March 29, 2024

​The votes are in: How ‘yes’ vote will change Scotland’s economy

Reuters / Paul Hackett

Reuters / Paul Hackett

The votes are in and being tallied. Will Scotland become the new Scandinavia or a failed state if it achieves independence? Here is a look at what happens to Scotland’s economy if it votes ‘Yes’ to become an independent country.

If the referendum is successful, Scotland will become an
independent country on March 24 2016, which will be the 309th
anniversary of its economic and political union with England.

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Scotland’s $250 billion economy will be forced to break its many
financial ties with Britain’s $2.5 trillion economy, which the
Nationalists have campaigned as economic freedom, and the ‘Better
Together’ side say spells economic ruin for the Scots.

A survey by a UK-based financial service company that polled 200
fund managers in Britain said Scotland faces“decade of
economic decline”
if it votes ‘yes’. It found that 63
percent of those polled believe Scotland’s economy will be weaker
for the next 10 years if it breaks away from Britain.

Britain’s major political parties have promised
Scots more autonomy over tax and welfare spending if they choose
to stay in the United Kingdom.

The business community, both in London and in Scotland, has
mostly thrown their support into a “No” vote, warning that
Scotland’s ties to London are too integrated to risk harming. But
more than 200 Scots business leaders have also expressed their
support for independence, arguing than
London-centricity is unsustainable
.

Here’s a brief outlook of what independence means for the
Scottish economy:

– Scots would begin to set out their own fiscal policy, separate
from the UK

It will need to decide
on the future of its currency. The options available include
keeping the pound – either with or without permission,- adopting
the euro or adopting a new currency

– It stands to lose
£65.2 billion in UK public spending

– The Scottish
government may assume a 90 percent share of UK oil revenues,
which in 2013 were £6.1 billion, but are expected to fall to £4.7
billion in 2014

– An independent Scotland could claim part of the UK’s £7.8 billion gold
reserves

– Like Norway, an independent Scotland would set up an oil fund
to manage North Sea-generated oil revenues. A major challenge
will be the variability and predicted fall in oil prices

– Gas, electricity, postal service and other state services would
shift to Scottish authority

– Banks like Royal Bank of Scotland and Lloyds Banking Group may
switch headquarters to London

READ
MORE: UK banks prepare ‘Yes’ vote contingency plans


Article source: http://rt.com/business/188720-economy-scotland-yes-vote/

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