Just in case you were not following the British elections, a small earthquake happened. The Tories won, the Lib Dems were wiped out, Labour performed poorly, and UKIP performed well but got no rewards. The bigger earthquake happened north of the border where the Scottish Nationalist party (SNP) won all seats bar three in a landslide, essentially running on a plank of Scottish independence.
This blog is a politics free zone and this blogger does not comment on political matters although he has (obviously !) strong views on every matter under the sun including Scottish independence :) But he can and will argue a point of view on the economics of the issue of Scotland's secession.
Scotland runs a much higher level of expenditure as compared to the income it generates. If it were a separate nation, it will be running a deficit of 8% of GDP, as against the UK's 4%. The SNP is even more to the left than Labour and wants to spend more. In the cuckooland of irresponsibility that all opposition parties operate in, this is all very possible.
Scotland's economy is tiny and is heavily influenced, even now, by oil. With the current low prices of crude, Scotland's already iffy finances would be in dire straits if it was an independent country. But thankfully it is not and is currently being bailed out by the English tax payer.
When the referendum was held last year (and Scotland voted to narrowly stay in the UK), it was promised to the Scots that the powers to tax and spend would be devolved to the Scottish parliament. What the SNP wants is the power to tax and spend, but continue to get the bailout by the English tax payer. For a period of transition this is acceptable, but this is not a sustainable proposition. What the Tory government would probably do is to immediately devolve the powers to tax and spend, but set a graded target of deficit reduction to the UK average over , say a five year period. That is enough to turn the squeeze on any government in Scotland. Independence would start to look an increasingly unattractive proposition.
The issue of independence will never be settled on economic grounds. Everywhere in the world it is settled on emotional and political grounds, even when it is blindingly obvious that it would be a case of economic suicide. It is for the electorate to decide, although every Anglophile, including this blogger, has a view. But one thing is certain. If the UK called the bluff and handed over the management of finances to a Scottish parliament, in an election five years later, whether Scotland is an independent nation by then or not, there is no chance that the SNP will win 56 seats. Its time to make the SNP accountable.
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