The costs of independence

The elections of 7th May 2026 provide the best opportunity to scrutinise the distinctive proposition at the heart of Welsh and Scottish Nationalism — independence — than have any elections since the advent of devolution.

Even in the case of Plaid Cymru where the delivery mechanisms can sometimes be a bit vague, the identity of the party, and its distinctiveness from other parties on the left, hangs around a commitment to independence. To this end the Plaid manifesto clearly sets out its vision that “our nation is on a journey to independence”, and if elected the biggest party will claim a mandate for its White Paper on Independence. In Scotland, meanwhile, the SNP is more forthright: “A vote for the SNP is a vote for a referendum on independence. Based on the 2011 precedent, an SNP majority at this election is a mandate for the transfer of powers to the Scottish Parliament to enable an independence referendum to be held.”

Up until now, the electoral strategies of the nationalist parties have sought to woo the hearts of their electorates with the notion of independence, abstracted from any immediate experience of the practical consequences of living with a border between Wales and the rest of the UK and Scotland and the rest of the UK. This is no longer possible in 2026 because we now live in a UK, part of which has, since the last Welsh Senedd and Scottish Parliament elections, been subject to a key constituent element of independence, the imposition of a customs border and an international Sanitary-Phyto-Sanitary (SPS) Border between itself and the rest of the country.

Now, of course, there are some unusual aspects of the Irish Sea border which make it less than independence. In the first instance, ostensibly at least, it has not been conceived as a nationalist mechanism, although it was striking that when the Northern Ireland Assembly voted on the arrangement, every single nationalist/republican member voted for the imposition for the border, just as every unionist member voted against it. (The measure passed because of the support from the Alliance Party which claims to neither be unionist nor nationalist). 

In the second instance, unlike a border created by Welsh or Scottish independence, the Irish Sea border works principally in one direction, on inputs and goods moving from GB to NI, not the other way around. However, while in the short term this border is less divisive than the kind of border that comes with independence, its presence makes it much easier to debate Welsh and Scottish nationalism than in previous elections where, practically speaking, independence was a very much unknown quantity within the UK.

The key lesson that the Irish Sea border presents the residents of Wales and Scotland as we approach 7th May is profoundly sobering. It is simply that the application of a customs and international SPS border, is far, far more destructive and far, far more costly when applied across what has been a fully integrated economy than the impact of an existing border that reflects the established division between separate economies.

In the context of talk about globalisation, it has become fashionable to believe that the global economy is a seamless web of undifferentiated economic inter-dependence. However, while interdependence is a fact of economic life, it is far from even. When we drill down, we discover that, notwithstanding the reality of the global economy, national economies are alive and well and sustain a qualitatively far more intense interdependence than exists between economies with close trading relationships. It is only when this point is understood that one has any chance of understanding the economic implications of Wales or Scotland becoming independent from the rest of the UK.

Like Northern Ireland, Wales and Scotland are fully integrated parts of the UK economy. Trade movements between England, Wales and Scotland currently flow as freely as trade movements within England, within Wales and within Scotland, and as they did between England, Wales, Scotland and Northern Ireland until 2021. This means that supply chains are structured in such a way that lorries moving goods within GB comply with conventional national rather than international trade movements and can carry many different goods, typically up to 300 different types, per vehicle. This approach would become completely impossible for trade movements from Wales to England or England to Scotland if either Wales or Scotland was to become an independent state because, even in the context of a free trade agreement removing the need to pay any customs duties, there would still be the huge cost of having to generate up to 300 customs and SPS forms and submitting to border checks. It is because the flow of goods between Northern Ireland and the rest of the UK has been this diverse that at one point 20 per cent of all documentary checks performed on goods entering the EU, with a population of over 450 million, were performed on goods entering Northern Ireland, with a population of just 1.9 million.

In this context the only sustainable way forward would be for lorries to carry one on two products in bulk, as per standard international trade movements, so that the cost of generating the customs and SPS paperwork expressed as a proportion of the value of the cargo would be manageable. This, however, would make trade movements far less flexible than in the context of our functioning as a fully integrated economy, where one can load lorries with lots of different products. The imposition of this border would deny Wales and Scotland unfettered access to the rest of what has been the UK economy — still the sixth largest economy in the world — for the first time and have a profoundly negative impact on the economic life of all concerned.

In order to really come to terms with the economic cost of breaking up the UK, it is important to remember that we are not just talking about impeding the flow of completed goods from Wales to England and England to Scotland, we are also dealing with inputs. This is a critical issue in Northern Ireland because manufacturers who previously brought inputs from other parts of their home UK economy, without having to meet the administrative costs of crossing the customs border, or having to pay duties, now find that even before they start making their goods, their costs are higher than their competitors in other parts of the UK. In this context we recently saw a major food processing plant shift its capacity to Scotland because it no longer makes economic sense to move food to NI for processing and then selling across the whole UK because it was not possible to move the food from GB to NI without having to engage with the expense of crossing the border.

Beyond this, we also have to recognise that until the end of 2020, all parts of the integrated UK economy benefited from the supply chain economies of scale associated with being part of the sixth largest economy in the world. It is because of this that goods in Northern Ireland have always been cheaper than those in the Republic which is why many people from the South do their shopping in NI. Independence would involve Wales and Scotland, and to some extent England, losing these economies of scale, as NI is now in the process of doing.

The idea of devolution was that it would make the United Kingdom more secure, but for various reasons it has simply served to generate momentum for more devolution

In setting out these difficulties, it is worth anticipating the counter argument that Wales and Scotland would seek to join the EU Single Market which is much bigger than the UK Single Market. On initial inspection that sounds compelling, but it is deeply misplaced, as we in Northern Ireland are discovering to our cost. The truth is that the vast majority of what a country produces is sold within itself or to countries relatively nearby because of the costs of transport. In this sense, for most purposes, Wales and Scotland will find that unfettered access to Poland is far less important to their economic wellbeing than unfettered access to a UK internal market. Moreover, if you are in the favoured position of having developed some new technology that people in Poland want to buy, regardless of the cost of travel, then the chances are that so too will people in other parts of the globe. In this context, one has to ask whether privileging Poland, via EU membership, is worth it if the cost is that your business is in a single market and customs union with less flexibility when it comes to negotiating trade deals with the Far East or North or South America?

The idea of devolution was that it would make the United Kingdom more secure, but for various reasons it has simply served to generate momentum for more devolution. In this context there is a need for an alternative approach, consistent with our unwritten constitution, that both cherishes the component units of the union, and the union itself, with its internal market.