A push for an independent Scotland could become costly if it breaks away from the United Kingdom, according to the National Institute of Economic Review, one of the United Kingdom’s leading think tanks.
Scotland’s problems are numerous. It highly depends on Westminster to plug the gap in its finances and the safety the British pound offers, and adopting their own currency will be troublesome, financially. Tax revenues from North Sea oil will not be enough to fill the £7 billion gap by removing Britian’s financial resources. The reserves are declining, and there is uncertainty on future crude prices. The reduction in North Sea reserves and aid from Westminster would cause an Independent Scotland to increase taxes while implementing spending cuts.
Dr. Angus Armstrong, director of macroeconomics at the predominant think tank, said that the economic analysis showed significant uncertainties about Scotland’s performance if it did asunder themselves from Britain, including a net-loss of funding.
All these uncertainties will be amplified due to Scotland’s large level of public debt. This could affect the ability for Scotland to borrow through debt issuance. Dr. Armstrong’s view to success would be to increase productivity, but it was unlikely that would happen.
The mounting uncertainties could stray voters and deter the pro-independence campaign from making progress. The country will vote during the September 18 referendum.