Alexander Elliot Anderson Salmond, the leader of the Scottish National Party (SNP) became the First Minister of Scotland in 2007 and served as First Minister until his resignation after the referendum loss in 2014. He was considered to be the driving force behind the SNP and the independence movement. He was able to schedule a binding referendum on the question of Scottish Independence, which referendum was held on September 18, 2014.
During the referendum campaign, the three main parties in the UK Parliament pledged to extend the powers of the Scottish Parliament; an all-party commission chaired by Lord Smith of Kelvin was formed.
What were the arguments in favor of Independence?
There were at least five: oil and the division of oil revenues within the UK, the Scottish economy, division of welfare benefits within the UK, division of tax revenues within the UK, and ethic and religious differences with England.
The North Sea Oil revenues and their division has been a major focal point of Scottish ire. If Scotland became independent, it would hold 95% of the UK’s current oil and gas reserves if they were split geographically using a median line from the English-Scottish border. If the reserves were split by population, that figure would be reduced to 9%. Currently, Scotland only receives less than 20% of the revenue under the division of revenues in Great Britain.
Thus, the independence forces felt that a better division of the North Sea oil revenues would favor Scotland.
Edinburgh is the financial services center of Scotland, with many large finance firms based there, including: Lloyds Banking Group (which owns of HBOS). Yet many of these financial firms are actually mainly English owned, rather than Scottish owned. Edinburgh was ranked 15th in the list of world financial centers, but fell but fell to 37th in 2012. By 2014, this ranking had fallen to 64th.
In 2012, total Scottish exports (excluding intra-UK trade) were estimated to be £26 billion, of which 59% (£15.4 billion) were attributable to manufacturing. Scotland’s primary exports include whisky, electronics, and financial services. The United States, Netherlands, Germany, France and Norway constitute the country’s major export markets. Scotland’s Gross Domestic Product (GDP), including oil and gas produced in Scottish waters, was estimated at £150 billion for the calendar year 2012.
Whisky is probably the best known of Scotland’s manufactured products. Exports increased by 87% in the decade to 2012 and were valued at £4.3 billion in 2013, which was 85% of Scotland’s food and drink exports. It supports around 10,000 jobs directly and 25,000 indirectly. It may contribute £400–682 million to Scotland, rather than several billion pounds, as more than 80% of whisky produced is owned by non-Scottish companies. The only problem is that most of the whisky distilleries in Scotland are owned by English interests. Hence, the true benefit of the whisky production flows to England.
Scotland since the beginning of the Union has felt that the economic benefit has gone mainly to England. The part of Scotland that has prospered under the Union is the Lowlands, not the Highlands. This was true in the 19th century when the industrialization of Scotland mainly went to Glasgow. Virtually all of her ship building was done there. Now with the North Sea oil, again it is Aberdeen that has benefitted.
This resentment is real and continues to this day.
Division of welfare benefits:
It is better to be in England and receive benefits than to be in Scotland and receive benefits. The average Scot wants the benefits to be equal or better in Scotland, because the average Scot is paying more than the average Englishman.
Division of Tax Revenues in the UK:
In February 2012, the Centre for Economics and Business Research concluded that “Scotland receives no net subsidy” from the UK, as greater per capita tax generation in Scotland balanced out greater per capita public spending. Over the past thirty years, Scotland contributed a relative budget surplus of almost £20billion to the UK economy.
While this may be so, the independence forces argued that Scotland has a higher tax burden under the UK.
Scotland is fundamentally different from England:
Scotland is 96+% white. It is overwhelmingly Presbyterian (54%) and 19% Catholic. Scotland declared itself a Protestant nation in 1590 (actually a Presbyterian nation). The Scots are descended from Celts, Picts, Vikings, and Irish. The English are descended from Angles, Saxons, and Normans are more religiously diverse.
Arguments Against Independence
According to David Cameron and the forces opposing independence, economic separation would lead to economic disaster. The bio-tech industry in Scotland has its best market in England. The software industry in Edinburgh has its best market in England and then the US.
Would Scotland still be in the EU? David Cameron threatened to block Scotland from being in the EU. Scotland stills wants to be on the Euro and be in the EU.
How would Scotland militarily defend itself? It has a very small population. Also, David Cameron threatened to take its nuclear subs out of Scapa Flow and return them to England.
The independence referendum was held on September 18, 2014. The Scottish people rejected independence by a majority of 55% to 45% on an 85% voter turnout.
In my next blog, we will explore what effect Brexit has upon to the Scottish Independence Movement.