Brexit + Indyref = Northern Powerhouse?

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Photo: PA

 

Today the news was broke of a post-Leave poll on Scots’ support for Scottish independence.

The online poll, conducted by ScotPulse, surveyed 1600 Scots on Friday – the day of the referendum result. The poll showed 59% of those surveyed support Scottish independence.

It follows the result on Friday, which showed 62% of Scots backed remaining a member of the EU, but failed to have an influence on the final result for the whole of the UK.

Aside from the debates and questioning pointed towards Nicola Sturgeon, there is something crucial to bear in mind: This is a very, very early poll, and six in ten Scots is unlikely to be enough to put Sturgeon’s mind at ease.

We have seen before how skewed polls can be, and a poll immediately after a Brexit is unlikely to have great bearing on the final decision at a second independence referendum.

If a campaign is begun by the end of the year, there will be perhaps up to a year of campaigning. The 2014 campaign lasted nearly 18 months, and the polls changed significantly in that time.

Sturgeon will want absolute assurance of victory, and when she does a referendum could be held as early as next May, I would imagine.

Secondly, the north of England.

This region voted very much in favour of a Leave vote on Thursday: Carlisle, Copeland, Eden and Sunderland some of the strongest in favour of a Brexit.

And so, we see a significant polarisation at the border between Scotland and England: The former strongly in favour of remaining, the latter not so.

This is going to be a hypothetical discussion, so bear with me. However, the evidence in favour of this idea is quite clear at many levels.

Imagine this: Scotland has voted in favour of leaving the UK, a UK now outside of the EU.

Currently, the UK has one land border with the EU, and at that Ireland is not physically connected to the main continent of Europe. Thus, it is hard to use this as a basis of investigation.

However, the wealthiest areas of the UK tend to be close to the south-east, in particular London. This is, of course, the closest the UK can get to the main EU countries of France and Spain, and so trade is significant in these areas.

Brexit, combined with a Scottish independence victory, will (I believe) shift the investment and monetary power of England northwards, towards those poorer areas of the country that have been the focus of Osborne’s “Northern Powerhouse” plan for years.

Let us look at Switzerland. Switzerland, according to Forbes, relies heavily upon its neighbouring countries, such as Liechtenstein.

Switzerland ranks 10th on the world’s richest countries, ahead of Germany in 18th, and the UK at 27th.

Also, examining a map (inset) of the wealthiest areas in Europe, the area surrounding Switzerland happen to be some of the wealthiest in the continent.

It is possible, then, that being outside the EU, but being on a border with it, can actually have benefits for nations such as Switzerland.

Gross_domestic_product_(GDP)_per_inhabitant,_in_purchasing_power_standard_(PPS),_by_NUTS_level_2_region,_2013_(¹)_(%_of_the_EU-28_average,_EU-28_=_100)_RYB15

Wealthiest areas of Europe. Photo: Europa.EU

On the borders of Switzerland and its neighbours, they accept Swiss Francs and Euros, with the fluidity of business perhaps offsetting the cost of exchanging the currency.

And so we return to a post-independence Scotland: Could it actually boost the local economy of the Debatable Lands?

As a border with the EU, Scotland would have a large amount of influence as being a mainland door to trade with the single market. This would allow for greater movement of goods and capital in the north of England.

This is further evidenced by Ed Cox, director of Manchester think-tank IPPR North, who said: “Whatever you believe about the Northern Powerhouse, few can deny that our trading relationships with our (soon to be former) EU partners matter much more to northern businesses than they do to the City of London.”

Furthermore, if Scotland did have to adopt the Euro, it could see the kind of system of exchange seen on the Swiss border in the north of England.

Easy use of two currencies, which would be the most sensible option for areas so close to one another with potentially very close trading links.

It may also encourage greater tourism from Scotland to the north.

Whereas Scots would undoubtedly have to exchange their currency for Pounds Sterling if travelling to London, fluid currency use in the north may encourage more Scottish people travelling closer to home so as to avoid the nuisance of exchanging currency.

And so we have it. Could a Brexit, combined with an independent Scotland, turn investment from London – with its Channel border with France – towards the north; the north now sharing a border with the single market, and perhaps greater fluidity of currency?

It is very much the best situation possible in these terms, and whether it is possible or not remains to be seen. But it is all hinged on Scotland securing a deal with the EU, and as I said yesterday this may be difficult.

For now, it remains a possibility, but it should not be completely ruled out.

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