Scotland the Brave

The signs are that the vote for Scottish independence this week is going to be close. The NO vote (or ‘No thanks’ as the posters politely put it) has been ahead for years, but as the voting day drew close the YES camp crept up, and for a time took a slight lead. I don’t think anyone really knows how it will go.

If Scotland does vote YES for the split from the UK, then the UK will lose about a third of its land mass, but only 8% of its population. It is unlikely the British PM David Cameron would keep his job for long (being the man who lost the Union), and yet (ironically) it would give his ruling party a much better chance of locking in political power for years, as it hardly has any MPs there. Labour would lose 40 seats in Westminster, the Conservatives only 1. Both sides of power have vested interests to keep the status quo. Possibly the worst (yet most likely) result is a close NO. The discontent from north of the border will rumble on for many years to come; nothing really will be settled.

What do I feel? Not much really. I’m British (English) and love Scotland – having honeymooned there 20 years ago and visited many times. My Uncle Jim is from Scotland. A lovely man, he is gentle and considerate, soft spoken and as passionate a Scotsman as ever there lived. A mad keen Scotland (and Chelsea) football fan. It’s a beautiful country. I wish it well, whatever it chooses.

Being an Economist by training though, I cannot reconcile the YES camp’s argument. It has to be more emotional and a ‘feeling’ that you can do better on your own. National pride. Yes I know countries with smaller populations (NZ, Singapore) have done well on their own, but this is a different situation. The economic sense of keeping the pound as the currency, but with monetary policy set by another country south of the border seems madness to me. Interest rates set by Bank of England for its own unique needs while the Scottish government may very well have its own priorities. 7% of Scottish jobs are in financial services (more than the 6% in oil) and many of those jobs will move south. Not independence really, but dependence. Much worse than now. Would they be allowed to join the EU, would they move to the Euro? How could they handle their own Defence? Public services? Economy? The GDP per head is lower than in the UK, they will no longer be drawing the benefits from their slightly richer, larger southern brother. They will have to pay for it themselves.

Staying in the union, Scotland seems to have the best of both worlds. Will it be Scotland the brave, Scotland the foolhardy, or Scotland the self confident?