Section Summaries of the 16 Questions book

Section Summaries of the 16 Questions book

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The Economy

Our experts look at three questions on the economy:

  • David Bell – What would the outlook for Scotland’s economy be if the vote is Yes/if the vote is No?
  • Angus Armstrong and Monique Ebell – Which currency arrangement would an independent Scotland use?
  • David Phillips – What would the picture for the Scottish Government’s finances be if Scotland votes Yes? What if Scotland votes No?

David Bell sets out the difficulty of trying to predict Scotland’s future economic prospects – and questions the reliability of both the UK and the Scottish Government’s claims about how much better or worse off Scotland would be if it voted Yes:

“Trying to predict the economic consequences of constitutional change poses some difficulty, because nothing about Scotland’s economic future can be known with certainty. There may be a superficial appeal in predicting that you will be £1,400 better off within the union or £1,000 better off under Independence – as the two sides in the campaign have done – but both forecasts are almost certainly wrong.”

He discusses border effects, the public debt an independent Scotland might have, the impact of policies on inequality, but also the possibility that independence might set free what Keynes called ‘animal spirits’ of economic creativity and dynamism. He concludes:

“If there is a No vote the Scottish economy will continue to follow the fortunes of the UK economy. Whether this performance has been good or bad, and whether therefore its continuation is acceptable, is a judgement that people will likely make based on their personal circumstances. Under independence, animal spirits may prevail – or they may not. It is a difficult call. The evidence is much more difficult to gather and to interpret.”

David Phillips takes up these points, focused on public finances – and sees challenges whether Scotland says Yes or No:

“It looks likely that the Scottish Government’s finances will be squeezed in the years after 2016 whether the public vote Yes or No. If Scotland remains part of the UK, cuts to grants from Westminster are set to continue until 2018–19. If the vote is to leave the UK, an independent Scottish Government would likely have to make spending cuts or tax rises of its own just to balance the books. Delivering the promises in the White Paper would need further tax rises, spending cuts in lower-priority areas or higher borrowing.”

Focusing in on a Yes vote, he says: “Independence would give more freedom to pursue a different, and perhaps better, economic policy, to undertake the radical, politically challenging reforms that could generate additional growth.”

He then offers this advice for those weighing up the arguments:

“Whether you believe Scotland’s government finances would be in a better state if Scotland votes for independence, should depend on two things.

  • First, do you think the Scottish Government could find new policies to deliver a sustained increase in economic growth; and
  • second would that additional growth mean higher tax receipts that will more than outweigh the long run decline in oil revenues.

If so then an independent Scotland might be able to continue with its relatively high public spending without much in the way of additional tax increases. If not the Scottish Government’s finances would likely be weaker if the result is Yes.”

Angus Armstrong and Monique Ebell look at Scotland’s currency options in the event of a Yes vote. For them:

“The single most important economic question in the Scottish independence referendum is which currency arrangement would an independent Scotland use … The choice of currency arrangement matters far more than just the notes and coins in peoples’ pockets. It determines the menu of available economic policy options, the interest rates at which people borrow money and the capacity of the economy to deal with crises.”

They are sceptical about the durability of a formal currency union with the rest of the UK amid the challenges an independent Scotland would face in managing its public debt:

“Would a formal monetary union be stable? If there were any doubts that Scots, in these circumstances, would accept the austerity, investors would be less likely to lend to the Scottish Government. This is a slow form of capital flight (funds being withdrawn from the country) which, once it starts, is very difficult to stop without being rescued by another government or even the IMF.”

Another option is informal currency union in which Scotland would use the pound, but with no influence over rest of UK monetary policy (often known as ‘sterlingisation’ or, after similar examples in Latin America, dollarisation). They are sceptical about this too:

“The most likely outcome of dollarization is that Scottish banks would move to the rest of the UK where they would have the backstop of the Bank of England. UK banks would then provide banking into an independent Scotland through a branch network. Since the supply of loans into a foreign jurisdiction is generally a riskier proposition than at home, the cost of borrowing by private citizens is likely to be higher in Scotland under dollarization.”

Their conclusion is that a new Scottish currency is preferable to a formal or informal currency union:

While introducing a new Scottish currency has serious transitional challenges, it may be the best option for a prosperous independent Scotland.”

They explain:

“The currency option that an independent Scotland can unequivocally deliver is issuing its own currency. Having its own currency and controlling its own interest rates would provide the greatest amount of policy flexibility. The more flexibly Scotland can respond to shocks, the greater the stability of its economy. True, trade costs would rise as Scotland and the rest of the UK would no longer use the same currency, but these costs pale in comparison to the costs of financial instability. Many successful countries in Europe with similar wealth and population sizes (such as in Scandinavia) and dependent on neighbouring markets have their own currency.”


If the vote is Yes

Our experts look at three questions that arise in the event of a Yes vote:

  • Nicola McEwen – How long will the independence negotiations take and what will the main challenges be?
  • Angus Armstrong and Monique Ebell – How will assets and liabilities be divided?
  • Patrick Dunleavy – How long would it take to set up a new Scottish state and how much would it cost?

Nicola McEwen anticipates how the process of negotiating independence might look if Scotland votes Yes. There would be a number of challenges, not least the timetable for negotiations, where The Scottish Government envisages a timetable for negotiations which would enable it to declare independence on 24 March 2016. This would mean Scotland could assume its status as an independent country in advance of the Scottish elections scheduled for May 2016.”

She notes that: “The Scottish Government’s timetable for negotiations is aspirational. It is not set in stone and cannot be imposed upon the team negotiating for the rest of the UK” and could be affected by the conduct and outcome of the May 2015 UK general election.

Throughout, “both governments will have an obligation to negotiate in good faith, but each will also be keen to get the best outcome for their respective constituents – and be seen to be striving to do so”. There may be packaged discussions in which quite different issues – e.g. currency questions and nuclear missiles – would be considered alongside each other.

She concludes:

“…it is impossible to give definitive answers to the questions concerning the process and timing of negotiation. In any negotiation, there is give and take on both sides. Not everything need be agreed before Scottish independence can be formally recognised by the UK Government and the international community. Becoming independent, and renegotiating the relationships between the nations and regions of these isles, would be an evolving process, not a one-off event. But given the inevitable uncertainty that would follow a Yes vote, the attendant risks of such uncertainty on the behaviour of citizens, businesses and investors, and the nervousness which is likely to be felt among other states at the potential repercussions of an independence vote beyond these shores, there would be enormous pressure on both governments to negotiate an agreement on the key issues as quickly and as cleanly as possible.”

Angus Armstrong and Monique Ebell’s main focus is on the division of public sector debt in the event of a Yes vote. Three key questions would need to be clarified: what measure of existing UK debt to use; how it would be divided; and how an independent Scotland would assume its share.

Though there are other, arguably better measures, the UK and Scottish Governments use Public Sector Net Debt (PSND). Armstrong and Ebell note that the UK Office of Budgetary Responsibility forecasts PSND “will reach £1,439 billion at the end of the fiscal year 2015/16, the date at which independence would occur.”

They note that once there is an agreement on which measurement to use for UK debt, that debt could be divided by population or other approaches. The choice of approach could increase or decrease the level of debt of an independent Scotland. “On a population basis, an independent Scotland would be responsible for 8.4% of the outstanding debt. On the narrower PSND measure an independent Scotland’s debt would be £121 billion, or 73% of GDP. The latter ratio is included in the UK Treasury and Scottish Government reports.”

They also note that once a particular division of debt had been agreed, an independent Scotland’s share could assumed in different ways: “The first option is where Scotland pays the full amount of its share at independence, which we call a ‘clean break’ option … The second option, noted in the Scottish Government’s White Paper, is that an independent Scottish Government would commit to paying its share of interest and principal payments as and when they fall due. We call this the ‘IOU’ option.”

Using a population share of PSND they calculate “the total amount of debt to be raised in the first year of independence would be only £16 billion”. For them “a critical question is the cost at which an independent Scotland could borrow this amount.”

Their answer on cost:

“We have estimated that an independent Scottish Government would be likely to pay between 0.72% and 1.65% higher interest rates than would be the case for the UK for borrowing over ten years.” Moreover: “Higher government borrowing costs would also be likely to lead to higher borrowing costs for households and businesses in an independent Scotland compared to the UK. However, the increase might not be as much.”

Patrick Dunleavy looks at the challenges of establishing the institutions of a new state, and their cost. New institutions would include a Scottish Defence Force, a Scottish Security and Intelligence Agency, a Foreign Ministry, a Passport Office and expanded Scottish Government directorates for Finance and Economy and for Welfare. In addition, other government functions in Scotland are currently handled by UK Government bodies, some 206 according to the UK Government.

However “there is a considerable scope for ‘streamlining’ what gets done north of the border, compared to UK practice. In fact, we think that rather than 206 bodies Scotland would need no more than 136 bodies, of which less than 60 would be new and of any significant size at all.”

In a number of areas, including defence, HMRC and the administration of welfare benefits, an independent Scotland would look to share services with the rest of the UK for a transition period.

How much would establishing independence cost? Dunleavy identifies several different types of cost, among them set-up costs:

Set-up costs are those incurred by Scotland only, in the early transition period (especially from a Yes vote to March 2016) in duplicating a capacity that already exists in the UK. These costs are unavoidable, one-off costs of transition that create no additional or offsetting welfare gain for Scotland’s citizens. We have estimated the set-up costs for Scottish Government as being in the range from £150 million to £200 million – that is £30 to £40 per person.”

Another important type of cost are investment costs which will “have to be borne by Scotland in order for its policy makers to gain full control over the tax, benefits and defence areas, running all the back-office systems in a self-sufficient way.”

The UK Government has said such costs for the administration of welfare benefits would, over time, be £400 million and for HMRC functions £500 million. Dunleavy notes:

“These estimates are not based on any careful analysis, but given prevailing IT and change costs they do not seem implausible. However, these are not just ‘set-up costs,’ because Scotland would be replacing older and complex legacy IT systems in each case, with newer, modern IT systems that would last for a long time (at least ten years), and could well be cheaper and far more flexible to operate.”


If the Vote is No

Here, Charlie Jeffery looks at the question: If the vote is No, would we get more powers? What difference would they make?

He discusses the proposals that the three main pro-union parties – the Conservatives, Labour and the Liberal Democrats – have produced on more devolution in the event of a No vote, noting:

“The various proposals differ in detail and emphasis but have plenty of common ground, especially around more devolution of tax and some welfare policies. The three parties came together around this common ground in June 2014 with a joint pledge to ‘strengthen further’ the Scottish parliament and to put their proposals in their respective manifestos for the May 2015 UK General Election.”

The most important proposals are on income tax devolution, with Labour offering less than the Conservatives or Liberal Democrats. Jeffery notes:

“The effects of decision-making powers on income tax, whether the more limited Labour version or the fuller Liberal Democrat/Conservative version, would be very visible in people’s pay packets and tax returns. Any changes would certainly prompt public debate and require the Scottish parliament to justify more fully the spending proposals that would be funded in this very direct way by the Scottish taxpayer (and rewarded or punished by the Scottish taxpayers’ votes at the next election).”

He also notes the Yes side’s view: The Yes side’s response to the pro-union parties’ proposals on more devolution has been very simple: the pro-union parties cannot be trusted to deliver.”

So would the No side deliver? Jeffery sees two reasons why they would (and why, as he says, “they would certainly be foolish not to”):

“The first lies in the pledge made by the pro-union parties in June 2014. Although it was painfully thin on detail, it exists … If those parties are felt to have gone back on their pledge there is likely to be only one beneficiary, the SNP.

“The second lies in the process of legislating on more devolution. Assuming a Bill is brought in at Westminster it would also – as the 2012 Scotland Act did – need the consent of the Scottish parliament, which has an SNP majority until 2016. So more devolution is not just a matter for the pro-union parties, but one on which the SNP has a say. That would certainly keep the pressure on the pro-union parties to deliver.”


International

Our experts look at three questions on the international dimensions of the independence debate:

  • Juliet Kaarbo and Daniel Kenealy – What kind of international role and influence would an independent Scotland have?
  • Michael Keating – Would an independent Scotland be in the European Union?
  • Colin Fleming – How would an independent Scotland defend itself?

Juliet Kaarbo and Daniel Kenealy ask what kind of foreign policy an independent Scotland would have and how much influence it could exert in the international system. They see a mix of continuity and change in the Scottish Government’s proposals:

“Continuity would be provided by on-going membership in a variety of international organisations, perhaps most prominent amongst them NATO and the EU. But there would also be the possibility of change as an independent Scotland would be free to pursue a set of values and interests somewhat distinct from those of the UK.”

They see that change in “a highly aspirational policy”, with a Scottish Government vision of Scotland as a “champion for international justice and peace” and “a good global citizen with a ‘do no harm’ principle, especially to developing countries”.

By contrast, “the No side sees Scotland stronger as a part of the UK than it would be on its own. The argument is captured in the phrase ‘A strong voice in the world’  …Their messages stress, in terms of sheer numbers and expenditure, how much larger the UK diplomatic service, the UK economy, the UK armed forces, and the UK intelligence services, are in comparison to hypothetical independent Scottish counterparts.”

Kaarbo and Kenealy make the point that these are views which “are talking past each other with No speaking the language of big states and power politics, and Yes speaking the language of small states punching above their weight.”

They also ask whether small states can indeed ‘punch above their weight’, finding:

“..small states can carve out niche roles, champion specific issues, and broker agreements, as they often enjoy more credibility and neutrality than larger states, because of their small size … Small states can use their power, and particularly their ‘soft’ power of persuasion and example-setting, in smart ways to advance their interests and exert influence.”

Colin Fleming echoes a number of these themes in his discussion of how an independent Scotland would defend itself:

“While the UK’s strategic effort remains global in scope, Scotland’s focus would be on the defence of its territorial integrity as well as taking on a regional defence role in northern Europe. In contrast to the current strategic posture of the UK, with its history as a major international power, the Scottish Government’s defence proposals reflect those of a small state.”

The two sides, in other words, are again talking past each other. But they are connected by the overlapping debates about Trident and NATO membership. The Scottish Government would want Scotland in NATO following a Yes vote, but is also committed to the removal of nuclear weapons from Scotland. So: “Because NATO is a nuclear alliance it has been argued that Scotland’s membership would be denied on the grounds of its anti-nuclear stance.”

So would Scotland’s proposed NATO membership be vetoed? Fleming notes that:

“…being anti-nuclear is not in itself a barrier to Scottish membership. The Scottish Government has signalled that it will sign up to NATO’s Strategic Concept which rests on it being a nuclear alliance. Refusing to sign would almost certainly prevent Scotland’s membership. However, by accepting NATO is a nuclear club the main barrier to membership is removed.”

But he adds a qualification:

“This does not mean that Scotland would gain entry immediately. The stance on the removal of Trident is crucial and NATO will be wary of permitting Scottish membership if the timetable for the removal of Trident forced the rest of the UK into nuclear disarmament against its wishes.”

This suggests flexibility on timetable would be needed. Fleming notes “that the Scottish Government has not provided a set timeline for removal of Trident … and will enter into negotiation with the UK Government on the issue”. He cites UK Government views that ‘around a decade’ would be needed and says:

“This seems appropriate and would allow London time to find suitable alternative facilities for Trident if it wished to maintain its current nuclear capability.”

Michael Keating looks at what is now a long-running debate on Scottish EU membership post a Yes vote. The debate has moved on:

“At the start of the current independence debate, positions were polarised. Independence supporters argued that Scotland would remain in the European Union (EU) more or less automatically, while their opponents suggested that it would be out.”

The Scottish Government now accepts that it would have to apply for membership, and many on the No side now “accept that Scotland could join the EU but that it would have to adopt the euro and enter Schengen and would lose the current UK opt-outs.”  So the debate is now more about the terms of membership than whether membership itself would be possible.

On this Keating notes:

“Keeping Scotland in the EU … might be complicated but pales beside the challenges of disentangling Scotland to get it out. Forcing it out of the single market, only to allow it back in again, is the sort of challenge member states can really do without.”

He also notes that “No country has ever been forced into the euro against its will,” and: “Nor is it likely that Scotland would be forced into Schengen, especially as the UK Government would have a strong interest in keeping an open border. This makes threats by UK ministers that there could be border posts between England and Scotland questionable; the only authority that might plausibly impose such posts is the UK Government itself.”

If Scotland were an independent member, Keating makes some of the points noted by Kaarbo and Kenealy about small states:

“We know that small states in the EU have less influence than larger ones, but they can be effective if they are well organised and know their way around the European institutions, and if they have a reputation as constructive players and good Europeans … As a small state it could not hope to behave like the UK does if it wanted to retain influence.”


What sort of Scotland?

Thinking about ‘what sort of Scotland’ we might see after the referendum, our experts explore the following:

  • Stephen Tierney – The constitution of an independent Scotland: What would it contain? How would it be made?
  • Kirstein Rummery and Craig McAngus – How different would or could Scottish social and welfare policy be from the policy of the UK in the event of either a Yes or a No vote?
  • David McCollum and Scott Blinder – Does Scotland need a separate immigration policy? And if the vote is Yes could we have one?
  • David Bell and David Eiser – What would happen to pensions in the event of a Yes or a No vote?

Stephen Tierney sees two big sets of questions around the making of a Scottish constitution, the first determining what kind of country Scotland becomes if it votes Yes, the second determining the legitimacy of the whole process:

  • “What would the final written constitution look like? Such a document would most likely entrench important principles beyond the reach of ordinary acts of parliament. This would inevitably hand more power to judges who would have the duty to interpret this constitution and to strike down the legislative will of parliament if an enacted law were found to be incompatible with the constitution.
  • Who would draft this permanent constitution? Would the process be genuinely popular, or would it be controlled by elites?”

Casting a critical eye over Scottish Government proposals on content and process, Tierney offers some answers:

“The drafting process for a new constitution should engage with the general public as much as possible – taking seriously public opinion on a range of issues – so that the process is genuinely popular rather than elite-driven.”

And commenting on the possibility that a new constitution could include detailed provisions on social and economic matters and issues like nuclear weapons, he adds:

  • “Important decisions should be left to parliaments, so that people can use the electoral process to make key choices on policy matters. It seems very questionable that the first generation of post-independence Scots should take upon themselves the power to crystallise a broad range of current policy preferences as constitutional principles.
  • By constitutionalising specific values and policies, the constitution would significantly ramp up the powers of judges, giving authority to a small unelected group which is arguably not entitled to determine these issues.
  • Also, to declare so many things ‘constitutional values’ can curtail political debate. People who then criticise policies which have been dressed up as constitutional principles can find themselves accused of disloyalty to the country, which is deeply unhealthy for democracy.”

Kirstein Rummery and Craig McAngus start by looking at the Scottish Parliament’s record so far on welfare, noting:

“In the areas where Scotland has had control over social policy, there are some indications that it favours a universal over a targeted approach to welfare. Policies such as universal access to free personal care, free prescriptions, and free higher education are designed to create social cohesion, although they do disproportionately benefit the well-off over poorer sectors of society. They are also designed to avoid the stigma associated with accessing welfare.”

They note that the Yes side has made a “case for a vision of social and welfare that is a departure from the Westminster model”, including the commitment to universalism and to addressing gender inequalities. They disagree with Tierney by arguing that:

“If principles designed to tackle this are not enshrined in the constitution [Scotland] will struggle to address this. A Yes vote would potentially offer the nation an opportunity to create a more socially just society than it would if it remained in the UK, but this depends heavily on the constitutional settlement that is agreed – not everyone in Scotland is committed to social justice and universalism.”

A No vote will see the “central pillars of the social security system stay at the UK level.” At that level “the current language of ‘welfare dependency’ versus ‘hard working families’ makes it clear that Westminster favours creating disincentives to use state services and benefits wherever possible.”

David Bell and David Eiser look at a core aspect of social security: pensions, including the state pension, public sector workplace pensions; and private occupational pensions.

They note that “the Scottish Government has been keen to stress that pension rights and benefits will not be affected by independence”. They see “no obvious reason why the conditions around any of these should change radically on independence”. Rather:

“The main long-run pension challenge is their affordability as the population ages. This is a challenge regardless of the constitutional position, although it is slightly more acute in Scotland than in the rest of the UK.”

In the case of a Yes vote they note that:

  • “…the Scottish Government has indicated that it would provide a slightly more generous State Pension … [this] will affect the affordability challenge posed by an ageing population and would have to be funded through general taxation.
  • Affordability will also be affected by the fact that Scotland has a higher proportion of public sector workers and a more rapidly ageing population. Under current arrangements, shortfalls in Scotland’s unfunded pension schemes are met through UK taxation, whereas under independence, shortfalls would clearly have to be met through Scottish tax receipts alone.
  • For those investing in occupational pension schemes, the prospect of an independent Scotland adopting its own currency raises issues: Scottish pensioners who had invested in UK schemes may find the value of their pension fluctuating depending on the exchange rate between sterling and the new Scottish currency. On the other hand, independence may enable Scottish workers to secure a larger pension fund for their retirement, if the Scottish Government has to pay more to borrow than the UK.”

They conclude that:

“…the challenges posed by an ageing population are likely to require some combination of increased contributions and/or general taxation in order to fund existing liabilities. Although this challenge will exist whatever the constitutional position, the affordability challenge is likely to be more acute for Scotland than it is for the rest of the UK.”

David McCollum and Scott Blinder start by noting basic differences in UK and Scottish Government views on immigration:

“The UK Government has developed an increasingly restrictive stance towards immigration, arguing that too many people coming in has strained social cohesion and put pressure on wage levels and public services. In contrast, the Scottish Government wants to attract more migrants to Scotland – particularly the highly-skilled – for both demographic and economic reasons.”

So if there were a Yes vote, Scotland “would likely enact a less restrictive set of immigration policies than those of the current Westminster government.” Indeed (and connecting to Bell and Eiser’s points about the affordability of pensions):

“Scotland is much more reliant than other parts of the UK on immigration in order to keep its population stable or growing. Scotland’s population is also ageing more rapidly than the rest of the UK’s, meaning that immigration may play a particularly significant role in boosting the population of working age people relative to retirees.”

By contrast, the UK Government’s contributions to the referendum debate have focused on “the difficulties of implementing a more open immigration system in an independent Scotland that shares a border with the rest of the UK, and the potential clash with UK interests and preferences”, in particular “the stated intention of the Scottish Government to remain within the Common Travel Area (CTA) that currently binds the whole UK with Ireland”.

However, McCollum and Blinder argue that “even within the UK, Scotland could operate a more distinctive immigration policy by varying the incentives allowed in the present points-based system to encourage high-skilled migration to Scotland.”

Differences in immigration policy in other words do not necessarily require border controls. This suggests that:

“…the likely level of autonomy for Scotland’s migration policy is not fixed but would be the outcome of political negotiations, either in independence or in continued union.”


Business and competition

Our experts look at two questions under this heading:

  • Brad MacKay – Would a Yes vote be good for business? Would a No vote?
  • Grant Allan, Patrizio Lecca, Peter McGregor, Kim Swales – What would independence mean for energy markets?

Brad MacKay starts by setting out the stakes of the debate about business and the referendum:

“How the vote impacts on business decisions to invest, re-invest, expand, withdraw, locate or relocate business activity within or outside Scotland is critical for Scotland’s economic prospects following the referendum.”

Unsurprisingly, views on this differ:

“The Yes side argues that having more powers to tailor economic policy to the needs of Scottish business will help to enhance productivity and growth. The No side argues that the success of Scottish business is underpinned by the scale of the UK single market.”

MacKay reviews the available evidence and finds that businesses generally see significant risk in the prospect of independence:

“The most problematic issues for businesses are the currency (with a strong preference for the pound Sterling), regulation, corporate and personal taxes, EU membership (with a strong preference for remaining in the EU), the business environment and the costs of a transition period. The vast majority of businesses indicate that independence poses significant risks to their business operations and strategies.”

Indeed: “A large majority of business leaders indicate that the costs and risks of independence to business outweigh the perceived benefits and opportunities that might occur.”

MacKay concludes:

“While some, primarily smaller businesses might benefit from more tailored policy by an independent Scottish government, for the majority of successful companies in Scotland today, their success has been achieved within the policy and regulatory context of a highly integrated UK single market. If this changes, so does the foundations on which their success has been built.”

Grant Allan, Patrizio Lecca, Peter McGregor, Kim Swales explore a range of issues concerning energy markets in Scotland and the rest of the UK in the event of a Yes vote. The Yes side claims that:

  • “The integrated British market in electricity and gas will be maintained and operate pretty much as it does now
  • The UK Government will continue to import electricity generated in Scotland on similar terms to those that currently prevail because it will be in its own interest to do so, since it would otherwise experience a problem of security of supply and be unable to meet its legally binding EU emissions targets for 2020.”

The No side claims that:

  • “There will continue to be an integrated network, but transactions will be subject to new, and purely commercial, contracts. Scotland may still export electricity to the rest of the UK, but these exports will not be privileged and will be dependent on competitiveness.
  • The rest of the UK is not dependent on Scottish imports for security of supply, they constitute less than 5% of total consumption.
  • The rest of the UK will be able to meet its EU targets without importing electricity from Scotland.”

Allan and colleagues argue that “the truth lies somewhere between these two positions”. For example, on security of supply:

“… given the timescales required to alter generation and interconnector capacities … imports from Scotland are likely to form part of the rest of the UK’s solution in the short and medium runs. Longer-term the rest of the UK could no doubt make arrangements that would ensure its standalone security of supply.”

Similarly:

“The Scottish Government’s claim of the rest of the UK’s dependence on Scotland to meet its binding emissions targets may be exaggerated, although other options prior to 2020 may be fairly limited.”

Their overall conclusion is:

“It is fairly clear that: cooperation between Scottish and the rest of the UK Governments is likely to be beneficial to both sides for most, if not all, of their energy policy goals; affordability is going to be a major issue for both Governments; both yes and no camps are prone to exaggeration.”

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