What it means if Scotland becomes world’s newest independent state

Scotland — the country from which some of Britain’s most famous political philosophers hail — goes to the polls on Sept. 18 to decide whether to engage in a daring political experiment: declaring independence and seceding from the United Kingdom, an alliance established in the year 1707. Earlier in 2014, surveys suggested a no vote to the proposal was almost certain, but now the latest polls show public opinion is evenly split.

The new data from market research firm YouGov has sent shivers down the spines of British currency traders as they endure markets jittery over the vote’s outcome, and have thrown politicians in London, who had bet on a no vote, into a nervous sweat.

Below, we help you make sense of it all.

What is at stake in the referendum?

There's a lot of ego at stake in the referendum, on both sides of Hadrian's Wall (the structure, still standing, set up by the Romans to keep out the unruly, blue-painted people from the island's far north). A yes vote would mean a new independent nation sprouting from the British Isles for the first time since most of the island of Ireland won its independence from the Crown in 1922.

That upheaval followed a violent rebellion. This time there'll be no bloodshed, just ballots — and perhaps a new seat in the United Nations for an independent Scotland. 

On a practical level, independence would mean that Scots would collect their own taxes for their own social programs and reject or endorse their own austerity measures without being subject to London’s decisions, which are usually more conservative than Scotland’s.

To Scots who support the independence movement, breaking away from the UK could mean a departure from policies London pursues that run counter to their more left-wing politics. The yes campaign has said it would remove Britain's nuclear submarine force that is based in Scotland.

On a less tangible level, independence could deal a severe blow to an already diminished sense of “Britishness.” It could also lead to Wales, Northern Ireland and the English regions demanding a further transfer of powers from the center.

Why are Scottish people being given the choice now?

The independence referendum was a campaign promise of the Scottish National Party (SNP) that won the 2011 elections to Scotland's devolved parliament. Following negotiations, in 2012, the UK government agreed to let the Scots go forward with a referendum.  

How close is the race? Why has it tightened?

Right now, the latest YouGov poll estimates public opinion in favor of independence at about 51 yes to 49 percent no. It’s not completely clear why the pro-independence camp has surged in recent weeks, but some say it was driven by a more vibrant presence of supporters on social media.

To commentator Mike Small, the shift comes from the sheer verve of yes supporters. While the no campaign has to pay its supporters to come out, yes volunteers pound the pavement for free. An arrogant presumption of victory on the part of no campaigners didn't do their cause any good, either, Small argues. 

It could also have something to do with the increasingly desperate tenor of the British government that, led by Prime Minister David Cameron, has promised greater devolution of powers from the center to Scotland in the event of a win for the no vote.

What are the economic implications of independence for both Scotland and the rest of the UK?

Scots already have their own parliament, but their budget and policies ultimately have to answer to the UK government. Many Scots who support their country staying in the UK fear a disastrous currency upheaval, as the head of the Bank of England has said Scots won’t be able to keep the pound as their currency — a claim disputed by Scotland's First Minister Alex Salmond, the leader of the independence campaign. The currency issue has featured strongly in the two televised debates between the leaders of the yes and no campaigns.

Campaigners for the union argue that Scotland isn’t strong enough to leave the union, while separation advocates say that an ocean of oil underneath the North Sea will underwrite Scottish independence. The “Better Together” campaign, however, says that creating a new independent country would put up unnecessary barriers to cross-border employment and trade that would negatively impact Scotland’s economy. Scotland retains painful memories of privatization of its biggest industries by the government of then-Prime Minister Margaret Thatcher, at a time when Scotland had voted decisively against her Conservative Party.

What would Scottish independence mean for the European Union?

The no campaign has said an independent Scotland would have to negotiate admission to the 28-member group, but the Scots would very likely get a place at the table of the economic and political union, eventually. Whether this means they would adopt the euro as their currency remains unclear. There is also the possibility that Scotland would remain on the fringes of the EU, and adopt a stance similar to that of Norway, which Scotland already in some ways resembles — oil-rich, scenic and traditionally socialist.

Some fear that a successful Scottish secession would encourage other European separatist movements, such as those of the Basques and Catalans in Spain.

How would Scottish independence affect Britain’s political parties?

In the short term, it would be bad news for the British Labour party, since Scotland is the party’s most dependable stronghold, accounting for a sixth of its members of parliament at Westminster. (Of Scotland's 59 members of parliament, 40 represent Labour.)

Westminster members of parliament representing districts in Scotland would get pink slips by 2016, upsetting the balance of power between Labour, the Conservatives and centrist Liberal Democrats in parliament. This doesn’t mean there will never be another Labour prime minister, but it will be harder to gain the necessary support.

Will a no vote settle the matter once and for all?

Scotland's relationship with the rest of the United Kingdom has been a recurrent issue for decades. A referendum to create a Scottish parliament failed in 1979, but succeeded in 1997. A no vote, especially by a small margin, is unlikely to be the last word on the matter.