As HMRC announces yet more Scottish export declines, it’s becoming clear that leaving the EU may be the only solution.
The figures aren’t pretty:
- Only one eighth of Scottish goods are sold abroad
- Overseas sales are down 9%
- The fall in Scottish exports is greater than the UK’s overall, which is 6%
- Machinery and transport exports are down 5%
- Whisky, one of Scotland’s biggest exports, was down 4.4%
This follows a general downward trend for Scotland — a year before exports fell a massive 11%. Notable declines were with the EU itself, particularly Germany and the Netherlands. On the other hand, exports with the US only dropped 3.5%.
Clearly, being in the EU isn’t helping Scottish exports. Scotland has long relied on the US, particularly its love of great whisky, as its biggest trading partner. Out of the EU Scotland can agree its own beneficial trading terms, free from Brussels’ control, with the US, which is recovering faster than the EU bloc.
Many analysts have blamed the exports decline on a strong sterling, which makes Scottish exports uncompetitive. As we saw at the end of February when London Mayor Boris Johnson announced he would support a Brexit, a drop in the value of the pound is all but certain if Britain leaves the EU — and the fortunes of the overseas manufacturing sector would improve accordingly.
Some may point to Ireland, an EU member, which saw its trade increase last year by a massive 20%, as a reason to stay. But this was thanks primarily to a weakening of the euro, not from the benefits of being in the EU itself.
The country Scotland really needs to look at is Switzerland — which is in Europe but not the EU. The EU takes 64% of Swiss exports compared to just 45% of British exports. Also, that 45% figure is 10% down from 10 years ago. Critics argue being in the EU gives no benefits to a country’s exports, and many mid-size businesses claim that red tape hampers it.
The fact is the EU has stagnated and isn’t particularly interested in buying Scottish goods. Last year saw Germany, France, and Italy all miss GDP targets, and no-one thinks it will improve any time soon. Scotland should note that countries similar to its size like Portugal and Finland did even worse.
It’s no secret that much of Scotland is against Britain leaving the EU. If Britain votes for Brexit it could increase the momentum for a second referendum on Scottish independence. For now this would be a mistake — oil prices are far too low for Scotland to seriously consider going independent in the current economic climate.
But by supporting Brexit, Scotland can benefit from greatly improved trade and, more importantly, really cash in when the world is hungry for oil again.