IT is clear that, without Scotland and its oil revenues the rest of the UK would have been forced to confront its economic demons in the 1980s, and put its economy on a sustainable footing.

Because the UK as a whole, cushioned by oil revenues, was able to survive temporarily, it did not face this discipline.

The benefits of North Sea oil were squandered on current spending, with the result that the UK has never achieved a sustainable economic model.

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This failure was inexcusable.

Surely, some might argue, bygones are bygones: all that matters from the point of view of sharing out the UK's current debt is where we are now, not how we got here?

That argument fails because of the principle of equity enshrined in the Vienna Convention [on dividing debt between states].

Imagine two possible scenarios.

Under scenario one, which we might call the "properly functioning union", a finite resource is discovered which lies largely within the territory of one part of the union. In a properly functioning union, it would be perfectly reasonable to imagine an unwritten but well-understood accord, whereby the fortunate area agrees that its resources should indeed be used for the greater good of the whole union: but naturally, the resource should be used wisely, and invested to help put the whole economy of the union on a sustainable long-term footing.

In these circumstances, if in due course the area in question chose to exercise its right to self-determination, there would be some case for saying let bygones be bygones when sharing out any debt of the whole union.

The alternative scenario, however, represents an improperly functioning union. Under this scenario, there is no implicit accord that the new resources should be used wisely. Instead, the central government of the union unilaterally decides that the finite resources should be extracted as quickly as possible to prop up a malfunctioning economy.

Steps are taken to conceal from the area possessing most of the resource the true significance of the value of what was found.

Far from investing the revenues, they are used for current consumption, and help to put back the day when hard decisions have to be made.

And ultimately, having squandered a large part of the resource, and having backed a failed economic model, the union as a whole is left with crippling debts.

In these circumstances, the area exercising self-determination is perfectly entitled to state that, as a matter of equity, bygones are not bygones, and that, in negotiating what share of debt to take on, recognition should be made of the way in which the implicit pact governing a properly functioning union was breached.

This picture of an improperly functioning union fits only too well what happened to Scotland within the UK.

The way in which the UK handled the oil reserves was particularly perverse, since oil was used to prop up a system where the south-east of England grew disproportionately, as most other parts of the union declined.

It is particularly grotesque, for example, that during the 1980s, the peak years for oil production, Scotland suffered net out-migration of around 150,000 people.

There is no doubt that the UK is a classic example of an improperly functioning union. Fully examined, the issues surrounding debt represent strong additional arguments in favour of, rather than against, independence.

First, the union has proved itself incapable of exercising proper stewardship, either of an irreplaceable resource like North Sea oil, or of the UK economy.

Second, the union has failed to honour the kind of implicit bargain of good faith that should exist in any properly functioning union.

And finally, if the Scottish case in the debt-sharing negotiations is properly advanced, a newly independent Scotland would not find itself facing any particularly crippling debt burden.

Extracted from "Issues surrounding the sharing of UK debt post independence", published by the Jimmy Reid Foundation.