Academics test how Scottish economy will fare

The austerity budgets from the London government over recent years have fuelled the desire for independence in Scotland, said Aberdeen University political scientist Malcolm Harvey.

Mr Harvey is a member of the Scottish Centre on Constitutional Change, set up to provide academic input to the political debate. He said the idea that an independent Scotland might have suffered even more from the banking crisis than Scotland did as part of the UK, is not something featuring significantly.

“It’s funny, but people do not connect austerity with the banking crisis and the idea that smaller states might have done less well.”

The plan is that an independent Scotland will continue to use sterling, and so will not have a central bank of last resort behind its banks, should there be another crisis.

What is fascinating about the independence debate in Scotland, said Mr Harvey, is the extent to which those intending to vote Yes believe in the ability of the political system to sort out difficulties.

“It is a very, very surprising outcome that people have that level of trust in politicians,” he said. This is a complete turnaround from a few years ago.

The independence debate has created an enormous upsurge of interest and engagement in politics, with Scottish voter registration at 97 per cent of the adult population. A turnout of more than 80 per cent is expected, in contrast to the recent European elections, when the Scottish turnout was less than 35 per cent.

“There has been a real process of citizen engagement that has not been the pattern for a long time. Irrespective of the outcome, we are now in a position where politics is going to change.”

Even if Scotland votes No, there will be pressure not just in Scotland, but throughout the UK, for constitutional change, Mr Harvey said.

Because of the size of England’s population relative to Scotland, Wales and Northern Ireland, he thinks there will be a move towards regional parliaments in England.

How the pressure towards greater devolution will play out in Northern Ireland, Wales and England will depend on the cultural and historical situations in each area. The situations in Scotland, Wales and Northern Ireland are very different, he said.

There is a view in Scotland that it and England have taken divergent political paths, with governments in London not being in tune with more social democratic views in Scotland. Austerity policies after the banking crisis fed into this.

Fears about an independent Scotland’s ability to cope with currency and banking issues are playing out at different levels, he said. Ireland had control over its currency and gave it up. Scotland has a limited say in UK banking and currency policies, and may move to a situation where it will have none. Because people already view Scotland as having a very limited say in such matters, giving up control has not played a major role in the independence debate, he said.

North Sea oil is playing a part in the debate but the Scottish parliament is trying to play down expectations and argue that Scotland has a strong economy without taking oil into account. The argument has not been so much over what should happen with oil revenue as much as over the extent of oil reserves.

Aberdeen University's Prof Alex Kemp and Linda Stephen have modelled how much oil and gas might still be extracted from the North Sea and say the answer depends on a range of factors. But the ability of the sector to continue to make a significant contribution to the economy, albeit to a lesser extent, could persist "well beyond 2050".

In Scottish Independence and the North Sea Oil and Gas Sector they say Scottish independence would require boundaries marking the Scottish Continental Shelf. The UK has boundary agreements with Ireland, Norway and Denmark/Faroe Islands. Independence would require a new ratification of these.