Rumours abound of Nicola Sturgeon seeking another Scottish independence referendum when Article 50 is triggered. Contrary to popular wisdom, if Scotland does break away, Brexit will be a tactic where devolution proves to be the strategic cause. The political impact on the Tories could be more benign that unexpected, too, as many English voters have mixed feelings about Scotland’s place in the Union, while the SNP would have to take full ownership of policy outcomes in Scotland. Either way, aside from short-term currency fluctuations, the change would affect companies serving the UK’s remaining public sector.
Subject to any final deal, Scottish independence would increase Westminster’s appetite for spending – partly as more funds become available to use in England, Wales and Northern Ireland, and partly to replace infrastructure assets (especially maritime assets) lost in Scotland. At the same time, state spending in a newly independent Scotland would probably fall in line with a smaller tax take and a lower international credit rating.
Paradoxically, “independence” could also mean less autonomy for the Scottish Government, as it would probably have to align itself with the business and trade regulations of a larger trading bloc (whether the UK or the EU) over which it has precious little influence.