Mar 26, 2013 | 10:15 GMT

6 mins read

Obstacles to Scottish Independence

Obstacles to Scottish Independence
Jeff J Mitchell/Getty Images

There is a notable trend in Scotland toward greater autonomy, but full independence is unlikely, despite recent moves in that direction. Scottish First Minister Alex Salmond announced March 21 that Scotland will hold a referendum on independence Sept. 18, 2014, seeking to end its 305-year political union with England. The announcement came five months after Salmond and British Prime Minister David Cameron signed an agreement giving the Scottish Parliament the legal power to stage such a referendum.

There are several issues that Scotland would need to account for or overcome along the path to independence. First, the government believes that an independent Scotland would base its economy on North Sea energy resources, but that depends on three things: future oil and natural gas production levels, energy prices and a favorable resolution in disputes with London over the division of the United Kingdom Continental Shelf. Moreover, an independent Scotland would need to take care of its own army, reach trade and monetary agreements with London and negotiate EU membership. Finally, keeping Scotland within the United Kingdom is a strategic imperative for London, so Cameron's government will probably be willing to accept more Scottish autonomy to prevent independence.

England and Scotland have had complex relations over the past seven centuries. After numerous wars, the Scottish and English crowns were unified in 1603 when King James VI of Scotland became the monarch of the British Isles. Tensions did not end there — there were frequent rebellions and at least one instance of state-on-state warfare in the 1640s, as well as the Jacobite risings of 1715 and 1745. Nevertheless, unification was solidified in 1707, when Scotland entered into a political union with England, thus creating the United Kingdom of Great Britain. Since then, numerous political movements sought to give Scotland independence, or at least greater autonomy. As a result, the Scottish Parliament was re-established in 1999 with significant policymaking and legal powers.

The next key step in Scottish history came in 2011, when the Scottish National Party won the regional elections and Salmond became first minister. During the campaign, Salmond promised to call for a referendum on Scotland's independence in 2014. One of the main arguments for independence is the claim that Scotland is not getting its fair share of tax revenue from London, especially considering its energy resources in the North Sea. Salmond's argument is that an independent Scotland with full control of its taxes and North Sea energy revenue would be able to finance a strong welfare state. He also promised that, despite independence, Scotland would have close political cooperation with London.

The Energy Question

The key element of the Scottish National Party's economic platform for an independent Scotland is control of the energy resources in the North Sea. Scotland accounts for more than 90 percent of British offshore oil production and more than half of its offshore natural gas production. Scottish oil and natural gas resources generated some 10.6 billion pounds ($16.1 billion) in tax revenues in the 2011-2012 fiscal year. (Scotland's gross domestic product is around 127 billion pounds.) Salmond often says that an independent Scotland could raise more than 50 billion pounds from energy-related tax revenues in the five years after independence, enabling it to follow Norway's example in the creation of oil-related sovereign wealth funds.

Oil and Natural Gas Fields in Great Britain

Scotland Energy map

According to the Scottish government, after the division of British territorial waters, Scotland would get around 90 percent of the North Sea oil and natural gas fields. London would probably dispute this assumption, and the demarcation of territorial waters would be a key disagreement between the two countries should Scotland become independent.

In addition, Scotland's projections about energy-related revenue may be too optimistic. It is widely believed that North Sea oil and natural gas production has already peaked. While there may be moderate increases in production in the coming years compared to recent years, there are no signs that new fields will be enough to replace declining production. In fact, the Department of Energy and Climate Change said last year that British oil production averaged 1.04 million barrels per day in 2011, the lowest level of production since the 1970s.

Finally, oil and natural gas revenues are linked to energy prices. Recent energy-related tax revenues in the United Kingdom have been volatile: from 2.5 billion pounds in 1998-1999, when oil prices were around $10 per barrel, to 12.9 billion pounds in 2008-2009, when prices peaked at about $150 per barrel. Oil prices are unlikely to dip to 1998 levels anytime soon, but an independent Scotland would still be more vulnerable to price fluctuations than it is now. 

Other Issues of Debate

Another important question would be Scotland's share of the United Kingdom's sovereign debt, which currently stands at around 1.16 trillion pounds, equivalent to 73.5 percent of Britain's GDP.

The military question is also important. Currently under the protection of the British military, Scotland would need to ensure its own defense if it became independent. Salmond's government has yet to detail what the independent Scottish armed forces would look like or how much they would cost. Moreover, there are questions about the division of infrastructure (such as air bases and submarine bases) and equipment between London and Edinburgh. An independent Scotland might benefit from NATO membership, which the Scottish National Party had opposed until recently.

Independence would also mean exclusion from the European Union. EU membership would be important because it would grant Scotland access to some of its major export destinations in continental Europe. However, a free trade agreement with the United Kingdom would be even more important. The rest of the United Kingdom is Scotland's largest trading partner, with exports totaling around 45 billion pounds per year, more than 10 times the rest of Scotland's export destinations, which include the United States (3.5 billion pounds), the Netherlands (2.3 billion pounds) and France (1.5 billion pounds).

Alternative Scenarios

Several Scottish political leaders argue that the nation should seek more freedom from London. They say Edinburgh should be given more power to raise its own taxes as well as more autonomy while keeping issues such as defense, monetary policy or foreign policy under the United Kingdom's control.

In fact, Salmond's original plan was to include two questions in the Scottish referendum: one on full independence, and a second demanding greater control over policymaking. But London rejected this idea and would allow Scotland to hold a referendum only under the condition that it be a "yes/no" vote on full independence. From the British government's point of view, it will be much harder for the Scottish National Party to win that sort of referendum.

While opinion polls vary considerably, most say the majority of Scots would like to remain within the United Kingdom, even if they think that Scotland deserves more autonomy. There are rumors in the United Kingdom suggesting that David Cameron could use the promise of more autonomy as a strategy for his anti-independence campaign.

Moreover, London is interested in keeping Scotland within the United Kingdom. Two of the United Kingdom's basic geopolitical imperatives are to dominate its territory and to secure the immediate seas around the United Kingdom. To achieve the first imperative, British leaders have sought to keep Wales and Scotland politically and economically connected to London. As a part of this strategy, London has allowed Scotland to have varying degrees of autonomy over time so as not to breed resentment. To achieve the second imperative, the United Kingdom has sought to develop a strong naval force.

An independent Scotland would threaten both imperatives because it would create a new state north of England that could eventually challenge the United Kingdom's position in the North Sea or make an alliance with an external power. As a result, London is likely to accommodate Scottish nationalism, conceding more autonomy to weaken calls for independence.

Scotland is its own case, but the call for a referendum comes at a time when other regions in Europe are seeking more autonomy or even independence. (The Spanish region of Catalonia is probably the furthest along in this regard.) As a result, the rest of Europe is following the Scottish referendum closely because it could become the model for other regions seeking independence.

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