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SNP Independent Scotland's Destiny With Economic Catastrophe, the English Subsidy - IndyRef2

Politics / Scotland Mar 24, 2017 - 06:10 AM GMT

By: Nadeem_Walayat

Politics

The SNP have declared there intension's for a second Scottish independence referendum barely 2 years on from the last 'once in a lifetime' referendum was as a consequence of the UK intending to LEAVE the European Union which includes exiting the EU Single Market.


The SNP in attempting to convince the Scottish people into commit collective suicide paints a fantasy picture of what an Independent Scotland would be, referring to building on Scotland's existing relative prosperity to the rest of the UK, one of average public spending far exceeding that of England which is why Scotland has free university education whilst English students are saddled with £40k+ of debt. Free prescriptions whilst English patients have to be pay more than £8 per item and the list goes on and on. And similar is true for Northern Ireland and Wales as the following table from the last Scottish Independence referendum illustrates:

However, what the SNP propaganda smoke screen tends to be effective at masking in the consciousness of at least half of the Scottish people is the fact that this huge disparity in public spending amounting to currently near £2,000 per head of population is as a consequence of the English subsidy. One of English tax payers forced to subsidise Scotland to the tune of £12 billion per annum that fills most of the black hole in Scotland's finances currently amounting to an annual budget deficit of £15bn per annum, some 10% per annum, far beyond that of bankrupt Greece!

Therefore one of the primary reasons why the people of England receive such a raw deal when it comes to quality of public services is as a consequence of being forced to subsidise the EU to the tune of £11bn a year and Scotland to the tune of £12bn a year, with another £15 billion going to Northern Ireland and Wales each year.

So if the SNP were able to con the Scottish electorate into committing suicide then at the end of the day once the dust has settled from the resulting chaos of ripping the UK apart then England should start to reap the benefits of no longer having to subsidise Scotland in perpetuity. Though of course there will be a heavy cost to England of a breakup of the UK that could total as much as £120bn, especially as a bankrupt Scotland would be in no position to service its share of Britains £1.8 trillion national debt. So it could take more than a decade before England starts to turn a profit from the break up of the UK.

Whilst for Scotland, well the Scottish economy would have jumped over the edge of a cliff where the impact of the loss of the English subsidy would be felt near instantaneously. The Scottish economy would be in free fall, and it would not be too long before Scotland passes Greece on the way down as the loss of £12bn per annum would demand deep cuts in government spending that I am sure would result in the SNP permanently losing power in Holyrood for bringing about such a catastrophe onto the Scottish people.

What about oil ?

The following graph says it all -

Where the oil revenues are concerned, SNP fantasy has never matched oil price reality.

The bottom line is that yes Scottish independence would be pain for the rest of the UK, probably take the UK a decade to fully recover from its consequences. However, for Scotland Independence would be catastrophic as there is the real risk that Scotland may not even survive in tact from what would follow as bordering regions in severe permanent economic distress would soon start to demand their own referendums to re-join the UK.

Ensure you are subscribed to my always free newsletter for my next in-depth analysis which will be on what Game Theory says Britain Should do following triggering of Article 50.

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2017 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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