An independent Scotland could “free ride”

The BBC’s economics editor, Evan Davis, has a good article in his blog on the economics of Scottish independence. He basically states that the revenue from North Sea oil and gas an independent Scotland would enjoy equals the funding it currently receives from Westminster. So when, in the not too distant future, the oil runs out, an independent Scotland would face hard times unless it had managed to reform its economy drastically before that happened. The Scottish National Party’s idea that oil money could be put into an endowment fund for the future, as has been done in Norway, wouldn’t work as the money is needed now to pay for public services. (And while they may claim that the UK government has squandered the oil revenue, could the SNP honestly say that they would have done any differently in the 1960s or 70s?)

One point that particularly caught my eye is where Mr Davis says that Scotland would save money on defence as it could “free ride on the defence of its neighbours”. In other words, no-one would want to attack unimportant little Scotland, but even if they did, Scotland’s European neighbours, including the United Kingdom of England, Wales and Northern Ireland, would jump to defend it. And of course, the rather left-wing SNP would have no interest in taking on peacekeeping or other internationally important roles, as their record in opposing the UK’s past involvement shows.

The defence issue reminded me of a television debate some years ago, where the SNP leader, Alex Salmond, was arguing that Scotland currently pays too much towards diplomatic representation overseas. The questioner had suggested that Scotland would have to foot a larger bill for its embassies after independence. But of course, an independent Scotland would have no intention of opening many embassies (probably just a few in counties where they would earn the most prestige). The SNP would be safe in the knowledge that citizens of the European Union are entitled to use the embassies of any EU member state, so no doubt Scots in trouble abroad would run to the UK embassy where they could be sure of friendly, English-speaking assistance. As with defence, Scotland would be saving money by using services paid for by the UK or other European countries.

There is some debate as to whether Scotland would automatically be an EU member, but opinion in the discussion following Davis’s article seems to be that Scotland and the remainder of the UK would both retain their membership. An independent Scotland would certainly become a net recipient of EU funding, initially at least. This contrasts with the UK, which is currently a net contributor to the EU’s budget. While “euro-sceptics” complain about this, I see no harm in contributing towards a more stable Europe by helping the poorer parts of the continent to develop. However, a Scotland that insisted on being independent from the UK, but still accepted its money, would seem quite hypocritical.

In a partnership, it’s best not to analyse who contributes the most financially. We are better off culturally and economically together, and there is no cause to complain about Scotland’s current funding arrangements. But an independent Scotland would be a different matter entirely, and I could foresee a great deal of resentment in the UK if Scotland was to thrive on payments from the country it no longer wanted to be part of. And wouldn’t the Scottish people feel ashamed of living off hand-outs?

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