Having sort of done this a couple of days ago in a comment on social media, it is clear that some may find an high level overview of the arguments useful. I’ll try to summarise both sides (I’m sure any mistakes will be picked up) and largely avoid numbers, though I can’t completely do so and will try to use them more for context. This is meant as a broad overview, so much nuance will inevitably be lost.
Assumptions
I can’t get away from some, but hopefully the following are uncontroversial. The main one is that an independent Scotland is looking to maintain higher government spending per capita than it would otherwise. Given this is explicit in the white paper and implicit in other yes campaign statements I don’t expect any argument.
Note the careful phrasing – the rural nature of Scotland means that it requires a higher spending per capita to deliver services equivalent to the rest of the UK. The Barnett formula delivers that and is justified on this basis, amongst others.
The amount of spending is, of course, subject to dispute. Yes campaigners cite savings on some UK budget items such as defence and London costs. No campaigners cite unfunded promises, additional costs of running the country and higher interest rates.
The second one is that oil will run out. There is a debate about when (a bit more on that below), but it will happen. It is worth noting that the decline in production will take place gradually over time rather than suddenly, but may not necessarily be continually down year on year.
What happens when oil runs out?
The question I’m going ask, which I think cuts through a lot of the fluff, is what happens when the oil runs out? Extra spending can be funded three ways: debt, taxes or income growth. Funding ongoing expenditure from debt in the long run is not sustainable, so the argument comes down to will there be more taxes (worse off) or extra income (better off.) [Aside: There are two other answers – cutting spending we have removed by assumption. Voters may also feel strongly enough about higher spending to be happy paying higher taxes. This is not an argument I have seen made, but it is possible.]
The two numbers I’ll use are our starting point: for the latest historic year available (no projections) the Scottish government budget deficit was 5.9% of GDP (source: Scottish Government), after allowing for a geographical share of oil revenues. Oil production is roughly 17% of Scottish GDP (source: S&P). I’ve found this BBC summary of oil facts useful too.
The yes campaign argue that they will fund the spending increase from oil revenues. They will also save some of the oil money, creating a sovereign wealth fund. That will be invested and when the oil runs out that will generate the extra income.
The no campaign argue that the oil money is already being spent so saving & increasing spending at the same time isn’t realistic. This is because oil production is declining, has been for some years and will continue to do so.
The yes campaign then argue back that there has been increased investment by oil companies in recent years so production will start to increase. There is also more oil out there than the official figures say.
The no side argue that the increased investment reflects increased costs of extraction (the easy, cheap stuff has gone), not greater volumes. Even if there is increased production at some point, it will be no more than blip in a long run decline.
This is the point where discussions tend to get a bit pointed, so it is where this article stops.
Growth
The other possible yes argument is that Scotland will experience better economic growth so that higher income offsets the higher tax revenue required. I haven’t managed to get a solid argument for this, but the possibility of green power seems have some substance. The no side point to declining oil revenues reducing GDP growth over the long run.
IMHO this has not really been debated. At the risk of editorialising my view is the few points of substance are independent of independence – oil will run out and Scotland will have more green energy regardless. Changing long term structural growth is very hard and I believe there is not enough information to come to a rational conclusion.
The argument on growth would then come down to the short term. The no campaign argue that there will be substantial disruption in the event of independence. The yes campaign say there won’t be and a 3% corporation tax cut will attract more companies. This is where the arguments about currency and financial regulation come in.
Final thoughts
I know that economics is not the only reason for your voting decision. And the ability to deliver the social commitments is not solely dependent on money. But the lack of it guarantees they won’t be delivered, so it does matter. Hopefully this allows to you place the details that are being argued about in the right context.