like the rest of the world, the UK will find itself seeking to influence EU decision-making from the outside. The animosity directed towards the EU from elements in the UK, during the Brexit process, will not make that task any easier. It is difficult to cultivate soft power and exercise indirect influence in an atmosphere of frustration, despondency and regret. Establishing positive EU-UK bilateral relations conducive to such influence will take years.

With the EU-UK agreement announced, one of the more salient questions to have arisen is how the bilateral partnership may evolve in the years ahead. A prevalent suggestion is that the UK could seek to move closer to the EU once again over time. Although the Trade and Cooperation Agreement, by its nature, does not replace every aspect of the UK’s former membership, it does create a platform for cooperation between the EU and the UK, which could conceivably lay the foundations for a more comprehensive relationship.

Nevertheless, the EU will surely remain cautious on this prospect. Having endured the unwelcome process of Brexit, the Union will favour stability over convergence in its future relations with the UK. It would be preferable to have a distant, but certain, partnership than a close, but unstable, one. The notion of the UK pursuing waxing and waning policies on its level of integration with the EU, predicated on transient political preferences or upended with changes of government, is not appealing.

The EU would want to be convinced of the durability of any potential evolution of the bilateral relationship – whether building directly on the TCA, creating an EEA-style arrangement (either formally in the EEA or bespoke for the UK) or, in the fullness of time, applying for membership once more. In truth, it is abundantly clear that the battle over EU membership in England is over for the foreseeable future. The Conservatives, Labour and the Liberal Democrats all now accept the principle that the UK has left the EU and it requires a new relationship, while differing in their visions for that relationship.

A realistic aspiration for the UK to rejoin the EU, in the decades to come, would have to be predicated on a fundamental transformation of the Westminster political culture on Europe and a definitive evolution of public opinion in England and Wales. Genuine reflection on the UK’s role in Europe and the world would be essential, along with a much fuller collective understanding of the EU’s functions and responsibilities.

Although it is unclear how the EU Member States would respond to a future membership application from the UK, the EU would undoubtedly require evidence of a significant and stable majority in public opinion in favour of rejoining. It would surely expect the UK to become a more normal Member State, fully integrated into Union policies, including the Schengen area and eventually the euro, with no opt-outs. If the UK ever does undertake a second EU membership, it would have to be as a wholehearted participant in the European project.

Challenges for Scotland’s European relations

In marked contrast to England, Scotland is far from finished with debating its relationship with the EU and its wider constitutional future. The Scottish public consistently opposed Brexit by definitive margins. The discord between the pro-European views of the people of Scotland and the Brexit populist course set by the UK Government has exposed serious flaws in the design and functioning of the UK state.

Nevertheless, the choice in the Brexit endgame was between the negotiated agreement and a no-deal outcome. The UK is already no longer an EU member. While not matching the preferences of the Scottish electorate, the conclusion of the Trade and Cooperation Agreement ensures that the end of the transition on New Year’s Day will result in managed disruption rather than unmanaged chaos. Scotland’s interests are manifestly served by avoiding a no-deal scenario, and that reality can be recognised without endorsing the principle of Brexit or the distant EU-UK relationship chosen by the UK Government.

Given the independence debate, the new EU-UK relationship will be consequential for Scotland in two primary dimensions. The first dimension is that Scotland will operate under this deal, at a minimum, for the next several years. Should a referendum take place after the next Holyrood election and produce a majority for independence, Scotland’s relationship with the EU would continue to be governed by the TCA during the post-referendum negotiations between the Scottish and UK Governments, until the date of independence.

While further analysis is required, it is reasonable to envisage that a post-referendum transition to independence could take around 2–3 years. If, for instance, a referendum were held in September 2022 and returned a result in favour of independence, Scotland’s relationship with the EU would be based on the EU-UK agreement, from January 1st 2021, for approximately the next 4–5 years. Were the people to instead support remaining part of the UK, then Scotland’s EU relations would resultantly be framed by the TCA indefinitely.

The second dimension is that this deal will substantially shape the future relationship between Scotland and the UK, should the former become independent and eventually join the EU. In that case, bilateral relations would not only be determined directly by the two states, but additionally by the EU (of which Scotland would be an integral part). In the aftermath of a referendum endorsing independence, the TCA would have to be modified to extricate Scotland, which would then build its own pre-accession relationship with the EU in preparation for becoming an EU Member State.

In all circumstances, it is therefore in Scotland’s strategic national interests for the UK to have a relationship with the EU which is as close and stable as possible. That imperative currently translates into seeing the new EU-UK partnership take effect and succeed. It will then take the shape of continually arguing for the UK to reintegrate further with the EU. The importance of the UK’s EU relationship to Scotland will persist, regardless of the latter’s constitutional future. Considering the salience of the matter, even as an independent state, Scotland should advocate close EU-UK relations, while respecting what would be the internal affairs of the separate United Kingdom.

The more immediate question is the future direction of Scotland’s own European relations. As a component polity of a third country, Scotland now faces substantial challenges to engaging in the EU and influencing EU decision-making. As outlined in Scotland and the Spirit of Europe, three principal difficulties will have to be confronted: reduced access to EU policy-making, less relevance to EU decision-makers and some association with UK policy, regardless of Scotland’s distinctive position.

As I have argued, Scotland would be best served in the Brexit era by a twin-pillar approach of practical cooperation with EU actors in areas of mutual interest and strategic contributions on the future of Europe. It is a matter of salient discussion as to whether EU Member States will be more receptive to substantively engaging with Scotland, once the post-Brexit transition expires and the UK is fully outside the structures of the EU. In any case, the independence debate should be minimised in official European relations to the greatest extent possible.

Scotland’s success in sustaining its European relationships and accruing some measure of influence in the EU will be predicated upon full appreciation of the time horizons at play. Irrespective of its future constitutional decisions, Scotland will remain outside the EU for years to come. For instance, were a referendum to take place in September 2022 and result in a majority for independence, a transition to statehood lasting around 2–3 years would follow. As set out in Scotland’s EU Blueprint, Scotland would not be able to apply to join the EU until after the date of independence.

Given its particular circumstances, enumerated in detail in the Blueprint, Scotland would reasonably take 4–5 years to join the EU, from the date of application to the date of accession. In consequence, even if the Scottish electorate chose independence in a future referendum, Scotland would conceivably remain, from January 1st 2021 and the end of the transition, fully outside the EU for around the next 8–10 years. With a 2022 referendum, Scotland could be an independent state by 2024–2025, and an EU Member State by 2028–2030. If a referendum were held later, or if the transition to independence or the EU accession process took longer, then the period of time outwith the EU would increase.

Scotland will therefore require a definitional strategy for its engagement with the European Union for the coming decade, in the Brexit era and outside the EU. Setting such an approach to the EU will be essential, regardless of whether Scotland becomes independent or remains part of the UK. As other places in Europe demonstrate, Scotland’s engagement with the EU would be most successful where it is rooted in cross-party cooperation. Admittedly, Scottish politics is not in that space – not least as European and international affairs are often regrettably reduced to arguments on independence.

Nevertheless, the Scottish public would benefit where political parties can find common ground on European relations. From now on, the default is that Scotland will fade into the European political background. Scotland – the Scottish Government, mainstream Scottish politics and wider Scottish society together – will have to be proactive in sustaining and developing their connections with the rest of Europe. More broadly, the national conversation on European affairs would benefit from greater depth. To successfully meet the challenges ahead in the years to come, Scotland will need renewed shared purpose on its relationship with the EU and its aspirations for the future of Europe.

Anthony Salamone FRSA is Managing Director of European Merchants

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