Category Archives: The Scots

The wages of Scottish independence – infrastructure

Geographically Scotland is very isolated. It is a stranded at the top of mainland Britain with a single land border with England. Any goods or people coming and going to Scotland have a choice of independent access by air and sea or dependent entry and exit via rail and road through England.

Why does this matter? Two reasons: Scotland cannot assume free passage for goods and people through England in perpetuity. They might not have it immediately after independence if Scotland is unable to gain EU membership, either because the reduced UK (henceforth the UK) opposed it or the other EU members did. Alternatively the UK (or England on its own) might leave the EU. It would also be in the UK Government’s hands
to impose its own restrictions on the free movement of Scottish imports and exports.

In any of these eventualities Scotland would be severely hampered in its importing and exporting. EU law would prevent the free export of Scottish goods to and through the rest of the UK if Scotland was not part of the EU and to the EU through the UK if the UK did not remain in the EU. If the UK did not remain in the EU, exports to Scotland from the UK would also be subject to EU protectionism and even goods from the EU could become subject to tariffs and quotas if they passed through the UK. As for the UK Government taking steps off their own bat to impose restrictions, that could be a real possibility if the UK left the EU, either in retaliation for EU imposed restrictions on UK trade with the
EU or EU restrictions on the movement of goods to and from the non-EU nations of Europe to the UK . There might also be disputes between the UK and Scotland which could result in restrictions, for example, Scotland failing to pay the interest on their share of the UK National debt at the time of independence or Scotland operating too lax an
immigration policy resulting in immigrants coming into Scotland with the intention of moving across the border to England.

The precarious geographical situation of Scotland shows the importance of it remaining on good terms with the UK in the event of independence. But it also means that the UK would have no incentive in improving railways and roads right up to the Scottish/English border. In the UK it may make sense for political reasons to build a high speed rail line from London to Glasgow and Edinburgh as is presently under discussion (http://news.scotsman.com/edinburgh/Scotland-must-be-on-new.6606935.jp),
although the proposed HS2 route is being fiercely resisted by those parts of England through which it will wend on its way to Scotland (http://www.rail.co/2011/01/31/why-britain-needs-hs2/). But if Scotland were independent , at best it would make no political sense for the UK to extend such as line further than Carlisle, a city ten miles short
of the Scottish border and 70 odd miles from Glasgow. More likely than extending the high-speed line to Carlisle would be a decision to extend it no further than Manchester, a city 170 miles from Glasgow. The same reasoning would be likely to apply to all rail and road access between England and Scotland, because there would be little benefit to the UK in improving the links right up to or anywhere near the Scottish border.

But even if the UK was willing to improve railways and roads up to the Scottish border, it is doubtful whether an independent Scotland could afford to extend the links to Glasgow and Edinburgh. HS2 if it ever gets built will cost tens of billions of pounds (http://stophs2.org/news/2368-hs2-bill-1000-family). A substantial part of the line, around a fifth of its length, would be in Scotland if it runs to Glasgow and/or Edinburgh. Bearing mind that Scotland’s GDP at present is less than £140 billion (in 2009 it was
officially estimated at £131 billion – http://www.scotland.gov.uk/Publications/2011/06/21144516/5), it is difficult to see how Scotland would fund the construction, maintenance and running of the HSE on their side of the border.

Poor communications, external and internal, would not hinder only Scottish exports and imports of goods . It would also adversely affect large sections of the private enterprise part of the Scottish economy such as tourism and dissuade talented individuals from coming to work in Scotland or businessmen to invest there. Poor infrastructure generally would be a disincentive to individuals and businesses. Existing well qualified individuals and companies located in Scotland might well decide to move elsewhere.

But infrastructure is about much more than main roads and rail links to major cities. An independent Scotland would have to fully fund all new capital projects in Scotland including the rail and road network over the sparsely populated highlands and islands, and maintain the existing networks. This would not be easy to do even under the present devolution arrangements because Network Rail (which has responsibility for the
railway in Scotland) is projecting considerable cuts in funding (http://www.guardian.co.uk/business/2010/may/31/rail-industry-prepares-for-public-funding-cuts)

Amongst other things, an independent Scotland would also have to build new schools, universities, prisons, law courts and hospitals and maintain the old ones; prevent coastal erosion (a considerable task with such an extensive coastline for such a small population); fund most the local council’s infrastructure spending and maintain state-owned Scottish Water infrastructure . Of course much of this is already done via the UK Treasury block grant Scotland receives each year, but thereby hangs a tale: in the first ten years of devolution public spending in Scotland increased dramatically. Now it is due to fall, viz: “In the last decade, Scottish Government departmental expenditure has grown by over 5% a year on average in real terms. It is projected that between 2011/12 and 2014/15 it could fall by an average of 2.9% in real terms per annum and be £3.5 to £4bn lower.” (http://www.scdi.org.uk/downloads/SCDIBlueprintforScotland.pdf). That is the official estimate in the event of Scotland remaining within the UK with all the benefits that provides, such as assurance for business investors that Scotland is effectively underwritten by England and a massive annual subsidy from England. (Shortly before Labour left office in 2010, the monetary benefits to Scotland since devolution in 2000 were calculated by the Scottish Secretary Jim Murphy’s office at £76 billion, that is the difference between tax raised in Scotland and public expenditure in Scotland since 2002 – http://www.scotsman.com/news/Scotland39s-76-billion-39devolution-dividend39.6009619.jp).

In short, infrastructure spending in the ten years since devolution has taken place in the most benign economic and fiscal circumstances. Those circumstances would not exist come independence. Indeed, they would probably be far worse by the time independence was reached because according to the Murphy report the tax deficit is already at dangerous levels : ‘… an examination of “real money” government expenditure that excludes capital spending, Scotland Office economists found total expenditure in Scotland currently amounts to 145 per cent of all Scottish tax receipts.”

An independent Scotland would find itself immediately saddled with a massive national debt as the result of taking on a proportionate share of the financial obligations of the UK at the time of independence (this would be in excess of £200 billion – https://englandcalling.wordpress.com/2011/06/02/the-wages-of-scottish-independence-public-debt/), further debt in the shape of PFI contracts for work undertaken in Scotland
and local authority debt. On the other side of the fiscal ledger, the tax base in an independent Scotland would shrink because of the unhealthy proportion of its GDP which is dependent on public spending (https://englandcalling.wordpress.com/2011/05/19/the-wages-of-scottish-independence-public-sector-employment/) and the receipts from oil in Scottish waters would not compensate for the £8 billion pa Scotland receives in extra funding from the UK Treasury because the per capita funding is around £1,500 per head higher in Scotland than it is in England. The oil is also a rapidly declining asset. (https://englandcalling.wordpress.com/2011/05/14/the-truth-about-uk-oil-and-gas/).
It is also a fact that Scotland has a dangerously narrow private sector being far too dependent on oil, Scotch whisky, material and tourism. This means it could easily be blown off course by a sudden change of fortune in one of the main revenue earners .

With additional costs and tax revenue falling, it is improbable in the extreme that Scotland’s infrastructure could be maintained at its present level let alone substantially improved. Nor is there any reason to believe that an independent Scotland would be wise in its use of money for infrastructure investment. The Scottish parliament was estimated to cost £40 million and cost £414 million (http://www.parliament.uk/documents/commons/lib/research/briefings/snpc-03357.pdf) and a tram scheme in Edinburgh which bids fair to waste £750 million with
precious little to show for it (http://scotlandonsunday.scotsman.com/comment/Edinburgh39s-disgrace-II-Tram-fiasco.6783582.jp). Those are serious amounts of money for an economy the size of Scotland. A massive like England could shake them off, but a few fiascos of this magnitude could seriously damage Scotland.

The likely outcome for infrastructure in an independent Scotland is more ridiculously expensive projects, less of it and worse maintained.

The wages of Scottish independence – the currency problem

The most problematic decision for an independent Scotland is the currency. There are three choices: to keep using the pound, join the Euro or create their own currency. If they choose the pound or Euro they will not be truly independent because they will have to relinquish control over a large slice of Scotland’s fiscal policy. True independence
would require the creation of a new currency.

If Scotland chooses to stay with the pound, as things stand they would l be subject to the
decisions about interest rates made by the Bank of England (BoE). It is improbable that the Westminster Government would change the present regime to suit an independent Scotland, and any change, for example, returning control of monetary policy to the Government from the BoE’s Monetary Policy Committee (MPC) or the alteration of the MPC’s remit, would be made to suit the UK Government not Scotland.

The MPC’s present remit is to keep inflation under control around a 2% target:

“ The Bank’s monetary policy objective is to deliver price stability – low inflation – and, subject to that, to support the Government’s economic objectives including those for growth and employment. Price stability is defined by the Government’s inflation target of 2%. The remit recognises the role of price stability in achieving economic stability more generally, and in providing the right conditions for sustainable growth in output and employment. The Government’s inflation target is announced each year by the Chancellor of the Exchequer in the annual Budget statement.”

(http://www.bankofengland.co.uk/monetarypolicy/framework.htm)

The MPC has ignored that remit since the recession began in earnest in 2008, leaving
inflation to look after itself by first reducing Bank Rate to an all-time low of half a per cent and then keeping it there. Ostensibly this has been done because of fears of a severe shrinkage in the UK money supply. In addition, to boost the money supply the BoE has engaged in what is politely known as Quantitative Easing (QE) and impolitely known as printing (virtual) money. A cynic might say that the reason the MPC and the BoE have behaved in this fashion is to covertly do the Government’s bidding, namely, (1) preventing
a wholesale collapse of house prices through massive defaults caused by keeping Bank
Rate at a sensible, much higher, level and (2) reducing public and private debt by inflating it away. Whatever the truth, the management of the economy since 2008 illustrates an important truth: whoever controls the currency to a very great extent controls the politics of a country.

If an independent Scotland opted to keep the pound, when shove comes to push they would have to accept whatever Westminster decided, not only from the direct
management of the economy through MPC decisions and strategies such as QE, but also
the effects of the general fiscal regime decided by Westminster which would affect the value of the currency. This would include the tax regime in the UK and Westminster’s attitude towards debt, especially private debt. It is not inconceivable that credit controls such as those which existed before Thatcher removed them in the 1980s could be re-imposed, for example restrictions on bank loans and mortgages.

There are also dangers for the rest of the UK if an independent Scotland is tied to the pound. One of two arrangements would exist: either no Scots say in how the Westminster Government acts (probable) or some arrangement by which Scotland would have
a formal say in the setting of interest rates (improbable). Whichever it was you can bet the Scots Numpty Party (SNP) would complain that interest rates are set to benefit England.
That would create a danger that politicians in Westminster would give some
ground to them even if there was no reason to do so. If you doubt this reflect on the fact that David Cameron has not laid down any conditions for Scottish independence merely said that he would campaign against it. (http://englandcalling.wordpress.com/2011/05/06/scottish-independence-yes-but-only-on-these-terms/). If the Scots do vote for independence , it is not probable that negotiations between the SNP and Westminster would result in the Coalition Government giving a great deal away to the SNP in the vain hope they can cobble together a deal which allows them to pretend the UK as presently territorially constituted still exists in some form. This is an issue which needs to be aired in public as often as posssible.

More fundamentally, the division of a currency between two supposedly sovereign states would create uncertainty in the money markets because it would not be clear who was pulling the strings or what would happen if Scotland got into the sort of economic trouble
Greece is currently experiencing. The danger for the UK would be that Scotland would get into such a financial mess that the rest of the UK (in reality England as both Wales and Northern Ireland are economic basket-cases) would come under immense pressure to bail Scotland out, exactly the predicament the richer EU countries have found themselves in over the Euro turmoil. Even if Scotland did not suffer a Greek-style economic collapse;
if it turned out to be church-mouse poor http://englandcalling.wordpress.com/2011/05/06/scottish-independence-yes-but-only-on-these-terms/) rather than the oil-tax El Dorado which fills the dreams of SNP members, that would have a serious effect on the behaviour of the currency, because the money markets would look at the combined economic performance of the UK and Scotland. That would mean UK Government borrowing would cost more. It would also probably mean higher Bank Rate than would otherwise be the case or higher inflation in the BoE kept rates low despite what the economic indicators were saying.

The Euro poses the same problems as the retention of the pound writ large. Whether the Euro will survive in its present form or even at all is uncertain. But even if it does manage to overcome the present difficulties which besiege the currency, it is dubious whether the richer Euro members, especially Germany, would welcome into the Euro fold another small country with a dangerously high dependence on public spending, much of which
would vanish at independence. However, if Scotland did gain membership of the
Euro, its government would have absolutely no effect on how the currency was managed and would be much more likely, because of the number and diversity of the Euro members, to find itself trapped by interest rates and the value of a currency which was not suited to Scotland’s needs than they would have been if they kept the pound ,
a stable, important currency which has been shared between Scotland and the rest of the UK for 300 years. The present mess that Ireland, Portugal and Greece find themselves in should be warning enough of these dangers.

The other problem with being in the Euro is the likelihood of ever more invasive powers over economic decisions such as oversight of banks being given to the Eurozone members . Even as things stand, in theory at least there are severe restrictions on the amount of public debt a Eurozone member may run up. The current Euro crisis is bringing ever louder calls for much more stringent controls over what Euro members can
do and meaningful enforcement of Euro regulations. Scotland would have far less fiscal freedom if they joined the Euro than if they retained the pound.

That leaves the creation of an entirely new currency. This would give Scotland fiscal freedom, but would come with its own vast problems. Getting international credibility for a currency is difficult for a large country with vast natural resources (think of Russia after the dismemberment of the Soviet Union); it is much more difficult for a small country (Scotland has a population of around 5 million) even one with still substantial oil reserves.

An Independent Scotland would not seem an attractive economic proposition to foreigners. Around 60% of current Scottish GDP is derived from public expenditure and this is projected to rise to nearly 70% by 2012 (http://www.telegraph.co.uk/news/uknews/scotland/4217793/Scotlands-dependence-on-state-increasing.html). Much of the public expenditure is dependent on a subsidy from England (the difference in per capita Treasury funding alone means Scotland takes around £8,000 billion from England each year – (http://englandcalling.wordpress.com/2011/05/06/scottish-independence-yes-but-only-on-these-terms/) and the likely tax revenues from oil and gas in Scottish waters (some of the oil and most of the gas is in English waters) are likely over a the medium term to be considerably less than the subsidy received from England. (http://englandcalling.wordpress.com/2011/05/14/the-truth-about-uk-oil-and-gas/).
Moreover, the amount of oil extracted in the future will depend on the price and likely tax regime and the amount of oil will decline steadily even if the price remains high.

Foreigners would also be concerned at the very narrow economic base of Scotland’s economy. Of the forty odd percent of the economy which is not publicly funded, a substantial part derives from the oil and whisky industries (http://www.corporatewatch.org.uk/?lid=1827). Moreover, much of Scotland’s private enterprise, especially the oil firms and rather humiliatingly the whiskey producers, is foreign owned so that the profits emigrate .

There is also a lack of entrepreneurism in Scotland so the private sector is unlikely to swell:

“Scotland has the lowest ratio of businesses per head of population in the UK, according to figures published by the Department for Business Innovation and Skills (BIS). At the outset of 2010, Scotland had 672 private sector enterprises per 10,000 adults, while England had 922, Northern Ireland 860 and Wales 783.” (http://thescotsman.scotsman.com/6983/Scotland39s-private-sector-lags-UK.6773823.jp)

An independent Scotland would also start with a massive national debt. Here is Bill Jamieson of the Scotsman dealing with the UK national debt:

“What of deficit and debt apportionment? Both in the immediate term and in the final settlement, the SNP has called for more borrowing powers. But how much more borrowing will be sought on top of Scotland’s share of UK debt? To give a proximate idea of what we face, let’s assume Scotland’s debt share is similar to that of her share of UK GDP – circa
10 per cent. By 2015-16, when a referendum vote may be held, UK net debt is projected at £1,359 billion (69 per cent of GDP) and the annual interest charge would have risen to £67bn. Scotland’s share would be £136bn, and £6.8bn respectively.” (http://thescotsman.scotsman.com/holyroodelections/Bill-Jamieson-The-burning-independence.6766635.jp?articlepage=2)

That would not be the full debt Scotland would have to take on. There would also be a proportionate Scottish share of the funding of UK public sector pensions up to the advent of independence; either a proportionate share of the UK’s PPP and PFI obligations at the time of independence or full responsibility for all PPP and PFI contracts in Scotland plus any other debt accrued for Scottish projects, both at local and national level, and other UK debt up to the time of independence. It is dubious whether foreign investors or the money markets would see an independent Scottish currency as a safe bet with those massive starting obligations.

More generally, companies operating in Scotland now have the assurance that they are operating within a country which is controlled by a much larger and richer national entity namely England. That is particularly important for the oil industry who need safe seas to operate in. They would have no such assurance if Scotland was independent.

Finally, there is the thorny question of the Scottish banking system. It is not merely that the British taxpayer (in reality the English tax payer because the Celtic Fringe take vastly more out of the UK tax pot than they put in) has put directly “The Government has pumped around £45 billion into RBS and £20 billion into Lloyds – holding stakes of 84% and 41% respectively – although the taxpayer is currently sitting on almost £20 billion in paper losses on the holdings.” (http://money.uk.msn.com/news/articles.aspx?cp-documentid=152384309). Those are horrific figures for an economy the size of Scotland (£140 billion approx – see below) . However, that is only the tip of the taxpayer cost iceberg. Part at least of the ongoing costs of the recession and the burgeoning UK national debt is down to the reckless behaviour of financial institutions and the two Scottish banks RBS and HBOS were by far the greatest contributors to the need for taxpayer support and the ravaging of value by feeding inflation through QE.

The size of the damage done can be seen from the Jamieson quote above: if the UK national debt reaches £1.4 trillion by 2015 that will mean the national debt will have nearly trebled (excluding inflation) since 2008 when it was around £500 billion (http://www.ukpublicspending.co.uk/uk_national_debt_chart_10_G.html). Even worse, the official national debt figure does not include the costs of bailing out the banks or the full cost of PPP and PFI expenditure, debt which was kept off the official national
debt by Gordon Brown’s off-the-books Enron style accounting. The official national debt figure with all identifiable costs included (the unadjusted measure of public sector net debt ) was £2252.9 billion or 148.9 per cent as at May 2011. (http://www.economicshelp.org/blog/uk-economy/uk-national-debt/).

Exactly how Scotland would be able to sustain an independent currency against the background of the loss of English subsidy, the narrowness of the Scottish economy, the over-dependence on the public sector, the huge national debt Scotland would start with and the awful mess of their banking system is to put it mildly difficult to see. That economic background also makes the idea of Scotland using either the pound or Euro very unattractive, because not only would it drag down the credibility of the currency (especially in the pound’s case), but the likelihood of a either England or the Eurozone having to bail-out Scotland with vast amounts of money looms very large.

All those obligations and difficulties have to be set against the small size of the
Scottish economy. No official GDP measure is produced but the ONS 2009 figure for Scottish Gross Value Added (GAV), which is GDP without taxes (less subsides) on products, was £102,552 billion (http://www.statistics.gov.uk/pdfdir/gva1210.pdf).
The GDP today is in the region of £130-140 billion.

Whatever currency choice Scotland made one thing is certain: borrowing by Scotland’s government, both central and local, and any other public body in Scotland would become much more expensive. The UK can borrow at a rate which is moderate: an independent Scotland would, because of its precarious economic situation, have to borrow at considerably more than the UK rate, if things go really wrong at the extortionate rates the Greek Government is having to pay despite being part of the Euro.

The wages of Scottish independence – the loss of the military

One of the most complex aspects of disentangling Scotland from the rest of the UK should Scotland become independent is defence. It is complex because of (1) the siting of the Trident submarines and other major ships at Faslane; (2) the awarding of MOD research contracts to Scotland and (3) the fact that the armed forces which now exist in Scotland would not be suited to Scotland’s defence needs, they being designed to fit into a UK defence strategy not a Scottish one.

Back in 2002 the Scotch Numpty Party (SNP) had these rather grandiose plans:

“Colin Campbell, the party’s defence spokesman, gave details of a Scottish Defence Service (SDS) which would operate in a nuclear-free Scotland following the removal of Trident.

“Mr Campbell said current estimates showed that a defence programme would cost £600 million a year with an extra £300 million for works.

“The total defence budget of £1.8 billion would be about the same figure as the Ministry of Defence currently spends in Scotland.

“He told the delegates: “We are looking at a maximum establishment of 20,000 regular personnel in Scotland … that is 5,000 extra people being paid in Scotland and spending their money in Scotland. That’s worth about £150 million a year.”

“He reckoned there would be 7,000 more indirect jobs as a result of the SNP’s defence policy.

Apart from 20,000 full-time regular troops, Scotland would also have 20,000 regular reservists and 8,000 part-time reservists. (http://news.scotsman.com/snpconference2002/SNP-proposes-nuclearfree-Scottish-Defence.2364594.jp)

A more realistic idea of the armed forces and independent Scotland could afford can be gained from those of the Republic of Ireland RoI) which has an estimated population of around 4.5 million http://www.cso.ie/releasespublications/documents/population/current/popmig.pdf) to Scotland’s estimated five million.

The RoI has an army of approximately 8,500, a navy of 1,100 and an airforce of 1,000. (http://www.military.ie/home). Total defence expenditure for 2011/12 is EUR725 million (£632 million – (http://articles.janes.com/articles/Janes-Sentinel-Security-Assessment-Western-Europe/Armed-forces-Ireland.html). To put that in context the UK’s defence
expenditure for the same year is £ £33.8bn, or around 53 times that of the RoI. (http://www.mod.uk/DefenceInternet/DefenceNews/DefencePolicyAndBusiness/DefenceBudgetCutByEightPerCent.htm).
The RoI armed forces could offer little meaningful opposition to an invasion by any serious invader. Their armed forces can perform a domestic quasi-police function at best .

An independent Scotland would have substantial revenues from oil which the RoI
does not have, although these are very susceptible to violent fluctuations in the oil price, something which would make planning for the future especially difficult as the oil tax receipts would form a substantial part of the anticipated revenue an independent Scotland would need. The oil is also a diminishing resource. (http://englandcalling.wordpress.com/2011/05/14/the-truth-about-uk-oil-and-gas/).
In addition an independent Scotland would lose the subsidy they receive from England each year (around £8 billion at present – http://englandcalling.wordpress.com/2010/11/12/celtic-hands-deep-in-english-taxpayers%e2%80%99-pockets/)
and begin their independent life with a large national debt as their share of
the UK national debt. That share would be at least £100 billion with the UK National Debt as it is now at around £1.1 trillion (http://www.statistics.gov.uk/cci/nugget.asp?id=277)
, but by the time a referendum is held on the proposed SNP timetable in 2015 it will probably have grown to £1.5 trillion. This would make Scotland’s proportionate share (based on her proportion of the UK population) around £140 billion. In addition there would be large sums of additional debt for Scotland arising from the rescue of the Scottish banks RBS and HBOS, PFI projects and the funding of public service pensions. Scotland would also have to fund a great deal of initial extra expenditure resulting from the setting up their separate public administration.

Taking these financial constraints into account, it is most unlikely that an independent Scotland would be able to support armed forces substantially greater than those of the RoI. If that were the case, Scotland would lose out in terms of the numbers of servicemen in Scotland, the number of MOD civilian workers and the lucrative contracts (with the jobs attached) for defence which they now receive from the UK Treasury. The MOD website gives a snapshot of the material benefits which belonging to the UK currently brings to Scotland via the defence budget:

“Scotland makes a very important contribution to UK Defence. Scottish military links and heritage remain strong and all three Armed Forces continue to have a significant presence at 381 sites across the country.

“There are 5,000 Armed Forces Volunteer Reservists and 10,000 Cadets throughout Scotland, plus ten University Squadrons and Corps. The Army alone has 58 Territorial Army centres, 17 Combined Cadet Force units, four University Officer Training Corps, and 228 Cadet detachments, which are supported by 1,000 adult volunteers.

“The MOD and the Armed Forces employ 20,000 people throughout the country. Each year the MOD spends an average of £600 million in Scotland, and awards over 500 direct contracts, sustaining additional jobs in Defence manufacturing. Scottish industry produces cutting-edge, hi-tech ships and equipment to enable our forces to carry out their operations.

“About 130 Royal Navy and NATO ships visit ports in Scotland every year, bringing money to the local economy.”

“An estimated 11,000 Scottish jobs are directly dependent on Defence contracts, with thousands more jobs supported in Scotland through the presence of the MOD and its spend in local areas. Defence industry varies greatly, from specialists in chemical protective clothing to shipyards that have produced Type 45 destroyers. The new royal Navy Aircraft Carriers will be built at Clyde shipyards in Glasgow and assembled as Rosyth Dockyard in Fife.”

(http://www.mod.uk/DefenceInternet/FactSheets/DefenceInScotland.htm)

Much of that would go because of the financial constraints described above. In the case of research and manufacturing , all of it would be removed as soon as alternative arrangements could be made and existing contracts expired. Without the patronage of the UK Treasury there would be greatly reduced opportunities for Scottish defence manufacturers and Scotland would, like most countries of her size, buy the bulk of her military equipment from foreign suppliers.

The heaviest loss would be the submarine base at Faslane which is scheduled to get even more work than it presently has because during Gordon Brown’s premiership (in 2009) the decision was taken to base all the UK’s new submarines – including those on which the UK’s nuclear deterrent Trident is now entirely based – at Faslane by 2016. It is a substantial facility to say the least viz:

“In May 2009 the then Minister for the Armed Forces announced that three Trafalgar Class submarines will transfer to Clyde by 2017, joining the Vanguard Class submarines and the Royal Navy’s new Astute Class vessels.

The announcement confirmed HM Naval Base Clyde’s future as the home of the UK Submarine Service and paved the way for Faslane to become the country’s submarine centre of specialisation.” (Once the transfer of work to Faslane has happened it will contain: “Four nuclear powered Vanguard Class SSBN submarines – HMS Vanguard, HMS Victorious, HMS Vigilant and HMS Vengeance – which between them maintain a continuous at sea presence of the UK’s Independent Strategic Nuclear Deterrent.

“Eight Sandown Class Single Role Mine Hunters (SRMH)….

“HM Naval Base Clyde can be thought of as a garage for all these vessels – keeping them ready to go to sea – and the hotel for the ship’s crews. Indeed, with over 2,000 beds, the base is one of the largest hotels in Scotland!…

“In March 2010, the MOD signed a long-term partnering agreement with Babcock, consolidating the company’s relationship with the base until 2025, guaranteeing cash savings for the MOD of at least £1.5 Billion. The agreement also helped to protect the long-term future of the maritime industry, hlping to preserve capabilities and vital skills neded to carry out future work.

“The Naval Base is the largest single site employer in Scotland, currently employing around 2,500 service and civilian personnel, of whom around 1,500 work for Babcock. When Fleet staff and other Lodger Units are taken into account, the total number of
people based at HM Naval Base Clyde rises to around 6,500.” http://www.royalnavy.mod.uk/operations-and-support/establishments/naval-bases-and-air-stations/hmnb-clyde/what-is-hmnbc/

That gives some idea of the potential scale of the losses of jobs and expertise and the complications caused by contracts already completed.

Since the 2011 elections in Scotland which unexpectedly delivered the SNP a majority in the Scottish parliament, the SNP leader Alec Salmond has attempted to push an “independence lite” agenda (http://www.telegraph.co.uk/comment/columnists/alancochrane/8516142/Dont-believe-SNP-on-Diet-nationalism.html)
which includes the suggestion that Scotland would “share” defence facilities with the UK. This would be impractical because of (1) the gross imbalance in the size of the defence resources of an independent Scotland and the UK and (2) the potential for conflicting foreign policies meaning the UK would want one thing and Scotland another. (http://www.telegraph.co.uk/news/uknews/scotland/8515034/Sir-Mike-Jackson-tells-Alex-Salmond-British-soldiers-have-only-one-master.html).
In addition, in the case of the nuclear submarines and deterrent, the SNP has as a policy of the removal of these from Scotland. (http://thescotsman.scotsman.com/politics/SNP-call-to-scrap-nuclear.4666024.jp). The submarines and the deterrent could be transferred to the facility at Devonport, Plymouth.

A taste of what the re-shaping of the military in Scotland would mean can be gained from the response to the cuts proposed by the Coalition Government in Westminster:

“There are specific parts of Scotland where defence-related employment makes up a significant proportion of local employment, including Moray which is home to two RAF
bases (Kinloss and Lossiemouth) and Fife, which is home to RAF Leuchars. Cuts in the defence budget (made in Westminster) will profoundly affect localities such as these. The UK Government has confirmed that RAF Kinloss will cease to operate after 31 July 2011 and the futures of RAF Lossiemouth and RAF Leuchars are still uncertain (an announcement will be made after the Scottish elections). In response, Moray Council and local businesses and communities have launched an action plan to stimulate the local economy in response to fears about the impact of the RAF job cuts and subsequent reductions in local economy activity and spending (BBC News 18th March 2011)”. (http://www.sac.ac.uk/mainrep/pdfs/publicsectorbudgets.pdf).

But even if an independent Scotland was wealthy, it would not simply be a question of taking over the Scottish military facilities which presently exist. These exist within the context of a UK defence strategy. It is improbable that an independent Scotland
would wish to get involved in overseas escapades such as Iraq and Afghanistan.
Her military needs would be to defend Scottish territory and patrol her
territorial waters. That alone would mean that much of the military establishment in Scotland would be scrapped and new equipment and training provided., another considerable expense.

The idea that Scotland could defend its land and territorial seas against a determined and large enemy is in truth nonsensical. Scotland is a relatively large country (30,000 sq miles) with a small population (5 million) , most of which is crammed into the lowland stretch from Glasgow to Edinburgh. Compare that with England, 50,000 sq miles and
a population of 54 million. Scotland has neither the bodies on the ground or the wealth to present a serious threat to an invader.

Because of Scotland’s inevitable military weakness, the rest of the UK (in reality England) would have to come to her aid if she was invaded by an enemy who was using Scotland as a backdoor to invading England. Scotland would also shelter under the UK
nuclear deterrent and her general military and diplomatic strength. Those two things cannot be avoided. However, it would be reasonable to make it a condition of independence that Scotland paid the remainder of the UK for that protection.