Scottish Independence

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Ian Pearson's picture

Apologies to my international readers—This one is just about Scotland.

Some Scots want independence and their leader Salmond promises that he will deliver a land of milk and honey. I wrote a few months on some reasons I don’t think they should go their own way.

The economics really don’t look good if they choose to do so anyway. A survey just published suggests 38.6% of large businesses and a third of small one would consider moving out of Scotland if it gains independence. That doesn’t mean they actually will, but it does suggest a potential financial problem. This week we have also learnt that European Law would require the Royal Bank of Scotland to move to London if it happened, since they do most of their business in the UK and banks have to be resident in the country where it does most of its business.

Salmond has suggested making loads of cash from wind farms. If every hectare of Scotland were covered in wind turbines at maximum density, it wouldn’t even make enough energy to replace England’s coal power stations. Hardly Saudi Arabia is it, as Salmond once claimed? Oil is still there in the sea in reasonable abundance, they might win ownership of much of it, and they could extract it for some more years. But not many. Thanks to the recent goings on with Russia, shale gas is starting to look a lot more desirable. England’s recoverable reserves estimates increased by 50% this last week. We have a lot of shale gas, and it will be much cheaper than oil or Russian gas if we can get past the current fracking objections. The same goes for many other countries that might otherwise be tempted by North Sea oil. Even if we can’t use our own shale gas, US shale gas production can expand a lot and could fill much of our needs too. So there may not be much demand for Scottish oil for much longer.

Each Scot is currently subsidised by English taxpayers. The subsidies allow Scottish students free University education (while the English have to pay £9000 per year). Elderly care is free, prescriptions are free. Estimates of the subsidy vary depending on the political allegiance of the source, but a BBC figure of over £3000 per head seems reasonable. An independent Scotland would have no reason to expect to keep receiving that.

A study 15 months ago based on stats collected by the Office of National Statistics pointed out that only 12% of Scots contribute more to the state than they receive back in total benefits. A reasonable assumption is that some of those 12% work for the big banks and other large companies that will move to London, and some work for the smaller businesses that would also consider leaving. Some of those will leave, and that will mean that an even smaller proportion of Scots are net contributors to the state. They might feel pretty unhappy if the politics still means that they are then expected to pay even more taxes to make up the deficit, so more of those ‘considering leaving’ might actually do so. A vicious circle will force more and more Scots onto the train to London or overseas. Scotland would soon be full of net receivers from the state, used to a heavily subsidised standard of living and willing to vote for anyone who will keep borrowing more and more to pay for it. Those that can will leave.

It is hard to escape the conclusion that a newly independent Scotland will very soon start to see its standard of living very significantly degraded. Even after tightening its belt a few times, it is likely to see its economy slide deeper into debt. Not a good prospect at all.

About the Author

Dr. Ian Pearson is a leading futurist, keynote speaker, and after-dinner speaker. All over the world, he has delivered over 1000 provocative talks about the future of many aspects of our daily lives - from work to leisure, fashion to climate change. He has written several books and appeared over 450 times on TV and radio.

This post originally appeared on his blog.

Comments

Scottish Independence

Good article.

In a way this is a very curious debate. The independence Scotland appears to want would see them keep the Queen as Head of State, remain in NATO, keep sterling and stay in the European Union. At the very least that means the final say on fiscal matters would lie in London, and on most legal issues, in Brussels.

And that is independence?

Scottish Independence is not

Scottish Independence is not voting for the policies of Alex Salmond,it's much wider than that. It's for Scots to get real democracy. Currently we have a Tory led government but just one Tory MP, another example of Scots not being ruled by the party we voted for
We want a fairer society, witness the efforts of our current parliament to negate the effects of the bedroom tax
Companies moving to England, most of these are run or owned by people who have sympathies to the Tory party. It costs nothing to posture but the move would cost them money otherwise the logic is they would be gone already
Scotland already has enough renewable energy to export some of it to England, and our land is hardly filled with turbines. But we also have wave power and a much older renewable in the form of hydro thats being expanded
Scots pay more tax than we get back, period
I find it hard to believe that so many authors from south of the border are willing to paint a picture of gloom and doom for when Scotland becomes independent and yet seem unwilling to let us go. Is it because we're just too stupid to look after ourselves?