The Case for Scottish Independence: Regional Trade, Energy and Power

Rob May

Originally published in February 2012.

In 2011, Alex Salmond MSP led his Scottish National Party (SNP) to electoral victory in Holyrood on the back of a tacit – and often explicit – desire for Scotland to break away from the United Kingdom (UK) and form an independent state. A referendum has since been scheduled for 2014, tabling the question of Scottish independence to the electorate; with much clamour in the media and political circles accompanying the announcement on Robbie Burns Day. The case against Scottish independence (or, as it is characterised, the “end of a United Kingdom of Great Britain”, despite that also requiring the end of “Britishness” has been circulating rapidly since then – but what about the case for Scottish independence? How will Scotland’s presence – and by inference, the UK’s presence – in international relations be fundamentally altered? What benefits can Scottish independence bring to the Scot-free UK, Scotland and other international partners? This short essay looks at three areas in which Scottish independence would benefit both Scotland, and a smaller UK: trade, energy and power. For the benefit of this article, any mention of the UK, or Britain, refers to a Scot-free United Kingdom.

At a time when currency is a political weapon, and when the economic crisis has turned the arena of international trade on its head, an independent Scotland could stimulate cross-border trade with the North of England, Wales and Northern Ireland. Careful regulation of public and private sector investment should allow the UK government to empower Northern businesses to take advantage of a Scottish economy invigorated by a successful independence campaign – and a weaker currency, if Scotland were to detach from the UK pound or even join the Euro – and use trade distortions as a result of currency differences across the border to gain a comparative advantage.