0:00:05 > 0:00:07In just a couple of months,
0:00:07 > 0:00:11Scotland will vote on whether to become an independent country.
0:00:18 > 0:00:21This is a nation whose people are being asked
0:00:21 > 0:00:25to make the most momentous decision in their history.
0:00:25 > 0:00:29And in that decision money will matter.
0:00:29 > 0:00:31We've got to look at the risk,
0:00:31 > 0:00:33we've got to look at the reward and then make up our mind.
0:00:33 > 0:00:36Now, this is one of the toughest questions
0:00:36 > 0:00:38I think I've ever been asked in my life.
0:00:39 > 0:00:43'I've been on an epic journey across Scotland,
0:00:43 > 0:00:45'by air,
0:00:45 > 0:00:47'sea
0:00:47 > 0:00:48'and road.'
0:00:48 > 0:00:51- Now I can't get the key out. - HE LAUGHS
0:00:55 > 0:00:58'But just how would Scotland's economy
0:00:58 > 0:01:00'be affected by independence?'
0:01:00 > 0:01:05Here we have it. A fresh batch of North Sea oil, still warm.
0:01:06 > 0:01:08'What about the national debt?'
0:01:09 > 0:01:11What would it cost them to borrow?
0:01:12 > 0:01:15'And what currency would the new country use?'
0:01:15 > 0:01:19This wonderful glittering thing is a unicorn.
0:01:20 > 0:01:25'Central to the debate is a big and intriguing question.'
0:01:26 > 0:01:29If Scotland were to vote for independence,
0:01:29 > 0:01:34would it be richer or poorer than if it stays part of the United Kingdom?
0:01:47 > 0:01:53'Big decisions often require head, heart and pocket.
0:01:53 > 0:01:57'During the independence debate, money has taken centre stage,
0:01:57 > 0:02:00'so I took to the streets of Paisley to carry out an experiment.'
0:02:00 > 0:02:02This is 500 quid...
0:02:02 > 0:02:06'Would the offer of being £500 a year better or worse off
0:02:06 > 0:02:09'influence how people would vote?'
0:02:09 > 0:02:12If you were persuaded that you would be 500 quid better off,
0:02:12 > 0:02:15- would you vote for independence? - Maybe, aye.
0:02:15 > 0:02:19It's an extra £500 in your pocket. Who says no to £500?
0:02:19 > 0:02:22No, I think it's immaterial whether you'd be worse off or better off.
0:02:22 > 0:02:26- So, £500 wouldn't make any difference to the way you vote? - No, absolutely not.
0:02:26 > 0:02:31If it was 500 quid better off, would that be enough to make you vote yes?
0:02:31 > 0:02:32Yes, aye, definitely.
0:02:32 > 0:02:35So you might well vote for independence
0:02:35 > 0:02:38- if you were absolutely sure you were going to be 500 quid better off? - Yes.
0:02:38 > 0:02:41- Well, you'd say 1,000, yes, but no' 500.- Hm!
0:02:43 > 0:02:46Money does come into it but...
0:02:46 > 0:02:50I don't believe anything politicians say, so, you know...
0:02:50 > 0:02:53They could tell you that you're going to be £3,000 richer
0:02:53 > 0:02:56but, at the end of the day, are you? Probably not.
0:02:57 > 0:03:00'My experiment's totally unscientific.
0:03:00 > 0:03:05'But in 2013 the Scottish Social Attitudes Survey tested
0:03:05 > 0:03:09'whether £500 was enough to shift people's voting intentions.'
0:03:09 > 0:03:11Is that my money?
0:03:13 > 0:03:15And it turned out it was.
0:03:15 > 0:03:19That's why the campaign has been awash with claims and
0:03:19 > 0:03:23counterclaims about how independence would make Scotland richer...
0:03:23 > 0:03:26The power to compete, to grow businesses here in Scotland,
0:03:26 > 0:03:30to attract headquarters, to ensure our best and brightest
0:03:30 > 0:03:33can realise their ambitions in their own country
0:03:33 > 0:03:37if they so choose - that is the economic prize of independence.
0:03:37 > 0:03:39..or poorer?
0:03:39 > 0:03:43You have 4 million people on the brink of a decision
0:03:43 > 0:03:46that will affect their lives in a profound way.
0:03:46 > 0:03:49The money in their pocket, the job they have,
0:03:49 > 0:03:52the chances their children will have.
0:03:52 > 0:03:55This is a major, life-changing decision.
0:03:56 > 0:03:59And in recent weeks they've upped the ante, even making
0:03:59 > 0:04:03a claim about the financial benefits of staying in the Union...
0:04:03 > 0:04:08It's worth £1,400 for each person in Scotland each year
0:04:08 > 0:04:09for the next 20 years.
0:04:09 > 0:04:12..and the supposed independence dividend.
0:04:12 > 0:04:16That amounts to £1,000 for every man, woman and child in the country,
0:04:16 > 0:04:19or £2,000 for every Scottish family.
0:04:21 > 0:04:25So what is the truth about these contradictory claims?
0:04:25 > 0:04:27Well, where better to start
0:04:27 > 0:04:32than in one of the richest cities in the UK? Aberdeen.
0:04:38 > 0:04:41Today, I'm setting out to discover just how Scotland would fare
0:04:41 > 0:04:43under independence.
0:04:46 > 0:04:48Would it bring a bright new future...
0:04:51 > 0:04:54..or the prospect of economic gloom?
0:04:56 > 0:05:02Any investigation into Scotland's wealth can only start in one place.
0:05:10 > 0:05:11The North Sea.
0:05:11 > 0:05:14Its oil and the taxes it generates
0:05:14 > 0:05:18have helped pay for the UK's public spending since the 1970s.
0:05:18 > 0:05:22But the Scottish Nationalists have long claimed it's Scotland's oil.
0:05:24 > 0:05:26Hello, Scottish National Party.
0:05:26 > 0:05:29It's been central to their case for independence.
0:05:29 > 0:05:32They believe if all the money had gone to Scotland
0:05:32 > 0:05:35its recent past would be a different story.
0:05:35 > 0:05:38But with North Sea oil now past its peak,
0:05:38 > 0:05:41the big question today is, how much is left?
0:05:43 > 0:05:47So here we have it, a fresh batch of North Sea oil, still warm,
0:05:47 > 0:05:49extracted some three miles away
0:05:49 > 0:05:53and three miles down and brought to this floating platform.
0:05:53 > 0:05:58Now, we've already had 40 billion barrels' worth
0:05:58 > 0:06:01of oil and gas from the North Sea
0:06:01 > 0:06:06and although there are up to 24 billion barrels left to obtain,
0:06:06 > 0:06:10what remains is much harder to extract,
0:06:10 > 0:06:13and that's why the newer technologies
0:06:13 > 0:06:16used by mobile floating platforms like this one
0:06:16 > 0:06:19may represent the future.
0:06:22 > 0:06:26As extracting oil gets trickier, the industry needs to get nimbler.
0:06:26 > 0:06:28This is the Gryphon,
0:06:28 > 0:06:33run by the Danish company Maersk 170 miles off the coast of Aberdeen.
0:06:33 > 0:06:37Because it's a mobile platform it can be moved more easily
0:06:37 > 0:06:40between fields to squeeze out the oil that's left.
0:06:41 > 0:06:46In the past year it's produced 7 million barrels' worth of oil.
0:06:48 > 0:06:51Now, a lot of people talk about the decline of the North Sea.
0:06:51 > 0:06:53What kind of a future do you think it has?
0:06:53 > 0:06:57We'll be producing gas and oil here for a number of decades to come.
0:06:57 > 0:06:59The fields will be smaller and more marginal
0:06:59 > 0:07:01but technology's allowing us to get after things
0:07:01 > 0:07:04that we weren't able to get after in the past.
0:07:04 > 0:07:07In the next two years, another 25 fields are coming on stream.
0:07:07 > 0:07:11And just to be clear, for you, the North Sea is going to remain
0:07:11 > 0:07:13a pretty big industry for a long time to come?
0:07:13 > 0:07:18Yes, it's certainly going to be a focal point for a number of decades to come.
0:07:21 > 0:07:22Apart from anything else,
0:07:22 > 0:07:26North Sea oil has been a spectacular feat of British engineering
0:07:26 > 0:07:32and for four decades all those reserves of the black gold
0:07:32 > 0:07:34have helped to make us richer.
0:07:34 > 0:07:38So, if Scotland were to go for independence,
0:07:38 > 0:07:43the big question is, how much of its way of life
0:07:43 > 0:07:48could continue to be paid for by the oil that's left?
0:07:53 > 0:07:56Subject to negotiation, an independent Scotland may get
0:07:56 > 0:08:00around a 90% share of the oil and gas out here.
0:08:01 > 0:08:05And it would need it, because spending per head in Scotland
0:08:05 > 0:08:07is higher than in the rest of the UK.
0:08:09 > 0:08:11Paul Johnson is the head of the IFS,
0:08:11 > 0:08:14the UK's top tax and spend number-crunchers.
0:08:15 > 0:08:19I think it's important to be clear, Scotland is a rich economy,
0:08:19 > 0:08:22it's on average about as rich as the rest of the UK.
0:08:22 > 0:08:26On that basis, going forward into independence, it can clearly afford that.
0:08:26 > 0:08:28It would need to make some real choices, though,
0:08:28 > 0:08:31because at the moment it's spending quite a lot more than
0:08:31 > 0:08:34the rest of the UK and it would need to make choices about
0:08:34 > 0:08:37whether it's going to pay for that through higher taxes
0:08:37 > 0:08:39or reduce some of that spending.
0:08:41 > 0:08:42At the moment,
0:08:42 > 0:08:45Scotland's public spending is relatively higher
0:08:45 > 0:08:47than in the rest of the UK,
0:08:47 > 0:08:51to the tune of about £1,200 extra per person each year.
0:08:52 > 0:08:55In recent times that spending's been roughly balanced out
0:08:55 > 0:08:57by North Sea oil revenues.
0:08:59 > 0:09:01But in future, an ageing population
0:09:01 > 0:09:05and declining oil revenues could combine to leave Scotland with
0:09:05 > 0:09:09a significant gap between what it spends and what it takes in taxes.
0:09:10 > 0:09:14The deficit in Scotland at the moment would just be a little bit worse
0:09:14 > 0:09:17than the rest of the UK. Oil revenues have gone down recently,
0:09:17 > 0:09:20they're projected to keep going down a bit, actually,
0:09:20 > 0:09:23so over the next few years we'd expect the deficit to be a bit worse.
0:09:23 > 0:09:26Over the long run, it gets worse still.
0:09:29 > 0:09:32Any prediction, however, depends on oil revenues,
0:09:32 > 0:09:35which are famously unpredictable.
0:09:35 > 0:09:39The Treasury in London points to the fact that oil revenues
0:09:39 > 0:09:43fell by a quarter last year alone, and it argues that future decline
0:09:43 > 0:09:47would leave Scotland with a bigger deficit than the rest of the UK.
0:09:47 > 0:09:51But the Scottish Government says that oil revenues are likely to only
0:09:51 > 0:09:56decline gently and that in future Scotland's deficit will shrink.
0:09:56 > 0:09:58So, the problem for the rest of us
0:09:58 > 0:10:03is the sheer number of unknowns which lurk beneath the North Sea.
0:10:05 > 0:10:07If you assume the price of oil goes up very fast,
0:10:07 > 0:10:10then of course the revenues will increase.
0:10:10 > 0:10:14But similarly, if you have to exploit more and more difficult fields
0:10:14 > 0:10:18to get the oil out of, then the cost goes up and the revenues come down.
0:10:18 > 0:10:20So all these things are unknown.
0:10:20 > 0:10:23It's very difficult to speculate on what the future would be,
0:10:23 > 0:10:27but the most likely thing is that oil revenues will gradually decline.
0:10:33 > 0:10:38In Aberdeen earlier this year, a duel over oil.
0:10:38 > 0:10:42David Cameron rode into town with his Cabinet in tow.
0:10:42 > 0:10:44How was Cabinet this morning, First Minister?
0:10:44 > 0:10:46Five miles down the road,
0:10:46 > 0:10:49Alex Salmond held his own Cabinet in a church hall.
0:10:49 > 0:10:53# This town ain't big enough for the both of us... #
0:10:54 > 0:10:56Cameron headed for an oil rig to make his case
0:10:56 > 0:11:00that staying in the union was the only way to cope
0:11:00 > 0:11:03with the volatility of North Sea oil.
0:11:04 > 0:11:07The broad shoulders of one of the top ten economies in the world
0:11:07 > 0:11:09has really got behind this industry
0:11:09 > 0:11:12and will continue to stay behind this industry
0:11:12 > 0:11:15so we get the maximum benefit out of it -
0:11:15 > 0:11:18the maximum benefit for all of the United Kingdom, including Scotland.
0:11:18 > 0:11:21But Alex Salmond, who likes to remind us
0:11:21 > 0:11:24he was an oil economist when David Cameron
0:11:24 > 0:11:28was a schoolboy on the playing fields of Eton, had a riposte.
0:11:28 > 0:11:30I can't really think of any countries in the world
0:11:30 > 0:11:32who've discovered oil and gas
0:11:32 > 0:11:35but many people in the population have got relatively poorer,
0:11:35 > 0:11:38but that has been Scotland's fate under Westminster control.
0:11:38 > 0:11:40I think it can be very different
0:11:40 > 0:11:44and much better for the Scottish people with independence
0:11:44 > 0:11:46and control of our own resources.
0:11:53 > 0:11:56Now, those who believe in independence have got
0:11:56 > 0:12:00a plan for how they can best manage those resources...
0:12:00 > 0:12:03and help make Scotland richer.
0:12:04 > 0:12:08They want to set up an oil wealth fund.
0:12:13 > 0:12:16We think an oil wealth fund is very important.
0:12:16 > 0:12:19It gives you this opportunity to take today's oil wealth
0:12:19 > 0:12:21and not spend it today,
0:12:21 > 0:12:23but to make it intergenerational and give your children
0:12:23 > 0:12:26and your children's children some opportunity
0:12:26 > 0:12:28to benefit in the economy for them also.
0:12:29 > 0:12:34As it happens, there's a blueprint for the Scottish Government's plan.
0:12:34 > 0:12:37To find out about it, I'm going on a journey
0:12:37 > 0:12:41to the furthest-flung bit of Scotland - Shetland.
0:12:41 > 0:12:44TRADITIONAL MUSIC PLAYS
0:12:44 > 0:12:46This is no ordinary crossing.
0:12:48 > 0:12:51This weekend sees the start of the Shetland Folk Festival...
0:12:55 > 0:12:58..and there's not much sign of anyone getting any sleep
0:12:58 > 0:13:01on the overnight ferry from Aberdeen.
0:13:17 > 0:13:18# Well, you're dirty and sweet
0:13:18 > 0:13:21# Clad in black, don't look back
0:13:21 > 0:13:23# And I love you
0:13:23 > 0:13:26# You're dirty and sweet Oh, yeah... #
0:13:26 > 0:13:30Shetland did something very smart back in the 1970s.
0:13:30 > 0:13:33When the giant oil companies came a-knocking,
0:13:33 > 0:13:36asking if they could build terminals,
0:13:36 > 0:13:39the islanders played tough.
0:13:41 > 0:13:43They said yes to a single big terminal,
0:13:43 > 0:13:47but only if the companies paid them a disturbance fee
0:13:47 > 0:13:49every time they used it.
0:13:49 > 0:13:52The oil companies had no choice but to cough up
0:13:52 > 0:13:55and instead of simply spending the cash,
0:13:55 > 0:13:58the Shetland Islanders put it into a trust.
0:14:00 > 0:14:05Ann Black is the trust's chief executive.
0:14:05 > 0:14:09Between 1975 and 2000, the Shetland Charitable Trust
0:14:09 > 0:14:13received £81 million in compensation from the oil industry.
0:14:13 > 0:14:17Then you invested that money. How much did it become worth?
0:14:17 > 0:14:21The fund's worth 227 million, as of today.
0:14:21 > 0:14:24It's split between 80% external investment -
0:14:24 > 0:14:26so, that's mainly on the stock exchange -
0:14:26 > 0:14:28bonds, properties, equities -
0:14:28 > 0:14:30and 20% in local investments.
0:14:33 > 0:14:37Now, what's smart about the Shetland fund is that they aim to only
0:14:37 > 0:14:40spend the return, the income, on those investments
0:14:40 > 0:14:43without touching the pot itself.
0:14:43 > 0:14:47And so, while there's £227 million in the kitty,
0:14:47 > 0:14:50they've already been able to spend more than that
0:14:50 > 0:14:52for the benefit of the islanders.
0:14:54 > 0:14:57This is just one of eight leisure centres
0:14:57 > 0:15:02paid for by Shetland's oil fund, which has also financed a museum,
0:15:02 > 0:15:08care homes for the elderly, and puts money into the local folk festival.
0:15:08 > 0:15:11The lives of 20,000 Shetlanders,
0:15:11 > 0:15:16enriched by a bit of forward-looking, canny financial planning.
0:15:20 > 0:15:24Cash from oil and the clever way they invested it
0:15:24 > 0:15:27has brought unprecedented prosperity to Shetland.
0:15:27 > 0:15:31Unemployment here is less than half the UK average.
0:15:32 > 0:15:35Yes, you do see the benefits of what they've done with the money.
0:15:35 > 0:15:39There's an immense transformation compared with Shetland in the 1970s.
0:15:39 > 0:15:41Initially, when I went there,
0:15:41 > 0:15:44you had to scare the sheep off the runway before the plane could land.
0:15:44 > 0:15:47The people here seem well set for the future, and I am too,
0:15:47 > 0:15:50having been given the enormous honour
0:15:50 > 0:15:52of opening their folk festival.
0:15:52 > 0:15:53I am a not-very-secret folkie
0:15:53 > 0:15:57and I understand this is the finest folk festival in the world,
0:15:57 > 0:15:59- so it's a privilege for me... - APPLAUSE
0:15:59 > 0:16:01..a privilege for me to be here, an honour.
0:16:01 > 0:16:03And, amazingly, it is my honour now
0:16:03 > 0:16:06to declare this great festival commenced. Thank you.
0:16:12 > 0:16:15# I saw stars
0:16:15 > 0:16:16# I heard a birdie sing
0:16:16 > 0:16:18# So sweet, so sweet
0:16:18 > 0:16:21# The moment I fell for you... #
0:16:21 > 0:16:23So, is this an exciting vision
0:16:23 > 0:16:27of what Scotland could expect from independence?
0:16:27 > 0:16:30# ..The moment I fell for you. #
0:16:32 > 0:16:37The Yes campaign thinks it is, and they point not just to Shetland,
0:16:37 > 0:16:42but to Norway, which set up an oil wealth fund in the 1990s.
0:16:44 > 0:16:48It's now worth a staggering £500 billion
0:16:48 > 0:16:51and owns an average 2.5% of every listed company in Europe.
0:16:54 > 0:16:57So in two decades, Norway has used its resources to become
0:16:57 > 0:16:59one of the most prosperous countries,
0:16:59 > 0:17:01and indeed one of the fairest societies, in the world.
0:17:01 > 0:17:03During the same period,
0:17:03 > 0:17:07the United Kingdom has built up debts of £1.2 trillion sterling.
0:17:09 > 0:17:11Alex Salmond likes to point out,
0:17:11 > 0:17:14perhaps mischievously from time to time,
0:17:14 > 0:17:17that there are only two oil-rich countries in the world
0:17:17 > 0:17:19which lack a sovereign wealth fund
0:17:19 > 0:17:22and they happen to be Iraq and the United Kingdom.
0:17:22 > 0:17:26It's possible that if Margaret Thatcher had established
0:17:26 > 0:17:30such a wealth fund here in the UK on the back of North Sea oil proceeds,
0:17:30 > 0:17:32we'd be a bit richer today.
0:17:32 > 0:17:34But the question right now is,
0:17:34 > 0:17:38if Scotland established a wealth fund, would it be viable?
0:17:40 > 0:17:43The British Government currently spends more than it earns,
0:17:43 > 0:17:46and an independent Scotland would inevitably start life with
0:17:46 > 0:17:49exactly the same problem.
0:17:49 > 0:17:52But Alex Salmond believes an oil wealth fund would be
0:17:52 > 0:17:54viable from the very beginning.
0:17:56 > 0:18:00Any payment realistically in the first year would just be a start.
0:18:00 > 0:18:04But my submission would be, great oaks from little acorns grow.
0:18:04 > 0:18:09Yet some experts stress that would mean making hard choices
0:18:09 > 0:18:12between today's financial needs and tomorrow's.
0:18:14 > 0:18:17The issue for an independent Scotland is how credible it is
0:18:17 > 0:18:22to build up a fund at a time when the overall budget
0:18:22 > 0:18:24is in significant deficit.
0:18:24 > 0:18:27In a sense, you can't count these revenues twice.
0:18:27 > 0:18:28You can't both say, well,
0:18:28 > 0:18:32they'll help us to deal with the fiscal deficit at the moment
0:18:32 > 0:18:34AND we'll put them into a separate fund.
0:18:34 > 0:18:37You have to think about them in one way or the other.
0:18:39 > 0:18:44Now, everyone agrees that the oil revenues will eventually decline
0:18:44 > 0:18:47so an absolutely vital question is
0:18:47 > 0:18:51how Scotland will generate wealth elsewhere.
0:18:51 > 0:18:54The battle lines have been drawn.
0:18:54 > 0:18:57The Yes campaign believe independence will make
0:18:57 > 0:19:00Scotland richer by enabling politicians to tailor policies
0:19:00 > 0:19:04to suit Scotland's particular needs.
0:19:04 > 0:19:07THEY CHEER
0:19:09 > 0:19:14And some of Scotland's most entrepreneurial types agree.
0:19:14 > 0:19:18Tony Banks runs a chain of care homes in the north-east of Scotland.
0:19:18 > 0:19:20He employs more than 1,000 people.
0:19:21 > 0:19:25I believe that Scotland will flourish under independence.
0:19:25 > 0:19:28To me, as an entrepreneur, independence makes total sense -
0:19:28 > 0:19:31to have control and be in charge of our own destinies
0:19:31 > 0:19:34and to be able to shape the future, shape the policies
0:19:34 > 0:19:37and shape the way the nation is going to turn out.
0:19:37 > 0:19:41I see independence as the business opportunity of a lifetime.
0:19:42 > 0:19:46The Yes campaign say that only an independent Scotland
0:19:46 > 0:19:49would have the taxing and investing powers
0:19:49 > 0:19:52needed to create a more dynamic economy.
0:19:52 > 0:19:54I just see independence as a way of
0:19:54 > 0:19:56lifting the whole nation's aspirations and ambitions
0:19:56 > 0:19:58and lifting the wealth of the nation.
0:19:58 > 0:20:02That should trickle right down to everybody in society.
0:20:07 > 0:20:09But pitted against the Yes campaign
0:20:09 > 0:20:13are some of British business's biggest beasts.
0:20:13 > 0:20:18They believe that in a global economy, size and scale matter
0:20:18 > 0:20:23and that independence could be bad for Scotland's prosperity.
0:20:23 > 0:20:26Douglas Flint is a Scot based in London
0:20:26 > 0:20:29as chairman of London's biggest bank, HSBC.
0:20:29 > 0:20:32He's given his own money to the Better Together campaign
0:20:32 > 0:20:36but he hasn't spoken about independence till now.
0:20:37 > 0:20:40Scotland's a rich country, there's no doubt of that,
0:20:40 > 0:20:43but I think it's richer as part of the United Kingdom.
0:20:43 > 0:20:45I think, to some extent,
0:20:45 > 0:20:47you're swapping the certainty
0:20:47 > 0:20:50of 300-odd years of history for a vision of the future
0:20:50 > 0:20:52which is well articulated
0:20:52 > 0:20:56but is only a vision of the future and is uncertain.
0:20:56 > 0:21:00How big a deal is this vote, not just for Scotland,
0:21:00 > 0:21:03- but for the whole UK? - I think it's huge.
0:21:03 > 0:21:05I think the UK represents
0:21:05 > 0:21:08one of the most successful unions ever in history -
0:21:08 > 0:21:11economically, culturally, in every way -
0:21:11 > 0:21:15and I think splitting it would be a tragedy.
0:21:17 > 0:21:20The clash is fundamentally about the best way
0:21:20 > 0:21:23for Scotland to generate wealth in the future.
0:21:23 > 0:21:26But to understand where it's going,
0:21:26 > 0:21:30you have to understand where its wealth came from in the past.
0:21:38 > 0:21:42Scotland has a rich tradition of buccaneering entrepreneurs
0:21:42 > 0:21:46who've set up successful businesses in Scotland and all over the world.
0:21:46 > 0:21:52Perhaps the finest example of an outward-looking trading business
0:21:52 > 0:21:55is the famous Johnnie Walker.
0:21:55 > 0:21:58Johnnie and his son Alexander Walker
0:21:58 > 0:22:01devised and developed a great idea.
0:22:03 > 0:22:07They'd combine single malts to create a distinctive blend.
0:22:08 > 0:22:11But their ambitions went way beyond that.
0:22:13 > 0:22:16The Walkers did two ingenious things.
0:22:16 > 0:22:20They persuaded Glasgow's sea captains to become
0:22:20 > 0:22:23the company's sales agents all over the world
0:22:23 > 0:22:26and they put the whisky into the distinctive square bottles
0:22:26 > 0:22:30which meant that more of them could be packed into crates.
0:22:30 > 0:22:35In this way, a Kilmarnock grocer became a world-beater.
0:22:38 > 0:22:41Through the 20th century and into the 21st,
0:22:41 > 0:22:44Johnnie Walker has conquered markets around the world.
0:22:47 > 0:22:48- VOICE-OVER:- 'Thanks to the foresight
0:22:48 > 0:22:51'of that Scottish grocer, John Walker,
0:22:51 > 0:22:54'Scotch whisky has become the first choice
0:22:54 > 0:22:57'of more people than any other party drink in the world.'
0:23:01 > 0:23:03But somehow in the post-war years,
0:23:03 > 0:23:07Scotland has failed to develop a new generation of Johnnie Walkers.
0:23:10 > 0:23:13The rate at which it has created new business
0:23:13 > 0:23:16has been markedly lower than in the rest of the UK.
0:23:17 > 0:23:20Why did we manage to have such a good tradition of entrepreneurship
0:23:20 > 0:23:23and, suddenly, something went wrong with it?
0:23:23 > 0:23:26I think some of it was to do with many of the industries
0:23:26 > 0:23:29we were involved in - shipbuilding, steel, those kinds of things -
0:23:29 > 0:23:32were changing dramatically both in their technologies
0:23:32 > 0:23:34and in where those things were done.
0:23:42 > 0:23:43After the Second World War,
0:23:43 > 0:23:47Scotland was powered by vast nationalised industries.
0:23:47 > 0:23:50SHIP'S HORN BLARES
0:23:51 > 0:23:53But their dominance may have stifled
0:23:53 > 0:23:56the country's natural entrepreneurial flair.
0:23:58 > 0:24:02And when heavy industry declined in the '60s and '70s,
0:24:02 > 0:24:05with the loss of many thousands of jobs,
0:24:05 > 0:24:09the private sector struggled to fill the void.
0:24:14 > 0:24:18Nothing symbolised the struggles of Scotland's economy
0:24:18 > 0:24:2240 and 50 years ago better than the Hillman Imp.
0:24:26 > 0:24:29Today, it's a bit of a cult classic.
0:24:29 > 0:24:32Back then, it was Scotland's gleaming future.
0:24:40 > 0:24:45Oh, my goodness. The look, the smell - it brings it all back!
0:24:45 > 0:24:48When I was what they would call here "a wee bairn",
0:24:48 > 0:24:51this marvellous vehicle, the slightly eccentric Hillman Imp,
0:24:51 > 0:24:53was more or less everywhere.
0:24:53 > 0:24:58What I didn't know is that it was the only mass-production car
0:24:58 > 0:25:01that was made here in Scotland and, as such,
0:25:01 > 0:25:06it's a poignant reminder of the decline of heavy industry
0:25:06 > 0:25:09and how successive governments have struggled
0:25:09 > 0:25:12to re-engineer the Scottish economy.
0:25:15 > 0:25:19To begin with, the Hillman Imp was a symbol of hope for Scotland.
0:25:22 > 0:25:24- VOICE-OVER: - 'And in this restless time,
0:25:24 > 0:25:27'the moment has come for Scotland to begin afresh
0:25:27 > 0:25:32'in the greatest light industry of all - the making of motorcars.'
0:25:34 > 0:25:35In the early 1960s,
0:25:35 > 0:25:39the Government in Westminster put pressure on the Rootes car firm
0:25:39 > 0:25:43to build a vast new factory to produce the Imp in Linwood,
0:25:43 > 0:25:44just outside Glasgow.
0:25:44 > 0:25:48The idea was that the plant would provide employment for workers
0:25:48 > 0:25:52who were losing their jobs in other heavy industries.
0:25:52 > 0:25:57- VOICEOVER:- 'Ideas and skill and steel and aluminium and raw shapes
0:25:57 > 0:26:01'have evolved into a new thing - a machine with the power of motion.'
0:26:02 > 0:26:06But the economics of the plant were doomed.
0:26:06 > 0:26:08It was hundreds of miles
0:26:08 > 0:26:11from the components factories in the Midlands and, in 1981,
0:26:11 > 0:26:15it shut with the loss of just under 5,000 jobs.
0:26:15 > 0:26:18# ..Will you send back a letter from America? #
0:26:18 > 0:26:21Linwood's end, along with many other factory closures,
0:26:21 > 0:26:27inspired the Proclaimers' most famous anthem - Letter From America.
0:26:27 > 0:26:29# ..Bathgate no more
0:26:29 > 0:26:31# Linwood no more
0:26:31 > 0:26:33# Methil no more
0:26:33 > 0:26:36# Irvine no more... #
0:26:36 > 0:26:39The Hillman Imp now stands as a symbol
0:26:39 > 0:26:43of what went wrong with Scotland's economy.
0:26:43 > 0:26:47As heavy industries closed, the country struggled to replace them.
0:26:50 > 0:26:55Scotland's economic past has been one of nationalised industries,
0:26:55 > 0:26:59but what's happened since the '60s is we have gone from a culture
0:26:59 > 0:27:03where someone else took care of you - i.e., the Government -
0:27:03 > 0:27:06and a job for life when I was at school,
0:27:06 > 0:27:09go down the pit, a job for life -
0:27:09 > 0:27:11to being, "No, there's no more of that."
0:27:11 > 0:27:15And therefore it's been a difficult transition
0:27:15 > 0:27:19to actually looking after ourselves once again.
0:27:24 > 0:27:26But today, it's by no means all gloom.
0:27:26 > 0:27:29Few places illustrate better how Scotland is trying to
0:27:29 > 0:27:34make that transition from old industries to new than Dundee.
0:27:34 > 0:27:38This place was once famous for its jute,
0:27:38 > 0:27:40jam
0:27:40 > 0:27:42and journalism.
0:27:42 > 0:27:45And famously, it's the home of the Beano.
0:27:47 > 0:27:49And Desperate Dan.
0:27:49 > 0:27:53Desperate Dan, one of my all-time favourites.
0:27:53 > 0:27:56Great to be meeting him in the flesh at last.
0:28:01 > 0:28:03Like most of Scotland, by the 1980s
0:28:03 > 0:28:07many of Dundee's traditional industries were in steep decline.
0:28:07 > 0:28:10Yet it would find a perhaps unlikely saviour.
0:28:10 > 0:28:14God, I feel nostalgic holding this wonderful bit of kit -
0:28:14 > 0:28:16the Sinclair ZX Spectrum.
0:28:16 > 0:28:20Now, back in the 1980s, almost every British home wanted one of these,
0:28:20 > 0:28:25and they were made here in Dundee in the local Timex factory.
0:28:25 > 0:28:29We have you build these computers for us not because we have any
0:28:29 > 0:28:32particular links with Dundee, not because we have to have computers
0:28:32 > 0:28:35built in Britain - we can have them built anywhere in the world.
0:28:35 > 0:28:37We have our computers built by you here in Dundee
0:28:37 > 0:28:41because you're the best people, as far as we're aware, to build them.
0:28:41 > 0:28:44And I'd like to thank you very much on behalf of Sinclair Research.
0:28:44 > 0:28:47That factory may have gone,
0:28:47 > 0:28:50the Sinclair ZX may now be in museums,
0:28:50 > 0:28:57but it spawned a generation of entrepreneurial computer game developers right here.
0:29:01 > 0:29:06Chris van der Kuyl was one of those enterprising 1980s geeks.
0:29:08 > 0:29:10Here in Dundee, we manufactured the console,
0:29:10 > 0:29:14so everywhere else in the UK, it cost something like £149.
0:29:14 > 0:29:17Here in Dundee, if you knew the right person, it's considerably less.
0:29:17 > 0:29:20So, what did kids here have to pay for a ZX?
0:29:20 > 0:29:23Allegedly, and I couldn't possibly confirm this,
0:29:23 > 0:29:26it was about £10 and a packet of Embassy Regal in the right pub.
0:29:26 > 0:29:28I personally had six of them.
0:29:28 > 0:29:32Those cut-price computers did Dundee a huge favour.
0:29:32 > 0:29:36Today the city has about 300 people working in computer games.
0:29:36 > 0:29:39It was Dundee that spawned the hit -
0:29:39 > 0:29:43some would say notorious - computer game, Grand Theft Auto.
0:29:43 > 0:29:46# Sweet dreams are made of these... #
0:29:46 > 0:29:49Many of those who work in the industry here
0:29:49 > 0:29:52are graduates from one of Dundee's universities...
0:29:52 > 0:29:54Abertay.
0:29:54 > 0:29:56It was the first in the world
0:29:56 > 0:29:58to run a degree in computer gaming design
0:29:58 > 0:30:02and has helped to drive the city's renewed success.
0:30:04 > 0:30:07Today, Chris van der Kuyl
0:30:07 > 0:30:10develops the PlayStation and Xbox versions
0:30:10 > 0:30:12of the massively successful game Minecraft.
0:30:14 > 0:30:16He's even created a computer version
0:30:16 > 0:30:18of what Dundee's waterfront would look like
0:30:18 > 0:30:25when the new Victoria & Albert Museum opens here in 2017.
0:30:25 > 0:30:27He's been a player in developing
0:30:27 > 0:30:31Dundee's very own, if small, Silicon Valley.
0:30:31 > 0:30:35Given the choice between sunny California
0:30:35 > 0:30:39and not always sunny Dundee,
0:30:39 > 0:30:41you chose Dundee. Why?
0:30:41 > 0:30:43I saw something unique in Scotland
0:30:43 > 0:30:45when it comes to digital media and technology.
0:30:45 > 0:30:48I saw that we have fantastic engineering and mathematical talent
0:30:48 > 0:30:51but also combined with creative talent
0:30:51 > 0:30:54that I've almost never seen replicated anywhere else.
0:30:54 > 0:30:56Those things coming together in the right way
0:30:56 > 0:30:58create something quite special.
0:31:00 > 0:31:04Dundee has another great strength - drug research and life sciences.
0:31:09 > 0:31:13The University of Dundee is one of the UK's leading centres
0:31:13 > 0:31:16in medical and pharmaceutical research.
0:31:19 > 0:31:23Sir Philip Cohen is the eminent scientist who's played
0:31:23 > 0:31:25an important role in that success.
0:31:25 > 0:31:30Life sciences in Scotland is very well respected internationally.
0:31:30 > 0:31:32In fact, in recent surveys,
0:31:32 > 0:31:35Scotland actually ranked number one in the world -
0:31:35 > 0:31:38well ahead of England
0:31:38 > 0:31:41and actually even further ahead of the United States.
0:31:43 > 0:31:48I'm now told that the life sciences and biotech industry in Dundee
0:31:48 > 0:31:51is something like 16% of the local economy.
0:31:51 > 0:31:54And of course these are very well-paid, hi-tech jobs.
0:31:54 > 0:31:57Just the sort of jobs that the town needs.
0:31:59 > 0:32:01Sir Philip Cohen and more than
0:32:01 > 0:32:03a dozen other distinguished scientists
0:32:03 > 0:32:07have put on the record their worries about the impact of independence
0:32:07 > 0:32:13on a discipline and an industry in which Scotland excels.
0:32:13 > 0:32:15Would life sciences and medicine
0:32:15 > 0:32:18be better off if Scotland was independent?
0:32:18 > 0:32:21I think there are very considerable risks for funding.
0:32:21 > 0:32:24If we're not eligible for
0:32:24 > 0:32:28funding from research councils in the United Kingdom
0:32:28 > 0:32:32and just have to use the small pot of money devolved to Scotland,
0:32:32 > 0:32:35I think this will be so risky.
0:32:35 > 0:32:39I think it would be dangerous for Scotland to go it alone,
0:32:39 > 0:32:42at least as concerns life sciences.
0:32:48 > 0:32:50Dundee may not be booming,
0:32:50 > 0:32:53but its large and respected universities,
0:32:53 > 0:32:55its thriving computer games
0:32:55 > 0:32:58and life sciences businesses give a clue perhaps
0:32:58 > 0:33:00to what the economy of
0:33:00 > 0:33:03an independent Scotland might look like.
0:33:03 > 0:33:05That said, the challenge faced by Dundee
0:33:05 > 0:33:08is in fact the challenge faced by much of the UK,
0:33:08 > 0:33:13which is how to turn imaginative ideas, intellectual property
0:33:13 > 0:33:18not just into successful local businesses but into world-beaters.
0:33:21 > 0:33:24So modern Scotland is developing new,
0:33:24 > 0:33:28more hi-tech industries to replace the ones it's lost.
0:33:28 > 0:33:30Alex Salmond uses them as examples of
0:33:30 > 0:33:35how and why Scotland can flourish as an independent nation.
0:33:36 > 0:33:39More top universities per head than any other country,
0:33:39 > 0:33:42a hotbed of life sciences, brilliance in creative industries.
0:33:42 > 0:33:45We will not let anyone tell the people of Scotland
0:33:45 > 0:33:48that we're not good enough to run our own country.
0:33:49 > 0:33:51But David Cameron counters that
0:33:51 > 0:33:54they would enjoy greater success as part of the UK.
0:33:55 > 0:33:59We are better off, Scotland's better off if we stick together.
0:33:59 > 0:34:01We have so many brilliant tech companies in Scotland,
0:34:01 > 0:34:06from video games makers in Dundee to web developers here in Edinburgh,
0:34:06 > 0:34:10and we in the UK are pulling every lever possible to help them.
0:34:13 > 0:34:15'There's another important ingredient
0:34:15 > 0:34:17'for a really successful economy.
0:34:17 > 0:34:19'Everyone agrees that Scotland
0:34:19 > 0:34:23'needs to rediscover its entrepreneurial zeal.'
0:34:23 > 0:34:27Yes, this is for people who want to start a business, grow a business.
0:34:27 > 0:34:29- Yes.- Because when you're starting...
0:34:29 > 0:34:31'Sir Tom Hunter is one of Scotland's richest men.
0:34:31 > 0:34:34'He built up a retail empire from scratch and he's given
0:34:34 > 0:34:36'millions of pounds of his own money
0:34:36 > 0:34:39'and office space to encourage business start-ups.
0:34:41 > 0:34:44'He's not saying which way he'll vote on independence,
0:34:44 > 0:34:45'but what matters to him
0:34:45 > 0:34:50'is that Scotland finds again its trading instincts.'
0:34:52 > 0:34:57There's still a stigma around failure, especially in Scotland.
0:34:57 > 0:34:59It's almost if you've tried and you've failed,
0:34:59 > 0:35:01you should never try again,
0:35:01 > 0:35:04um, which I'm so against.
0:35:04 > 0:35:06They embrace failure in the States
0:35:06 > 0:35:09because they see it as just another learning point.
0:35:09 > 0:35:14That's such a positive message for the young entrepreneurs in Scotland
0:35:14 > 0:35:17because fear of failure is holding us back.
0:35:18 > 0:35:22Sir Tom believes that after years of failing to create the business
0:35:22 > 0:35:27the country needs, Scotland might just be starting to turn the corner.
0:35:27 > 0:35:30I think we are really beginning to get our act together,
0:35:30 > 0:35:31but we're at the beginning.
0:35:31 > 0:35:35If you're a young or even an old entrepreneur and want to start
0:35:35 > 0:35:37and grow a business in Scotland,
0:35:37 > 0:35:41I think now there's never been a better time.
0:35:41 > 0:35:45So I think we're getting better but there's a long way to go.
0:35:50 > 0:35:52Now the Yes campaign
0:35:52 > 0:35:55believes independence will make Scotland richer.
0:35:56 > 0:35:59But there's a big unknown about their vision,
0:35:59 > 0:36:01which has provoked fierce debate
0:36:01 > 0:36:05and which could make Scotland poorer, at least in the short term.
0:36:06 > 0:36:09And that's perhaps best explored here,
0:36:09 > 0:36:12in the magnificent setting of the British Museum.
0:36:18 > 0:36:21From the 12th century to the Act of Union in 1707,
0:36:21 > 0:36:25Scotland had its own currency and coins.
0:36:25 > 0:36:27This is a bawbee...
0:36:29 > 0:36:33..and this wonderful, glittering thing is a unicorn.
0:36:33 > 0:36:36Now, historical curiosities they may be,
0:36:36 > 0:36:39but they're also amazingly relevant and resonant
0:36:39 > 0:36:42because in the question of whether Scotland should go
0:36:42 > 0:36:48independent, the issue of what currency it should use is red-hot.
0:36:49 > 0:36:51Now, there was a time when Alex Salmond
0:36:51 > 0:36:54wanted an independent Scotland to join the euro.
0:36:54 > 0:36:56But these days, he has a different plan -
0:36:56 > 0:36:59he wants to keep the pound.
0:37:00 > 0:37:04Now, let's mull all this over a coffee in this Edinburgh cafe.
0:37:06 > 0:37:10Every day, they bake a batch of referendum cupcakes -
0:37:10 > 0:37:13yes, no and maybe -
0:37:13 > 0:37:16and they use them as an unscientific straw poll.
0:37:19 > 0:37:21At the moment, they do business in sterling,
0:37:21 > 0:37:24which include Scottish banknotes.
0:37:25 > 0:37:28And what the Yes campaign would like
0:37:28 > 0:37:30is to keep things just that way under independence,
0:37:30 > 0:37:35by doing a deal to share the pound in what's called a currency union.
0:37:38 > 0:37:41It all sounds straightforward but, in London,
0:37:41 > 0:37:43the Treasury had other ideas.
0:37:46 > 0:37:49And in February, George Osborne played
0:37:49 > 0:37:51what he thought was his trump card.
0:37:59 > 0:38:03I could not, as Chancellor, recommend that we could share the pound
0:38:03 > 0:38:06with an independent Scotland.
0:38:06 > 0:38:11The evidence shows it wouldn't work, it would cost jobs and cost money.
0:38:11 > 0:38:17If Scotland walks away from the UK, it walks away from the UK pound.
0:38:20 > 0:38:23Alex Salmond retaliated.
0:38:24 > 0:38:27This was a punch-up between two political bruisers.
0:38:29 > 0:38:33To be told that we have no rights to assets jointly built up
0:38:33 > 0:38:36is as insulting as it is demeaning.
0:38:36 > 0:38:40To be told there are things we can't do will certainly elicit
0:38:40 > 0:38:43a Scottish response that is as resolute
0:38:43 > 0:38:46as it is uncomfortable to the No campaign.
0:38:46 > 0:38:49It is yes, we can.
0:38:53 > 0:38:56At the moment, quite a lot of the debate about currency options
0:38:56 > 0:38:59has a tone of schoolboy squabbling in the playground.
0:38:59 > 0:39:01George Osborne saying,
0:39:01 > 0:39:04"It's my pound and I'm not going to let you have it,"
0:39:04 > 0:39:05and Alex Salmond saying,
0:39:05 > 0:39:09"No, it's my pound as well, and I want my share of it."
0:39:09 > 0:39:12I think that's one of these questions where,
0:39:12 > 0:39:15if you do actually get a yes vote for independence,
0:39:15 > 0:39:17then officials sit down
0:39:17 > 0:39:21and start negotiating sensible solutions to practical problems.
0:39:24 > 0:39:29Perhaps the biggest problem is the long shadow cast by
0:39:29 > 0:39:31the Eurozone's recent crisis.
0:39:31 > 0:39:35There, too, independent countries share a currency
0:39:35 > 0:39:39but they run their own tax-and-spend policies.
0:39:39 > 0:39:41That led to disaster,
0:39:41 > 0:39:44when smaller, weaker nations like Greece
0:39:44 > 0:39:48had to be bailed out by bigger, successful economies like Germany.
0:39:49 > 0:39:53And George Osborne worries that a currency union with Scotland
0:39:53 > 0:39:57could leave taxpayers in the rest of the UK footing the bill
0:39:57 > 0:40:01for Scotland's possible future profligacy.
0:40:01 > 0:40:05UK taxpayers would have to transfer money to an independent Scotland
0:40:05 > 0:40:07in times of economic stress
0:40:07 > 0:40:11with limited prospect of any transfers the other way.
0:40:11 > 0:40:15We got Britain out of the Eurozone bailouts,
0:40:15 > 0:40:19now we'd be getting into an arrangement that was just the same.
0:40:19 > 0:40:22The people who compare a sterling zone to the Eurozone, I think,
0:40:22 > 0:40:25are comparing apples to oranges, here.
0:40:25 > 0:40:27If you take a place like Germany and a place like Greece,
0:40:27 > 0:40:30their productivities are about 50% apart,
0:40:30 > 0:40:34and so it was always doomed to have some kind of difficulties.
0:40:34 > 0:40:38They don't work well when economies are massively different in the way that they operate.
0:40:38 > 0:40:43Ours work very closely together, and so the chances of it being successful are extremely high.
0:40:45 > 0:40:48Now, it's always possible that in the event that the Scots
0:40:48 > 0:40:50were to vote for independence,
0:40:50 > 0:40:54the Government would buckle and would negotiate a formal currency union.
0:40:54 > 0:40:57But there would probably be a steep price for Scotland
0:40:57 > 0:41:03because Westminster would insist on tough controls on taxing, spending and borrowing,
0:41:03 > 0:41:08and some would question whether that represented much in the way of economic independence.
0:41:11 > 0:41:15If Scotland gave up the pound and it didn't want to join the euro,
0:41:15 > 0:41:17there would be one final option.
0:41:21 > 0:41:23It could create its own currency,
0:41:23 > 0:41:28to, in effect, revive the bawbee or the unicorn.
0:41:28 > 0:41:33That might give Scotland more economic freedom,
0:41:33 > 0:41:36but it could also force what are called transaction costs,
0:41:36 > 0:41:39charges for changing currency,
0:41:39 > 0:41:43on any business that does trade across the border.
0:41:43 > 0:41:48And given that two-thirds of Scotland's exports go to the rest of the UK,
0:41:48 > 0:41:51that could be a big deal for the new nation.
0:41:55 > 0:42:00The engineering firm the Weir Group is one of Scotland's biggest businesses,
0:42:00 > 0:42:03trading in 70 countries.
0:42:03 > 0:42:05The chief executive, Keith Cochrane,
0:42:05 > 0:42:10commissioned a report to look at the pros and cons of independence,
0:42:10 > 0:42:15and it found a new currency would come with a steep price tag.
0:42:15 > 0:42:20It imposes significant additional costs on business.
0:42:20 > 0:42:26Our report estimated some £800 million of costs involved with
0:42:26 > 0:42:29business changing over to a new currency,
0:42:29 > 0:42:34and then ongoing costs of some 500 million a year to Scottish business.
0:42:34 > 0:42:39So, again, it starts to undermine the cost competitiveness
0:42:39 > 0:42:42of a Scottish base, a Scottish location,
0:42:42 > 0:42:44in terms of serving the rest of the UK.
0:42:46 > 0:42:50Alex Salmond points out that businesses south of the border
0:42:50 > 0:42:53would pay these transaction costs, too.
0:42:53 > 0:42:56But if Westminster refused to share the pound,
0:42:56 > 0:43:00a new currency might just be Scotland's only realistic option.
0:43:02 > 0:43:06Now, if Scotland went back to the bawbee or the unicorn,
0:43:06 > 0:43:08if it adopted its own currency,
0:43:08 > 0:43:11it could gain some important economic freedoms,
0:43:11 > 0:43:13but there could also be some big costs.
0:43:13 > 0:43:17Now, if you are uncertain about the pros and cons of what currency
0:43:17 > 0:43:21an independent Scotland should use, you're certainly not the only one.
0:43:24 > 0:43:29This trade-off between the costs and benefits of independence
0:43:29 > 0:43:33runs right through the next big area - how Scotland would borrow.
0:43:37 > 0:43:41This is the Firth of Forth, just north of Edinburgh,
0:43:41 > 0:43:44site of the iconic Victorian rail bridge
0:43:44 > 0:43:47and a 20th-century road bridge.
0:43:47 > 0:43:49But soon there'll be a third
0:43:49 > 0:43:52because, taking shape on the water out here,
0:43:52 > 0:43:56is a 21st-century road bridge.
0:43:56 > 0:43:58It's exactly the kind of project
0:43:58 > 0:44:03an independent Scotland would have to borrow to pay for.
0:44:05 > 0:44:09This is where the new bridge is rising from the waters of the
0:44:09 > 0:44:12Firth of Forth at a rate of four metres every ten days
0:44:12 > 0:44:15as concrete is poured in. Now, by the middle of next year,
0:44:15 > 0:44:21this central tower will be four times as tall, 210 metres high.
0:44:21 > 0:44:26It's Scotland's most ambitious infrastructure project
0:44:26 > 0:44:27in a generation.
0:44:29 > 0:44:32What about the scale of this bridge?
0:44:32 > 0:44:34How would you rate it in terms of size?
0:44:34 > 0:44:38It's certainly one of the largest in the world.
0:44:38 > 0:44:41It's definitely Champions League bridge construction.
0:44:41 > 0:44:45The towers, with a 210-metre central tower, will be
0:44:45 > 0:44:52the highest in the UK by quite a bit, and the main spans of 650 metres,
0:44:52 > 0:44:55that's a large bridge construction, for sure.
0:44:57 > 0:45:00Projects like this don't come cheap.
0:45:02 > 0:45:06This one is on schedule and under budget,
0:45:06 > 0:45:11but it'll still cost £1.4 billion of public money.
0:45:14 > 0:45:18Governments borrow to fund big projects like this one.
0:45:18 > 0:45:22The power to borrow, to raise money on the international markets
0:45:22 > 0:45:26is therefore crucial for any independent nation.
0:45:31 > 0:45:34The Scottish Government takes enormous pride
0:45:34 > 0:45:38in its track record of investing in infrastructure,
0:45:38 > 0:45:41and Alex Salmond believes that if Scotland were to go it alone,
0:45:41 > 0:45:46he would have even more freedom to borrow to invest in vast
0:45:46 > 0:45:49and ambitious projects like this one, and in that sense Scotland
0:45:49 > 0:45:54would have much more control over its economic and industrial destiny.
0:45:54 > 0:45:57But, in practice, how much extra financial freedom
0:45:57 > 0:46:01would an independent Scotland have?
0:46:04 > 0:46:08This issue of borrowing and debt is another vital question
0:46:08 > 0:46:11at the heart of the independence debate.
0:46:13 > 0:46:16The British Government has a huge national debt.
0:46:16 > 0:46:20That's our historic accumulated rolling overdraft,
0:46:20 > 0:46:24the total of all our deficits down the years.
0:46:24 > 0:46:28It's likely to be around £1.5 trillion at the time of independence.
0:46:31 > 0:46:33Now, as part of any independence deal,
0:46:33 > 0:46:36Scotland would be expected to take on some of that burden.
0:46:36 > 0:46:42So, what kind of share of the national debt would the Scots have?
0:46:42 > 0:46:45Most people think, and including the First Minister,
0:46:45 > 0:46:48that a reasonable basis would be a population share,
0:46:48 > 0:46:51so that means an independent Scotland would take over
0:46:51 > 0:46:538.5% of the debt,
0:46:53 > 0:46:56and the rest of the United Kingdom would shoulder the rest.
0:46:56 > 0:46:58And in money terms, what are we talking about?
0:46:58 > 0:47:03In money terms, in 2016, that's about £150 billion-worth.
0:47:03 > 0:47:06So, the United Kingdom would effectively have
0:47:06 > 0:47:10an IOU from the rest of Scotland over a number of years,
0:47:10 > 0:47:14and the key issues are, what terms are those IOUs on?
0:47:14 > 0:47:16Is there any collateral to back it?
0:47:16 > 0:47:19And what interest rate would it charge Scotland?
0:47:20 > 0:47:25So a deal would have to be done between Scotland and Westminster
0:47:25 > 0:47:28on the size of that IOU, on the interest rate to be paid
0:47:28 > 0:47:31and the date of its repayment.
0:47:31 > 0:47:34But along with what Scotland would owe the rest of the UK,
0:47:34 > 0:47:38an independent Scotland would also need to borrow on what's called
0:47:38 > 0:47:43the bond market, a market with the power to make or break governments.
0:47:43 > 0:47:47This is the London headquarters of PIMCO,
0:47:47 > 0:47:50the biggest bond investors in the world.
0:47:50 > 0:47:55It's in places like this that a key question for an independent Scotland would be settled -
0:47:55 > 0:47:59how much would Scotland have to pay
0:47:59 > 0:48:02to borrow from investors in the bond market?
0:48:02 > 0:48:06Scotland would be a high-quality borrower, let's be clear about that.
0:48:06 > 0:48:09Whether it would be absolutely the highest-quality borrower
0:48:09 > 0:48:13comparable to the US or the UK or Canada, I think is unlikely.
0:48:13 > 0:48:15What would it cost them to borrow?
0:48:15 > 0:48:20Our best estimate, assuming a reasonably even split of assets and liabilities,
0:48:20 > 0:48:26the interest rate would be between 0.5% and 1% more than the UK Government currently pays.
0:48:29 > 0:48:33Scotland would be charged more to borrow than the rest of the UK,
0:48:33 > 0:48:37mainly because it would have no track record as a borrower,
0:48:37 > 0:48:40and although an extra 1% on the interest rate may not sound like a lot,
0:48:40 > 0:48:44on debts running to tens of billions of pounds,
0:48:44 > 0:48:46it wouldn't be trivial.
0:48:46 > 0:48:50It would mean there'd be less money available to fund public services.
0:48:50 > 0:48:54So, you, as an incredibly influential player on the bond market,
0:48:54 > 0:48:58are clear that Scotland would have to pay more to borrow?
0:48:58 > 0:49:01What would that mean for the prosperity of Scotland?
0:49:01 > 0:49:05What it actually means, when you work through the numbers,
0:49:05 > 0:49:09is that it would cost Scotland between 0.5% and 1% of their national income each year
0:49:09 > 0:49:12to be in control of their own destiny,
0:49:12 > 0:49:14and that really is the nub of the question.
0:49:14 > 0:49:17Are they willing to pay that extra price
0:49:17 > 0:49:19to be in control of their own destiny?
0:49:20 > 0:49:24Now, those in favour of independence might and, in fact, do
0:49:24 > 0:49:27dispute the precise figures, but few can doubt there would be
0:49:27 > 0:49:31significant costs associated with independence.
0:49:31 > 0:49:33However, some would see those costs
0:49:33 > 0:49:36as an investment in Scotland's future prosperity,
0:49:36 > 0:49:39as a price worth paying to secure
0:49:39 > 0:49:43greater control over the country's economic and wider destiny.
0:49:43 > 0:49:46The big question, therefore,
0:49:46 > 0:49:50is how to weigh up those probable short-term costs
0:49:50 > 0:49:54against the possible longer-term benefits.
0:49:58 > 0:50:04So I sounded out some successful and influential businesspeople
0:50:04 > 0:50:08to weigh up the costs and benefits of Scottish independence.
0:50:12 > 0:50:15And I started on the factory floor.
0:50:16 > 0:50:21This is an irreversible, this is a fundamental decision.
0:50:21 > 0:50:24There will be no going back once this decision is made.
0:50:24 > 0:50:26But you, personally, how are you going to vote?
0:50:26 > 0:50:28I am going to vote no,
0:50:28 > 0:50:31because I believe we've got the best of both worlds at this point.
0:50:31 > 0:50:34We've got the ability to influence and set
0:50:34 > 0:50:37our own domestic agenda here in Scotland
0:50:37 > 0:50:41but also to be part of one of the world's largest economies
0:50:41 > 0:50:43and get the benefits of scale
0:50:43 > 0:50:48that are realised from that and, certainly, as we look at the question
0:50:48 > 0:50:55in the round, the costs very much outweigh any potential benefits
0:50:55 > 0:50:58that might arise from independence.
0:51:01 > 0:51:05Tony Banks believes the costs have been exaggerated
0:51:05 > 0:51:08and his eyes are on the prize.
0:51:09 > 0:51:12All my life, I have waited for this moment.
0:51:12 > 0:51:15And I think the moment is right.
0:51:15 > 0:51:17I think that the global situation is right
0:51:17 > 0:51:19for Scotland to become independent,
0:51:19 > 0:51:20I think the people of Scotland
0:51:20 > 0:51:23believe it is the right moment to become independent.
0:51:23 > 0:51:26And I do believe that this huge responsibility
0:51:26 > 0:51:28that we have on our shoulders as a nation
0:51:28 > 0:51:30is not going to be taken lightly.
0:51:31 > 0:51:35The bosses of defence giant BAE Systems, however,
0:51:35 > 0:51:38who employ 3,000 people in Scotland,
0:51:38 > 0:51:42many making warships for the British Government, see risks.
0:51:42 > 0:51:48They worry that independence for Scotland could mean that those jobs have to go elsewhere.
0:51:50 > 0:51:54Can you contemplate a Government in London
0:51:54 > 0:52:00placing orders for warships from a company based in an independent Scotland?
0:52:00 > 0:52:02It's certainly not their history.
0:52:02 > 0:52:06And it's certainly, absolutely, according to their public statement,
0:52:06 > 0:52:08not their intention.
0:52:08 > 0:52:11I mean, the history is we build warships in the United Kingdom
0:52:11 > 0:52:16for the United Kingdom. No evidence of a belief of change in that view.
0:52:16 > 0:52:21If the Government were to decide it would be completely inappropriate
0:52:21 > 0:52:24for warships to be built in an independent Scotland
0:52:24 > 0:52:27as a foreign country, how serious would that be?
0:52:27 > 0:52:31To say that they cannot be made there
0:52:31 > 0:52:35would create a completely different programme of manufacture
0:52:35 > 0:52:37which would have to be established elsewhere.
0:52:37 > 0:52:39That is cost, that is time,
0:52:39 > 0:52:43that is capability, and that is very undesirable for everyone.
0:52:45 > 0:52:47But other business leaders don't think it would be
0:52:47 > 0:52:49quite that clear cut.
0:52:49 > 0:52:52Come with me to Grangemouth, 25 miles west of Edinburgh.
0:52:52 > 0:52:57Jim Ratcliffe is the billionaire owner of this vast petrochemical plant,
0:52:57 > 0:53:01a giant, sprawling complex at the heart of the Scottish economy.
0:53:01 > 0:53:04I'm fairly neutral on independence,
0:53:04 > 0:53:06I don't think independence will make
0:53:06 > 0:53:08a great deal of difference to this facility.
0:53:08 > 0:53:13Are you better off being a huge economy or are you better off being,
0:53:13 > 0:53:18as Scotland might be, a smaller, perhaps nimbler country?
0:53:18 > 0:53:21I'm not a believer, necessarily, in big is beautiful.
0:53:21 > 0:53:24I think small can work,
0:53:24 > 0:53:26it can be very, very focused, it can be very energetic,
0:53:26 > 0:53:29it can be nimble and it can be extremely effective.
0:53:29 > 0:53:34And...you can take Switzerland as a very good example of that,
0:53:34 > 0:53:35it's an extremely successful economy,
0:53:35 > 0:53:37it's one of the highest GDPs per capita
0:53:37 > 0:53:39and it's the same size as Scotland.
0:53:39 > 0:53:43There are some Scottish businesspeople who say to me
0:53:43 > 0:53:47the reason they quite like the idea of independence
0:53:47 > 0:53:50is they just like there being a shorter gap
0:53:50 > 0:53:53between them and politicians who make decisions.
0:53:53 > 0:53:57Is it as easy to pick up the phone and talk to George Osborne or David Cameron
0:53:57 > 0:54:00as it is to pick up the phone and talk to Alex Salmond?
0:54:00 > 0:54:05It's much easier to pick up the phone and talk to Alex Salmond than it is to George Osborne or David Cameron.
0:54:07 > 0:54:13But what makes the evaluation of the costs and benefits almost impossible
0:54:13 > 0:54:17is the sheer number of imponderables and unknowns.
0:54:17 > 0:54:21Important decisions on currency and debt
0:54:21 > 0:54:23will only be made after the vote.
0:54:23 > 0:54:26We don't have all the information we need,
0:54:26 > 0:54:28but that doesn't mean we know nothing at all
0:54:28 > 0:54:33about whether an independent Scotland would be richer or poorer.
0:54:33 > 0:54:38Are we talking about, in your view, Scotland being
0:54:38 > 0:54:42way better off or way worse off than the rest of the UK
0:54:42 > 0:54:44if it goes independent?
0:54:44 > 0:54:48I wouldn't expect it to make a great big difference, it's not going to
0:54:48 > 0:54:50end up in 20 years' time as a basket case,
0:54:50 > 0:54:55probably, it's not going to end up in 20 years' time as massively richer than the rest of the UK.
0:54:55 > 0:54:59The best place to start is, at the moment, the Scots are about as well off as the rest of us.
0:54:59 > 0:55:04In 20 years' time, in or out, I expect they will still be just about as well off as the rest of us.
0:55:04 > 0:55:07And if you had a vote, would you make that judgment on economics
0:55:07 > 0:55:09or would you make that judgement on another basis?
0:55:09 > 0:55:12To be honest, I wouldn't make the judgment on the basis of economics.
0:55:12 > 0:55:16You can't vote on the basis you'll be £500 a year better off for sure,
0:55:16 > 0:55:19or £500 a year worse off for sure, we just don't know.
0:55:19 > 0:55:22You're probably not going to end up terribly differently off.
0:55:24 > 0:55:29So if money isn't the decisive factor, what would be?
0:55:29 > 0:55:35Well, this summer, a telling of Scotland's national story has become a bit of a hit.
0:55:35 > 0:55:40This is Anchor Mill in Paisley, home to the Great Tapestry of Scotland.
0:55:40 > 0:55:44It's the longest embroidered tapestry in the whole world,
0:55:44 > 0:55:48and it depicts the history of Scotland from Bannockburn
0:55:48 > 0:55:50to the Act of Union...
0:55:50 > 0:55:53from the Hillman Imp
0:55:53 > 0:55:56to Irn-Bru and Tunnock's tea cakes.
0:55:56 > 0:56:02It's been seen by more than 100,000 visitors in the last year alone,
0:56:02 > 0:56:04and it's proof that Scottish people
0:56:04 > 0:56:07care deeply about their national identity.
0:56:09 > 0:56:11It seems to me that if this debate is to be serious,
0:56:11 > 0:56:19people should be voting about identity rather than about how much cash is in their pockets.
0:56:19 > 0:56:24The slogan "give me liberty or give me £500"
0:56:24 > 0:56:27doesn't have quite the same ring about it.
0:56:34 > 0:56:37I think Scotland could be independent.
0:56:37 > 0:56:40The big question is, should it be independent?
0:56:41 > 0:56:44It's a huge decision. Huge decision.
0:56:44 > 0:56:48It's the biggest vote we're going to take in 300 years,
0:56:48 > 0:56:50so we can't sleepwalk into a decision
0:56:50 > 0:56:53and then, a couple of weeks afterwards say,
0:56:53 > 0:56:55"Oh, no, we've made a terrible mistake.
0:56:55 > 0:56:59"Let's just go back to what was there before."
0:57:01 > 0:57:05I think it would be foolish to say Scotland couldn't do it or it couldn't be successful.
0:57:05 > 0:57:08I don't think that's the question. The question is,
0:57:08 > 0:57:12would it be better to be part of something that is stronger,
0:57:12 > 0:57:14that has more stability,
0:57:14 > 0:57:18that has less uncertainty, and where there has been
0:57:18 > 0:57:19an alignment of the two economies
0:57:19 > 0:57:24for over 300 years, and I would say it's better to be part of that.
0:57:27 > 0:57:30It's not where we are now, it's not where we've come from,
0:57:30 > 0:57:33it's what we can be. What sort of nation can we be?
0:57:33 > 0:57:36What sort of people can we be? If it's good,
0:57:36 > 0:57:38that's down to the people of Scotland.
0:57:38 > 0:57:41If it's bad, that's down to the people of Scotland.
0:57:42 > 0:57:46Identity and history, Scots have it by the bucket load,
0:57:46 > 0:57:51as this magnificent tapestry and its great popular success demonstrate.
0:57:51 > 0:57:55That's why the impassioned debate about whether Scottish people would be richer or poorer
0:57:55 > 0:58:00as a result of independence, well, it matters, but it shouldn't be the be-all and end-all.
0:58:00 > 0:58:04Much more important, surely, is Scots' sense of self.
0:58:04 > 0:58:08Who they think they are as a nation.