Who will pay for Scottish independence?

What is the financial impact on Scotland of independence?

Stephen Richard — Thu, 28 Oct 2021 11:14:09 +0000

What is the financial impact on Scotland of independence? Stephen Richard Thu, 10/28/2021 - 12:14

Author or Creator

Common Weal

What is the financial impact on Scotland of independence?

There are three aspects to this – the initial debts inherited, the cost of the work to become independent and the ongoing financial position of Scotland after independence. The last of these is not part of the process of establishing a new country and so has not been considered here.

So what is the debt aspect of this?

As was discussed under negotiations above, that is not something we can know until negotiations are complete, but there isn't really a scenario where Scotland's debt liability is any higher than it already is inside the UK and there are a number of scenarios where it could be less – and even significantly less. As we have seen through two periods of very large scale 'quantitative easing' right across Europe and indeed the wider world, debt size in comparison to the size of the economy when you are in charge of your own currency is not a major concern. The issue is the cost of servicing it which will not be higher than it currently is for Scotland.

But these questions reveal a lot of set-up costs do they not?

Yes, but this should be put into perspective. If you add up all of the above costs then the total comes to about £25 billion and this is not particularly large when we think about the bank bailout or the emergency Covid measures. And it is dominated by two major costs – the cost of setting up a Foreign Currency Reserve and cost of setting up a Scottish Defence Force. The first of these is a cost but it is also an asset (this is real money you can spend and invest) and the second would be spent over a decade and much of it would come from annual spending on defence which would actually be less than what we are spending at the moment as part of the UK. These are all one-off costs and in the end are no more than a small proportion of how much Scotland's share of the bank bailout cost.

So that is how much the national debt would rise by to become independent?

No, that is the total cost of the set-up and doesn't include Scotland's likely share of the UK's assets. About £15 billion of the £25 billion total would come to Scotland as a share of assets (or would be subtracted from debt). The additional cost to Scotland which would be borrowed is only £10 billion which, as a one-off, really isn't that substantial.

How would we pay for it?

To go back to the beginning, the National Commission would be given bond-issuing powers so would use this to borrow the money as it does its work. At the end this would be consolidated and added to the national debt.

What do we get for our money?

Well, our own country – and a giant economic stimulus. An awful lot of the money it would cost to set Scotland up as an independent country would be spent on goods, services and wages inside Scotland would would help to boost Scotland's economy.

Keywords

Cost of independence

Public Debt

Government bonds

The Future of the United Kingdom’s Territorial Constitution: Can the Union Survive?

Stephen Richard — Tue, 05 Oct 2021 08:33:44 +0000

The Future of the United Kingdom’s Territorial Constitution: Can the Union Survive?

Primary Author or Creator

Aileen McHarg

Stephen Richard Tue, 10/05/2021 - 09:33

Date Published

Sat, 01/05/2019 - 12:00

Category

Sovereignty

Type of Resource

Academic Paper

Length (Pages, words, minutes etc...)

23pp

Fast Facts

The arrangements for the countries of the UK are likely to continue to develop through piecemeal change. This change process is more difficult as a result of the 2016 referendum on the EU. This presents an ongoing threat to the survival of the UK as a unitary state.

More details

The 2014 Scottish independence referendum has failed to settle the question of Scotland’s constitutional future, notwithstanding that a clear majority voted to remain part of the United Kingdom (UK). Since the referendum, the UK Parliament has legislated to fulfil the promise made to the people of Scotland that substantial additional powers would be devolved to the Scottish Parliament and its status as a permanent part of the UK constitution guaranteed. Nevertheless, a growing body of opinion argues that more comprehensive reform to the UK’s territorial constitution is required to ensure the long-term survival of the Union. This chapter outlines the nature of the UK’s current territorial constitution, arguing that, while it is formally unitary, constitutional practice suggests that it is better viewed as a union state. However, as currently constituted, the territorial constitution fails to either to adequately recognise the territorial diversity of the UK or to provide sufficient territorial cohesion to maintain the legitimacy of the UK state. An adequate programme of territorial reform therefore needs to go beyond further devolution of powers to Scotland to address problems of lack of security for the autonomy of the UK’s constituent parts, lack of attention to institutions of shared rules, and lack of constitutional reciprocity. Nevertheless, the chapter also identifies major obstacles to the achievement of comprehensive reform of the territorial constitution. It concludes that the territorial constitution is more likely to continue to develop through continued piecemeal and evolutionary change, and that, in the current climate of territorially-polarised politics, exacerbated by the result of the 2016 referendum on membership of the European Union, this represents an ongoing threat to the survival of the Union.

pp 139-162 in: López-Basaguren A., Escajedo San-Epifanio L. (eds) Claims for Secession and Federalism. Springer, Cham. https://doi.org/10.1007/978-3-319-59707-2_8

Resource Address (URL)

https://link.springer.com/chapter/10.1007%2F978-3-319-59707-2_8

Keywords

Language English