Report - Section 8

The European Community

Membership of the EEC affects the economics of Scottish independence in several important respects. It guarantees access to English and Continental markets in a way which would not be possible otherwise. Without EEC Scotland would always run the risk that England might find it expedient to impose an import surcharge, a quantitative control or even a tariff on goods coming from Scotland. It was largely to eliminate this that Scotland accepted the Union of 1707. Now EEC rules would have the same effect and for all nine member states. In the unlikely event of England leaving the EEC, Scottish access to the other countries could in time largely compensate for any restrictions that might arise on English trade.

Access to EEC should also help to provide a major stimulus to Scottish industrial investment. The EEC is not only a bigger market than the UK but its economy has been much more buoyant than that of Britain. There is no doubt that the exclusion of the United Kingdom had a damaging effect on investment and that foreign firms in particular preferred development within EEC. To gain the full advantage of this stimulus from membership it will, of course, be necessary to have a stable domestic economy. High rates of inflation and a declining currency such as the UK has had recently would do much to discourage foreign companies from coming to Scotland.

North Sea oil could have far-reaching consequences for Scottish membership of EEC because of the tremendously increased political power it would confer. Without oil other members might pay little enough regard to Scotland; her voting power would not be large and it might indeed be argued that she could exert more leverage on the Community as part of the United Kingdom. As the major producer of oil in Western Europe, however, Scotland would be in a key position and other countries would be extremely foolish if they did not seek to do all they could to accommodate Scottish interests. For Scotland the net cost of Common Agricultural Policy, which features so large in British discussions, would be at most some £40m a year, a small sum compared with the balance of payments gain from North Sea oil. The more common policies come to be decided in Brussels in the years ahead, the more Scotland would benefit from having her own Commissioner in the EEC as of right and her own voice in the Council of Ministers instead of relying on the indirect, and so far hardly satisfactory, form of vicarious representation through UK departments.