Home Currencies Scottish independence: The cost of breaking the union Scottish independence: The cost of breaking the union, Moneyweek

Could an independent Scotland become the next Singapore, or would a ‘Yes’ vote be an act of national self-harm? Merryn Somerset Webb investigates.

In the late 1690s, Scotland’s government granted a charter to the Company of Scotland to set sail and attempt to establish a colony on the coast of Panama.

The interesting thing about this adventure is not so much its miserable end (most people died and only one ship returned to Scotland)*, but the way in which Scots of all sorts took part in it.

The Oxford Dictionary of National Biography puts it like this: “While Williamites and Jacobites remained implacably opposed over the monarchy, they came to be united in a belief that the Company of Scotland offered the prospect of national and personal prosperity. The original joint-stock company of 1695 was now the vehicle for the Scottish colony of New Caledonia, supported by a remarkably diverse group of Scots who had set aside their many and varied differences in pursuit of national glory and personal wealth.”

They didn’t get either, of course. The wealth was lost and the union (which allowed participants to recoup their losses via a payment from England to Scotland known as ‘the equivalence’) was found.

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Independence referendum: Top economists spell out 13 ways a Yes vote will hit us in the pocket, Daily Record

Sep 15, 2014 08:25 By Torcuil Crichton

THIRTEEN experts have written a joint letter to the Daily Record explaining exactly why they fear Scotland will not be richer or fairer after a vote for independence.

A BAKER’S dozen of top economists have listed 13 reasons why the people of Scotland will be worse off if there is a Yes vote.

Academics from universities across the country joined forces to spell out why they believe

independence would be a “big mistake”.

The 13 experts include the heads of economics at Edinburgh and Glasgow universities.

They warn a Yes vote would require more austerity and harsher cuts than those planned by the Westminster government – a threat that would see the poor bear the brunt.

In a joint letter issued to the Daily Record, the economists say: “Our main contention is that Scotland is unlikely to be richer and fairer if there is a Yes vote in the referendum.

“The irony is that within the Union, Scotland has a higher level of income per person than the UK.”

The academics add: “When we add up these 13 reasons not to vote for independence, we are extremely concerned that to do otherwise would be to gamble with the economic prospects of the present generation.

“As experienced and respected economists, we would urge you to vote No on September 18.”

Get all the latest independence referendum news right here.

The warning came after a leading think-tank claimed Alex Salmond has severely underestimated the economic risks of independence.

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Why destroy a united nation? Sunday Express, John Reid

Do we stay part of the family of nations which make up the United Kingdom or do we take a huge leap into the unknown and the uncertain by setting up a separate state?

I have fought many elections. I have knocked on doors, delivered leaflets, spoken at rallies and manned street stalls in town centres. In that sense, this referendum has qualities that are like an election but this is not like a normal election.

If we vote to leave the UK, it will be for ever, irreversible. There will be no changing our minds in four years if it turns out the promises made by the leader of a political party cannot, or will not, be kept.

That is why it is no time for a protest vote. It is not a time to gamble. This is not a lottery. There will not be another chance next week. The decision we take on Thursday is not just one for ourselves, it is for our children, for our grandchildren and for generations to come.

So, we have to get it right and the right decision is to say "no thanks" to separation. We do not need to take the risks of separation to change Scotland. Change is already coming with a No vote, faster change, better change, safe change.

We can strengthen our Scottish Parliament without losing the strength, security and stability that comes with being a member of the UK. A leap into the unknown with independence would be a huge risk for families across Scotland.

"The nationalists have not answered the fundamental questions. They cannot, or will not, tell us what currency we would use in the event of separation" 

John Reid

The nationalists have not answered the fundamental questions. They cannot, or will not, tell us what currency we would use in the event of separation. Currency matters.

It affects what our wages are worth, how much our mortgages and rents cost, what our credit card and shopping bills cost. It affects how we fund our pensions, how we fund our public services; our schools, hospitals and police. We cannot put that at risk. We can't risk a partnership which has benefited us all for three centuries.

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Expert confirms ‘There will be no oil bonanza’,

12 September

The nationalists want us to believe that we are on the verge of another oil boom and that oil will pay for everything.

The problem with this argument is that it is simply wrong. Now one of the experts that nationalists rely on has corrected the record. Professor Alex Kemp the oil expert relied upon by Alex Salmond to give credibility to his oil estimates , has today said that a separate Scotland would have no oil bonanza.

In a letter to the Press and Journal Professor Kemp wrote;

“SIR, - In Wednesday’s Press and Journal, there was a headline attributed to myself predicting an “oil bonanza” from the North Sea. Nowhere did I say this.In our research, our economic model predicts that investment will fall off in the near future, while oil/gas production could increase for a few years, but then enter long-term decline. The total recovery we predict to 2050 is in the 15-16.5billion barrels of oil equivalent.

By 2050, production is in the 200,000-250,000 barrels of oil equivalent per day. But production can continue well beyond 2050. Our current estimate of the ultimate potential is certainly less than the 21 billion barrels of oil equivalent which is at the upper end of DECC’s most likely range. There will be no bonanza.”

The timing of this letter will come as a blow to Alex Salmond who in recent weeks has used Professor Kemp’s name to deflect criticism that his oil forecasts have been overestimated .

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Salmond planning victory parties before polling day even starts, Daily Express

ALEX Salmond was last night ­accused of “planning parties” and taking independence for granted ­after announcing “a day of celebration” on Friday.

The First Minister asserted that Westminster politicians were going to “get their comeuppance” because he believes Scots are going to vote Yes in “very substantial proportions”.

He made the comments in Glasgow yesterday after ­taking time out from his two-day helicopter tour of Scotland in an ­aircraft named ‘Saltire One’.

Yes Scotland chief executive Blair Jenkins also predicted that his side would win Thursday’s poll, saying: “I think we’ve got a Yes vote.”

However, critics suggested Mr Salmond’s over-confidence could become his “Neil Kinnock moment”, referring to the infamous Sheffield rally which cost Labour the 1992 general election

Meanwhile, Finance Secretary John Swinney has admitted that a separate Scotland would have to ­increase borrowing to support its ­independence plans. Appearing on BBC Radio Four’s Any Questions? , he was quizzed on how the country would provide free tuition, free ­prescriptions and a free NHS.

Explaining that he was planning to increase public spending by three per cent, he conceded that borrowing would also have to increase.

He said: “The United Kingdom is borrowing up to its oxters just now, so don’t consider it a revelation that suddenly an independent Scotland might borrow some money.

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Scottish independence: 'Yes campaign every bit as dodgy as Iraq dossier', Daily Telegraph

By Andrew Gilligan

One of the key themes of the Yes independence campaign – I saw it scrawled on a No poster in Edinburgh only last night – is that a “free Scotland” will no longer be tricked into illegal wars based on lies.

But as the BBC reporter who first exposed those lies, I believe that Scotland is being led over a cliff by a dossier every bit as dodgy as the one that took us into Iraq.

Like the whole of Britain in 2003, Scotland in 2014 is being asked to fix a problem that does not exist. Back then, it was an imaginary threat from Iraq. Now, it is an imaginary threat to the NHS, 45 minutes from destruction if you vote No.

Back then, it was the supposed “clash of civilisations” between Islam and the West. Now, it is a supposed “fundamental conflict of social values” between two nations, England and Scotland – whose social values, all surveys show, are extremely similar.

And just as in 2003, Scotland is also being asked to tackle another problem that is real and does exist – but in a way that will only make that problem worse, for itself, and for all of us. Back then, we were told that invading Iraq would protect us from international terrorism. In fact, of course, it gave international terrorism a boost beyond al-Qaeda’s wildest hopes and dreams.

Now, Scots are told that independence will protect them from global capitalism. They are told that a new international border at Gretna will form a magic shield against the City, the Tories, and the cuts.

In fact, after a Yes vote the City, the Tories, and the architects of the cuts would have more power over Scotland, not less.

Because what is offered by Alex Salmond and the Yes campaign is not independence. It is sharing a currency, whether formally or informally, with England.

Scotland’s central bank would be in London. All the key levers of Scotland’s economic policy – interest rates, borrowing and spending – would be controlled not in Edinburgh, but by a UK government that Scots no longer had any role in choosing; a government much more likely than before to be Tory, without Scottish votes.

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Deutsch bank chief warns of dangers of Yes vote. The Scotsman

SCOTTISH INDEPENDENCE: The financial and economic arguments against Scottish independence are “overwhelming”, a leading bank warned as it compared a Yes vote to the mistakes which led to the Great Depression of the 1930s.

In one of the starkest warnings yet issued by a financial institution, the chief economist at Deutsch Bank David Folkerts-Landau said voters and politicians had failed to grasp the potential severity of the negative consequences of separation.

He said he found it “incomprehensible” that Scots were even contemplating withdrawal from the United Kingdom, and pointed to the “recessions, higher taxes, lower public spending and higher interest rates” that had afflicted nations seen as potentially heading for the eurozone exit.

But the Scottish Government accused him of failing to take into account Scotland’s “strong fiscal position”, and said it would start life as an independent nation “from stronger economic foundations than any other nation in history”.

In a highly-critical analysis of the prospects of independence, Mr Folkerts-Landau said: “Everyone has the right to self-determination and to exercise his or her democratic rights.

“But there are times when fundamental political decisions have negative consequences far beyond what voters and politicians could have imagined. We feel that we are on the threshold of one such moment.

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