{"id":37872,"date":"2014-01-17T12:18:57","date_gmt":"2014-01-17T12:18:57","guid":{"rendered":"http:\/\/mostafa.openonline.co.uk\/?guid=a2c507aae95924c0b754978c7ad6eea9"},"modified":"2014-01-17T12:18:57","modified_gmt":"2014-01-17T12:18:57","slug":"speech-chief-secretary-to-the-treasury-danny-alexander-on-scotland-analysis-eu-and-international-issues","status":"publish","type":"post","link":"https:\/\/mostafa.openonline.co.uk\/?p=37872","title":{"rendered":"Speech: Chief Secretary to the Treasury Danny Alexander on Scotland analysis: EU and international issues"},"content":{"rendered":"
\n

Thank you William [Hague]<\/p>\n

What you\u2019ve said is a real reminder of just how influential the UK is internationally.<\/p>\n

How we project our collective power and our ideas for good\u2026<\/p>\n

And particularly for the benefit of the poorest and most disadvantaged people in the world.<\/p>\n

\n

Read \u2018Scotland analysis: EU and international issues\u2019.<\/a><\/p>\n<\/div>\n

Being on track to meet the target of 0.7% of GNI on international aid, even in these most challenging times, is one of our proudest achievements<\/p>\n

It was also a reminder of how being in the United Kingdom family\u2026 <\/p>\n

And the influential membership that gives us of\u2026<\/p>\n

The EU. The UN. <\/p>\n

The G7. The G8. The G20.<\/p>\n

The IMF. The World Bank.<\/p>\n

Really gives us \u2013 as Scots \u2013 an ability to punch above our weight internationally.<\/p>\n

To fight for Scottish interests across the world. <\/p>\n

To promote Scottish values across the world.<\/p>\n

And to export Scottish products across the world.<\/p>\n

It\u2019s one of the most powerful reasons why we\u2019re better as part of the United Kingdom.<\/p>\n

The research before us today gives us Scots \u2013 I think \u2013 two powerful messages.<\/p>\n

The first is that \u2013 as William majored on \u2013 we have more influence in the world as part of the UK.<\/p>\n

And the second is that our membership of these international organisations \u2013 those I just mentioned \u2013 comes a lot cheaper as part of the UK.<\/p>\n

And my message is that \u2013 by leaving the UK \u2013 we would pay more\u2026<\/p>\n

But that we\u2019d influence less, and we\u2019d achieve less.<\/p>\n

I\u2019ll explain shortly how \u2013 on our EU membership alone \u2013 Scotland will be between \u00a31.9 billion and \u00a33.8 billion better off as part of the UK in the next 7 years.<\/p>\n

But before I get into the details, I want to talk about the principles.<\/p>\n

The question that will be put in September is of monumental importance.<\/p>\n

The UK is a family of nations that has grown together through good times and bad times.<\/p>\n

Our ancestors have literally fought and died to protect it from harm.<\/p>\n

And I ask everyone in Scotland to reflect on our history.<\/p>\n

We are woven together in so many ways\u2026<\/p>\n

And I have a strong sense that as the debate intensifies \u2013 as the referendum gets closer \u2013 that the rest of the UK doesn\u2019t want to see our family of nations torn apart.<\/p>\n

Our nation is valued and appreciated.<\/p>\n

The UK is successful.<\/p>\n

And let\u2019s remember that a \u2018Yes to Independence\u2019 vote is a one way ticket. <\/p>\n

There will be no going back.<\/p>\n

Money<\/h3>\n

So William has already explained why we Scots would lose influence and clout by leaving the UK\u2026<\/p>\n

But why \u2013 you might ask \u2013 does it also save Scotland money?<\/p>\n

Surely greater influence comes at a greater cost?<\/p>\n

But the truth is, that as a United Kingdom we simply have more financial clout.<\/p>\n

You may have seen that earlier this week I made clear that the UK Government would \u2013 of course \u2013 honour our debts should independence occur. <\/p>\n

And that an independent Scotland would pay its fair and proportionate share of the debt to the continuing UK Government.<\/p>\n

We took that action to ensure that those who lend to us continue to do so at low interest rates \u2013 which is crucial for every business and mortgage-holder across the whole UK, including in Scotland. <\/p>\n

The markets were showing the first signs of unease and nervousness at a situation in which they might have ended up being owed money by a newly Independent Scotland with no credit history of its own.<\/p>\n

Because all the experts agree that a new country with no track record in financial markets \u2013 like an independent Scotland \u2013 would not retain the same credibility in financial markets as the UK.<\/p>\n

The National Institute of Economic and Social Research has estimated that an independent Scotland could expect to pay a premium above UK borrowing costs of up to 1.7 percentage points. <\/p>\n

With UK gilt yields currently around 3 per cent, that would mean an independent Scotland paying more than one and a half times the interest rate we get as part of the UK right now.<\/p>\n

The referendum will decide whether that is a price we want to pay in future\u2026<\/p>\n

But I was not going to allow taxpayers in all parts of the UK to pay more for that risk in advance of the referendum.<\/p>\n

EU Budget \u2013 paying more to get less<\/h3>\n

Our Union \u2013 our history \u2013 is crucial here. <\/p>\n

In debt management, we achieve better deals for everyone in Scotland because of our collective strength.<\/p>\n

And that is true elsewhere.<\/p>\n

Let\u2019s look at the EU\u2026<\/p>\n

Before we get into the detail of the analysis, I won\u2019t surprise anyone if I say that I\u2019m a strong supporter of the European Union\u2026 <\/p>\n

Or that I believe our membership is vital for our economy, that our coalition believes it is vital for investment and trade, but above all for jobs. <\/p>\n

I don\u2019t think the EU is perfect. I think it\u2019s far from it\u2026<\/p>\n

But I think we\u2019re at our best when we\u2019re at its centre.<\/p>\n

Reducing bureaucracy\u2026<\/p>\n

Leading trade deals\u2026 <\/p>\n

Something \u2013 again \u2013 we have far more clout in as part of the UK.<\/p>\n

But our membership of the EU doesn\u2019t come for free. <\/p>\n

The UK contributes to the EU budget, like each member state. <\/p>\n

And those combined contributions are then distributed throughout the Union, based on seven-year budget agreements.<\/p>\n

Now, explaining, and quantifying the benefits of our EU budget position isn\u2019t ever the most straightforward task! <\/p>\n

But I\u2019ll try to do it as clearly as possible today. <\/p>\n

The bottom line is this.<\/p>\n

Scotland outside of the UK would have to negotiate its own way back into the EU\u2026<\/p>\n

And \u2013 as such \u2013 its terms of membership would be entirely different to those it currently enjoys.<\/p>\n

At present, Scotland gets the benefits of EU Membership at a discount of between \u00a31.9bn and \u00a33.8bn over the next 7 years\u2026<\/p>\n

And that\u2019s because we are part of the UK.<\/p>\n

Outside of the UK we\u2019d pay more and get less.<\/p>\n

CAP and Structural<\/h3>\n

In terms of paying in, every nation contributes according to their National Income\u2026<\/p>\n

And in terms of receiving money back, there are two main programmes:<\/p>\n

    \n
  • Structural and Cohesion Funds<\/li>\n
  • Common Agricultural Policy \u2013 or CAP<\/li>\n<\/ul>\n

    And it\u2019s easy to see the impact both those funds have here in Scotland.<\/p>\n

    In Glasgow the Structural Funds have helped turn old buildings like the town hall into new cultural and digital projects.<\/p>\n

    And Structural Funds in my own part of Scotland, in the Highlands, have had an even bigger impact.<\/p>\n

    CAP payments too, play a crucial role in supporting farmers across the country.<\/p>\n

    Rebate<\/h3>\n

    On top of those funds, the UK also receives a unique, permanent rebate on our contributions.<\/p>\n

    This rebate is \u2013 essentially \u2013 the refund we get on what we pay in to the EU budget. <\/p>\n

    We get some back, because we don\u2019t take as much out as other Member States.<\/p>\n

    And the UK\u2019s rebate is currently worth around \u00a33 billion pounds every year.<\/p>\n

    It was hard fought for\u2026<\/p>\n

    It took 12 years after entry to achieve\u2026<\/p>\n

    And it is strongly objected to by every other member, every time the budget is negotiated.<\/p>\n

    Now, the research before you models the impact that Scotland\u2019s independence would have on each of those three areas.<\/p>\n

    On Structural Funds, Scotland would lose out on around \u00a3200 million over this seven year spending round\u2026<\/p>\n

    And that\u2019s because the UK Government has recognised Scotland\u2019s specific needs, and acted to ensure that Scotland received \u2013 compared to England \u2013 a higher percentage of the UK allocation. <\/p>\n

    On CAP payments, the picture is more complex.<\/p>\n

    There are question marks over transition periods, and negotiated splits, and whether Scotland\u2019s CAP payments would need to be phased in over a 10 year spell\u2026<\/p>\n

    As has happened to every other country that has joined the EU in the last three accessions.<\/p>\n

    But in the best case scenario \u2013 incidentally the only scenario put forward by the Scottish Government.<\/p>\n

    In the best case scenario CAP payments would increase by \u00a3850 million over the seven years\u2026<\/p>\n

    And in the worst case scenario \u2013 CAP payments \u2013 would in fact decrease by over \u00a31bn.<\/p>\n

    But the most important figure here is what would happen with the rebate.<\/p>\n

    The Scottish Government\u2019s position is that the UK\u2019s rebate can simply be shared in the event of independence. <\/p>\n

    But that\u2019s not how a rebate works. <\/p>\n

    It\u2019s not an annual lump sum that can be divided. <\/p>\n

    It\u2019s based on a formula, reflecting the UK\u2019s respective shares in the EU\u2019s economy and receipts\u2026 <\/p>\n

    So the new amount would relate to the continuing UK, excluding Scotland. <\/p>\n

    There would be no \u2018Scottish share\u2019 left. <\/p>\n

    For Scotland to secure a rebate, or a correction upon accession\u2026<\/p>\n

    There would have to be a change to the rulebook approved by every other single EU member state. <\/p>\n

    Quite simply, it would be unprecedented.<\/p>\n

    No other country has ever secured any budgetary correction on joining the EU\u2026 <\/p>\n

    So it is inconceivable that an independent Scotland would secure a rebate as the UK has\u2026<\/p>\n

    In the unlikely event that any correction could be secured at all. <\/p>\n

    We also have to remember that all new member states contribute to the UK\u2019s rebate\u2026 <\/p>\n

    Which means that an independent Scotland \u2013 like any other EU member state \u2013 would have to make a contribution to the rest of the UK\u2026<\/p>\n

    We calculate nearly \u00a3600m over the seven year period.<\/p>\n

    The numbers<\/h3>\n

    So \u2013 adding those factors together \u2013 how much might it cost for an independent Scotland to be a member of the EU?<\/p>\n

    The graphs on page 96 of your documents set this out.<\/p>\n

    The best case scenario for an independent Scotland, based on the Treasury\u2019s analysis, is that for 2014 through to 2020\u2026<\/p>\n

    With structural funds going down, a loss from the UK rebate, a contribution to the UK rebate\u2026<\/p>\n

    And an increase in CAP receipts.<\/p>\n

    Scotland would be \u00a31.9 billion worse for the period. <\/p>\n

    And in the worst case scenario\u2026<\/p>\n

    Where CAP receipts went down rather than up\u2026<\/p>\n

    Scotland\u2019s net position would be \u00a33.8bn worse. <\/p>\n

    What this means for Scottish families is that over the next seven years\u2026<\/p>\n

    Continuing as part of the United Kingdom will save them at least \u00a3750 per household. <\/p>\n

    Possibly climbing to \u00a31 470 per household.<\/p>\n

    So, as part of the UK\u2026<\/p>\n

    We Scots pay less, and we get more out of our EU membership.<\/p>\n

    UN<\/h3>\n

    Of course, the EU is just one example.<\/p>\n

    What about \u2013 say? \u2013 the UN?<\/p>\n

    As part of the UK, Scottish views \u2013 Scottish values \u2013 are represented by one of the founder members, with a permanent seat on the Security Council. <\/p>\n

    And while an independent Scotland could join the family of the United Nations\u2026 <\/p>\n

    It wouldn\u2019t have that permanent Security Council seat, and the influence it brings\u2026 <\/p>\n

    And it would also pay for its membership at a rate equivalent to similar countries. <\/p>\n

    So \u2013 with regards to the UN\u2019s regular budget \u2013 our analysis shows that an independent Scotland might be expected to contribute between $12.9m and $18m a year\u2026<\/p>\n

    And to the peacekeeping budget, between $50m, and $64m. <\/p>\n

    That\u2019s before we take into account the UN\u2019s specialised agencies, like UNESCO or the World Health Organisation. <\/p>\n

    White paper<\/h3>\n

    This is a huge decision for Scotland.<\/p>\n

    And \u2013 as such \u2013 we can\u2019t afford to base it on anything but the very best information. <\/p>\n

    But what struck many people about the Scottish Government\u2019s White Paper at the end of last year\u2026<\/p>\n

    Was that when it came to money \u2013 time after time \u2013 their figures made clear they were based on a very partial account of the \u201cbest case scenario only.\u201d <\/p>\n

    But I think the Scottish people deserve to see the best and the worst case scenarios. <\/p>\n

    And it\u2019s fair to say that some of the Scottish Government\u2019s best case scenarios are optimistic.<\/p>\n

    That Scotland would keep the pound they claim \u2013 despite the fact that such an arrangement would be highly unlikely to work, and highly unlikely to be agreed.<\/p>\n

    That Scotland would be in a stronger fiscal position than the rest of the UK \u2013 a claim based on wildly optimistic oil and gas forecasts, which conveniently ignores unfunded commitments on tax and childcare.<\/p>\n

    Or that Scotland would join the EU under article 48 \u2013 despite the fact that many key figures have said this couldn\u2019t happen.<\/p>\n

    Conclusion<\/h3>\n

    But when it comes to the EU \u2013 what the facts show \u2013 is that Scotland and the rest of the UK are better together, and stronger together.<\/p>\n

    And everything we\u2019ve covered today only serves to highlight that.<\/p>\n

    As a United Kingdom we get a seat on all the most important international tables\u2026<\/p>\n

    And put Scottish values and British at the centre of all global decisions.<\/p>\n

    As a United Kingdom we have a historic and successful network of embassies and trade bodies across the world.<\/p>\n

    Which opens up the whole globe for Scots to travel and do business in.<\/p>\n

    And as a United Kingdom we secure good deals on debt and on the cost of these memberships\u2026<\/p>\n

    Which puts more money back in Scottish pockets.<\/p>\n

    But by leaving the United Kingdom.<\/p>\n

    We would see our international influence decrease.<\/p>\n

    And we would see the costs to our country increase.<\/p>\n

    We would be getting less, and paying more.<\/p>\n

    So let\u2019s keep a situation where we pay less, and we get achieve more in the world together.<\/p>\n

    We are better together.<\/p>\n

    Thank you for listening.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

    Chief Secretary to the Treasury speaks at the launch of the latest Scotland analysis paper on EU and international issues.<\/p>\n","protected":false},"author":8,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"_links":{"self":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/37872"}],"collection":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=37872"}],"version-history":[{"count":0,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/37872\/revisions"}],"wp:attachment":[{"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=37872"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=37872"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mostafa.openonline.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=37872"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}