What are the benefits to the rest of the UK from Scottish independence?

Question

We've read a lot about why Scottish independence would benefit Scotland and hinder the UK. I'm interested to know how Scottish independence (voting YES to devolution) will benefit the UK on a commercial/business level.

Answer 1

According to an article in the the Economist It'll cost you, Scotland currently receives about as much in subsidies as it pays in oil. As such, a vote for independence would relieve the rest of the UK the burden of, for example, 187 million quid in RBS subsidies.

Speaking about the benefits for Scotland, it states:

Both are wrong, in the short term at least. Assuming it keeps the oil and gas extracted from under Scottish waters, an independent Scotland would currently gain roughly as much in taxes as it would lose in subsidies (see article).

The future, however, looks much dicier. This is a stormy economic world, and an independent Scotland would be a small, vulnerable barque. It would depend on oil for some 18% of its GDP, making it subject to shifts in global commodity prices. Though high oil and gas prices have pushed up tax revenues, if they drop production as well as receipts would plummet. The richest reserves have already been exploited, leaving inaccessible oil that becomes uneconomic when prices fall. North Sea production has been falling by about 6% a year for the past decade. Eventually the oil will run out entirely.

A small country is more vulnerable to other shocks. In 2008 the British government had to bail out Royal Bank of Scotland (RBS) and HBOS, Scotland's two biggest banks. At its peak, RBS's balance sheet was 13 times Scottish GDP. Edinburgh has faltered as a financial centre since, and would be hard to revive. There is a limit to how large a financial sector an independent Scotland—a new, small economy—could support. Mr Salmond has already rebuffed suggestions that he should take a share of RBS's £187 billion of toxic assets.

This borne out in public spending, where Scotland, on average, receives more than other parts of the UK. In "The Scottish Play", they write:

Such arithmetic calls into question not just Scotland's economic future but its political one. Spending per head is currently 13% more than in Britain as a whole, supplying free university tuition, for example, which is not available south of the border. Welfare spending, which consumes a third of public funds, is 11% higher than in England and is rising faster as a share of public expenditure than any other category.

Finally, as "Breaking Up is Hard To Do" (Nov 3, 2012) suggests, Scottish independence would probably bring about a new player within the EU.

Some suggest that the break-up would lead to the creation of two entirely new states, both of which would have to renegotiate their membership of international organisations. Others argue that, on the contrary, both Scotland and a British rump would become “successor states”, entitled to automatic continuing membership of all those bodies to which the UK currently belongs. But most believe that, after any divorce, the UK would continue to exist as before, with only Scotland as a new state.

Having a close ally with a different position in the EU, albeit without some of the benefits that the UK already has, could allow for some renegotiation with the EU. This could be even more (if they play the "We're gonna leave if you don't give us even more" game) special privilege, or even new status - although it could just as easily be a "good riddance with you" from the EU, too.