Having to join the euro
IF A breakaway Scotland were allowed to join the EU – and that is currently looking increasingly improbable – it would have to join the euro, whatever the SNP says. Salmond used to advocate joining the euro. That’s now a vote loser. So he wants to leave the fiscal, banking and political union with Britain, but still keep the pound – which would entail, yes, a new fiscal, banking and political union. No British government will agree to that, so Scotland might have to have its own special currency. How much might that be worth?
Spending cut or tax hike
If the SNP won the referendum Scotland would lose fiscal transfers from Britain and it would have to find more than €1 billion a year after joining the euro and losing Britain’s EU budget rebate. The Institute for Fiscal Studies calculates a breakaway Scotland would need between £3 billion and £10 billion of spending cuts or tax increases to make its finances sustainable, equivalent to an 8 per cent cut in public services or an 8 per cent hike in the income tax rate.
Dwindling oil revenues
AN isolated Scotland would depend on falling reserves of North Sea oil and gas. Production slumped between 2000 and 2011 – oil by 65 per cent and gas by 60 per cent. Total British oil and gas revenues are forecast at £4.5 billion in 2017-18, against £11.3 billion in 2011-12.
Keep cutting wages
SALMOND wants Scotland to keep all the EU’s anti-trade union laws, directives, regulations and judicial decisions. The SNP’s Fiscal Commission Working Group, said, “Wage and price flexibility can help facilitate changes in relative production costs and competitiveness.” Simply, it wants low wages.
Passports at the ready
If it left Britain and joined the EU Scotland would have to become part of the Schengen area – establishing border and immigration controls with the rest of Britain while relaxing them with other Schengen jurisdictions. That would cost between £74 and £102 million a year. ■