The view of a poor, dumb colonial.
Suppose the Scottish referendum next week goes in favor of independence. What would be next for Scotland?
Among the complexities of separation is the matter of pensions provided by employers. Most such pensions are not fully funded; although, most such pension providers have apparently viable plans for curing the shortfall, over some number of years. However, the EU (and we’ll assume Scotland succeeds in joining the EU for this bit) requires all pension funds with members in two or more countries to be fully paid up. Moreover, funds that are not have only two years to get fully paid up. There are quite a number of large-ish UK companies, employing thousands each, whose pension funds have members in both countries, and whose pension funds are on one of those “some number of years to fund” plans.
There’s some chatter in the UK about splitting the pensions in two, one for the UK and one for Scotland, as a means of ducking this problem. I see a possibility of splitting the companies themselves in two, each with its own pension scheme. Either course, though, is fraught with complexity.
A larger complication is the UK national debt, some £1 trillion ($1.62 trillion): how would this be divided, and based on what criteria? I’ll elide whether the new Scottish economy could handle its new debt.
That sort of thing is trivial, though, compared with a couple of larger questions. Scotland has some serious economic problems, including that debt, a risk of sharp inflation, lack of clarity on what it would use as a currency, what sort of trade arrangements a settled-on currency would imply, and so on.
The economic problems will have their impact on independent Scotland’s near- and mid-term stability.
Too, accession to the EU requires a unanimous vote of the existing members, and that’s not a done deal. Which means Scotland would not be able to count, soon, on any EU…assistance.
Frankly, I think Scotland would be better off outside the EU than in it (recall the EU’s treatment of Ireland and Iceland), but this is a move Scotland has to make, and properly so, without my sage advice.
Regardless of EU membership and those “larger problems” just mentioned, though, independent Scotland will need to broaden its economy. 80% of its national income is from North Sea Oil which, aside from questions of how to divide that with the UK, is a declining asset value [sic], and the bulk of the remaining 20% is from tourism. A self-sustaining independent Scotland will need a more broadly based economy in order to function without the UK subsidies it currently gets.
Finally, I don’t know that Scotland would be better off independent from the UK. Certainly, there are advantages for a nation that’s free to chart its own course without having to say, “Mother, may I” to a higher-up. I think, though, given Scotland’s socialism and those subsidies, the UK would be better off with an independent Scotland.
The aftermath also will be fun to watch. Northern Ireland? Catalonia? Basque Country? Sicily?