THAT Scotland trades more with the rest of the UK than it does with the EU isn’t surprising.

What is surprising is Unionists claiming that’s a reason for Scotland not to become independent, because that trading situation demonstrates one of the great failings of the Union.

The UK’s dogmatic preference for a strong pound has meant that EU countries and other nations with a weaker currency can’t afford Scottish exports as easily as the rest of the UK(rUK). In other words, Scotland has been forced to trade more with rUK and its exporting and manufacturing industry has therefore been damaged by the pound being kept artificially strong for the benefit of the City of London. Margaret Thatcher declared she “had a preference for a strong pound” and since then the UK has bet the house on financial services and lost everything, but keeps on doubling down on the same losing hand.

Westminster has also forgotten that sustainable, equitable and successful economies manufacture things and the strongest economies make smarter products and then export more, thus creating a healthy balance of payments.

The City is reliant on a strong pound as financial assets and property trades denominated in a strong sterling are far more in demand, but this also discourages exports and encourages imports. It becomes cheaper to import all manufactured goods, especially from nations with low-labour-cost manufacturing. As a result, factories closed and call centres opened, and as George Osborne found out, you can’t have a march of the makers if you cut their legs off years ago.

Many media commentators now claim the weak pound will boost exports and improve the UK’s balance of trade but I see a problem. Manufacturing companies don’t exist in isolation. They form supportive economic clusters, the oil and gas services sector being a great example, but the strong pound meant cheaper imports, and manufacturers found it expensive to buy components from the local manufacturer.

So the suppliers closed down faster than the main manufacturers and UK manufacturers now import components, and the fall in the pound means component costs have just jumped at least 20 per cent. Strong and weak pounds are also misnomers, strong sounds good and weak sounds bad, but there is only really optimal and sub-optimal currency exchange rates in relation to your nation’s economic strategy. Germany likes the euro to be weak and has bet the house on middle-sized companies that manufacture and export: turns out they knew something successive Westminster governments didn’t.

Cheap imports have badly hit employment in former manufacturing areas Glasgow and Dundee, and in England in the north-east, north-west and Midlands in particular. Thirty-five years of neglect of manufacturing policy in the UK through keeping the pound artificially strong has costs jobs, impacted on public health, destroyed communities, created inequality and deepened the north-south divide. It has made the rUK the only market Scotland can sell to as our goods are kept artificially expensive due to inflated exchange rates with the rest of the world. Ipso facto, we trade more with England than the EU, but that’s a cost of the Union, not a dividend.

Scotland’s manufacturing sector has fared better than the UK’s overall and we still make and export far more per head than the rest of the UK. The key reasons for this are that oil and gas are geographically locked into Scotland, creating their own service cluster, and that Scotch whisky can only come from Scotland and can command a premium price, as does Scottish food. So, despite the weaker pound not being able to boost UK exports it has now become more optimal in relation to the make-up of Scotland’s economy.

It seems likely that over the two years of Brexit negotiations Scottish food and drink exports to the EU (with almost no non-Scottish ingredients) will rise dramatically, thus preparing Scotland’s balance of trade for even greater success as an independent nation. The weaker pound also means that Scotland, which has about 8.45 per cent of the UK’s population but receives 17.4 per cent of all the EU grants to the UK, will see the value of euro-denominated grants rise by 20 per cent.

All this is good news for farmers, researchers and matched capital investment.

Looking at the down side, imported food and electronic goods will rise in price and when Brexit really starts to hurt people’s pockets, that’s when the cost of Brexit will hit home and people will begin the see that the UK does not offer more stability than an independent Scotland within the EU.

One of the reasons the UK managed to keep kidding itself that there was a recovery on the way after the 2008 crash was that it was able to implement significant quantitative easing (increasing the money supply, although mostly to the finance sector), but now they just won’t be able to find buyers for their gilts. Another was that sterling was held stronger by its membership of the IMF reserve currency basket due to its consistent strength, meaning other nations would complete international transactions in sterling and hold significant reserves – the new-found weakness and volatility of the pound now threatens that status and many are predicting the pound will drop and stay below $1.

Westminster’s economic mismanagement has created a terrible balance of trade and left no manufacturing sector to bail it out with increased exports. Soon they will have no international trade deals (actually none) and a falling currency, leading to high inflation and increased interest rates, which will lead to a housing market correction in the region of 30 to 40 per cent in London and the south east. Add to this a diminishing ability to create new money through QE and the UK’s ability to cover its deficit with massive inflows of foreign debt money driven by the strong pound will be a memory.

Any Scottish company that thinks it is safe because it is exporting its products to England is in for a shock and it needs to start looking to use the weaker pound as a springboard to international business development as if its very survival depended on it, because it might. The UK economy is wilfully being driving off a cliff and internationalisation of trade, continued access to the single market and the powers of independence are all crucial components of Scotland’s new recipe for prosperity. If we don’t have an independence referendum in 2018 (and vote Yes), then our economy will go down with the good ship Britannia with all hands lost.