Scottish independence would have major negative impact on Ireland

If the very real prospect of Scotland actually leaving the United Kingdom has suddenly crept up on hitherto dozy UK political establishment, then the indifference of the Irish political culture has been even more baffling. For such a momentous decision by the Scots next Thursday could have serious and very negative implications for both Northern Ireland, and the Republic.

The immediate effect would be a legislative and economic upheaval, but when the dust settles Ireland will have an independent Scotland directly competing with it in terms of direct investment, tourism - and a share of EU funding and resources. The Scots will have the advantage of still being in the pound and not tied to the depressed Euro currency, as the Irish are.

In reality, a UK without Scotland would result in a more Tory dominated UK and one that would have little interest or affection for Northern Ireland - and this at a time when the two political traditions there are incapable of holding the Stormont coalition together. A panic-stricken London establishment is now offering more powers to a Scotland if it stays in the UK, and these devolved powers would also likely be given to Northern Ireland. But, with the divided Stormont partnership incapable of administering what it has, extra powers could further destabilise the North.

All of this is why the Sinn Fein leadership has been relatively quiet about the Scottish campaign. It knows that more money going to Scotland, to buy them off, would mean less for Northern Ireland and could worsen the existing stand-off on Government spending there, where Sinn Fein is unwilling to implement welfare cuts demanded by the UK exchequer.

For the South, an independent Scotland would create a rival country in terms of foreign investment and trade.  It would complicate the Irish trade and co-operation agreements with the UK, since these were developed on the generosity of a much larger UK. A small, independent Scotland might not be so generous and could wish to revise those parts of the existing agreement that affect them.

Even if the Scottish vote doesn’t go through, the alternative devolution deal they are being offered by London will give Scotland much greater powers and independence. This has to change the dynamic of Ireland’s relationship with it. But the Republic’s political classes seem to have been asleep on this one. Indeed, Irish complacency about this referendum is a wake-up call to the implications of an even more momentous vote coming down the tracks, and that is the UK referendum on EU membership due by 2017.

Read more: An independent Scotland means the end of Britishness

Certainly, the Scottish nationalist leader, Alex Salmond is well aware of the consequences for Ireland. Interviewed on TV this week, about the implications for Ireland of an independent Scotland, he immediately and repeatedly used the word ‘competitive’. He said it would be a ‘friendly competitive’ relationship between the two neighbouring countries, but he had a gleam in his eye. Salmond is well aware of the brutal economic realities of the wider world - he wants to do what the Republic has done in Ireland, and if necessary take some of its business.

Asked in the same interview about the implications for Northern Ireland, Salmond said that the vote showed how major legislative change could be achieved by constitutional means and without resort to violence. But there is no prospect of a return to violence in the North and Salmond knows that - both sides in the North are committed to peaceful means.  However, even with this peaceful process, they are making a mess of things. And a Scottish Yes vote would add to this instability. But Salmond didn’t want to get into that. He is not interested in what happens in the North. He is thinking of Scotland and of Scotland alone.

For years, the Republic has been a magnet for investment by offering itself as a small EU state which was friendly, English speaking, well-educated with low corporate tax, business breaks, good schools and scenic golf courses. And now Scotland can do the same. And the Scots are very good at marketing and national brand management: they have long promoted their tartan, shortbread biscuits and whiskey throughout the world. The Scottish brand is more popular internationally than the British one, and on its own, or even with devolved powers, an invigorated Scotland could clean up. (And compete with the Republic for investment, tourists and scenic movie shoots).

Many believe Scotland could have extraordinary prosperity by directly emulating the Irish low-tax model for investment, but also because it is rich in oil and in the alternative energy sources such as wind and water. And there is one other big difference with Ireland: it is still competitive. With the Republic’s high property prices, costly utility bills and high taxes and wages, the former Celtic Tiger has lost its competitive edge. The danger now is that it will be supplanted by a new Celtic Tiger, to be given birth at the polls next Thursday.