Friday 8 August 2014

Beyond the Scottish Independence Question, Looking at a Greater Devolution in The United Kingdom, A Perspective, Updated



Like many of you, I have been following the Scottish Independence Debate from various media sources,  and  I think we in the United Kingdom of Great Britain (England, Scotland and Wales) and Northern Ireland need to ask ourselves and our political leaders some questions about the future shape of our country ?




Personally I feel that Alex Salmond is an astute politician, however his desperation for self promotion from the First Minister of Scotland to the President of Scotland,  (although he has stated that the Queen is the head of state,   I feel there is a possibility at her Majesty’s passing, some voices in the Scottish National Party will call for Scotland to be a republic.) Mr Salmond economic arguments for Scotland to be independent quite simply don’t add up,  for the last few years, the revenues from North Sea Oil have been decreasing year on year.   His latest interaction to say that Scotland will keep the pound and if they’re not allowed to keep the pound,  a newly independent Scotland will not pay it’s share of the UK National Debt  is more like the politics of the playground,  where Mr Salmond is telling everyone if I don’t get my own way,  I will throw my toys out of the pram.

Brian Wilson: Show us the money, Mr Salmond


He has now decided that Scotland will keep the pound, in the some sort of informal currency union, or dollaristion scheme (A sterling zone)  the Panama Option,  (Panama uses the US Dollar as it’s currency) many students  of history would know  what happened when Scotland last looked at a Panama Option,  they suffered economic turmoil and eventually bankruptcy because of a Ponzi scheme known as the Darien Colony.


Currently under the Barnett formula, the Scottish Government receives it’s income from the United Kingdom Treasury ,  and is generally allowed to spend this at it sees fit,  Mr Salmond’s dream of  creating a Nordic Model of a Free Market Economy with a Welfare State (Social Democracy)  is reliant on the UK Taxpayer,  if Scotland did vote for Independence  on the 18th September 2014,  after any successful negotiation by Scottish and United Kingdom Governments,  Scotland even if it  decided to keep the Pound, it would either have to enter a time of austerity or drastically increase taxation,  the Nordic Model of Social Democracy does mean high taxation to pay for it’s welfare state,  on it’s current tax revenues and because it receives more back from Westminster that it pays to Westminster,  The Scottish Social Democracy model would not be sustainable  long term after 2016.




 An Independent Scotland of 2016 onwards will see falling tax revenue from North Sea Oil and Gas and other sources.  A large part of the Scottish Finance Sector would move  south of Hadrian’s Wall because a majority of it’s customers will be in the United Kingdom and  due to the  financial uncertainty caused by dollarization,  it would be extremely difficult or indeed impossible for Scotland to borrow money from International sources  at reasonable rates because Scotland would not have the standing of the United Kingdom,  although it’s possible that China and / or the Gulf States or indeed Russia  could lend money to Scotland, this of course would come with conditions such as access to Scottish Oil and Gas for Chinese Companies or the opening of Scottish Ports to Chinese Naval Vessels.

Read this important report to see why an Independent Scotland doesn't add up

Institute for Fiscal Studies , Fiscal sustainability of an independent Scotland



 Scotland also would have to negotiate to join international organisations such as International Monetary Fund,  The United Nations and The European Union,  although because of Spain facing issues with both the Basque Region and Catalonia wanting  independence,  the Spainish  Government could veto an newly independent  Scotland joining the EU Club.

The Westminster Government and the Opposition,(  The Conservatives, The Liberal Democrats and the Labour Party) have recently offered that if the people of Scotland  if they vote to remain part of the United Kingdom this is known as the Devo Max option, that Scotland would be more responsible for its income and expenditure , this would see a decrease in the money from the Barnett Formula and the Scottish Government would see either Tax raising or Tax varying powers,  if  the people of Scotland are given the option, it’s my opinion  that both the Welsh Assembly Government and the Northern Ireland Assembly Government  should also be given the option of having their own equilvalent versions of Devo Max  depending on their needs and requirements, for example the Welsh Assembly Government could use some of it’s income and perhaps borrow on the international finance markets or from the European Union or the Westminster Government  for capital projects such as improving North – South Wales transport and infrastructure links.

 Before the 19th Century many of the United Kingdom’s largest cities such as Leeds, Manchester and Newcastle were virtual city states it was due to the rise of  Railway Networks that a fragmented country came together,  if the people of Scotland,   Northern Ireland and Wales are given their own versions or types of  fiscal federalism,   the people of  the English Regions should also be given fiscal federalism .

 The United Kingdom needs to move away from a  centralised London and South East of England  system of Government  and Economic Management and the people of the English Regions,  Scotland, Northern Ireland and Wales should be given greater autonomy,  and responsibility to run their own affairs although agree with a centralised government for larger picture issues s such as defense, legal issues, foreign relations and currency.

I also believe that the British Overseas Territories such as the Falkland Islands and Gibraltar should be represented  in a more United Kingdom of Great Britain and Northern Ireland.

Further Reading:




Blair Humphreys

8th August 2014

Southport, Merseyside, England

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