Speech

Chief Secretary to the Treasury Danny Alexander on Scotland analysis: EU and international issues

Chief Secretary to the Treasury speaks at the launch of the latest Scotland analysis paper on EU and international issues.

• From: HM Treasury and The Rt Hon Danny Alexander
• Published: 17 January 2014

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

• Location: The Lighthouse, Glasgow
• Delivered on: 17 January 2014 (Original script, may differ from delivered version)

Thank you William [Hague]

What you바카라 사이트檝e said is a real reminder of just how influential the UK is internationally.

How we project our collective power and our ideas for good바카라 사이트�

And particularly for the benefit of the poorest and most disadvantaged people in the world.

Read 바카라 사이트楽cotland analysis: EU and international issues바카라 사이트�.

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

It was also a reminder of how being in the United Kingdom family바카라 사이트�

And the influential membership that gives us of바카라 사이트�

The EU. The UN.

The G7. The G8. The G20.

The IMF. The World Bank.

Really gives us 바카라 사이트� as Scots 바카라 사이트� an ability to punch above our weight internationally.

To fight for Scottish interests across the world.

To promote Scottish values across the world.

And to export Scottish products across the world.

It바카라 사이트檚 one of the most powerful reasons why we바카라 사이트檙e better as part of the United Kingdom.

The research before us today gives us Scots 바카라 사이트� I think 바카라 사이트� two powerful messages.

The first is that 바카라 사이트� as William majored on 바카라 사이트� we have more influence in the world as part of the UK.

And the second is that our membership of these international organisations 바카라 사이트� those I just mentioned 바카라 사이트� comes a lot cheaper as part of the UK.

And my message is that 바카라 사이트� by leaving the UK 바카라 사이트� we would pay more바카라 사이트�

But that we바카라 사이트檇 influence less, and we바카라 사이트檇 achieve less.

I바카라 사이트檒l explain shortly how 바카라 사이트� on our EU membership alone 바카라 사이트� Scotland will be between 拢1.9 billion and 拢3.8 billion better off as part of the UK in the next 7 years.

But before I get into the details, I want to talk about the principles.

The question that will be put in September is of monumental importance.

The UK is a family of nations that has grown together through good times and bad times.

Our ancestors have literally fought and died to protect it from harm.

And I ask everyone in Scotland to reflect on our history.

We are woven together in so many ways바카라 사이트�

And I have a strong sense that as the debate intensifies 바카라 사이트� as the referendum gets closer 바카라 사이트� that the rest of the UK doesn바카라 사이트檛 want to see our family of nations torn apart.

Our nation is valued and appreciated.

The UK is successful.

And let바카라 사이트檚 remember that a 바카라 사이트榊es to Independence바카라 사이트� vote is a one way ticket.

There will be no going back.

Money

So William has already explained why we Scots would lose influence and clout by leaving the UK바카라 사이트�

But why 바카라 사이트� you might ask 바카라 사이트� does it also save Scotland money?

Surely greater influence comes at a greater cost?

But the truth is, that as a United Kingdom we simply have more financial clout.

You may have seen that earlier this week I made clear that the UK 바카라 사이트 would 바카라 사이트� of course 바카라 사이트� honour our debts should independence occur.

And that an independent Scotland would pay its fair and proportionate share of the debt to the continuing UK 바카라 사이트.

We took that action to ensure that those who lend to us continue to do so at low interest rates 바카라 사이트� which is crucial for every business and mortgage-holder across the whole UK, including in Scotland.

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.

Because all the experts agree that a new country with no track record in financial markets 바카라 사이트� like an independent Scotland 바카라 사이트� would not retain the same credibility in financial markets as the UK.

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.

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.

The referendum will decide whether that is a price we want to pay in future바카라 사이트�

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.

EU Budget 바카라 사이트� paying more to get less

Our Union 바카라 사이트� our history 바카라 사이트� is crucial here.

In debt management, we achieve better deals for everyone in Scotland because of our collective strength.

And that is true elsewhere.

Let바카라 사이트檚 look at the EU바카라 사이트�

Before we get into the detail of the analysis, I won바카라 사이트檛 surprise anyone if I say that I바카라 사이트檓 a strong supporter of the European Union바카라 사이트�

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.

I don바카라 사이트檛 think the EU is perfect. I think it바카라 사이트檚 far from it바카라 사이트�

But I think we바카라 사이트檙e at our best when we바카라 사이트檙e at its centre.

Reducing bureaucracy바카라 사이트�

Leading trade deals바카라 사이트�

Something 바카라 사이트� again 바카라 사이트� we have far more clout in as part of the UK.

But our membership of the EU doesn바카라 사이트檛 come for free.

The UK contributes to the EU budget, like each member state.

And those combined contributions are then distributed throughout the Union, based on seven-year budget agreements.

Now, explaining, and quantifying the benefits of our EU budget position isn바카라 사이트檛 ever the most straightforward task!

But I바카라 사이트檒l try to do it as clearly as possible today.

The bottom line is this.

Scotland outside of the UK would have to negotiate its own way back into the EU바카라 사이트�

And 바카라 사이트� as such 바카라 사이트� its terms of membership would be entirely different to those it currently enjoys.

At present, Scotland gets the benefits of EU Membership at a discount of between 拢1.9bn and 拢3.8bn over the next 7 years바카라 사이트�

And that바카라 사이트檚 because we are part of the UK.

Outside of the UK we바카라 사이트檇 pay more and get less.

CAP and Structural

In terms of paying in, every nation contributes according to their National Income바카라 사이트�

And in terms of receiving money back, there are two main programmes:

• Structural and Cohesion Funds
• Common Agricultural Policy 바카라 사이트� or CAP

And it바카라 사이트檚 easy to see the impact both those funds have here in Scotland.

In Glasgow the Structural Funds have helped turn old buildings like the town hall into new cultural and digital projects.

And Structural Funds in my own part of Scotland, in the Highlands, have had an even bigger impact.

CAP payments too, play a crucial role in supporting farmers across the country.

Rebate

On top of those funds, the UK also receives a unique, permanent rebate on our contributions.

This rebate is 바카라 사이트� essentially 바카라 사이트� the refund we get on what we pay in to the EU budget.

We get some back, because we don바카라 사이트檛 take as much out as other Member States.

And the UK바카라 사이트檚 rebate is currently worth around 拢3 billion pounds every year.

It was hard fought for바카라 사이트�

It took 12 years after entry to achieve바카라 사이트�

And it is strongly objected to by every other member, every time the budget is negotiated.

Now, the research before you models the impact that Scotland바카라 사이트檚 independence would have on each of those three areas.

On Structural Funds, Scotland would lose out on around 拢200 million over this seven year spending round바카라 사이트�

And that바카라 사이트檚 because the UK 바카라 사이트 has recognised Scotland바카라 사이트檚 specific needs, and acted to ensure that Scotland received 바카라 사이트� compared to England 바카라 사이트� a higher percentage of the UK allocation.

On CAP payments, the picture is more complex.

There are question marks over transition periods, and negotiated splits, and whether Scotland바카라 사이트檚 CAP payments would need to be phased in over a 10 year spell바카라 사이트�

As has happened to every other country that has joined the EU in the last three accessions.

But in the best case scenario 바카라 사이트� incidentally the only scenario put forward by the Scottish 바카라 사이트.

In the best case scenario CAP payments would increase by 拢850 million over the seven years바카라 사이트�

And in the worst case scenario 바카라 사이트� CAP payments 바카라 사이트� would in fact decrease by over 拢1bn.

But the most important figure here is what would happen with the rebate.

The Scottish 바카라 사이트바카라 사이트檚 position is that the UK바카라 사이트檚 rebate can simply be shared in the event of independence.

But that바카라 사이트檚 not how a rebate works.

It바카라 사이트檚 not an annual lump sum that can be divided.

It바카라 사이트檚 based on a formula, reflecting the UK바카라 사이트檚 respective shares in the EU바카라 사이트檚 economy and receipts바카라 사이트�

So the new amount would relate to the continuing UK, excluding Scotland.

There would be no 바카라 사이트楽cottish share바카라 사이트� left.

For Scotland to secure a rebate, or a correction upon accession바카라 사이트�

There would have to be a change to the rulebook approved by every other single EU member state.

Quite simply, it would be unprecedented.

No other country has ever secured any budgetary correction on joining the EU바카라 사이트�

So it is inconceivable that an independent Scotland would secure a rebate as the UK has바카라 사이트�

In the unlikely event that any correction could be secured at all.

We also have to remember that all new member states contribute to the UK바카라 사이트檚 rebate바카라 사이트�

Which means that an independent Scotland 바카라 사이트� like any other EU member state 바카라 사이트� would have to make a contribution to the rest of the UK바카라 사이트�

We calculate nearly 拢600m over the seven year period.

The numbers

So 바카라 사이트� adding those factors together 바카라 사이트� how much might it cost for an independent Scotland to be a member of the EU?

The graphs on page 96 of your documents set this out.

The best case scenario for an independent Scotland, based on the Treasury바카라 사이트檚 analysis, is that for 2014 through to 2020바카라 사이트�

With structural funds going down, a loss from the UK rebate, a contribution to the UK rebate바카라 사이트�

And an increase in CAP receipts.

Scotland would be 拢1.9 billion worse for the period.

And in the worst case scenario바카라 사이트�

Where CAP receipts went down rather than up바카라 사이트�

Scotland바카라 사이트檚 net position would be 拢3.8bn worse.

What this means for Scottish families is that over the next seven years바카라 사이트�

Continuing as part of the United Kingdom will save them at least 拢750 per household.

Possibly climbing to 拢1 470 per household.

So, as part of the UK바카라 사이트�

We Scots pay less, and we get more out of our EU membership.

UN

Of course, the EU is just one example.

What about 바카라 사이트� say? 바카라 사이트� the UN?

As part of the UK, Scottish views 바카라 사이트� Scottish values 바카라 사이트� are represented by one of the founder members, with a permanent seat on the Security Council.

And while an independent Scotland could join the family of the United Nations바카라 사이트�

It wouldn바카라 사이트檛 have that permanent Security Council seat, and the influence it brings바카라 사이트�

And it would also pay for its membership at a rate equivalent to similar countries.

So 바카라 사이트� with regards to the UN바카라 사이트檚 regular budget 바카라 사이트� our analysis shows that an independent Scotland might be expected to contribute between $12.9m and $18m a year바카라 사이트�

And to the peacekeeping budget, between $50m, and $64m.

That바카라 사이트檚 before we take into account the UN바카라 사이트檚 specialised agencies, like UNESCO or the World Health Organisation.

White paper

This is a huge decision for Scotland.

And 바카라 사이트� as such 바카라 사이트� we can바카라 사이트檛 afford to base it on anything but the very best information.

But what struck many people about the Scottish 바카라 사이트바카라 사이트檚 White Paper at the end of last year바카라 사이트�

Was that when it came to money 바카라 사이트� time after time 바카라 사이트� their figures made clear they were based on a very partial account of the 바카라 사이트渂est case scenario only.바카라 사이트�

But I think the Scottish people deserve to see the best and the worst case scenarios.

And it바카라 사이트檚 fair to say that some of the Scottish 바카라 사이트바카라 사이트檚 best case scenarios are optimistic.

That Scotland would keep the pound they claim 바카라 사이트� despite the fact that such an arrangement would be highly unlikely to work, and highly unlikely to be agreed.

That Scotland would be in a stronger fiscal position than the rest of the UK 바카라 사이트� a claim based on wildly optimistic oil and gas forecasts, which conveniently ignores unfunded commitments on tax and childcare.

Or that Scotland would join the EU under article 48 바카라 사이트� despite the fact that many key figures have said this couldn바카라 사이트檛 happen.

Conclusion

But when it comes to the EU 바카라 사이트� what the facts show 바카라 사이트� is that Scotland and the rest of the UK are better together, and stronger together.

And everything we바카라 사이트檝e covered today only serves to highlight that.

As a United Kingdom we get a seat on all the most important international tables바카라 사이트�

And put Scottish values and British at the centre of all global decisions.

As a United Kingdom we have a historic and successful network of embassies and trade bodies across the world.

Which opens up the whole globe for Scots to travel and do business in.

And as a United Kingdom we secure good deals on debt and on the cost of these memberships바카라 사이트�

Which puts more money back in Scottish pockets.

But by leaving the United Kingdom.

We would see our international influence decrease.

And we would see the costs to our country increase.

We would be getting less, and paying more.

So let바카라 사이트檚 keep a situation where we pay less, and we get achieve more in the world together.

We are better together.

Thank you for listening.

Published 17 January 2014