Hadrian’s Wallet: Scotland’s independence referendum and oil

Depending on who’s talking, an independent Scotland would see either the arrival of a new, modern and confident state or it will be fed into the Euro-blender to be destroyed forever. The idea of Scottish independence is not new – it dates back to the Act of Union in 1707. What is new is the proposed referendum in 2014 to give Scots a chance to vote on the matter.

The governing Scottish National Party put the cat among the constitutional pigeons with their announcement on 10 January to hold a referendum in autumn 2014. The referendum will ask two questions. The first is whether there should be an extension of the powers and responsibilities of the Scottish Parliament, short of independence; while the second asks whether the Scottish Parliament should “also have its powers extended to enable independence to be achieved”.
All the polls suggest voters will turn down the proposal. YouGov’s polling from 1990 to 2009 show support for full independence hovering around the high 20s to low 30s percentiles. A clearer majority – though never more than 60 percent – are happier with more tax raising powers for the existing Scottish parliament created in 1999. The referendum that created that parliament showed most Scots wanted power over their own taxes (currently they can vary the basic rate of personal income tax by a maximum of 3p in the pound). The issue was, as First Minister Alex Salmond said, in October 2010, “there is no point in being a pocket money parliament when the pocket money stops.”The 2011 study of Scottish attitudes showed 70 percent of the population saw themselves as Scottish first while 15 percent thought they were British. The study also showed support for increased devolution is increasing but there was ambiguous findings on specifics. Questions on who should pay for what and by what amount narrowed opinion in a way that was different than the ungranulated question of whether people are nationalist or unionist.

Opinion is also divided as to whether Scotland would do better alone with its annual £6.5b North Sea oil wealth. Michael Moore, the secretary of state for Scotland, said the year on year variations of oil prices in 2011 were better managed in a UK-wide economy where Scotland could share in the risks as well as rewards. But Scottish finance secretary John Swinney disagreed saying Scotland contributed far more to the UK Exchequer than its share of population which underlined the strength of Scotland’s finances and the opportunities of independence. Opinion polls consistently support the latter view with most Scots thinking those south of Hadrian’s Wall do better from the Union than they do.

Polls are less clear on economic benefits. Most people think they would pay more tax under an Edinburgh administration and there is no consensus on whether the nation would be better off financially. The debate reflects a strong and complex intertwining of English, Scottish and British traditions that make many Scots ambivalent about nationality.

Unlike the Irish Act of Union a century later, the English-Scottish Act of Union of 1702 was a genuine marriage of near-equals. Scottish kings had sat on the throne of England for over a hundred years (until ousted by the Glorious Revolution). Scotland was still the minor party in the marriage, and as in the case of Ireland, bribery was needed to pass the Act in Edinburgh. Scotland was still reeling from the economic catastrophe of the Darien Scheme for a Scottish colony in Panama. But the Act of Union was good for Scotland; it gave free trade with England and led to the Scottish Enlightenment of the mid 1700s. Thinkers like David Hume and Adam Smith had an immense effect not only on Scotland but on the newly United Kingdom and beyond.

Scots became a driving force in the new British Empire, despite continued rebellions of the highlanders. The lowlands were transformed by the Industrial Revolution with linen, coal and steel and a massive financial centre. Glasgow became a powerhouse city based on shipbuilding and railways. Scottish cities paid a terrible price in World War II with extensive bombing by the Luftwaffe. The deindustrialisation of the post-war years was balanced by the discovery of oil in the North Sea in 1970. Though production has fallen in recent years, a 2010 report said there was still 25 billion barrels of oil in Scottish waters, though they are in hard-to-reach areas near the Shetlands.

The importance of oil in border negotiations cannot be underestimated. 85% of British oil is in Scottish waters. The nationalist site Oil of Scotland claims Westminster moved Scotland’s marine boundaries in 1999 from Berwick-upon-Tweed to Carnoustie “illegally making 6000 miles of Scotland’s waters English.” The website called the Scottish Adjacent Waters Boundaries Order 1999 an “unjust act secretly passed, without the consent of the Scottish People” that took 15% of oil and gas revenues out of the Scottish sector of the North Sea and £2.2 billion out of the Scottish economy. “This lost revenue is more than the proposed £35 billion Scottish budget cuts for the next 15 years,” the group said.

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