This September, the ballot to vote on Scottish Independence will be held. Scotland’s North Sea possesses a great amount of oil revenue for the United Kingdom, which poses a threat to the United Kingdom if Scotland were to become independent. What does this mean economically and politically for the country of Scotland, the United Kingdom, and the European Union? A lot of uncertainty. The rarity of the creation of a new state in Western Europe poses a lot of questions that economists do not know the answer to.
The only relatable occurrence of this type of independence in the past is when Ireland became independent from the United Kingdom in 1922. Ireland was forced to take on some of Britain’s debt, and defaulted on some of the debt ten years later. It took decades for Ireland’s economy to gain financial stability, and unrest between the two countries lasted for years to come. The oil reserves that Scotland currently shares with the United Kingdom will spark debate, as well as the current debt Scotland shares with the United Kingdom.
In past examples, becoming independent is a lot easier politically than it is financially or economically. The independence will change the United Kingdom political spectrum greatly, because in the House of Commons there is only one Conservative Member of Parliament from Scotland, but forty one Labour Members of Parliament from Scotland. This will cause the Conservatives to have a majority in the House of Commons and will likely create a Tory Government. Many United Kingdom Labour Members of Parliament are strongly opposed to the independence solely due to this.
So what is going to happen to Scotland if it achieves its desired independence from Britain? Is this a good idea for either Scotland or the United Kingdom?