Indyref2 & UK Foreign Policy – Ever Decreasing Circles of Influence

The Scottish National Party’s (SNP) decision last week to call for a second independence referendum will have serious implications for the UK’s foreign policy. At the time of the 2014 referendum, much was said about how independence would affect Scotland and to a lesser extent the effects on the UK or the remainder of the UK (RUK). However, this time round there is the additional upheaval threatened by the vote to leave the European Union (EU). Regardless of the outcome of the Scottish referendum, there are a number of significant foreign policy impacts for the UK and for Scotland receiving little apparent consideration in either government or media.

Impact on Prosperity

The most immediately apparent impacts would affect the UK’s hard power. The easiest to measure is economic impact. In 2016, Scotland represented approximately 8.8% of UK exports and 5.5% of UK imports. At first sight this would seem a relatively small percentage, only slightly higher than the 2016 figures for % import/export growth in the UK. However, it still remains larger than the combined economy of Wales and Northern Ireland. More importantly, the UK in 2016 had a £133.7bn trade deficit, and losing the Scottish economy would amount to a loss of a £2.5bn trade surplus. There would also be a detrimental economic impact on the FCO, with its already skeletal budget likely to suffer cuts, as well as more work and costs associated with setting up a new representation in Scotland.

One of the major challenges that an independent Scotland’s foreign policy would face is to build a successful network of institutions and individuals. Scottish First Minister Nicola Sturgeon has argued that Scotland would aim to have 100 embassies and consular offices, approximately the same as Norway. A recent British Foreign Policy Group report shows that Norway has a £380million foreign affairs budget, which gives an indication of what the costs would look like, in addition to the “set up” costs that the SNP hopes to cover with just £150 million through FCO assets.

Impact on Defence

At the time of the 2014 referendum, the UK government stated that “the defence of the UK as a whole benefits from Scotland’s contribution as part of it”. One example is Trident, based at Her Majesty’s Naval Base Clyde. The UK Government has previously described having to relocate this Scottish base as a “huge cost” and an “enormous exercise” that would “cost billions of pounds and take many years”. Scotland have said they would commit to a £2.5 billion defence budget if independent, optimistically calculating that “most of the equipment we need to establish Scotland’s defence forces” would be covered by a £7.8 billion population-based share of UK Ministry of Defence assets. Whilst the RUK would be able to provide additional assistance to cover for additional deficiencies, this would inevitably be done only when in the RUK’s self-interest. This unreliability will mean that Scotland would suffer from at least an initial security and defence deficiency.

Impact on Influence

There are also measurable risks to the hard power aspects of UK influence. The RUK could lose its strong and beneficial position in various international institutions as a consequence of the UK dividing into two nations. However, relevant precedent suggests the risk of that happening is minimal. After the dissolution of the USSR, Russia was recognised “as the continuation of the former Soviet Union” and its permanent membership of UN Security Council was not challenged. This risk would be higher for an independent Scotland that would have to rejoin many international organisations treaties. Some transitions would be smooth, whilst others, such as joining the EU, less so. A significant challenge that Scotland would face is avoiding a Spanish veto to joining the EU, which Spain would consider if they thought it would help them in avoiding Catalan independence. Though they may ultimately acquiesce, this threat allows Spain to have more of a say in the matter, as can be evidenced by Spain’s Foreign Secretary, Alfonso Dastís, announcing last week that were Scotland to become independent, they would have to join the back of the queue for EU membership, regardless of whether Scottish independence were to be before or after Brexit.

Soft Power Impacts

Many of the hard power impacts appear relatively straightforward to overcome for the RUK, but it is the soft power impacts that threaten to be much more damaging to RUK foreign policy. From Scotch whisky to the Loch Ness, Scotland has a vast array of assets that contribute greatly to the significant soft power projection that the UK currently enjoys. Not only would the RUK lose out on these assets, but, if “soft power is about the power of attraction towards your world view, it is at a first glance difficult to see fragmentation as anything other than a negative judgment on the UK”. A fragmented UK would lead to severe reputational damage to the RUK but wouldn’t have the same negative impact on an independent Scotland. Whilst many aspects of independence feature a loss of assets which would require time and money to rebuild, Scottish soft power, rated by one 2016 report as 15th in a list of 50 selected countries, may not be diminished. The ´transferral’ of soft power to Scotland would be immediate and would provide an important foreign policy tool.


Given this, there are two important aspects that the UK government could consider. The first is to prepare for all outcomes. One lesson to be drawn from the EU referendum is the need for contingency plans. The government’s deliberate reluctance to plan for Brexit prior to the referendum led to a prolonged uncertainty for the UK public and businesses alike. Not repeating this mistake will help minimise the uncertainty and instability that UK foreign policy would face. Secondly, the Joint Ministerial Committee (JMC), the institutional platform for the UK to share decision making with devolved governments appears inadequate not least because meeting once a year is too infrequent. Building on Gordon Brown’s recent suggestion of further devolution of powers, and related discussions of a move towards a more Federal UK, the UK government has the opportunity to change the narrative and catalyse a new national partnership on foreign policy issues that would not only involve the devolved administration, but could also include in some form the UK’s Overseas Territories and Crown Dependencies. This would provide an opportunity for the UK to engage with these governments to refresh its foreign policy objectives for the fast changing world of the 21st century, and once again renew its reputation as a forward looking, innovative global actor capable of responding effectively to disruption in support of UK and global interests.

The views expressed in this article are those of the author and do not reflect the views of the BFPG. The BFPG is an independent not for profit organisation that encourages constructive, informed and considered opinions without taking an institutional position on any issue.
Edward Elliott

Edward Elliott is a Senior Associate at the British Foreign Policy Group.