Introduction

Stiftung Wissenschaft und Politik German Institute for International and Security Affairs Comments

Negotiating with a Dis-United Kingdom WP The EU’s Options Concerning Scotland and Northern Ireland in the Brexit Talks

Nicolai von Ondarza and Julia Becker S

As if the process or withdrawal from the European Union were not already complex enough in itself, the Brexit vote has also reopened constitutional questions for the United Kingdom. Scotland’s devolved government is calling for a new independence referendum and seeking a special arrangement with the EU. Northern Ireland has drawn less attention but is politically at least as significant: Brexit endangers its open border with the Republic of Ireland and consequently the stability of the peace process. These factors not only enormously complicate London’s negotiations with the European Union. Brussels and Berlin also need a strategy for their dealings with Scotland and Northern Ireland. Especially in order to protect the interests of its member state Ire- land, the EU should demonstrate openness for flexible solutions.

The British referendum on EU member- land, the governing Scottish National Party ship has exposed the regional divisions (SNP) now links the relationship with the within the “United Kingdom of Great EU to its calls for greater autonomy – por- Britain and Northern Ireland”: Although traying a hard Brexit against the will of the the “leave” camp attracted 51.9 percent of Scottish population as another manifesta- the British electorate as a whole, it only tion of English dominance. After her calls actually gained a majority in England and for a special arrangement with the EU were Wales. rebuffed by the UK government, the Scot- In Scotland 62 percent voted “categori- tish First Minister is now calling for a new cally and decisively to remain within the independence referendum before the UK European Union” (Scotland’s First Minister formally leaves the EU. Nicola Sturgeon). And in Northern Ireland A different set of difficulties exists in the remain vote reached 55.8 percent. Yet Northern Ireland, with Brexit coming at a with England and Wales together represent- juncture where clouds were already loom- ing almost 90 percent of the UK population, ing. Politically, the open border with the Scotland and Northern Ireland were unable Republic of Ireland is a crucial pillar of the to alter the outcome. Northern Ireland peace process. Economi- As such, the Brexit vote has stirred up cally too, it is vital for both North and two politically sensitive regions. In Scot- South. A hard Brexit of the kind announced

Dr. Nicolai von Ondarza is Deputy Head of the EU / Europe Division at SWP. SWP Comments 7 Julia Becker was an intern with the EU / Europe Division and is currently completing an M. A. March 2017 in Comparative Politics and Policy Analysis at the universities of Edinburgh and Konstanz.

1 by Theresa May would place question marks the UK parliament retains the power to over this arrangement. overrule them. The Supreme Court ruled that the Sewel Convention is purely politi- cal in nature and cannot be enforced Regional Questions in the through the courts. Accordingly there is no Withdrawal Process requirement for the regional parliaments These regional tensions create additional to approve the initiation or conclusion of complications for both sides in the immi- the withdrawal process. In short: legally nent Brexit negotiations (see SWP Com- May’s government has a free hand and can ment 35/2016). From the European perspec- completely ignore the devolved govern- tive, the first question is what legal and ments and parliaments. political role the governments of Scotland Politically, the UK government at first and Northern Ireland (and also Wales) made the cohesion of the Kingdom one of should play in the process. its top political priorities. Immediately In legal terms a clear answer has already after her appointment as prime minister, emerged. The British population as a whole Theresa May visited Edinburgh, where she voted to leave, and only the British state as promised to consult closely with the Scot- a whole can set the withdrawal process in tish government – and its Welsh and North- motion “in accordance with its own consti- ern Irish counterparts – on the prepara- tutional requirements” (Article 50 TEU). The tions for withdrawal talks, and not to trig- United Kingdom has no written constitu- ger Article 50 until there was a “UK-wide tion, and the legal position is not absolutely approach”. In fact, the devolved govern- clear. A ruling by the UK Supreme Court in ments were neither consulted nor did they January 2017 clarified that an act of parlia- agree with the Brexit strategy Theresa May ment is required before triggering Article laid out in January 2017, under which the 50. Although the House of Lords initially United Kingdom will quit the single market proposed some amendments, in particular and the customs union. After Holyrood on the rights of EU citizens and the parlia- voted against triggering Article 50 under mentary procedure to decide on a final these circumstances, the UK government Brexit deal, the British government man- and parliament decided to ignore this posi- aged to get this “European Union (Notifica- tion. Thus far, the devolved governments – tion of Withdrawal) Bill” approved by both including the Welsh – have dismissed the houses of the UK parliament in March 2017 regular consultations in the Joint Minis- without amendments. terial Council as purely symbolic. The court case drew enormous public attention. The devolved governments of Scotland, Northern Ireland and Wales inter- Relevance for the European Union vened to clarify whether the approval of Looked at coldly, from the EU’s perspective their devolved legislatures was required. these regional matters are first and fore- The heart of the question here is that the most an internal affair of the UK state. Scotland Act and the Northern Ireland Act Legally, the British government is the EU’s both require the Scottish parliament (Holy- only negotiating partner, and politically rood) and the Northern Ireland Assembly London would regard direct talks between (Stormont) to implement EU directives that Brussels and the devolved governments as fall within their competences. At the point a provocation. Nevertheless, there are three when withdrawal actually occurs, there- reasons why developments in Scotland and fore, both pieces of legislation will need to Northern Ireland remain relevant for the be amended. Under the Sewel Convention, EU’s negotiating strategy: this normally requires the consent of the Firstly, the EU has a fundamental inter- respective devolved parliament, although est in protecting the interests of its member

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2 Ireland in the Brexit negotiations. The open fullest possible ties to the EU. Its positions border with Northern Ireland is of central and demands for the Brexit process are laid economic and political importance for out in detail in a white paper published in the Republic of Ireland. Moreover – driven December 2016, “Scotland’s Place in Europe”. by its peace narrative – the EU has also Edinburgh’s central demand is for the invested significant political capital and United Kingdom to remain in the single financial support in the Northern Ireland market, complete with its four freedoms. peace process. The United Kingdom – in- The single market is Scotland’s most impor- cluding Northern Ireland – is also the tant (non-UK) market, taking 43 percent of Republic’s most important trading partner. its international exports. Scotland’s agri- And under the Good Friday Agreement of culture and universities, the paper argues, 1998 the Republic of Ireland is also closely are especially reliant on freedom of move- involved in Northern Ireland’s institutional ment within the EU. Scotland also calls for architecture (see below, p. 6). More than support for European solidarity, and for par- 20 percent of Northern Ireland’s residents ticipation in joint counter-terrorism meas- possess Irish – and thus EU – citizenship; in ures, initiatives to curb climate change and theory any British citizen born in Northern exchange programmes such as Erasmus. Ireland is entitled to an Irish (and thus EU) With its declared objective of leaving passport. the single market and the customs union Secondly, regional tensions could con- London has clearly rejected all of Edin- strain London’s options in the Brexit talks. burgh’s requests. The British government has no interest in a break-up of the UK or a visible failure of the peace process in Northern Ireland. While A special arrangement with the EU Theresa May has to date ignored Scottish In the event of a “hard Brexit” involving calls for a role in the process, a frontal con- the loss of full access to the internal mar- frontation with Edinburgh would impose ket, the Scottish government calls for an an additional burden on her government arrangement permitting Scotland to remain during the Brexit talks. integrated in the single market and other Thirdly, a new independence referen- EU policies on its own. Nicola Sturgeon dum in Scotland would complicate the believes she has a democratic mandate Brexit process for the EU side too, as the for this demand, as 62 percent of Scottish EU-27 would then have to take a stance on voters voted to remain in the EU. (re)accession for Scotland. A second refer- Edinburgh proposes that Scotland endum on independence would also boost should remain part of the United Kingdom, separatist tendencies in other EU member but be granted the right to conclude a spe- states such as Spain. cial arrangement with the EU in order to In light of these matters, the EU side remain inside the single market and con- should not underestimate the role and tinue to participate in other EU policies interests of the two regions in the Brexit (such as research funding). The mechanism process. proposed is for Scotland to join the Euro- pean Economic Area as part of EFTA, either in its own right or through British asso- Scottish Demands ciation. The Scottish (minority) government led by However, the “special arrangement” First Minister Nicola Sturgeon of the Scot- model presents considerable challenges tish National Party (SNP) stated its clear from both the European and British per- position on the Brexit talks directly after spectives. Legally such a construction is not the referendum: Given the clear “remain” impossible. Depending on a state’s consti- vote in Scotland, it wishes to retain the tutional arrangements, individual parts

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3 may possess limited legal personality From Brexit to Scottish independence? under international law and be able to In view of these obstacles – and the im- enter into international agreements and probability of the Conservative government treaties. Under Article 32 of the German granting such sweeping autonomy – the Basic Law, for example, the Länder may principal function of the “special arrange- conclude treaties within the scope of their ment” proposal appears to be to prepare powers, subject to the approval of the the ground for a second independence federal government. The European Union referendum. Indeed, even before the UK in turn has trade and association agree- government formally triggered Article 50, ments with a string of overseas territories Scottish First Minister Nicola Sturgeon an- that belong constitutionally to four mem- nounced that she will start the legislative ber states (Denmark, France, the Nether- procedure to initiate a new independence lands, United Kingdom) but not to the EU. referendum to be held between late 2018 But Scotland lacks central prerequisites and early 2019. Before Scotland becomes for such an arrangement. On the one hand, an independent country, however, there unlike the German Länder, it presently pos- are three central impediments: sesses no competence to conclude treaties, Firstly, the formal preconditions for a nor does it have the breadth of autonomous new independence referendum must be powers required to implement EU legis- fulfilled. In Holyrood, the SNP minority lation applicable to the single market. So government can count on the votes of the before such a special arrangement could Scottish Greens for a majority, while the come about, the Scotland Act would have Scottish wings of the Labour and Conserva- to be greatly expanded with the approval tive parties have already (for the most part) of the UK parliament to enable Scotland to made their opposition clear. To hold a legally implement the acquis in the many areas binding referendum Holyrood would re- linked to the single market fully and in- quire the consent of the UK parliament; the dependently: migration (freedom of move- Edinburgh Agreement of 2012 granted this ment), competition policy, environment, on an explicitly one-off basis for the 2014 etc. In other words, the preconditions for independence referendum. The UK govern- a special arrangement would have to be ment has not rejected the idea of a second created by London and would require sig- independence referendum outright, but so nificant constitutional reforms – in parallel far seems very opposed to holding it before to the already complex Brexit process. Brexit is completed. On the other hand, the existing EEA Even if the formal conditions are met, framework provides only for membership there is – secondly – no guarantee that the of states. Norway, for example, has already Scottish electorate would choose independ- made it clear that Scotland could only join ence in a second ballot. Even after the Brexit as an independent state. Similarly, separate vote, polls still showed 55 percent for re- inclusion in the single market would re- maining in the United Kingdom, falling to quire Scotland to be able to control trade 50 percent after the hard Brexit announce- with the rest of the UK. So in the course of ment. While the SNP’s base calls vigorously the negotiations the EU (and possibly also for another referendum, the leadership will the EEA states) may have to decide whether have to weigh the risks of a second defeat and to what extent they are willing to con- within such a short space of time. A new clude such a far-reaching agreement with referendum campaign would also raise the an entity whose legal personality and com- same issues as in 2014, such as the currency petences are limited by a UK that is pur- question and the viability of the Scottish suing a hard Brexit. economy. Falling prices have placed the oil industry – as Scotland’s third-largest export sector – in a precarious situation. To date

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4 the UK Treasury has assisted the oil and gas 1. Hard Brexit, hard border sector with tax breaks and incentives for in- The UK’s only land border with the Euro- vestment in research. Commercially, Scot- pean Union (apart from Gibraltar) is the land is closely integrated with the rest of one between Northern Ireland and the the United Kingdom, which receives about Republic, and the effects of a hard Brexit two-thirds (63 percent) of all its exports will be especially severe here. The situation of goods and services. In other words, un- at the border has changed enormously over impeded access to the rest of the UK is eco- recent decades: while the British armed nomically more important for Scotland forces conducted strict border controls than participation in the single market. from the 1970s to 1990s, it is now no more Not least, a Scottish independence refer- than a line on the map. This is significant endum – and the actual separation – would for Northern Ireland in two senses: Politi- have to be coordinated with an already cally, the open border symbolises and enormously complex EU withdrawal pro- reinforces the peace process by enabling cess. If the referendum takes place as citizens to move freely between the two demanded by Sturgeon in late 2018 and states. Economically, Northern Ireland and the transition period needed for organising the Republic are closely interconnected. the secession is taken into account, Scot- For example, trade between them generates land would first need to leave the EU as about €2,8 billion annually and they run part of the UK and then apply to rejoin largely integrated electricity and gas grids. later on. For good reasons the EU treaties About 15,000 commuters cross the border contain no arrangements for the eventuality on a daily basis for work. It is hard to see of secession by part of a member state. The how it can retain that degree of openness prevailing opinion is that an independent after it becomes an external border of the Scotland would have to apply for member- European Union. ship under the regular procedure (Article Significantly, the open Irish border pre- 49 TEU), although perhaps under a “fast dates EU membership. Freedom of move- track” procedure as Scotland has already ment of persons is regulated under the implemented the EU acquis. While Brexit Common Travel Area (CTA), which was makes Scotland a special case among Euro- established in 1923 between the then Irish pean regional entities seeking independ- Free State and the United Kingdom follow- ence, such a move would create a strong ing Irish secession. The Republic of Ireland precedent with effects in particular in and the United Kingdom also grant their Spain (Catalonia) and therefore divide not citizens full reciprocal voting rights (in- only the United Kingdom but potentially dependently of EU citizenship) and those also the EU-27. born in Northern Ireland have the right to both British and Irish citizenship. It was in order to preserve the CTA that Ireland The Case of Northern Ireland remained outside Schengen along with the Despite superficial parallels with Scotland, United Kingdom. Ireland’s Schengen opt- Brexit presents a quite separate set of chal- out remains in force after the UK leaves, lenges and conflicts of interest for Northern and would thus permit the CTA to be pre- Ireland. Like Scotland, Northern Ireland served. But if the UK were to tighten immi- voted to remain in the EU (although by a gration controls it would also have to do smaller majority, 55 percent). But with a so in particular at the Irish border. population of just 1.8 million (around one- At the same time, a hard Brexit would fifth of London’s) this had only a marginal definitely make it necessary to control effect on the result. The situation in North- the movement of goods and services. If the ern Ireland presents three specific chal- United Kingdom also leaves the single mar- lenges: ket and the customs union as Theresa May

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5 has announced, Ireland at least would Northern Ireland not only ended the thirty- have to introduce customs controls. Even if year armed conflict; all the parties also the EU concludes a far-reaching free trade agreed to hold a referendum on Irish unifi- agreement with the United Kingdom, the cation (a border poll) if there are indica- origin of goods will still have to be verified. tions of a majority. To date surveys suggest Services supplied across the Irish border are otherwise, but after the Brexit referendum especially liable to face restrictions. But the Irish Taoiseach Enda Kenny called for movement of livestock and transport of the option of unification – and thus bring- agricultural products – as the largest sector ing Northern Ireland back into the EU – at of trade between North and South – would least to be included in any withdrawal certainly also require either a deep free agreement between Brussels and London. trade agreement with mutual recognition Brexit will also weaken the cross-border or additional permits. And if Brussels and bodies established in 1998. As well as in- London fail to reach even a basic free trade vesting more than €13 billion of structural agreement, tariffs will apply as well. In this funds in Northern Ireland since 1994, case, the Irish Department of Finance fore- the EU funds civil society cooperation to casts a fall in exports to the UK of up to strengthen the peace process through the 30 percent. The political danger here is that PEACE programme. The Special EU Pro- the London could publicly declare its wish grammes Body, which administers the EU’s to keep the border open, and place the structural and cohesion funding jointly entire blame for closure on the EU’s inflex- for both parts of the island is such a cross- ibility. border body. The future of this form of funding and cooperation is questionable, especially after a hard Brexit. At the same 2. Threat to the peace process time the DUP has to date refused to discuss As well as the open border, political co- the effects of Brexit in the most important operation between Northern Ireland and joint political body, the North-South Minis- the Republic in the framework of the terial Council. Northern Ireland peace process is closely tied to both sides being members of the EU. The Brexit vote reveals the continuing 3. Political fragility in Northern Ireland divisions within Northern Ireland. While The Brexit process finds Northern Ireland Northern Ireland as a whole voted with in an already fragile political state. Since 55.8 percent to remain in the EU, exit polls the Good Friday Agreement and the trans- showed almost 90 percent of the National- fer of powers from London to its Executive ist side voting to keep EU membership and Assembly, Northern Ireland has been while two-thirds of Unionists voted leave. governed under a power-sharing arrange- Unlike in Scotland, where all voting areas ment by coalitions comprising both Union- had a remain majority, some largely Unionist ists and Nationalists. In 2016 three of the constituencies supported Brexit. Of the main five hitherto governing parties quit the two power-sharing parties (until recently), coalition, leaving just the DUP (pro-Brexit) the Democratic Unionist Party (DUP) sees and Sinn Fein (anti-Brexit) to run the Execu- Brexit as a shared British project, while tive. This residual coalition itself collapsed Sinn Fein demands a referendum on Irish in January 2017 after Sinn Fein withdrew unification. in protest at wastage of government funds The Good Friday Agreement of 1998 in a renewable energy scheme; First Minis- does indeed provide for a “border poll”. ter Arlene Foster of the DUP is implicated The power-sharing arrangement reached in the scandal. between the United Kingdom, the Republic This turn of events has immediate reper- of Ireland and the main political parties in cussions for Northern Ireland’s role in the

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6 Brexit process. Firstly, the new elections in trols on its border with the Republic, or early March 2017 significantly shifted the conduct them on the air and sea routes balance of power. The Unionists lost their between Northern Ireland and the British Stormont majority for the first time, while mainland. Sinn Fein came within one seat of the DUP. The second question relates to maintain- Secondly, Northern Ireland finds itself ing free movement of goods and services. entering the Brexit process without politi- Customs controls at the Irish border become cal representation. If the parties fail to find almost inevitable as soon as the UK leaves a power-sharing agreement within three the customs union and the single market. weeks, there will either have to be another The possibility of Northern Ireland remain- election or Northern Ireland will be tem- ing within the EU’s customs union with a porarily governed from London, with all special status has therefore been floated the symbolic consequences entailed. in Ireland. Customs controls (and duties) Here Brexit drives an additional wedge would then be located not at the Irish between the power-sharing parties. The border, but between Northern Ireland and DUP was the only major party in Northern the rest of the United Kingdom. As in the Ireland to explicitly support Brexit, for Scottish case, this would require greatly ex- which it campaigned aggressively both in panded autonomy and willingness on the Northern Ireland and in London. The Ulster part of the EU to grant such far-reaching Unionist Party (UUP) was divided, the Na- rights to a region of a third state. For North- tionalist parties supported remain. Despite ern Ireland, however, this step would in- the majority for remain in Northern Ire- evitably increase its distance from the rest land as a whole, First Minister Foster (DUP) of the UK and therefore be strongly opposed welcomed the Brexit result. After the March by the Unionists. Assembly elections, parties that opposed Brexit now hold more than 65 percent of the seats. The more concrete the impact on EU Should Show Flexibility Northern Ireland becomes, the greater the From the European perspective, the UK’s stresses and strains placed on Stormont. regional concerns are one among many issues in the complex web of Brexit prob- lems. But analysis of the dynamics in Scot- A special status for Northern Ireland? land and Northern Ireland clearly reveals In view of these challenges, the possibility that the hard Brexit emerging in the inter- of a special status for Northern Ireland is actions between the EU-27 and the May being floated in both Northern Ireland and government will exacerbate these tensions. the Republic. The main objective would The recommendations to the European be to keep the border open. There are two Union are quite different for Scotland and aspects to this: Northern Ireland: Firstly, to preserve freedom of movement Despite its European ambitions, Scotland of people. The minimal objective from the represents a principally domestic British Republic’s perspective is to keep the CTA. challenge. Legally and politically, London Although the CTA existed long before Ire- negotiates withdrawal from the EU, which land and the United Kingdom joined the will then also apply to Scotland. Similarly, European Union, the juxtaposition of EU the questions of greater autonomy for Scot- freedom of movement against (a harder) land (as required for a special arrangement British migration policy after Brexit would with the EU), permission to hold a second create an open door for illegal immigra- independence referendum or implementa- tion. In order to preserve the CTA, the tion of the new Brexit realities are all mat- United Kingdom would either have to ters for London and Edinburgh alone to voluntarily refrain from immigration con- negotiate. However, the EU should take the

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7 outcome of these internal negotiations into account in its positioning vis-à-vis the UK. In the unlikely event of London agreeing to vastly increase Scottish autonomy, it would also be in the EU’s interest to con- clude a special arrangement with Scotland. Given the political dynamics in the UK, how- ever, this can only be considered a remote possibility. First and foremost, the EU needs to prepare for the scenario of a second Scot- tish independence referendum towards the end of the exit negotiations. In this connec- tion it will be crucial for Brussels to draw a clear distinction between the independence

© Stiftung Wissenschaft und movement in Scotland and other regional Politik, 2017 independence movements, for example in All rights reserved Catalonia, by declaring it a special case on These Comments reflect the basis of its entanglement with Brexit. the authors’ views. While still maintaining that an independ- SWP ent Scotland would need to reapply to the Stiftung Wissenschaft und EU, this would hold the door to Scottish EU Politik German Institute for membership open. International and The interests of the EU-27 are affected Security Affairs more directly in the case of Northern Ire- Ludwigkirchplatz 3­4 land. Here too, the European Union will 10719 Berlin negotiate only with the United Kingdom Telephone +49 30 880 07-0 Fax +49 30 880 07-100 as a whole, and any special status would www.swp-berlin.org require London’s consent. But especially [email protected] in the Brexit talks, the EU should make it ISSN 1861-1761 clear that it is guarding the interests of Translation by Meredith Dale each and all of its members. In that connec- tion it should also work very much more (Updated English version of SWP-Aktuell 11/2017) proactively for an acceptable solution for the Irish border – and prepare to support Ireland to cushion negative impacts asso- ciated with a hardening.

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