Ahsan Bin Tufail
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Referendum for the separation of Scotland from the rest of the UK
Source: Scottish independence: how will Scotland separate from Great Britain - Telegraph
It will be around breakfast time next Friday when the final result from 32 local counts across Scotland will be declared, deciding, perhaps forever, the future of Great Britain.
If the result is Yes, Alex Salmond has declared Independence Day to be March 24 2016: exactly 309 years since the Acts of Union that joined England and Scotland were signed.
The separatist administration has set out the blueprint for a new nation in a 600-page white paper, covering pensions, health, welfare and defence.
The Westminster government – in an attempt to deny credibility to the independence campaign – insists it has drawn up next to no contingency plans for the event of a Yes vote.
The truth is, a Yes vote would be a giant step into the dark for the entire United Kingdom – and nobody quite knows what happens next.
THE DEBT
The prospect of a Scottish default on its share of Britain's £1.2 trillion debt would lumber the new state with Wonga-sized interest rates for a generation – just as it would be most in need of international lending to support public services.
But that is precisely the threat that Alex Salmond has issued unless he gets his own way on a currency union. David Cameron has called the ultimatum "chilling", and one that will bring "crippling" interest rates on Scottish families.
In a move to reassure lenders, the Treasury has said it would guarantee the entire UK debt in the immediate event of a break-up, and within minutes of a Yes vote next week it is likely the Dept Management Office would reassure markets that – whatever Mr Salmond threatens – the UK would shoulder the debt in the immediate term.
In the long run, an independent Scotland faces "significant" tax rises and spending cuts of around £6 billion a year higher than the Coalition austerity programme if it is to get its debts on a sustainable footing.
Otherwise, an ageing population, higher borrowing costs and declining oil revenues risk pushing debt to over 300 per cent of GDP within 50 years.
Even if it does pay its debts, credit ratings agencies warn that Scotland will pay higher interest rates as a new nation with no credit history – pushing up mortgage costs.
Alex Salmond has insisted Scotland will continue to use the pound in a currency union – a position all three Westminster leaders have ruled out, because taxpayers south of the border would have no reason to continue supporting Scotland's banks and public deficit.
One option would be to continue to use sterling, but without the backing of the Bank of England as lender of last resort – much like Panama uses the US dollar. That could see financial institutions flee south, analysts believe. Interest rates on Scottish mortgages and credit cards would be set from London – but not take into account the country's unemployment or personal debt levels. It would also require spending cuts to build vast currency reserves.
The only way for an independent Scotland to set its own monetary policy would be to set up a new currency. That could trigger a wildly fluctuating exchange rate and high transaction costs at first – and Scotland, a small, new country with no record of currency management, would be regarded as more like Greece than Norway by international lenders.
A fourth option would be joining the euro – despite the fact question marks linger over the long-term future of the currency union.
THE BANKS
Goldman Sachs, the major bank, has warned that even the prospect of exiting the pound could trigger a rapid and dangerous run on the banks as savers withdraw their deposits – just as happened when Czechoslovakia broke up in 1993. Investors would have "a strong incentive to sell Scottish-based assets".
Mark Carney, the Governor of the Bank of England, has promised to act as a lender of last resort during the transition period – but it may do little to calm panicked depositors.
Lloyds Banking Group and the Royal Bank of Scotland are likely to move south of the border due to the stakes held by the British government. Standard Life has made contingency plans to move. The major flow of capital would almost certainly shrink Scotland's economy, to the south's advantage.
DEFENCE
Expelling Trident, Britain's nuclear deterrent, from Scottish waters has been a mainstay of the nationalist cause for decades - the SNP blueprint promises to achieve this by 2020. No-one knows where the submarines, and the stockpile of nuclear warheads, would go.
Faslane, the nuclear submarine base on the Clyde, would become the headquarters of a new Scottish defence force with a budget of £2.5 billion a year, comprising two frigates from the Royal Navy fleet and three infantry battalions named after historic regiments such as the Black Watch. The SNP insist Scotland could become a Nato member, but the alliance is split over whether this could happen.
A separate Scottish air force would have a fleet of 12 Typhoon jets and six Hercules transporters, while the remainder of the UK would still have access to RAF Lossiemouth. A Scottish spy agency would be allowed to share intelligence with MI5 and MI6, the SNP say.
General Sir Richard Shirreff, the former deputy supreme allied commander in Europe, has called the plans "amateurish" and "dangerous".
EU MEMBERSHIP
Scotland would "continue" as a member of the European Union on the same terms as the UK, Alex Salmond has insisted. Negotiations with Brussels would start immediately following a Yes vote and could be finalised within 18 months, he said.
A principle of "continuity of effect" would mean Scotland receives the same special deals as the UK, including the right to remain outside the Euro, opting out of the Schengen zone and keeping Margaret Thacher's rebate – worth £300 million a year to Scotland.
But Jose Manuel Barraso, the outgoing European Commission president, insists that it would be "extremely difficult, if not impossible" for Scotland to join the bloc because it would require unanimity from all member states – including those who have joined on far worse terms. Spain has blocked Kosovo's entry because it is seeking to halt the Basque breakaway movement.
Latvia, Ireland and the Czech Republic insisted that Scotland would not enjoy fast-track entry and go through the full accession process - which can take up to a decade.
THE WELFARE STATE
Scotland has run a budget deficit bigger than that of the rest of the UK for the past 25 years – meaning without subsidies from Westminster it will need to implement an austerity programme far steeper than George Osborne's to balance the books.
Yet the White Paper says there is "no requirement" to cut spending, and reversing Coalition welfare reforms such as the so-called Bedroom Tax is a key plank of the separatist campaign. This is despite an ageing population and greater levels of welfare dependency.
As well as undercutting the UK corporation tax rate by three percentage points, the SNP say an independent Scotland would retain free university tuition, increase child care for preschool children and uprate benefit payments more quickly than in the UK. The Scottish Government also promises to introduce a more generous state pension, and opposes increasing the retirement age to 67.
OIL
The White Paper proposes establishing a Norway-style sovereign wealth fund to squirrel away oil revenue that is currently absorbed by public spending. The Scottish Government claims £1.5 trillion of oil and gas is left under the sea. But Sir Ian Wood, one of Scotland's most successful oil explorers, has warned that reserves have been dramatically overstated and will decline steeply within 15 years. An independent Scotland may end up importing shale gas from England.
Westminster will face a nightmarish negotiation over where to draw new borders under the North Sea.
Mr Salmond wants to make Scotland a world leader in wind energy – but the industry is currently heavily reliant on subsidies from English and Welsh taxpayers.
THE QUEEN
Under the White Paper, the Queen would remain head of state – continuing the Union of the Crowns of 1603. The Church of Scotland has said subsequent monarchs will need to separate coronations, for the first time since Charles II in 1651, to enshrine their position as King or Queen of the Scots.
God Save the Queen may be scrapped as Scotland's official national anthem.
However, many separatists favour a republic, leaving the long-term future of the monarchy in doubt. Constitutional experts have suggested the Queen may have to appoint a governor general, as in Australia, as an interim arrangement.
IMMIGRATION
British citizens in Scotland, and those born in Scotland living elsewhere, would be automatically granted Scottish citizenship.
The White paper says Scotland would implement a much more liberal migration regime in order to support the economy and offset low population growth forecasts, with incomers more than doubling to 24,000 a year.
Ed Miliband this weekend raised the prospect of the Westminster government installing border guards – a move the Scottish government insists is unnecessary.
TELEVISION
Under the White Paper, Scots would continue to have access to "all current programming" provided by the BBC, including EastEnders, Doctor Who and Strictly Come Dancing, in exchange for shows produced by a new Scottish Broadcasting Service. The SBS would adopt BBC Scotland's staff and assets.
But John Birt, the former BBC director general, he said the idea of a programme- swapping venture is "make-believe" and said Scots would have to pay extra to view shows that would only be available on "commercial terms".
A BRITAIN DIMINISHED?
The British government argues that a vote would create just one new nation – Scotland – and the rest of the UK would exist as the "continuing state", its status within the EU, Nato, IMF and the United Nations in tact.
But foreign envoys in London private warn that whatever name the new country of England, Wales and Northern Ireland takes, it would be diminished on the world stage.
The chances of securing a renegotiation in Europe for a smaller Britain could be slimmer. Britain's voice in Washington would be quieter. And China and Russia – which last year dismissed Britain as a "small island no one listens to" – could use the vote to argue that Britain no longer merits a seat at the UN Security Council.
"¦ AND A POLITICS IN TURMOIL
Forget the Clacton by-election and the party conference season.
In the event of a Yes vote, all Westminster politics south of the border would be pushed aside to focus on carving up a settlement with a new northern neighbour.
Ed Miliband and other Labour figures are likely to have a seat at the table, meaning the Cabinet could resemble the wartime coalitions of national unity.
David Cameron has insisted he won't resign – but some Tory MPs say there is no way he could remain in office as the Prime Minister who lost the Union.
It's doubtful whether Ed Miliband, whose party has dominated Scottish politics for sixty years and was supposed to be a bulwark against nationalism, could survive the backlash. Losing Scotland would make Labour majorities in Westminster far harder to achieve.
By law, an election is to be held in May 2015. It's up for debate whether that would go ahead, and whether MPs would be returned from Scottish constituencies.
Source: Scottish independence: how will Scotland separate from Great Britain - Telegraph
It will be around breakfast time next Friday when the final result from 32 local counts across Scotland will be declared, deciding, perhaps forever, the future of Great Britain.
If the result is Yes, Alex Salmond has declared Independence Day to be March 24 2016: exactly 309 years since the Acts of Union that joined England and Scotland were signed.
The separatist administration has set out the blueprint for a new nation in a 600-page white paper, covering pensions, health, welfare and defence.
The Westminster government – in an attempt to deny credibility to the independence campaign – insists it has drawn up next to no contingency plans for the event of a Yes vote.
The truth is, a Yes vote would be a giant step into the dark for the entire United Kingdom – and nobody quite knows what happens next.
THE DEBT
The prospect of a Scottish default on its share of Britain's £1.2 trillion debt would lumber the new state with Wonga-sized interest rates for a generation – just as it would be most in need of international lending to support public services.
But that is precisely the threat that Alex Salmond has issued unless he gets his own way on a currency union. David Cameron has called the ultimatum "chilling", and one that will bring "crippling" interest rates on Scottish families.
In a move to reassure lenders, the Treasury has said it would guarantee the entire UK debt in the immediate event of a break-up, and within minutes of a Yes vote next week it is likely the Dept Management Office would reassure markets that – whatever Mr Salmond threatens – the UK would shoulder the debt in the immediate term.
In the long run, an independent Scotland faces "significant" tax rises and spending cuts of around £6 billion a year higher than the Coalition austerity programme if it is to get its debts on a sustainable footing.
Otherwise, an ageing population, higher borrowing costs and declining oil revenues risk pushing debt to over 300 per cent of GDP within 50 years.
Even if it does pay its debts, credit ratings agencies warn that Scotland will pay higher interest rates as a new nation with no credit history – pushing up mortgage costs.
Alex Salmond has insisted Scotland will continue to use the pound in a currency union – a position all three Westminster leaders have ruled out, because taxpayers south of the border would have no reason to continue supporting Scotland's banks and public deficit.
One option would be to continue to use sterling, but without the backing of the Bank of England as lender of last resort – much like Panama uses the US dollar. That could see financial institutions flee south, analysts believe. Interest rates on Scottish mortgages and credit cards would be set from London – but not take into account the country's unemployment or personal debt levels. It would also require spending cuts to build vast currency reserves.
The only way for an independent Scotland to set its own monetary policy would be to set up a new currency. That could trigger a wildly fluctuating exchange rate and high transaction costs at first – and Scotland, a small, new country with no record of currency management, would be regarded as more like Greece than Norway by international lenders.
A fourth option would be joining the euro – despite the fact question marks linger over the long-term future of the currency union.
THE BANKS
Goldman Sachs, the major bank, has warned that even the prospect of exiting the pound could trigger a rapid and dangerous run on the banks as savers withdraw their deposits – just as happened when Czechoslovakia broke up in 1993. Investors would have "a strong incentive to sell Scottish-based assets".
Mark Carney, the Governor of the Bank of England, has promised to act as a lender of last resort during the transition period – but it may do little to calm panicked depositors.
Lloyds Banking Group and the Royal Bank of Scotland are likely to move south of the border due to the stakes held by the British government. Standard Life has made contingency plans to move. The major flow of capital would almost certainly shrink Scotland's economy, to the south's advantage.
DEFENCE
Expelling Trident, Britain's nuclear deterrent, from Scottish waters has been a mainstay of the nationalist cause for decades - the SNP blueprint promises to achieve this by 2020. No-one knows where the submarines, and the stockpile of nuclear warheads, would go.
Faslane, the nuclear submarine base on the Clyde, would become the headquarters of a new Scottish defence force with a budget of £2.5 billion a year, comprising two frigates from the Royal Navy fleet and three infantry battalions named after historic regiments such as the Black Watch. The SNP insist Scotland could become a Nato member, but the alliance is split over whether this could happen.
A separate Scottish air force would have a fleet of 12 Typhoon jets and six Hercules transporters, while the remainder of the UK would still have access to RAF Lossiemouth. A Scottish spy agency would be allowed to share intelligence with MI5 and MI6, the SNP say.
General Sir Richard Shirreff, the former deputy supreme allied commander in Europe, has called the plans "amateurish" and "dangerous".
EU MEMBERSHIP
Scotland would "continue" as a member of the European Union on the same terms as the UK, Alex Salmond has insisted. Negotiations with Brussels would start immediately following a Yes vote and could be finalised within 18 months, he said.
A principle of "continuity of effect" would mean Scotland receives the same special deals as the UK, including the right to remain outside the Euro, opting out of the Schengen zone and keeping Margaret Thacher's rebate – worth £300 million a year to Scotland.
But Jose Manuel Barraso, the outgoing European Commission president, insists that it would be "extremely difficult, if not impossible" for Scotland to join the bloc because it would require unanimity from all member states – including those who have joined on far worse terms. Spain has blocked Kosovo's entry because it is seeking to halt the Basque breakaway movement.
Latvia, Ireland and the Czech Republic insisted that Scotland would not enjoy fast-track entry and go through the full accession process - which can take up to a decade.
THE WELFARE STATE
Scotland has run a budget deficit bigger than that of the rest of the UK for the past 25 years – meaning without subsidies from Westminster it will need to implement an austerity programme far steeper than George Osborne's to balance the books.
Yet the White Paper says there is "no requirement" to cut spending, and reversing Coalition welfare reforms such as the so-called Bedroom Tax is a key plank of the separatist campaign. This is despite an ageing population and greater levels of welfare dependency.
As well as undercutting the UK corporation tax rate by three percentage points, the SNP say an independent Scotland would retain free university tuition, increase child care for preschool children and uprate benefit payments more quickly than in the UK. The Scottish Government also promises to introduce a more generous state pension, and opposes increasing the retirement age to 67.
OIL
The White Paper proposes establishing a Norway-style sovereign wealth fund to squirrel away oil revenue that is currently absorbed by public spending. The Scottish Government claims £1.5 trillion of oil and gas is left under the sea. But Sir Ian Wood, one of Scotland's most successful oil explorers, has warned that reserves have been dramatically overstated and will decline steeply within 15 years. An independent Scotland may end up importing shale gas from England.
Westminster will face a nightmarish negotiation over where to draw new borders under the North Sea.
Mr Salmond wants to make Scotland a world leader in wind energy – but the industry is currently heavily reliant on subsidies from English and Welsh taxpayers.
THE QUEEN
Under the White Paper, the Queen would remain head of state – continuing the Union of the Crowns of 1603. The Church of Scotland has said subsequent monarchs will need to separate coronations, for the first time since Charles II in 1651, to enshrine their position as King or Queen of the Scots.
God Save the Queen may be scrapped as Scotland's official national anthem.
However, many separatists favour a republic, leaving the long-term future of the monarchy in doubt. Constitutional experts have suggested the Queen may have to appoint a governor general, as in Australia, as an interim arrangement.
IMMIGRATION
British citizens in Scotland, and those born in Scotland living elsewhere, would be automatically granted Scottish citizenship.
The White paper says Scotland would implement a much more liberal migration regime in order to support the economy and offset low population growth forecasts, with incomers more than doubling to 24,000 a year.
Ed Miliband this weekend raised the prospect of the Westminster government installing border guards – a move the Scottish government insists is unnecessary.
TELEVISION
Under the White Paper, Scots would continue to have access to "all current programming" provided by the BBC, including EastEnders, Doctor Who and Strictly Come Dancing, in exchange for shows produced by a new Scottish Broadcasting Service. The SBS would adopt BBC Scotland's staff and assets.
But John Birt, the former BBC director general, he said the idea of a programme- swapping venture is "make-believe" and said Scots would have to pay extra to view shows that would only be available on "commercial terms".
A BRITAIN DIMINISHED?
The British government argues that a vote would create just one new nation – Scotland – and the rest of the UK would exist as the "continuing state", its status within the EU, Nato, IMF and the United Nations in tact.
But foreign envoys in London private warn that whatever name the new country of England, Wales and Northern Ireland takes, it would be diminished on the world stage.
The chances of securing a renegotiation in Europe for a smaller Britain could be slimmer. Britain's voice in Washington would be quieter. And China and Russia – which last year dismissed Britain as a "small island no one listens to" – could use the vote to argue that Britain no longer merits a seat at the UN Security Council.
"¦ AND A POLITICS IN TURMOIL
Forget the Clacton by-election and the party conference season.
In the event of a Yes vote, all Westminster politics south of the border would be pushed aside to focus on carving up a settlement with a new northern neighbour.
Ed Miliband and other Labour figures are likely to have a seat at the table, meaning the Cabinet could resemble the wartime coalitions of national unity.
David Cameron has insisted he won't resign – but some Tory MPs say there is no way he could remain in office as the Prime Minister who lost the Union.
It's doubtful whether Ed Miliband, whose party has dominated Scottish politics for sixty years and was supposed to be a bulwark against nationalism, could survive the backlash. Losing Scotland would make Labour majorities in Westminster far harder to achieve.
By law, an election is to be held in May 2015. It's up for debate whether that would go ahead, and whether MPs would be returned from Scottish constituencies.
