Tomorrow, September 18th, the Scottish people will be called to vote in the referendum which will decide on the independence of that which may be the 197th country in the world. But a victory for the “yes” is likely to have not only geographical but also political and economic consequences.
Probably the most complicated issue to the UK are the oil reserves of the North Sea that belong to the Scottish geographical area. If “yes” win in the referendum , the Scottish First Minister , Alex Salmond, will complain about 90% of the reserves of oil and gas from the North Sea. And it is going to lead to complex negotiations involving the future of oil exploration licenses already issued by the British government to private companies, and there are even companies such as BP warns that it will reduce the exploitation of oil fields in the North Sea.
If the oil and natural gas revenues are considered, Scotland has a GDP per capita higher than the UK: 26,424 pounds per capita in Scotland, against 22,336 pounds in UK. Those resources represent 4.1% of GDP and a big part of the revenues generated with taxes. (Figure 1) But if the oil doesn’t count for assessing the GDP, it will be similar with a slight advantage for Great Britain. According to geographical area, North Sea oil and gas revenues would have accounted for over 15% of revenues in 2010-11 compared with 1.6% for the UK as a whole. But that revenues can be very volatile and as the “Better Together” moviment explains “the Scots can not rely on oil revenues, which does not last forever.“
Figure 1 – Tax revenue: Scotland and UK 2012-13
But not only with the coming oil revenues, the Scots have to worry. Public spending per head is about £ 1.200/ year higher in Scotland than in the UK as a whole (about £ 11.800 against 10.600 pounds in 2010-11). If Scotland remains within the UK, the country will continue to use tax money, the pension fund, the National Health Service and the military defense of the United Kingdom. If “no” wins tomorrow, the British government ensures greater devolution to Scotland and greater protection of the national health system. As the household income per capita is very similar in “both countries” and many scottish people are working in companies based in other countries continued to belong to the union of countries of the United Kingdom would cause expenditures did not increase, which would be beneficial for the economy.
Moreover, some financial institutions threatening to move their headquarters to London if it voted for independence, such as the Royal Bank of Scotland and Standard Life insurance company who say that going to be based on “City” London. This is an unfavorable decision to Scotland.
To conclude, “the scottish society is very divided” about what vote for the referendum tomorrow, according to Luiz Moutinho (Professor of Management at Glasgow Business School) and this will always be a tricky question on which there will be no consensus by all economic and political reasons related.
Diário Económico, Edição 16 de Setembro de 2014, “Londres conseguiu radicalizar sociedade escocesa”
Diário Económico, 17 de Setembro de 2014, “Independência escocesa fará subir juros britânicos”
José Maria Vaz Patto
Student no 732