This is my write-up (response to a yes voter) on various "no/bad" reasons for Scottish Independence. Wrote up in est. 20-30 minutes. Feel free to rip it apart where possible. I'd like to see counter-arguments.
No, no, no, the Scottish Independence debate is incredibly flawed regarding the "Yes" vote. Primarily, to become a truly independent state they would need their own currency, currently, this is an argument that Alex Salmond has yet to address. He has tossed and turned many an idea regarding an independent Scottish currency but the idea of such a move is scarce, it will not happen, Scotland do not possess the fiscal power to create an entire new currency while dealing with the transition costs to ensure the currency and thereby, ensure Scotland's economy stays afloat and does not crash. This means that they will have to tie themselves to Britain or Europe. As such, Salmond would have 3 routes to take regarding currency and anyone who believes this a marginal part of the bigger picture, you're in the wrong discussion. All options deteriorate Scotland's independent nation-statehood (if they do become independent):
1. An independent Scotland stay with the Sterling - Implications: The Bank of England run the Sterling's interest rates and can alter this figure as they see fit, moreover it would have an adverse effect on Scotland's tax revenue and Scotland would have less of a voice in the currency than they currently have at this time. Furthermore, if they did stick with the Sterling, the rest of the United Kingdom would have to bail Scotland out if they entered financial difficulties with banks such as RBS.
2. An independent Scotland could enact "dollarisation": Dollarisation is essentially the theory that Scotland could use the Sterling as Latin-American countries use the US-Dollar but hold no formal ties with the central bank (BoE). This would be an economic disaster for Scotland as they would again have no influence over the Bank of England. Furthermore, Scotland has a large amount of financial services relying on access to the central bank services, something they would not have if this were to happen.
3. If Scotland become independent, they will cease to function as a member of the European Union and therefore the European Monetary Policy. Alex Salmond has already stated he wishes to join the EU, however, this process takes a minimum of 3 years to come to fruition. There is a small possibility that Scotland could too come to use the Euro currency, however, he would need to pick one of the other options for the first 3 years and even then, how is it viable changing currency after 3 years? It is economic suicide.
There are his options, they are not rosy at the least and I paraphrase the famous economist John Maynard-Keynes, "He who runs the currency, runs the country."
Continuing, onto this argument regarding Scotland's oil reserves. One has to realise that Scotland's oil reserves are at best, very, very sporadic in their effect on the economy. Here are some figures:
In the 2008/09 fiscal year, oil accounted for 21% of Scotland's overall GDP.
In the 2009/10 fiscal year, oil accounted for just 12% of Scotland's overall GDP.
That is a massive swing for a single fiscal year and when you look at the bigger picture, if Scotland cannot effectively forecast how much oil will account for their yearly revenue, how will they make certain their public spending forecasts? As of now, the majority of public spending decisions are made at Westminster. However, if independence were to occur, it would be held at Hollyrood and imagine the economic disaster that an 8% miss of GDP would take on the Scottish economy? Scotland would be plunged into an economic crisis if they failed to correctly forecast what is a crazily sporadic market.
Furthermore, the SNP's entire economical argument is based on the assumption that Scotland would receive 90% of North Sea oil. Having been interested in this myself, I had a quick look at the company actually extracting and selling this oil. Centrica, the company that owns British Gas stated that only 14% of the North Sea oil reserves are actually definitively Scottish while the other 86% is shared amongst Norway, Holland and England. Furthermore, if these figures are actually wrong (I doubt they are) Scotland would still not reap the rewards for the oil industry because it isn't nationalised. All the revenue the Scottish will receive is the tax revenues and that would account to approximately 16% of their tax recipients which at 2012/13 was £10.8 billion. This is because the profit from the oil is not going to the UK treasury or the Scottish treasury, they are being paid out to those shareholders of whom have shares and assets in companies such as Centrica.
There is much more to grasp on the subject but generally speaking, the Scottish economic plan is a joke. Alex Salmond's vision of a land of milk and honey is a joke. Salmond wants to increase public spending while introducing tax cuts, this is simple economics, look at what happened in America, George W. Bush pushed through a method of fiscal conservative economics without increasing much of the public spending and he amounted a deficit of 439 billion dollars, although Scotland's would obviously be lower, Salmond has no idea on what he is actually doing.