The Cost of Independence

Topics: Scottish independence, Scottish National Party, United Kingdom Pages: 8 (4097 words) Published: March 29, 2013
"The Cost of Independence - concerns and fears of Scottish Businessmen" Martina Macáková

"What business leaders in Scotland really seek to hear is a positive discussion on the future for Scotland and what part they can play in shaping it, not a re-run of old arguments about potential damage to the economy of constitutional change."


Ewan Hunter, Director of HunterSearch

This essay deals with a discussion about Scottish independence through the perspective of local business leaders. Its aim is to analyze their opinion on Scottish tendencies towards independence, if and to what extent could they influence the results of upcoming referendum and whether Scotland’s business companies could play a role of an ally of the UK government. It provides the analysis of the current situation, especially in the light of recent events, as the First Minister Alex Salmond, leader of the Scottish National Party (SNP), in the beginning of January announced that the referendum on Scottish Independence should be held in autumn 2014. In this essay I will attempt to come with a prediction of the possible future development of the opinion of Scottish leading business companies. For that purpose I have examined mostly newspaper articles, opinion polls, governmental documents and public speeches given by the local business representatives. As a secondary source and the introduction to the topic of Scottish Independence I found very valuable a publication written by Jo Eric Murkens, Peter Jones and Michael Keating Scottish Independence: A Practical Guide. A division of state into two sovereign parts would be very complicated and long-term process. It is a process fraught with problems and controversy. Whether it is a break up of marriage or of nations, the major bone of contemption is always the same - who gets what. The division of Czechoslovakia in late 1992 and 1993 could serve as a precedent for similar action, anyhow the situation of the Union and former Czechoslovakia differs. In Scotland’s case, controversial may be especially the separation of state debt and North Sea oil reserves; the future of military bases on the island of Clyde, home of British nuclear missiles; question of the membership in the European Union and currency issue. Despite the fact that the independence is primarily a question of national identity and political change, we cannot forget that economic prosperity is prerequisite for well-functioning state. It's Scotland's oil

If there was an independent Scotland would it be economic failure or success? It might sound a paradoxical thing to say but the core issue related to the economics cannot be really answered correctly. According to Peter Jones, the starting point for dealing with the economics of independence needs to be existing Scotland. And current Scotland is a Scotland that operates within the United Kingdom of Great Britain and Northern Ireland. It is obvious that public spending would demand greater income as two new types of costs would affect the public sector. First of all, there are costs incurred by the need to add on functions (such as defense) and those incurred by the need to disentangle the Scottish element of such UK-wide bodies (for example Inland Revenue). Undoubtedly, Scottish government can count on the benefits from obtaining control of offshore oil and gas resources. The representatives of SNP repeatedly assert the Scotland would be among the world’s richest countries. Additional GDP acquired from the profit made by oil companies offshore is something what we can more or less rely on. Before his re-election campaign Alex Salmond grasped the opportunity to dust off SNP’s old slogan “It’s Scotland’s Oil”. It was a smart move. As the election results showed the resurrecting claim that all North Sea oil – as well as its revenues – belongs solely to Scotland, was what Scottish voters wanted to hear. Oil and gas resources themselves don’t guarantee long lasting wealth. Douglas...
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