The people of Scotland have decisively rejected calls for Scotland to become an independent state. The electoral turn-out was 84.5% which compares favourably with the average general election turnout in the UK (1918-2010) of 73.3%, but broadly means that one Scot in five could not be bothered to vote on the nation’s future. The margin of victory for the unionists was 55.3% to 44.7% (2.002 million to 1.618 million votes); comfortably above projections which predicted that the decision was too close to call. Of the 32 electoral regions, only four returned majorities in favour of independence.
Forex markets have reacted well to the news, pushing Sterling to a 2-week high against the (rallying) Dollar and a 2-year high against the Euro with the FTSE up by 0.75% - since the vote is for “business as usual” some of these gains have been transient.
In the end, it seems that many of those who supported independence were keen on the idea of new country whose fate lay in their hands – an emotional position that we can all understand. However, such a move would mean dismantling a successful union with a three hundred year history and the strongest of ties between its member nations. Many Scots identify with being both British and Scottish, of course. That notion aside, a decision to secede from the union would have brought with it enormous uncertainty and probably harmed the economies and global status of both Scotland and the rest of the UK.
Whilst nothing could have stopped an independent Scotland from using the Pound as its currency, the rest of the UK would not have agreed to a currency union which would place the Bank of England on the hook from profligate Scottish spending precipitating a financial collapse in an independent state. First Minister Alex Salmond (SNP) never explained why such a notion could be in the interests of the remaining UK – all the supposed trade benefits would accrue from the Scots continuing to use Sterling, so why on earth would Britain backstop Scotland financially?
Another serious issue was Scotland’s continued membership of the EU. Independence would certainly have led to Scotland’s exit from the EU and Spain, for one nation, would not have been willing to fast-track its re-entry. Many major businesses expressed concerns about independence and had put in place contingency plans to relocate their ventures south of the border. Others claimed that prices in Scotland would inevitably rise, if economies of scale from a British operation were lost.
Much of the independence drive stemmed from the belief that the oil in the oceans around Scotland would be granted to them. Debate centred on how much oil remained and what its value would be. However, the oil was exploited with British money in the first place, so any claim of Scottish ownership would have been hotly contested in a post-independence climate – particularly since Salmond was threatening to renege on the Scottish share of UK debt if an independent Scotland was denied currency union. The SNP position on independence was to “cherry-pick” the bits of being part of the UK that they liked best and leave the rest of us to deal with what remained.
As a Britain, I welcome the decision of my countrymen to remain in the union, but feel we should have avoided an expensive, pointless 2-year exercise where the ramifications of the decision being taken were unclear. Perhaps the economic arguments will be at the forefront of people’s minds if Cameron wins the 2015 election and honours his pledge for a (populist) “in-out” referendum on the UK’s continued membership of the EU. It is high time for politicians to grow-up and look at the bigger picture in an increasingly global economy: as they say, pigs might fly.