Dear Scotland

I guess you should know?

 

From the Mirror on line. Not the best source, But it kind of echoes the other stuff I have heard on late night radio 4 and read elsewhere.

If Scotland leaves the United Kingdom how will it affect banking, our sporting hopes, the country's defence capabilities and immigration?

Banks
The prospect of independence has already raised fears of a run on Scottish banks.

Sources say Edinburgh-based banks are preparing to make more cash available in branches, at ATMs and via e-banking to prevent problems should people rush to withdraw funds.

Investors are already worried about how an independent Scotland would cope in the event of another banking crisis.

The UK government was able to bail out RBS and Lloyds in the banking crisis because of its sheer size.

But Scotland’s banking sector has assets 12 times the size of Scotland’s gross domestic product, according to the Banker magazine.

That’s why financial firms, starting with Lloyds, are likely to announce plans to relocate their headquarters to London in the event of a yes vote.

Doubts also remain over protection for deposits under the Financial Services Compensation Scheme.

The economy as a whole, still recovering from the longest downturn in post-war history, would be rocked by Scotland voting for independence.

Today’s stock market jitters were just a taste of the potential reaction. For a start, Scotland makes up around 8% of Britain’s GDP.

A big chunk of that is through oil revenues, on which the SNP is relying heavily as a vital source of income.

An immediate loss of oil revenues would also hit the UK’s already dire balance of payments deficit.


Security
Independence would have a huge and almost certainly damaging effect on the defence capabilities of both countries.

A Scottish government would make decisions only in its interests – like when to go to war – but would lose centuries of defence and intelligence cooperation.

Under current plans a Yes vote would mean a build-up to 15,000 regular and 5,000 reserve armed forces over a decade.

Col Richard Kemp, former commander in Afghanistan, fears a “betrayal” of hundreds of years’ battlefield sacrifice by Scots troops, a massive loss for UK forces and uncertainty as nuclear bases relocate

Immigration
If the vote is Yes, Scotland would be entitled to decide its immigration policy.

But Rob McNeil, of The Migration Observatory at Oxford University, says much would depend on whether Scotland wanted to maintain the policy that allows movement between England, Wales, Ireland and the Channel Islands.

That decision would also determine whether the 40,000 Scots estimated to cross the border daily could continue to do so.

He said: “The UK could also insist border enforcement was invested in so Scotland’s borders were not used as a way in by people to the rest of the UK.”


Politics
A Yes vote could topple David Cameron, decide the result of the general election and even bring the next government down.

Scots opting to go it alone would spark a bitter divorce battle as the Edinburgh and Westminster governments scrapped over everything from oil rights to national debt.

The SNP wants to run an independent country by March 2016 but the other parties have not even agreed to that.

Many say the PM will have to go if the UK breaks up. But Ed Miliband could also be damaged because Labour supporters are set to decide the referendum and the party has run the No campaign.

John Curtice, professor of politics at the University of Strathclyde, thinks it is “inconceivable” that Mr Cameron will be Tory leader at the 2015 general election if Scots back independence.

He insisted it was “nonsense” to say independence would stop Labour, who have 41 out of 59 MPs in Scotland, winning another general election. He said: “Removing Scottish MPs increases the share of the vote Labour needs by 1%.”

Labour could win next May but see its majority wiped out when independence took effect and Scot MPs no longer sat in Westminster, triggering another contest.

Bills
A ripple effect from Scottish independence could hammer every household in the pocket.

Yesterday saw the pound fall to its lowest level in 10 months against the dollar and the euro. The fear is that is could plunge even further, especially with a yes vote triggering 18 months of uncertainty about a series of seismic issues such as Scotland’s use of the pound and oil revenues.

A weaker pound would make UK exports cheaper but could lead to higher import prices too.

The loss of control over Scotland’s oil revenues could force the rest of the UK to import more energy from abroad, potentially driving up bills.

But Scots could also be hit, with a Government report warning households will have to pay as much as £189 a year more for their energy if they vote for independence.

Electricity and gas bills would soar because an independent Scotland would be forced to shoulder the cost of Scottish energy projects that are currently shared among all UK consumers.

And around 40% of the food we eat comes from abroad so any increase in the cost will hammer already cash-strapped households.

Poorer families, who tend to spend a greater proportion of their income on food, would be affected the most.

Other items from abroad could also go up in prices, just as the economy risks hitting the buffers.

Longer term, there have even been questions about where the rest of the UK will get its water from.

Falling water levels in England could increase the need to import supplies from Scotland. This could be harder in the event of a yes vote for independence.


UK status
Britain risks losing its clout on the world stage if Scotland votes for independence, experts have warned.

Our seat on the United Nations Security Council and role as the bridge between the USA and Europe could be under threat.

Dr Andrew Blick of King’s College, London, says other countries will view what is left of the UK differently.

He said: “It’s not going to destroy us as a power overnight but it is going to have implications on the perception of the UK.”

We would go from being the third biggest country in Europe behind Germany and France to fourth after Italy.

With a population of 58 million instead of 63 million, the UK would slip from being the world’s 23rd largest country to 21st.

Dr Blick added: “Countries which are not on the UN Security Council may say ‘we have a lot bigger populations’. And there’s a question about the nuclear deterrent.

“All of these then raise issues about what are we doing on the Security Council if we are a country that is falling apart.

“We have prided ourselves on being a stable state. It’s a lot harder to maintain that authority if bits are falling off you.”