Littler Britain

If Scotland leaves the Union, where does that leave the rest of us?

The future of the union is on a knife edge. The polls point in different directions from one day to the next, and there is a real chance that the historic bond tying Scotland with England, Wales and Northern Ireland could be cut on September 18.

A “yes” vote by Scots would transform the political, economic and social aspects of life for the UK’s remaining 58 million citizens. What might it be like to live in a littler Britain?

They’ll take the weather with them

in the union | with independence

The average annual rainfall will fall by 20cm if Scotland secedes.

The culling of the Commons

The UK’s political landscape will undergo an unprecedented shift if Scotland votes for independence.

David Cameron is a passionate unionist who, as he put it this week, “would be heartbroken... if this family of nations was torn apart”. But in 2010, the prime minister’s political life would have been a lot easier had Scotland not participated in the election. Discarding the Scottish seats from the Commons would have given the Conservatives an overall majority.

The four Tory election victories of 1979, 1983, 1987 and 1992 were convincingly won in the face of strong and consistent Labour majorities in Scotland. Although victorious Labour governments have leant on support from Scotland at general elections since 1959, Tony Blair would have commanded an equally impressive majority without its backing.

How would past general elections have looked without Scotland?

in the union | with independence

2010
351
Labour seats

result:

Conservative government

(Cameron)

202
Conservative seats

Harold Wilson is the historical leader who perhaps had most reason to thank the Scots. In 1964 and February 1974, after two elections that created hung parliaments, he would not have led the largest party without the support he gained north of the border. Furthermore, when he managed to gain an overall majority in the Commons after the second election of 1974, he was able to do this only with Scottish seats.

Scotland has had little sway in the landslide elections of recent history. However, the closer the UK-wide result has been, the more pivotal a role Scots have played in deciding it, often providing Labour with help when it was most needed.

Four years ago, Scottish support for Labour shielded Gordon Brown from an outright defeat. In May, Ed Miliband is no doubt hoping to use the same power base to propel his party back into government. Without it, his journey to Downing Street will be a lot tougher.

Taxing questions for peers

Since 2010, all peers in the House of Lords have had to pay certain taxes in the UK. At least 62 are currently considered resident in Scotland and would have to choose to pay these taxes in the rest of the UK to remain in the Lords (potentially in addition to paying tax in Scotland). A further six hereditary peers have titles relating only to Scotland, but it is undecided whether they would be allowed to remain in the House.

If the Lords loses all of its Scottish peers in the event of a “yes” vote, it would be left with 692. Comparing this potential make-up of the Lords with a House of Commons without Scottish seats, parliament would have a ratio of 1.17 MPs to peers — only slightly higher than it stands now.

Scotch whisky represents a quarter of UK food and drink exports

in the union | with independence

If Scotland leaves the Union, we lose 1.23 billion bottles of whisky exports at a value of £4.3bn.

A weaker pound

Strategists at JP Morgan expect at least a 4 per cent weakening of the pound immediately after a “yes” vote, as well as a drop of 10 to 15 base points in 10-year bond yields, which are typically taken as a measure of long-term interest rates.

However, this is not expected to have a profound effect on inflation. Allan Monks, an economist at JP Morgan’s London office, says: “As a very rough guide, a sustained 4 per cent drop in the currency, for example, might raise year-ahead inflation by 0.2 per cent.”

Scottish independence would also dampen growth for the rest of the UK, according to Mr Monks. JP Morgan will be revising its forecasts down 0.5 per cent to 2.5 per cent for the fourth quarter this year and the first quarter next year.

Mr Monks says this is likely to push any Bank of England base-rate increases back three months until just after the general election.

How much is Scottish salmon worth?

Speculating on mortgages

Alex Montgomery, of the legal firm Turcan Connell, says: “While most investors would balk at the idea of taking on currency risk in their mortgages, others might speculate that they could be better off with a sterling mortgage.

“If rates in the rest of Britain ended up lower than those in Scotland, it might attract Scots to borrow south of the border to purchase a home.

“It is hard to say, and on balance the most likely outcome is that there would be a negligible impact on the availability and pricing of the rest of the UK’s mortgages.”

However, Mr Montgomery says that there could be knock-on effects for mortgages if interest rates increase faster than expected in the rest of the UK, or mass withdrawals from Scottish banks reduce their ability to lend, allowing the rest of Britain’s banks to take advantage of decreased competition with rate rises.

One in five of our London 2012 medals were won by Scots

in the union | with independence

At the London 2012 Olympics, 11 athletes from Scotland won 13 medals — 20.6 per cent of a total 63. If Scotland left the Union, we’d be left with 21 golds, pushing us into fourth place behind Russia.

A riskier outlook for pensions

Mr Montgomery says: “The risks certainly far outweigh the opportunities with a ‘yes’ vote and affect those in the rest of the UK as much as they would people in Scotland.

“On the assumption that Scotland would join the EU, pension schemes with employees building up benefits in Scotland and the UK would be deemed cross-border schemes with more onerous funding requirements.”

Slimming the financial sector’s share

in the union | with independence

UK output (gross value added)

Financial sector

If Scotland secedes, the financial sector’s share of UK output will fall by 3.3 per cent, to 9.4 per cent of gross value added.

Dividing the national debt

In the event of a “yes” vote, the UK’s remaining politicians may be less generous in their campaign promises for the 2015 general election. The debt to GDP ratio would rise by just under 10 per cent, forcing the Westminster parties to tighten their prospective purse strings.

One possibility is for national debt to be divided by population share, according to Angus Armstrong and Monique Ebell, of the National Institute of Economic and Social Research. This would leave Scotland with a debt-to-GDP ratio of 86 per cent in 2016/17, assuming 8.4 per cent of the UK’s total obligations.

Alex Salmond, the first minister of Scotland, has said the country will accept a share of UK debt only if a currency-sharing deal is reached. The two governments would have until March 2016 to hammer out a deal.

Employment per head improves if the Scots leave

in the union | with independence

1,007,500
Unemployed people in the UK

A £12 billion saving

The UK government could save just over £12 billion a year if Scotland leaves the union.

The most recent figures from the Scottish government, confirmed by the Treasury, show that Scotland contributed £53.1 billion in tax revenues in 2012-2013, but spent £65.2 billion — a shortfall of £12.1 billion.

The figures include North Sea oil revenues, allocated between Scotland and the rest of the UK according to “geographical share”. If the revenues are instead distributed per head of population, the cost of Scotland to the UK’s coffers increases to more than £17 billion.

The Treasury confirmed the figures, but declined to comment on the grounds that the department had entered the period of purdah before the referendum.

Scotland’s net cost to the Treasury has increased by a third from £8.5 billion in 2011-2012, with Scots contributing 9.1 per cent of the UK’s tax revenues but accounting for 9.3 per cent of public spending in 2012-2013.

Nine of the UK’s 88 Nobel Prizes were won by Scots

in the union | with independence

The Scots helped the UK win three Physiognomy or Medicine prizes, two Nobel Peace prizes, two Chemistry prizes, one Physics prize and one Economics prize. If Scotland were to leave the UK, the UK will lose claim to all nine — a 10 per cent decrease.

Less sex offenders

The number of convictions for sexual offences per 1,000 people will fall by 5.5 per cent if Scotland secedes from the Union.

Convictions per head for possession of weapons or handling an offensive weapon would also fall, although there would be a 2.5 per cent rise in the percentage of robberies.

Overall, there are marginally more convicted criminals per head in the rest of the UK, so there would be a slight rise in total convictions per head of 0.9 per cent.

How many golf clubs
would the UK lose?

There are 578 golf clubs in Scotland, and 2,762 currently in the whole of the UK. If Scotland left the Union, we would lose 21 per cent of our golf courses.

Words by Joshua Boswell, Callum Jones and Alice Ross. Additional reporting by Ann Yip and Amy Hawkins. Design by Luke Griffiths. Development by Joshua Boswell and Ann Yip