So in the next five years there will be a referendum on Scottish independence. Leaving aside the many other interesting aspects of this event (what form should the referendum take? what sort of majority should be required? should other British people have a say? what currency willScotland use? what will happen to the union flag?), I have been musing over some figures.
Estimates of the post independence loss to Scotland in terms of revenue vary between about £10 - 20 billion per annum. Let's take the low estimate of £10 billion, and apply that to the 2.5 million Scottish taxpayers. If Scotland had to make up its revenue loss by increasing taxes, the average taxpayer would be £4000 worse off every year. Of course this doesn't take into account corporate taxes, but you get the picture. Given that imposition of that kind of increase is politically impossible, and would in any event send the economy into a nosedive, it looks as if Scotland would have to impose draconian spending cuts that would make George Osborne's current efforts look feeble (and would in any event take demand out of the economy and strangle economic growth). Of course Alex Salmond would have an answer to this. I'm not sure what it would be, but Salmond is an impressive politician who rivals Ed Balls in his ability to make the best of a dubious case.
I suspect that independence would in the long run make Scotland a lot poorer economically, and that, far from the socialist paradise some Scots imagine would ensue if only they could get rid ofWestminster's shackles, Scotland would actually become a more right wing country than it is now. Scottish taxpayers would realise that the public services on which so much of the country depends were only affordable at very much higher levels of taxation. They would start to ask where the money was going (it being only too apparent to them from where it was coming). Conversely, Englandwould I think become less right-wing for the obvious converse reasons.
If enough Scots want independence, of course they should have it. There is a strong streak of sentimentality about nationalism everywhere, in which myths are burnished at the expense of inconvenient facts. Not many Scots know that more of their countrymen fought with the Hanoverians than with the Jacobites at Culloden, or that Bonnie Prince Charlie's mother was a Polish countess, or that his first language was Italian and that he spoke neither Gaelic nor English. I wonder whether this sentimentality is blinding Scots to economic realities too. Freedom from the tax generating engine which is the South East of England (and which keeps us Mancunians going too) may well be a chilly kind of freedom.
