Nobody would have predicted what followed in Scotland. The emancipation of our trade transformed our nation from an agricultural society to a leader of industry and a contributor to modern life around the world. Today, we export nearly £50 billion worth of goods and services to the rest of the UK.
Now is the time to ask ourselves why that is the case.
While many eyes are rightly cast on the future of post-Brexit trading relationships beyond our domestic borders, regardless of the final hue of Brexit, Scotland’s largest export market will remain the rest of the UK.
Scotland exports £14.9 billion to the EU each year. Yet for every pound we trade overseas, we trade three right here in the UK. It is vitally important, therefore, that our business community remains focused on domestic trade corridors at a time when our natural instincts are to look overseas.
The service industry should be particularly mindful of this. Together, the value of financial, professional, scientific and technical services exports to the rest of the UK is nearly four times that of the food and drink industry, which is our most successful international export by some margin. At home, services are supreme.
Scotland’s middle market has been particularly successful at trading domestically recently. In the last available records, the value of exports by medium sized Scottish businesses rose 12 per cent year on year – that’s three times the rate those same businesses achieved internationally.
The services sector has a symbiotic relationship with London, in particular. It is the epicentre of international trade (at least within our frame of reference). Indeed, the Scottish Government’s own strategic export plan includes an undertaking to protect and develop the London market. The referral market from London up into Scottish firms is substantial, if not easy to quantify.
Business confidence will be key to this. Both London and Scotland voted to remain in the EU. As uncertainty builds and a no-deal Brexit seems realistic, these two marketplaces must accept that trade between us can, if anything, strengthen further. Let’s strive to prevent the Brexit doldrums from becoming domestic distrust of an otherwise healthy trading relationship.
One might ask whether scrutiny of such a well-worn and fluid trade corridor is worthwhile. Complacency is our most likely threat. At a time when governments are spending huge resources and political energy to develop new relationships overseas, it is not unreasonable to expect some neglect of our closest partnership.
Now would not be the time. Weak productivity in Scotland means our economy can ill afford to stutter – if we do, it may be some time before we can trade through a recession.
This argument is not one of protectionism, though. One of the clear outcomes of the global recession a decade ago has been so-called ‘islandisation’ policies in some parts of the world. That is not what has brought Scotland success and it is important to distinguish domestic focus from at-all-costs protectionism.