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    Referendum in Scotland

    Selling Healthcare for Oil in Scottish Independence Referendum

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    Scotland on the Eve of Independence Referendum (210)
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    The potential impact of independence on Scotland's economy and social services are at the center of the highly politicized debate on whether to split from the UK.

    MOSCOW, September 18 (RIA Novosti) – The potential impact of independence on Scotland's economy and social services are at the center of the highly politicized debate on whether to split from the UK.

    The Scottish National Party Paper had recently leaked information that, if the "Yes" vote wins, about 3.5% of Scotland's National Health Service Budget would have to be cut next year. Meanwhile, supporters of independence argue that a "No" vote would eventually result in greater pressure from England to initiate austerity, privatization, and paid services for patients; Scottish Health Secretary Alex Neil calls it "a matter of ideology south of the border," as cited by the Guardian.

    According to the Herald Scotland, the SNP called the cuts short-term "efficiency savings," and projected the raising of the NHS budget to 12 billion pounds, higher than ever before. Nevertheless, the pro-unity arguments have forced Scotland's First Minister, SNP leader Alex Salmond to assure voters that the NHS would stay free forever.

    Scotland's National Health Service is already spending 200 pounds more per person than its English counterpart, states Bloomberg. The privatization of health services is limited to about one percent in Scotland, compared with a figure of six percent for the UK overall. Scotland's public sector is generally stronger than that of England, for instance offering tuition-free university to Scottish students, "Yes" campaigners claim. The fact that Scotland already has the power to decide on issues of health care spending has lead former UK Prime Minister Gordon Brown to argue that the SNP were lying "about protecting the NHS with Scottish independence because [Scottish Parliament] already has the power it needs to do so," according to BBC News.

    The Scottish economy, another hot debate topic, is also an area of contrasting arguments and figures. "Yes" voters argue that independence would mean the loss of 9 billion pounds in subsidies to Scotland, including things like university research funding, the green sector and EU farm sector subsidies.

    Independence supporters argue that separation would mean about 25 billion pounds for the Scottish treasury. According to the US Energy Information Administration, 90 percent of the UK's North Sea oil is extracted in Scottish waters. Scotland also generates about 25 percent of the EU's total offshore wind and tidal energy and 10 percent of its wave energy. Scotland also adds about 11 billion pounds from the financial services sector, and 9 billion from the food and drink industry to the British treasury.

    The pro-unity side argues that Scotland's revenue stream would be unstable due to fluctuating projections on how much oil remains accessible in the North Sea. Together with an aging population, a shrinking tax base, and higher public spending, Scotland would be worse off economically in the long term, and would have a hard time maintaining its social safety net, according to the UK Institute of Fiscal Studies.

    The lack of clarity about an independent Scotland's currency is also played upon by pro-unity activists. According to the Guardian, the leaders of Britain's three major parties have said that there would be no currency union with an independent Scotland. Salmond has responded by warning that Scotland would refuse to take on its share of British debt following separation, as cited by BBC News.

    The Independent claims that Scotland would probably be forced to adopt a new currency. In the meantime, it would be left with a small pool of 7 billion pounds during the adjustment period. If it defaulted, it would face punitive borrowing conditions internationally, with the Bank of England rejecting the role of lender of last resort to Scotland's banking industry. Pro-unity analysts also suggest that the new country's financial instability would result in the migration of Scottish banks south, adding to the potential GDP and tax base hit, notes Financial Times.

    Herald Scotland quotes Nobel Prize winning economist Joseph Stiglitz. He brushes off the worrying commentary, saying that many arrangements are possible, and that talk of an unstable currency is "a lot to do about nothing."

    Pro-independence analysts have argued a great deal about how an independent Scotland would have the potential to become a lot like Norway, a wealthy country with an advanced social safety net. Unity supporters counter that it took Norway nearly 90 years to reach its present wealthy status, and that at the time of independence, the vast majority of the population supported separation from Sweden, compared with today's unsteady, divisive 50/50 split in Scotland.

    Scotland on the Eve of Independence Referendum (210)
    referendum, independence referendum, Scotland