First let’s look at some numbers to get this debate in perspective:
UK GDP – £2,435 Billion
Scottish GDP – £216 billion (8.87% of UK GDP)
London GDP – £452 billion (18.5% of UK GDP)
Edinburgh GDP – £12 billion (0.49% of UK GDP)
UK Debt – £1,377 Billion
Consider these 5 questions before voting in the Scottish referendum:
- The main driver of the UK economy is London and its knock on effect in the surrounding South East of England. This is one of the few parts of UK that earns more income than it spends. The current and future world income generators are the big international cities – London, New York, Shanghai, Hong Kong, Singapore etc. etc. They are clusters of high value added service industries supporting the regional management of large multinationals with such things as financial services, legal services, management consulting, marketing, advertising and recruitment. They attract massive international investment and provide talented and educated people with highly paid jobs. This creates wealth which trickles down to workers in the supporting industries and services. Edinburgh is not a major international city, nor a major European city. Neither is Glasgow. There can only be one regional hub and currently that crown belongs to London, making the creation of a second hub nearby very difficult. Do the Scottish Nationalists have a detailed plan as to how they will elevate Edinburgh or Glasgow to the status of other major international cities?
- A currency union between an Independent Scotland and the UK could be a bad idea for both parties. The UK wouldn’t want an independent Scotland to mismanage its economy to the detriment of the English, Welsh and N. Irish. The three main UK political parties have said they would not allow an independent Scotland to use the pound. Mark Carney, The Governor of the Bank of England, has said that “a durable currency union requires some ceding of national sovereignty” which would negate the notion of Scottish independence if it used the pound. Also, the reasons that Scotland doesn’t want to join the Euro should also apply to a currency union with the UK. The recent catastrophic economic collapse of Greece trying to operate within a currency zone shared with Germany is a sobering and relevant example as to why an independent Scotland should not share the Pound. Do the Scottish Nationalists have detailed contingency plan as to how an independent Scotland could operate without the pound?
- Scotland’s two biggest banks, Royal Bank of Scotland (RBS) and Lloyds have bank assets twelve times the size of its GDP. The equivalent multiple for the rest of Britain is below five; for Ireland on the eve of the financial crisis it was about seven. In another economic meltdown Scotland would struggle to rescue its banks. Do the Scottish Nationalists have detailed plan as to how they will manage their new banking system to avoid the recent problems of other small countries such as Iceland, Cyprus and Ireland?
- Scotland would find it difficult to get all 27 of the other member countries to agree admit them into the European Union. Spain for one would not want to admit Scotland, as it would set a precedent for Catalan independence. Spain has already blocked Kosovo’s membership bid because it broke away from Serbia. There are other separatist movements within Europe which could cause some other countries to veto Scottish membership. Do the Scottish Nationalists have a plan B for the possibility of independence outside the European Union?
- Scotland is seeking independence at the time their North Sea oil reserves are running out and at a time when large shale oil reserves are being discovered in England. Do the Scottish Nationalists have a detailed plan as to how they will manage their future economy without North Sea oil?