Never has it been a better time to join the new AS Economics course, with all the news of Scotland’s independence dominating news headlines. The classroom is buzzing with debate on the economic impact of possible independence, and we students are experiencing first –hand perhaps the making of history!
It is difficult to say what the outcome of the vote will be tomorrow morning however; there are some key questions which are being asked by many regarding what will happen if the Scottish are to gain independence. Here are a few of these questions:
Currency and finance
Mark Carney, the governor of the Bank of England claimed that a currency union would not be possible with an independent Scotland however Alex Salmond says this argument is a bluff. If an independent Scotland is denied a currency union, the government said it will refuse to take on its share of UK debt.
Banks such as RSB and the Lloyds Banking Group warn of a possible re-location to London if Scottish voters back breakaway from the UK. This means that Scotland could lose a large amount of its financial sector. The movement of the headquarters of such large banks would also make it harder for home owners in Scotland to get a mortgage.
Prices in Scottish branches of Waitrose and John Lewis may rise to be more expensive than the rest of the UK. Over 130 businesses have signed a letter implying they are in favour of staying united with the rest of the UK. However, over 200 business figures have signed an open letter backing independence.
Will an independent Scotland be able to re-join the EU?
Most probably yes, however it will not be as quick and easy as it is claimed the SNP. Missing out on the EU will have a significant impact on the free movement of trade, people and capital!
North Sea Oil
Scotland is one among the 20 wealthiest countries in the world and this is partly due to its vast oil wealth. It is also argued that there will be better investment in Scottish businesses if the country is independent. North Sea oil has always been seen as crucial not only to employment and tax revenues but to the whole viability of Scotland as a thriving and nation state.
Ayeisha Vaze and Shabnam Golestani
L6th AS Economics students