Does Scottish Independence Make Sense?

DOES SCOTTISH INDEPENDENCE MAKE SENSE?

By Samuel O’Mara

The Brexit vote has highlighted the difference between Scotland and the rest of the UK and it appears the disconnect between the people of Scotland and the politicians in Westminster is widening and Scottish Independence is somewhat inevitable. Scotland voted overwhelmingly to remain in the EU with 62% voting remain compared to the 48% for UK as a whole (BBC News, 2016). In 2014 Scotland voted to stay in the UK with a vote of 55% against Scottish Independence. Despite the recent surge in support for independence in the opinion polls it seems unlikely that another referendum will take place in the immediate future (Milne 2017). In this article I’ll examine why there is support for Scottish Independence and whether it makes sense for Scotland to pursue Independence.

It is important to note that Scotland already has some deal of autonomy. The Scottish parliament has had control over areas such as health and education since 1999 however a great deal of the decision making is done in Westminster. I will be discussing the impact of Scotland completely detaching from the UK although it is highly possible some other arrangement could be found, perhaps with the Scottish parliament gaining more power but still ultimately coming under the control of the UK government. Scotland’s economy largely revolves around services and the North Sea Oil industry (BBC News, 2017). Taking more direct control over North Sea oil would be a benefit for Scottish Independence, however it is an aging production area for an aging industry and is set to decline in importance. It is also a large misconception that natural resources always lead to long term prosperity. For example, mismanagement of wealth and political instability have caused Iran and Venezuela to squander the potential of oil deposits. Alternatively, Norway is a perfect example of how sensibly managed oil deposits can allow for long term, nationwide increases in living standards.

So, does Scotland get a good deal from the UK? From examining the budget, we see that Scotland has a deficit issue. Total spending for person is £1661 higher than the UK average and the notional deficit is at 7% compared to 1.1% for the UK as a whole. This means that Scotland has a bigger deficit than any country in the EU. Scotland would require cuts of around 11 billion to reach the UK level pointing to rather bleak prospects for the country financially if they were to split from the UK, as a deficit this high is not feasible.

However Scottish Finance Secretary, Derek Mackay argues that independence would allow Scotland to take control of economic policy and so tackle this problem as a country.

This means that Scotland has a bigger deficit than any country in the EU. Scotland would require cuts of around 11 billion to reach the UK level pointing to rather bleak prospects for the country financially if they were to split from the UK, as a deficit this high is not feasible.

However, it is hard to see how this can be achieved without some form of cuts to spending. He has also said an independent Scotland would not pay UK debt repayments instead offering solidarity payments to cover part of the historic debt. Perhaps there is some argument then that an Independent Scotland could tackle their deficit problem as £6.5 billion is spent on servicing UK debt payments and defence spending, including trident (Carrell, 2019). However, government data does not fully support this notion as Scottish expenditure growth is greater than that of the UK and the gap between expenditure per person is at 13.6% and seems to be growing. Although public expenditure as a share of GDP is falling despite being higher than the UK, with 45.3% and 37.9% respectively (Scottish Government, 2019).

It seems a large degree of the support for independence comes from a point of Scottish nationalism and pride and a clear desire to claim sovereignty and control over policy. Ironically, this shares many of the same arguments

It seems a large degree of the support for independence comes from a point of Scottish nationalism and pride and a clear desire to claim sovereignty and control over policy.

This perhaps highlights how Scottish nationalism is placed far higher than pride in the union despite it being present for over 300 years. Some in favour of Scottish independence point to potentially rejoining the EU as an argument for Scottish independence. However, it is not clear as to whether this is realistic. Desperate to deter similar independence movements, such as that of Catalonia, Spanish officials have said that Scotland would be at the back of the queue for joining the EU. Furthermore, the EU requires a deficit of lower than 3% to join and as previously mentioned this would require a 4% cut. Additionally, from 2020 joining the EU requires adopting the euro, which could be a bonus for Scottish people. With two thirds of Scottish trade with the rest of the UK, it makes little sense for them to favour closer ties with the EU than the UK from a trade point of view. Indeed, most economists would argue that trade integration almost always leads to positive outcomes and so protecting trade with the rest of the UK should be of primary importance and so it could be argued adopting the British pound over the Euro (Constable, 2017).

Desperate to deter similar independence movements, such as that of Catalonia, Spanish officials have said that Scotland would be at the back of the queue for joining the EU. Furthermore, the EU requires a deficit of lower than 3% to join and as previously mentioned this would require a 4% cut.

Controlling other policies could also benefit Scotland. Around 9% of the population are migrants compared to 14% in the UK as a whole (Rienzo, Vargos-Silva, 2020). Taking control over Scotland’s migration policy, targeting areas of labour shortages and bringing in skilled labour could help boost an independent Scotland’s economy. SNP leader Nicola Sturgeon has already made clear an independent Scotland would instantly scrap Trident, the UK’s nuclear deterrent facility based in Clyde keeping the Faslane base as a conventional navy base for the Scottish Navy. The presence of nuclear weapons is always a hot button issue and for the Scottish people removing them from their shore whilst also freeing up some spending money is a major bonus of independence (Barford, 2014).

References

BBC News. June 2016. “EU Referendum Results”. Available at https://www.bbc. co.uk/news/politics/eu_referendum/results

Milne, Claire. 15th March 2017. “A second independence referendum: what does Scotland think?”. Full Fact, available at, https://fullfact.org/scotland/secondindependence-referendum-what-does-scotland-think/?utm_source=content_ page&utm_medium=related_content

BBC News. 15th March 2017. “Scotland Profile - Overview”. Available at https:// www.bbc.co.uk/news/world-europe-20718605

Carrell, Severin. 21st August 2019. “Scotland’s deficit seven times higher than UK as a whole last year”. The Guardian, available at https://www.theguardian.com/ uk-news/2019/aug/21/scotland-2018-deficit-higher-than-uk-as-a-whole-last-year Scottish Government. 21st August 2019. “Government Expenditure and Revenue in Scotland (GERS): 2018 to 2019”. Available at https://www.gov.scot/publications/ government-expenditure-revenue-scotland-gers/pages/1/

Constable, Simon. 17th March 2017. “Why the Economics of Scottish Independence Don’t Make Sense”. Forbes, available at https://www.forbes.com/ sites/simonconstable/2017/03/17/why-the-economics-of-scottish-independencedont-make-sense/#3f1491eb65db

Rienzo, Cinzia. Vargos-Silva, Carlos. 12th October 2020. “Migrants in the UK: An Overview”. The Migration Observatory, available at https://migrationobservatory. ox.ac.uk/resources/briefings/migrants-in-the-uk-an-overview/ Barford, Vanessa. 30th June 2014. “Scottish independence: Where might Trident go?”. BBC News Magazine, available at https://www.bbc.co.uk/news/ magazine-28009977

Salamone, Anthony. 19th November 2019. “What a Scottish independence referendum in 2020 would mean”. London School of Economics and Political Science, available at https://blogs.lse.ac.uk/politicsandpolicy/indyref-2020/