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William Hague: independence would see Scotland lose billions in EU funding William Hague: independence would see Scotland lose billions in EU funding
(35 minutes later)
An independent Scotland would lose billions of pounds in EU funding and could be forced to help pay for the UK's EU rebate, the foreign secretary, William Hague, has warned. An independent Scotland would lose billions of pounds in EU funding and could be forced to help pay for the UK's EU rebate, the foreign secretary, William Hague, has said.
A new Foreign Office analysis released by Hague estimates Scotland would face an extra bill of between £1.65bn and £3.5bn as other more powerful states in the EU forced it to accept much tougher terms of membership after independence. A Foreign Office analysis released by Hague estimates Scotland would face an extra bill of between £1.65bn and £3.5bn as more powerful EU states forced it to accept tougher terms of membership after independence.
Warning that those talks would take several years and involve major concessions by a Scottish government, Hague insisted Scotland would also be forced to accept the euro, arguing that no new member state since the currency came into use had been able to refuse. Warning that those talks would take several years and involve major concessions by a Scottish government, Hague said Scotland would also be forced to accept the euro, arguing no new member state since the currency came into use had been able to refuse.
Hague said repeated assurances from the first minister, Alex Salmond, that Scotland could smoothly and quickly join the EU, potentially within 18 months of a yes vote in this year's referendum, were on very shaky ground. Hague said the repeated assurances from the first minister, Alex Salmond, that Scotland could smoothly and quickly join the EU, potentially within 18 months of a yes vote in this year's referendum, were unconvincing.
As Scottish ministers accused him of fleeing Scotland without facing up to an open debate on his claims, Hague said: "Uniquely among all the choices we face in life, they will present the choice for Scotland to leave the UK as pure gain and no loss.As Scottish ministers accused him of fleeing Scotland without facing up to an open debate on his claims, Hague said: "Uniquely among all the choices we face in life, they will present the choice for Scotland to leave the UK as pure gain and no loss.
"It is an astonishing claim because the assurances they are giving are based on very shaky ground. On the terms of this paper alone, they are offering a fraction of what Scotland already has. There are great risks, and it would be wrong for us to pretend otherwise.""It is an astonishing claim because the assurances they are giving are based on very shaky ground. On the terms of this paper alone, they are offering a fraction of what Scotland already has. There are great risks, and it would be wrong for us to pretend otherwise."
The FCO paper on independence, the EU and international affairs, said Salmond was wrong to claim that an independent Scotland would be entitled to take a share of the UK's £3bn-a-year rebate from the EU, along with all the UK's other concessions. The FCO paper on independence, the EU and international affairs, said Salmond was wrong to claim an independent Scotland would be entitled to take a share of the UK's £3bn-a-year rebate from the EU, along with the UK's other concessions.
That rebate was based on the size of the UK's respective share of the EU economy; any change to that unique deal would require unanimous agreement of all other 27 EU states, which would be highly unlikely to agree a new deal subsidising Scotland. That rebate was based on the size of the UK's respective share of the EU economy; any change to that unique deal would require unanimous agreement of the 27 other EU states, which would be highly unlikely to agree a new deal subsidising Scotland.
Despite insisting it could take years to strike a final deal, the FCO figures assumed that Scotland was independent this year because the current EU budget covers 2014 to 2020, but does not adjust them from 2016 – the year Scotland could declare independence. Despite insisting it could take years to strike a final deal, the FCO figures assumed Scotland was independent this year because the current EU budget covers 2014 to 2020, but does not adjust them from 2016 – the year Scotland could declare independence.
Based on that baseline, an independent Scotland would have to pay an extra £1.9bn by 2020 from the loss of its share of the UK rebate, as well as paying £530m over the next seven years towards the UK's rebate.Based on that baseline, an independent Scotland would have to pay an extra £1.9bn by 2020 from the loss of its share of the UK rebate, as well as paying £530m over the next seven years towards the UK's rebate.
At the same time as trying to block demands to join the Schengen open borders treaty and the euro, Scotland was likely to be forced to accept deep cuts in its common agricultural policy (CAP) payments and structural investment funds during the entry talks.At the same time as trying to block demands to join the Schengen open borders treaty and the euro, Scotland was likely to be forced to accept deep cuts in its common agricultural policy (CAP) payments and structural investment funds during the entry talks.
While it could theoretically earn £648m more than it does now by 2020, it was more likely to see cuts of up to £1bn in CAP income and up to £188m less in structural funds. Although it could theoretically earn £648m more than it does now by 2020, it was more likely to see cuts of up to £1bn in CAP income and up to £188m in structural funds.
The FCO paper refused to set out what the UK government's own negotiating stance on Scotland's EU membership would be in advance of the 18 September referendum, but it hinted at an important shift in Whitehall's position. The FCO paper refused to set out what the UK government's own negotiating stance on Scotland's EU membership would be before the 18 September referendum, but it hinted at an important shift in Whitehall's position.
After months of attacks on Scottish membership, the document accepted that, in theory, Scotland could win special concessions and transition arrangements before joining the EU, including keeping current CAP payments as any new deal was phased in.After months of attacks on Scottish membership, the document accepted that, in theory, Scotland could win special concessions and transition arrangements before joining the EU, including keeping current CAP payments as any new deal was phased in.
Backed by leading European political and legal experts, including a former UK judge at the European court of justice, Sir David Edward, Salmond and his deputy, Nicola Sturgeon, insisted it would inconceivable for the EU to eject Scotland after a democratic and legally-mandated vote for independence. Backed by leading European political and legal experts, including a former UK judge at the European court of justice, Sir David Edward, Salmond and his deputy, Nicola Sturgeon, insisted it would inconceivable for the EU to eject Scotland after a democratic and legally mandated vote for independence.
Sturgeon said Scotland had already lost £850m in CAP payments through not being independent, adding that nothing Scotland wanted from the EU would materially change the EU's finances or structures.Sturgeon said Scotland had already lost £850m in CAP payments through not being independent, adding that nothing Scotland wanted from the EU would materially change the EU's finances or structures.
She said: "It seems strange that the UK government is so very negative about the outcomes of Scotland's negotiations with our EU partners over terms of continuing membership when Scotland is seeking no change from the status quo – nothing we propose changes the material conditions of any other member state – while they are so certain of complete success in their own ill-advised renegotiations with the EU over proposals that will fundamentally change the provisions of treaties on which the entire EU, and its single market, rests. More than ever Scotland needs direct representation in Europe so we can protect and promote Scotland's interests."She said: "It seems strange that the UK government is so very negative about the outcomes of Scotland's negotiations with our EU partners over terms of continuing membership when Scotland is seeking no change from the status quo – nothing we propose changes the material conditions of any other member state – while they are so certain of complete success in their own ill-advised renegotiations with the EU over proposals that will fundamentally change the provisions of treaties on which the entire EU, and its single market, rests. More than ever Scotland needs direct representation in Europe so we can protect and promote Scotland's interests."
Sturgeon also insisted Scotland could not be forced to join the euro, because that required voluntarily joining the European exchange rate mechanism (ERM). Scotland would refuse to do so, she said, pointing to Sweden and Poland, which have failed to introduce the euro. Sturgeon also said Scotland could not be forced to join the euro, because that required voluntarily joining the European exchange rate mechanism (ERM). Scotland would refuse to do so, she said, pointing to Sweden and Poland, which have not introduced the euro.
Hague countered that since European treaties insisted on euro membership, that implied that joining the ERM was required. Only Denmark and the UK had a permanent opt-out. Hague said it would be a remarkable thing if Scotland were to win all the concessions and privileges claimed by Salmond. Hague countered that since European treaties insisted on euro membership, that implied that joining the ERM was required. Only Denmark and the UK had a permanent opt-out. Hague said it would be remarkable if Scotland were to win all the concessions and privileges claimed by Salmond.
Hague conceded he was wrong to claim in 1997 that Scotland would become a "high-tax ghetto" after the Scottish parliament was set up, but said the current debate on independence was based on facts.Hague conceded he was wrong to claim in 1997 that Scotland would become a "high-tax ghetto" after the Scottish parliament was set up, but said the current debate on independence was based on facts.
He said: "It would be a huge negotiation and it wouldn't be smooth as the cheery claims [from Scottish government ministers] suggest. Voters should be worried about how easy it would be. It would be of uncertain length and unknown outcome."He said: "It would be a huge negotiation and it wouldn't be smooth as the cheery claims [from Scottish government ministers] suggest. Voters should be worried about how easy it would be. It would be of uncertain length and unknown outcome."
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