While Britain reels over the continuing bad weather than has seen hurricane strength winds and almost constant rain for weeks there is another storm brewing in Scotland of a political kind, that of Scottish independence.
The Scottish government set out its plan for how Scotland would operate as an independent country, subject to a yes vote in this year's independence referendum. The 670-page White Paper on independence was hailed by First Minister Alex Salmond as being "Scotland's future in Scotland's hands".
The re-balancing of Scotland's economy, by increasing manufacturing, is noted as a priority. But should Scotland become an independent state, it may face some serious challenges.
In the last few days all parties in Westminster have said the pound may not shared with the Scots [D Mail].
Indeed with independence, Scotland may find itself not only politically independent but financially independent. This could create problems on both sides of the border with Scotland having to decide whether to join the euro or creating its own separate currency.
Some small business owners feel that independence would be an attractive proposition whilst others believe independence may come at a cost. "On the face of it, I would say with regard to small businesses it looks quite attractive," one business owner told the BBC in November as plans for a referendum were published. Another voice raised concern, saying, "Can the country really afford it?" [BBC]
At the end of the day it will be the Scottish people who will decide the direction they wish to go.
The Scottish government set out its plan for how Scotland would operate as an independent country, subject to a yes vote in this year's independence referendum. The 670-page White Paper on independence was hailed by First Minister Alex Salmond as being "Scotland's future in Scotland's hands".
The re-balancing of Scotland's economy, by increasing manufacturing, is noted as a priority. But should Scotland become an independent state, it may face some serious challenges.
In the last few days all parties in Westminster have said the pound may not shared with the Scots [D Mail].
Indeed with independence, Scotland may find itself not only politically independent but financially independent. This could create problems on both sides of the border with Scotland having to decide whether to join the euro or creating its own separate currency.
Some small business owners feel that independence would be an attractive proposition whilst others believe independence may come at a cost. "On the face of it, I would say with regard to small businesses it looks quite attractive," one business owner told the BBC in November as plans for a referendum were published. Another voice raised concern, saying, "Can the country really afford it?" [BBC]
Long fight for independence
Scotland joined the union in the early 17th century following the Anglo-Scottish Wars, a series of wars fought between the Kingdom of England and the Kingdom of Scotland. This culminated with the Union of the Crowns in 1603.
This was the last major battle between the two Kingdoms, but Scotland had been warring with England for more than a thousand years prior to this. Indeed one of Scotland’s most famous characters in history is Robert the Bruce who won a major victory over the English in 1307 at the Battle of Loudoun Hill. Robert fought successfully during his reign to regain Scotland's place as an independent nation, and even today he is remembered in Scotland as a national hero.
However battles continued between both countries for the next three centuries until Scotland eventually succumbed to English dominance.
Now after some 400 years Scotland may be reasserting itself. But this time the battle battle will be fought at the ballot box rather than in a battle field.
Scotland joined the union in the early 17th century following the Anglo-Scottish Wars, a series of wars fought between the Kingdom of England and the Kingdom of Scotland. This culminated with the Union of the Crowns in 1603.
This was the last major battle between the two Kingdoms, but Scotland had been warring with England for more than a thousand years prior to this. Indeed one of Scotland’s most famous characters in history is Robert the Bruce who won a major victory over the English in 1307 at the Battle of Loudoun Hill. Robert fought successfully during his reign to regain Scotland's place as an independent nation, and even today he is remembered in Scotland as a national hero.
However battles continued between both countries for the next three centuries until Scotland eventually succumbed to English dominance.
Now after some 400 years Scotland may be reasserting itself. But this time the battle battle will be fought at the ballot box rather than in a battle field.
Financial hurdles
For many Scots independence will be welcome. But economically there maybe many difficulties ahead. With Chancellor George Osborne having make clear that Scotland could not keep the pound, an independent Scotland will face many hurdles [BBC].
Speaking in Edinburgh, Osborne said, "The pound isn't an asset to be divided up between two countries after a breakup like a CD collection...If Scotland walks away from the UK, it walks away from the UK pound."
In such a scenario, an independent Scotland would be more exposed to risks from the "volatile" energy and finance industries according to some analysts.
However, it has been widely suggested that an independent Scotland would not be obliged to take a share of UK debts. This could be a contentious issue on both sides of the border.
The UK's national debt in January 2012 stood at £988.7 billion. This excluded bank bailouts. Scotland's GDP per capita is only slightly below the UK's average, standing at about 98.7% of the UK average, so it might be a reasonable approximation to divide this debt evenly by population.
Thus, given Scotland has a population of around 5.1 million of the UK's 62.2 million people, its share of the debt would be about £81 billion. However, UK debt has increased over the past two years and may rise further still.
Should an independent Scotland be obliged to pay off its past debts, there will undoubtedly be some resentment. Conversely, should Scotland be allowed to walk away from these debts, there may be just as much resentment down south.
For many Scots independence will be welcome. But economically there maybe many difficulties ahead. With Chancellor George Osborne having make clear that Scotland could not keep the pound, an independent Scotland will face many hurdles [BBC].
Speaking in Edinburgh, Osborne said, "The pound isn't an asset to be divided up between two countries after a breakup like a CD collection...If Scotland walks away from the UK, it walks away from the UK pound."
In such a scenario, an independent Scotland would be more exposed to risks from the "volatile" energy and finance industries according to some analysts.
However, it has been widely suggested that an independent Scotland would not be obliged to take a share of UK debts. This could be a contentious issue on both sides of the border.
The UK's national debt in January 2012 stood at £988.7 billion. This excluded bank bailouts. Scotland's GDP per capita is only slightly below the UK's average, standing at about 98.7% of the UK average, so it might be a reasonable approximation to divide this debt evenly by population.
Thus, given Scotland has a population of around 5.1 million of the UK's 62.2 million people, its share of the debt would be about £81 billion. However, UK debt has increased over the past two years and may rise further still.
Should an independent Scotland be obliged to pay off its past debts, there will undoubtedly be some resentment. Conversely, should Scotland be allowed to walk away from these debts, there may be just as much resentment down south.
The oil question
Alex Salmond has hinged much of his economic dream on North Sea oil. However, according to the latest monthly report from the Organisation of Petroleum Exporting Countries [Opec], the average oil output in 2013 from the North Sea registered its lowest level since 1977.
This represented a roughly 10% decline from the previous year of 90 thousand barrels per day [tb/d] and could undermine the arguments a number of Scottish nationalists regarding the North Sea oil and gas cash cow which would be available to Scots.
The revenues are significant, though the UK's Office for Budget Responsibility [OBR] predict oil revenue will drop from £6.7 billion in 2013 to £4.1 billion by 2017-18.
The bigger issue at hand is whether such reserves would willinngly be handed to an independent Scotland by Westminster. Under the present arrangement, oil tax revenues are assigned to an economic region set up by the UK government, which is called the UK Continental Shelf [UKCS].
This means that oil resources are not officially assigned to Scotland but instead to a region distinct from the British mainland.
But if Scotland were to become independent, and a sovereign state, it might expect the UKCS to be divided up on a "geographical" basis.
Westminster might try to negotiate a Median Line approach; drawing a dividing line on which all points are the same distance from the Scottish and rest of the UK coastline. This would be similar to the approach used to determine the boundary between Scotland and the rest of the UK for fisheries after devolution in 1999.
No discussion has yet taken place between the UK and Scottish governments on the detail of what would happen to oil revenues should Scotland achieve independence [BBC / Guardian / IBT].
Alex Salmond has hinged much of his economic dream on North Sea oil. However, according to the latest monthly report from the Organisation of Petroleum Exporting Countries [Opec], the average oil output in 2013 from the North Sea registered its lowest level since 1977.
This represented a roughly 10% decline from the previous year of 90 thousand barrels per day [tb/d] and could undermine the arguments a number of Scottish nationalists regarding the North Sea oil and gas cash cow which would be available to Scots.
The revenues are significant, though the UK's Office for Budget Responsibility [OBR] predict oil revenue will drop from £6.7 billion in 2013 to £4.1 billion by 2017-18.
The bigger issue at hand is whether such reserves would willinngly be handed to an independent Scotland by Westminster. Under the present arrangement, oil tax revenues are assigned to an economic region set up by the UK government, which is called the UK Continental Shelf [UKCS].
This means that oil resources are not officially assigned to Scotland but instead to a region distinct from the British mainland.
But if Scotland were to become independent, and a sovereign state, it might expect the UKCS to be divided up on a "geographical" basis.
Westminster might try to negotiate a Median Line approach; drawing a dividing line on which all points are the same distance from the Scottish and rest of the UK coastline. This would be similar to the approach used to determine the boundary between Scotland and the rest of the UK for fisheries after devolution in 1999.
No discussion has yet taken place between the UK and Scottish governments on the detail of what would happen to oil revenues should Scotland achieve independence [BBC / Guardian / IBT].
Growing economy
Scotland’s GDP stood at £148.73 billion in 2013, though this included revenues from North Sea oil and gas. But even aside from energy reserves, its GDP is strong.
When thinking of Scotland many have images of Whisky, haggis and lochness monsters. But Scotland also has a thriving economy currently growing at around 0.7% per annum.
Beyond its claims on North Sea gas and oil reserves, Scotland also does well in agriculture, banking & finance, the computing sector, construction, fishing, shipbuilding, textiles, tourism as well, of course the production of its most famous of exports, Scottish Whisky.
Indeed whisky is probably the best known of Scotland's manufactured products with exports having increased by 87% in the past decade and currently contributing over £4.25 billion to the UK economy. Indeed should the UK's Office for Budget Responsibility [OBR] be correct in its projected drop in oil and gas revenues, whisky may surpass profits made from North Sea Oil ! [Wikipedia]
Scotland will likely do well on its own. The difficulties it will face will be more a psychological one as the North-South divide becomes a little wide with a potential rift growing between the English and Scots once again.
Scotland’s GDP stood at £148.73 billion in 2013, though this included revenues from North Sea oil and gas. But even aside from energy reserves, its GDP is strong.
When thinking of Scotland many have images of Whisky, haggis and lochness monsters. But Scotland also has a thriving economy currently growing at around 0.7% per annum.
Beyond its claims on North Sea gas and oil reserves, Scotland also does well in agriculture, banking & finance, the computing sector, construction, fishing, shipbuilding, textiles, tourism as well, of course the production of its most famous of exports, Scottish Whisky.
Indeed whisky is probably the best known of Scotland's manufactured products with exports having increased by 87% in the past decade and currently contributing over £4.25 billion to the UK economy. Indeed should the UK's Office for Budget Responsibility [OBR] be correct in its projected drop in oil and gas revenues, whisky may surpass profits made from North Sea Oil ! [Wikipedia]
Scotland will likely do well on its own. The difficulties it will face will be more a psychological one as the North-South divide becomes a little wide with a potential rift growing between the English and Scots once again.
Forced to join euro?
Even without any real antagonism, England might feel even more isolated within Europe should Scotland join the euro. It would leave only Wales and Northern Ireland still using the pound, apart from a few outlying islands such as Guernsey, Jersey and the Falklands.
Scotland’s acceptance of the euro is a very real prospect, post-independence, at least according to some commentators. Writing in the Telegraph Andrew Lilico, an Economist with Europe Economics, and a member of the Shadow Monetary Policy Committee, suggests that Scotland would essentially be forced to accepting the euro if it wanted to remain in the EU due to financial rules already laid down.
Even without any real antagonism, England might feel even more isolated within Europe should Scotland join the euro. It would leave only Wales and Northern Ireland still using the pound, apart from a few outlying islands such as Guernsey, Jersey and the Falklands.
Scotland’s acceptance of the euro is a very real prospect, post-independence, at least according to some commentators. Writing in the Telegraph Andrew Lilico, an Economist with Europe Economics, and a member of the Shadow Monetary Policy Committee, suggests that Scotland would essentially be forced to accepting the euro if it wanted to remain in the EU due to financial rules already laid down.
At the end of the day it will be the Scottish people who will decide the direction they wish to go.
tvnewswatch, London, UK
No comments:
Post a Comment