FEATURE
Overall, the SNP want to emulate the
Scandinavians, with countries like
Norway, Iceland and Sweden, continually posting highly on the Human
Development Index, providing its citizens with high living standards and
access to basic life sustaining goods.
Integrating a model of free university
tuition, free child care and better
pensions along with an economy of
large economic activity, the SNP beability for Scotland to use an imlieve they will hold the reigns to a
portant
economic
policy
tool
prosperous new state.
(monetary policy) would be lost. The
Economic Reasons against main problem is that countries grow at
different rates and are separate stagScottish Independence
es of the economic cycle. With the
Even with independence promised,
potency that interest rates have in inthe road to economic prosperity is
fluencing aggregate demand, the
long and hard, and without the UK to
Bank of England may set high interest
guide the way, Scotland may find
rates to curb England’s housing bubitself small and vulnerable. Oil is a
ble and reduce inflation, while Scotvolatile market for Scotland to be
land require lower interest rates to
pinning its hopes to. Shifts in global
boost economic growth. The same
commodity prices may mean on the
issues would arise if Scotland were to
one hand Scottish tax revenues may
adopt the Euro. This would leave
rise, on the other plummeting prices
Scotland with the large transitional
would see not only receipts fall but
costs of establishing their own
also extraction of oil for domestic use
currency.
too. [This could force the nation to
buy more energy imports decreasing The worst loss that Scotland could
face would be the annual ‘subsidies’
the wealth of the nation].
they would lose from the UK governIndeed, one problem quickly leads to
ment. Every member of the union are
another and that problem is money.
allocated a set ‘subsidy’ from the UK
Recent news dictates that all UK parfor its own public spending plans.
ties: Conservative, Labour and LiberFrom the ‘New Statesman’, Westminal Democrats will block a move that
ster pays every year £10,212 to the
would see Scotland retain the pound
people of Scotland, approximately
sterling.
£1,624 more than the people of EngInstead it seems Scotland is being land per head. Dodging round the popushed closer to the somewhat por- tential patriotic row over who detrayed Euro trapdoor, where under- serves what, the fact of the matter is,
neath lies the economic corpses of with independence, political fractures
countries gone by. If Scotland were say these subsidies will dry up. The
to retain the pound the Scotland’s end of such funding may mean the
base rate (the rate at which commer- end of Scotland’s promised free unicial banks can borrow from the Cen- versity places, medical prescriptions
tral Bank) would be controlled by and highly subsidised trains and
The Bank of England. Therefore, the health care.
P.3
Conclusion
Scottish nationalists argue that their
oil and gas revenue to the UK government has been covering the subsidy bill for years and will not be
affected if it goes away. However,
there has to be a time when Scottish government realise their reserves are not renewable. North
Sea oil is being reduced by 6% a
year for the last 10 years, with
claims the richest reserves are already gone. It is scarcely imaginable how Scotland could possibly
replace such an asset when all the
oil dries up.
On the whole, a cost-benefit
analysis is surely in order. The opportunity to call oneself an independent country and to be able to
manipulate policies to how one
sees best is irreproachable. However, this leap of faith carries huge
risk. A liberated, free Scotland,
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