Dumfriesshire, Clydesdale and Tweeddale MP David Mundell has raised concerns about the economic impact of independence on the South of Scotland region following the publication of the UK Governments latest analysis. Mr Mundell is particularly worried by the prediction that exports from an independent Scotland to the rest of the UK could fall dramatically, and could be over 80% lower after 30 years, according to new figures, something that would be seriously damaging for businesses and traders in this region. The same figures also show that remaining part of a borderless United Kingdom could boost real incomes in Scotland by as much as four per cent after 30 years, equivalent to £5 billion in 2012.
The local MP believes that it is an unavoidable consequence of independence that these issues and challenges would be most severely felt in the communities which lie closest to the border.
The estimates come from the latest Scotland analysis paper published by the Treasury, and have prompted the local MP to again question the SNP’s claims that local people would be better off in an independent Scotland.
“These latest figures, produced using international evidence of the existence of a “border effect” between separate countries, show that we really are ‘Better Together’, “ added the Dumfriesshire, Clydesdale and Tweeddale MP.
“Here in my constituency we have many firms regularly ‘exporting’ goods just over the Border and these latest figures suggest these could be at risk if Scotland votes ‘Yes’ next year, thanks to the “border effect.”
“One of the interesting points this research shows is that Borders don’t have to be physical checkpoints in order to have a real impact on economic behaviour. Even where free trade agreements exist and physical borders are weak or non-existent, neighbouring countries with similar economies are still affected,” he said.
Presently, the whole UK benefited from integrated markets, with Scotland exporting £36 billion worth of goods and services to the rest of the UK in 2011, and importing £49 billion worth. The Treasury’s analysis suggested that exports from an independent Scotland to the rest of the UK could fall dramatically in the event of independence.
Evidence for this came from trade between Canada and the USA, thought to be 44% lower than it could be because of the border between them, and despite a free trade agreement between the neighbouring countries, added Mr Mundell.
Also at threat was local businesses ability to recruit the best people for the job. At the moment they could recruit from across the UK, and people searching for work could move to any part of UK with the minimum of fuss knowing their employment, welfare and pension entitlements would remain unaffected and follow them around the UK.
In 2010-11, nearly 44,000 people moved from Scotland to the rest of the UK, and nearly 41,000 moved from the rest of the UK to Scotland. This is much higher than between Germany and Austria – despite the single market and close cultural integration, the presence of a border has had a real impact.
The local MP added: “That is why I want to make sure that our communities here on the border with England are heard in the national debate, because no matter what Alex Salmond says it is our region that would face the biggest challenges in an independent Scotland.”