9 Jan 2012

What if Scotland chooses independence?

Political Editor

As David Cameron insists that a referendum on Scottish independence should be held within 18 months, Channel 4 News looks at what separation from England would mean.

Scotland’s First Minister, Alex Salmond, knows he faces an uphill battle to win a referendum on independence. That is why he wants to hold a vote in the second half of the parliament, probably 2014.

Opinion polls show the Scots are not persuaded that independence is the right option for them, even if a recent Scottish Social Attitudes survey suggested a majority could be won if people were convinced they would be better off to the tune of just £500 a year.

Rob Johns, a senior politics lecturer at Essex University, told Channel 4 News: “For some people there are very strong emotionally-held views pro or anti the union. But for a lot of people it is really what works and if an independent Scotland would mean they were better off, then they could well be inclined to support it.

“I think it is clear that doubts about independence concern the economy in particular, so that would be something the yes campaign would need to win in order to win a referendum.”

If an independent Scotland would mean they were better off, then they [the Scots] could well be inclined to support it. Dr Rob Johns, Essex University

Any split would see Scotland break from the United Kingdom – so not just England but Wales and Northern Ireland as well. But the key ideological split would be with England – so what would it mean if it happened?

Economy, stupid

Arguments for and against independence are often couched in economic terms. Could Scotland afford to go it alone? Would England and the rest of the UK be better off?

Public spending per head is higher in Scotland than in England, a fact English nationalists use to make the case that the English are subsidising the Scots and would be wealthier if the union ended.

Scots nationalists say they could cope perfectly well without money from London, if they were able to levy their own taxes and make their own spending decisions, particularly if they were free to keep the revenue from North Sea oil.

North Sea oil

As FactCheck has shown in the past, most of the UK’s fossil fuel lies off the coast of Scotland.

“Detailed research of the money brought in by the UK oil and gas fields suggests that Scottish waters – defined by the line of demarcation used in the fishing industry – accounted for 91.1 per cent of UK North Sea revenue in 2008/09,” our team found.

But even with this revenue, Scotland has raised less in tax than it has spent since 2005. Official figures show the deficit was £2bn in 2005-06, rising to £14bn in 2009-10 (10.6 per cent of Scottish GDP) as the economy worsened. But Scotland’s deficit was lower than the UK’s (11.1 per cent of GDP).

Countries don’t collapse as a result of constitutional change. Prof David Bell, Stirling University

Professor David Bell, an economist at Stirling University, told Channel 4 News that while public spending was higher in Scotland than in England, England would not experience a gold rush if Scotland went it alone. “It’s not a huge sum of money. It’s not nirvana by any means at all.”

Prof Bell agreed with Dr Johns that people’s feelings about their personal finances would be uppermost.

“Countries don’t collapse as a result of constitutional change. Look at the Czechs and Slovaks. It didn’t result in catastrophe. It’s a question of level, rather than collapse: are you better off or worse off?”

Scotland’s nationalist government has made much of the fact that the Scottish economy has performed more strongly during the downturn than the UK as a whole. Recent figures showed Scotland faring better than every UK region apart from London and the south east, which was seized on by the SNP.

But does the Salmond government deserve the credit? In his blog, Strathclyde University economist, Professor Brian Ashcroft, said the figures do not “support the view that Scotland’s relative economic performance has improved under an SNP government, which would be even better if Scotland was independent.”

Scottish passports

The Scottish government is keen to stress that an independent Scotland would not look radically different from day one. Scots would be issued with their own passports on the EU model, but border controls would not be introduced and Scotland would remain in the same timezone as England.

The English would continue to be able to board a train at King’s Cross and travel to Edinburgh, and vice versa, without being asked to produce an identity document.

“On social interaction, I cannot see how there would be very significant change,” said Prof Bell.

“People are used to having the freedom to move about and any restrictions would be deeply unpopular on both sides of the border, particularly in Scotland. Scots rely more on contacts with England than the English do with the Scots.”

Read more in Gary Gibbon's blog: Battle of wills begins on Scottish independence

NHS and policy

For centuries, Scotland has had a different education system from England, so there would not be any changes there. But looking at the NHS, an independent Scotland would be free to pay its doctors and nurses what it wanted, as long as it could afford the bill.

It would be in a position to decide on its own spending priorities and raise taxes to pay for these services.

“It is about being able to control the levers of fiscal policy,” said Prof Bell.

It is often assumed that a independent Scotland would follow a social democratic model, that it would be politically to the left of England. But Prof Bell said this would have cost implications.

“There’s a huge onus on the Scottish government to come up with policies for economic growth and growth in tax revenue if we want to have a social democratic state.”


The Scottish government wants to be able to levy a lower rate of corporation tax than the UK to attract inward investment. This could make it a more attractive destination, from a fiscal perspective, than England. But tax is just one of the concerns faced by business.

Prof Bell said: “One of the issues would be regulation. Would Scotland set up the equivalent of the Office of Fair Trading, Ofwat, Ofgem?

Would it set these up to regulate competition within Scotland? Businesses in Scotland would have a view about that. Will they end up with more regulation?”


One of the most dramatic changes would be the removal of Trident nuclear submarines from Scottish waters.

The Scottish government says hopefully: “Whether the remainder of the United Kingdom continued to retain a nuclear deterrent would be a matter for that state to decide.”

Prime Minister David Cameron has made it clear England would maintain a nuclear deterrent. But if Scotland is independent – where would the submarines be based?