We asked a number of influential JLA speakers what they would expect to happen in economic terms if Scotland votes to go it alone. Given the claims and counter-claims emanating from the rival camps, we started with the most fundamental question…
What’s the state of the Scottish economy?
Doug McWilliams, Executive Chairman, Centre for Economics & Business Research:
Outside the oil sector, Scotland has lagged behind the UK economy for most of the past 30 years. But since the start of recession its relative performance has caught up. This might seem surprising, given the damage to Scottish banking, but it partly reflects the fact that Scots became less indebted than others in the UK. Meanwhile consistently high oil prices (though production is now declining) have meant that the oil sector continues to boom. Because extraction is increasingly in more complicated fields, the knock-on effect from oil remains strong. As for the referendum, what the business community fears most is an inconclusive result – particularly a ‘No’ vote with a small majority that would keep the issue in play almost continuously.
Would a ‘Yes’ vote make a difference to the UK economy?
Lord Lamont, Former Chancellor of the Exchequer:
I hope it doesn’t happen. In my view it would be disastrous for Scotland. At present it looks unlikely, but of course opinions can change. If there were an unexpected ‘Yes’ vote it might have a knock on confidence in the UK, but no real long-term effect.
David Smith, Economics Editor, The Sunday Times:
I think it would make a difference, in both the short and long-term. The challenges for Scotland are greater, but the end of the United Kingdom as we know it would reduce our international clout – and complicate monetary and fiscal policy at a time when we do not need it.
What would the future bring for an independent Scotland?
Paul Johnson, Director, Institute for Fiscal Studies:
Scotland could of course afford to be independent. Unlike Wales it’s just as rich as the rest of the UK. But it is subsidised by the rest of the UK, it would face very big fiscal questions and it would need to respond to them if it did become independent.
Bill Jamieson, Former Executive Editor, The Scotsman:
The biggest issue is bank and financial sector regulation, tax and pensions, and the workability of the joint currency proposal. If such an arrangement proves impossible, Scotland would either have to adopt the Euro or launch its own currency – which wouldn’t go down at all well with voters or business.