Political Science Discussions

If Scotland became its separate independent nation after the referendum, the effects of this transition would be highly detrimental to Scotland in an economic sense.

Scotland and the United Kingdom have been united for over 300 years. Over the course of these 300 years, Scottish separatists have always been campaigning for a separate and independent Scotland. In 1934, this separatist movement took a new turn with the establishment of the Scottish National Party. The main purpose of this party was to further promote the concept of Scotland’s independence on a democratic and legal basis. Slowly, the party continued to gain more and more support and on October 23, 2011, the party leader Alex Salmond officially announced their campaign for independence. Just a year after, the British Prime Minister, David Cameron and Scottish National Party leader, Salmond, signed an agreement to have a referendum, which took place yesterday on September 18, 2014.

Therefore, yesterday, the world eagerly awaited an answer to a question that has been asked for 300 years: “Should Scotland be an independent country?” Though the results came in favor of “No”, what would have occurred if with opposite happened? What would have happened if the results came in favor of “Yes”? If this were the case, the effects would be highly detrimental to Scotland financially in my opinion, as I mentioned in the beginning.

Economists predicted that the house prices would instantly fall by £30,000 just off the bat. This was because most large financial firms like the Royal Bank of Scotland and Standard life pledged to relocate if the “Yes” vote were to win. In addition to this, the potential loss of highly skilled jobs would have made the Scottish economy greatly suffer.

Moreover, the UK government declared that if the “Yes” side was to win the referendum, there would be no formal union between the two nations on the topic of currency. However, even if Scotland decided to continue using the pound as their currency, just as Panama uses the U.S Dollar, the Bank of England would still set monetary policy according to its own will. As a result, Scotland still wouldn’t have gotten much say. So basically Scotland would have a lot of obstacles if it wanted to stick to using pound as its currency. If Scotland decided to make their own currency, it would face foreign exchange costs. In a nutshell, Scotland would have either had to come up with their own new currency and pay foreign exchange costs or possibly join the EU.

Another point to keep in mind is that UK debt will be roughly hitting £1.5 trillion by 2016-2017 (the year when independence would take place). According to economists if this debt was split up on a per capita ratio, Scotland would easily take up on £122 billion.

In addition to all of these economic implications, Scotland would also need to start investing in military along with various other security methods to protect its sovereignty. That again will require money and investment.

In my opinion, separating from the UK would have had highly detrimental effects to Scotland in an economic sense. It wouldn’t really have been a pleasant start for Scotland to start acting as an independent nation being £122 billion in debt, with no definite currency and with scary notices of the relocation of huge financial firms etc. At the end of the day, the people democratically made their decision to stay apart of  the UK and this decision should be welcomed and respected by supporters of both sides.