Costs of Scot independence for England

In a matter of weeks, voters in Scotland will choose to embark on the biggest constitutional shakeup that the country has seen for more than 300 years.

It is almost clear what this country would call itself after independence. The country leaves behind; few even have a clue of what that would be called. How would the remainder of the United Kingdom perform in the negotiations over the treaty after separation? Would it hold together as a country without the bits dropping off? Would it be a poorer country? Would it be a more right wing country? And how would the rest of the world look at it after Scotland had left?

For Britain, Many agree that a separation could be a high speed relegation to a lower world league. It is even predicted that it would be the most momentous damaging blow to the remaining of the UK since the fall of the empire and Suez loss. By the way, a new chapter could open in the politics of the remainder state.

Upon separation of Scotland, the English and the Welsh will inevitably find themselves weakened in the IMF, the G7, the G20 and in every international gathering that there is. It could bring a whole series of destabilizing constitutional crises in Westminster if Scotland votes for independence. In the 2015 elections, Scotland will be electing MPs to sit in the Commons, but they could be living dead zombie status MPs out the door as soon as 2016 separation negotiations are finished. If those Scottish MPs helped to elect a Labour majority government, overnight that labour government becomes a more precarious minority one.

If Scotland leaves, Westminster will never see a majority labour government again. Currently, the labour has a stronghold on Parliamentary seats in Scotland. Without those 40 odds seats in Scotland, the Labour’s chances of being the leading party, let alone an absolute majority in Westminster, would take a big hit. However, Labour tries to take pride in posture arguing that there are more than enough seats in England and Wales, which labour has historically wanted at times to sustain a Labour government. Nevertheless, the damages to England due to separation of Scotland won’t be restricted to such issues.

Upon independence, Scotland would try to lure investment over the border, thus there would be economic pain for the North of England. Scots would compete very ruthlessly to attract more investment.

Meanwhile it is predicted that the Scotland won’t be the last bit of the old UK to drop off, and it could start a trend. Welsh Nationalists would relish the present and for some in Northern Ireland darker taught would prevail. The Scottish independence could mean the unraveling of the Good Friday agreement. It will certainly send a signal to those who wish to unravel the agreement. At the moment, it is impossible. Technically, the Union is settled, and the constitution looks stable. However, Scotland separation and inevitable revision of the old United Kingdom constitution could trigger a tide of revisionist ideas all across Northern Ireland.

Whether London likes it or not, the Scottish independence and in broader term, Scottish referendum will turn to a blueprint for what happens next in the other parts of the United Kingdom. If Alex Salmond’s gamble pays off, there will be a whole lot of people across Britain looking at the vent, asking: “is there something in there for us? Could we use this?” Who would come out on top in the treaty negotiations that would follow a yes vote? Cameron insists no one is preparing for them in London while pro-independence campaigners are already sharpening their opening bids for a long time.

The land border between Scotland and England isn’t disputed. It simply runs along the fence. What is disputed is the maritime border. In the late 90s, the government in London decided to redraw maritime borders. It was supposed to draw along the land border, but London decided to curve in 60 miles to the north, taking in a few oil wells along the way. Who Benefits of North Sea oil is a fundamental question. Who gets the money has been influencing politics in Scotland for the last 30 years, and it is essential to the nationalist argument. Scots have it right on their doorstep with nearly half a million people working in the industry, making it a bigger oil producer than Kuwait. They have long argued that an independent settlement should grant Scotland at least a 90% share of revenues from the lucrative North Sea oilfields. There are nearly 40 different wells (284 platforms) producing oil offshore Scotland.

The British mainstream media leaning towards No campaign, try to draw the Scottish independence movement as a greedy tide fuelled by the smell of oil revenue. However, in reality, there seems to be much more than that in the Scots vision. They dismiss the accusation arguing that the case for a self-governed Scotland has been a bold issue for almost 100 years. 1967 was the first breakthrough in political modern times in Scotland, which was well earlier than the time oil was first pumped up in the North Sea. In other words, oil revenue gives the separatist argument more economic credibility and produces economic confidence, in contrast to the claims that the oil creates the Scottish nationalism. Upon exploration of oil, it was seen as the future. a future free from the crippling prices imposed by OPEC.

This explains why North Sea oil was so important to Britain in 1975. However, the government clearly didn’t expect it to last long. The government papers from the1970s stated that the North Sea will be exhausted in the 1990s. Oil producing companies estimate that there are up to 30 billion barrels of oil left. Moreover, oil experts believe that there are still parts of the UK continental shelf that has never been examined at all, and there is a lot to go for. There are still huge amounts of oil, and gas reserves left in the North Sea and the wider UK continental shelf. It is predicted that Scotland would be exploring and extracting oil and gas for the next four decades and may be beyond that. All this sounds like a very good news for Scotland. As long as the price is rising every barrel on the ground is becoming more valuable, so it makes perfect economic sense to go after it.

Alex Salmond is an economist of oil as well as a politician and former economist at the Royal Bank of Scotland. He launched an index to track Scotland’s oil industry, and the bank is still using it today. According to the Scottish first-minister, Scots can safely assume that the average price of oil and gas for the next 30 years is going to be substantially higher. North Sea oil pumps billions into the Treasury’s coffers. It starts with the license that companies have to buy to find the oil. The licences can cost anything from a few thousand pounds to a few million.

Then there is the tax. Since 1968, the oil companies have paid up to £230 billion tax in today’s money on the oil that extracted. Add to this the corporation tax, which is about £4.8 billion a year. Then there is a supplementary charge, a tax by another name. That adds up to £3.4 billion annually. But it doesn’t stop there. Some oilfields have an extra petroleum revenue tax charged on them that could be another £1.7 billion. That’s all just paid to pump oil ashore. Taxation process starts again when the crude is refined as petrol, diesel or kerosene. Then there are fuel duty and VAT, which bring in roughly £30 billion a year. In Britain, for every one pound you spend at the pump 65p goes on tax. Making the British motorist the most highly taxed in Europe.

Who benefits from such huge revenue is a fundamental question. Who gets the money has been influencing politics in Scotland for the last 30 years, and it is essential to the nationalist argument even now. Legal experts predicted a dispute over the oil, and the maritime borders could run for up to 10 years.

At the end of the day much is at stake for Britain. If Scotland were to offer independence, the departure would be extremely disruptive in England, particularly at a time of economic meltdown. Should the Scots vote yes for independence the quarrels over mentioned issues would be only a few of the many points of contention. Security, the head of state, military resources, Trident Bases as well as the question of what currency would be used are not easy questions both governments need to answer. Could SNP score and dictate its terms to London?