The independence referendum is due to be held in 2014 or 2015. If the majority of residents in Scotland vote “yes”, the UK will be broken up and Scotland will apply for membership of the EU.
So imagine, if you will, we’ve woken up the day after Scotland has voted “yes”. Both the UK and Scottish governments would have to negotiate the break up of many institutions (the Armed Forces, Customs, Inland Revenue, Social Security, the Security Service, the Diplomatic Service, the Border Agency and so on). The budget deficit will also need to be broken up. It is unimaginable that we would be allowed to ride off into the sunset without being allocated our share of the national debt. We would need to pay back the bail out of RBS and HBOS – £470 billion. And then finance the setting up of an independent Scottish state (Armed Forces, Customs, Inland Revenue, Social Security…..) Previously devolved areas would also have to be funded – like health, education and transport. Instead of a seamless transfer from UK to Scottish institutions we will have to find many billions of pounds to set up Scotland and pay back debts to the rest of the UK. Independence Day will leave us saddled with debt.
So Scotland has set up a new country, and the SNP administration have sent the EU our application form. We can have a bigger voice in European affairs, they say. But what the SNP haven’t publicised is that new member states must join the Euro. Now I don’t know about you, but the thought of joining a very unsteady currency gives me pause for thought. And by adopting the Euro as our currency, our fiscal decisions will be made – not by Holyrood but by the European Central Bank. We won’t be able to set our interest rates or our conversion rates. We may have to help bail out another Greece. Our own budget deficit after setting up a new State will be considerable – and there will be no way to stop the ECB imposing harsh cuts on our spending. I know Mr Salmond was keen for us to copy the Celtic Tiger – but that would be taking it a bit too far.
Don’t let independence kill Scotland.