An independent Scotland would end up 'subsidising England's EU rebate', claims Treasury Secretary Danny Alexander


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Taxpayers in an independent Scotland would lose the benefit of the United Kingdom’s current European Union rebate and end up subsiding England’s rebate from Brussels, according to the chief Treasury secretary, Danny Alexander.

Speaking in Glasgow alongside the Foreign Secretary, William Hague, at the launch of a UK government paper on the international and EU implications of Scotland leaving the union after this September’s referendum, Mr Alexander said the EU annual rebate of around £3 billion could not be shared in the event of Scotland seceding.

He said there was no precedent for such a “budgetary correction” for a new member state, and that as all new EU members contributed to the UK rebate, an independent Scotland would be required to do the same.

The budget contribution was estimated to be £600m over a seven-year period.

Without rebate payments, and added to reductions in money from the EU’s structural fund programme, Mr Alexander said that Scotland in the “most optimistic” case would be £1.9 billion worse off as an independent member of the EU, But under less favourable analysis, he said this could rise to £3.8 billion.

The Foreign Secretary’s wider focus on Scotland’s membership of international organisations cast doubt on the claims made by Scotland’s First Minister, Alex Salmond, and his deputy, Nicola Sturgeon, that a breakaway Scotland would enjoy “smooth and quick” progress to full EU membership.

Mr Salmond has claimed EU membership would be negotiated inside a “realistic” timetable of 18 months.

Mr Hague however said it took “years and years for new member states to be able to negotiate EU membership normally”.

He said the complexity of the “huge issues” involved, as described in the government’s paper, meant there were no guarantees that negotiations would be completed within the Scottish Government’s stated timeframe.

Last year independent legal advice published by the UK government said that in the event of Scotland leaving the union, the rest of the UK would continue as before as the successor state retaining all the rights and obligations of the UK. Scotland, as a new state, would have to start afresh.

Mr Hague said it was “not reasonable for the Scottish Government to expect what they have claimed would be a ‘seamless transition’".

The journey north by the Foreign Secretary and the Chief Treasury Secretary, and the numerical detail in the new UK paper, represents a significant shift in Mr Cameron’s approach to the referendum.

So far Downing Street’s strategy has been to assume Scottish voters will say No in September, and that detailed analysis could only add to secessionist’s legitimacy. Although the leave-it-to-Scotland appears to have changed, Number 10 remains adamant that Mr Cameron will not take part in a pre-vote televised debate with Mr Salmond.

Ms Sturgeon described the comments of Mr Hague as “an example of the same old hypocritical Tories lecturing Scotland on why we shouldn’t be taking decisions ourselves".

She said that because the Conservatives fear the threat from UKIP and planned to hold an in-out referendum on Europe if they won the next election, Scotland could find itself out of the EU even if it voted to remain a member.