Independent Scotland would have same influence in EU as Finland, says CBI

http://www.theguardian.com/politics/2014/mar/26/independent-scotland-influence-eu-finland-cbi

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The CBI has warned that an independent Scotland would be left with same influence in the European Union as Finland.

The business organisation said Scotland faced the real risk of being "left out in the cold" after a yes vote in September's referendum as it fought to persuade the other 28 member states to allow it membership of the EU.

Scotland had little hope of keeping all the special opt-outs won by previous UK governments and would face "significant barriers to a smooth and seamless transition" to membership, it added.

In a highly critical report on the Scottish government's independence white paper, the CBI said Alex Salmond's claims that Scotland could join the EU within 18 months of the referendum were "highly ambitious".

Accusing the Scottish government of failing to tell voters the truth about the scale of these difficulties and what it could lose, the CBI added: "We see it as more likely that the process would drag on for a number of years."

It would need to either accept the euro, sign the Schengen open borders treaty, lose its share of the UK's multibillion rebate on EU funding or lose other opt-outs as part of a highly complex series of negotiations.

John Cridland, the CBI's director general, said he had to take seriously recent remarks by José Manuel Barroso, the European commission's outgoing president, that continuous membership for Scotland after a yes vote would be "extremely difficult, if not impossible".

Cridland did not know whether that meant Scotland would be forced to leave the EU and reapply from scratch after independence, but he was sure Scotland would have to accept the loss of many of the UK's special rights.

"Continuity of membership is not sustained by the evidence," he said.

If it did join, the CBI said, Scotland would end up with just seven votes on the European council of ministers, the same number as Finland, leaving it with little power to influence some of the biggest issues facing the EU.

Independence would also cut the UK's 29 votes on the council of ministers and its number of MEPs, underlining the value of a no vote to all parts of the UK, said the CBI.

The CBI, which represents firms with half a million employees in Scotland, said its members were also unnerved by doubts over Scotland agreeing a currency union with the UK, the extra red tape its members would face doing business after independence, and the heavy impact that declining oil reserves would have on Scottish government spending and its levels of public sector debt.

It said that while a currency union was clearly in Scotland's interests, it was highly unlikely to be politically acceptable for the rest of the UK, warning: "Breaking up the [UK] internal market would increase costs for businesses and consumers on both sides of the border."

Alyn Smith, the Scottish National party MEP, said the CBI was correct that an independent Scotland would have only seven votes on the European council but insisted that was not where real decisions were made in Brussels.

Decisions were made in working groups through political horse-trading, where Scotland could fight hard for its special interests, such as fisheries and energy, without having to go though uninterested UK ministers.

"I would readily swap having 100% of Finland's influence in the EU compared to the UK's out-of-touch, dysfunctional government setting our priorities," Smith said.

Nicola Sturgeon, Scotland's deputy first minister, said the only serious threat to Scotland's EU membership was the Tory party's proposed in/out referendum in 2017.

While the CBI confirmed that Scotland had a strong economy with one of the world's highest GDP levels, Sturgeon said: "This one-sided report ignores the positive impact of growth policies in [the white paper] Scotland's Future, such as giving Scottish business a competitive tax advantage, cutting air passenger duty, a sensible immigration policy, plans to transform childcare and grow the working population, increase the number of women on company boards and a range of levers necessary to counter the massively unbalanced nature of Westminster economic policy-making which favours London and the south-east of England."

The CBI is the largest major business body to attack independence, following interventions by BP, Shell, RBS, the investment giant BlackRock, BAE Systems and Lloyds, among others.

Cridland said that after hosting a CBI Scotland board, which has 50 chief executives elected by CBI members, to discuss the white paper, he was "absolutely confident" the CBI report represented the overwhelming majority of its members.

But Tony Banks, chairman of the care home company Balhousie Care and a pro-independence member of CBI Scotland, said he had not been consulted.

"I am confident voters in Scotland will see this report as no more than a rehash of the already discredited case put forward by the no campaign and the UK Treasury over recent months," he said.