It seems that there are a few more isseus that the government may want to consider in the event of a referendum in Scotland in favour of independence. This one concerns a matter of housekeeping going back over 550 years, and in the interest of keeping on good terms with our North European naighbours it is a matter that any sensible government should resolve before the Salmond government thinks it controls Orkney and Shetland
As keen historians will be aware, Princess Margaret of Denmark was betrothed to James of Scotland in 1460. The marriage was arranged by recommendation of the king of France to end the feud between Denmark and Scotland about the taxation of the Hebrides islands, a conflict that raged between 1426 and 1460. In July 1469 she married James III, King of Scots (1460–88) at Holyrood Abbey.
Her father, King Christian I of Denmark and Norway (and for a period of time, Sweden), agreed to a considerable dowry of 60,000 Rhenish Guilders. The first 10,000 was payable in cash, and the remainder was promised by Christain I backed by a pledge of Orkney as security. In the event, King Christian was only able to pay 2,000 Guilders immediately, so the promise of the remaining 8,000 Guilders was secured by a pledge of Shetland.
The money owed by King Christian had still not been paid three years later, so the Scottish Parliament passed an Act annexing both Orkney and Shetland to Scotland. It seems a little dubious that the Scottish Parliament could annex a body of land which was actually pledged as security for a debt owed to the monarch in a personal capacity rather than to the government, and the situation was clarified by the 1669 Act of Annexation of Orkney and Shetland to the Crown, which specifically removed Orkney and Shetland from the jurisdiction of the Scottish Parliament and placed it firmly in the care of the Crown. Even so, the claim to the land as a possession still seems somewhat tenuous and it could well be argued that the pledge was not a pledge of title but a usufruct, a right to enjoy the fruits of posession.
Nowadays, it seems unsatisfactory that this matter should be left unresolved with our Norwegian and Danish neighbours while the Scots contemplate their independence. My suggestion is that in the event of a vote for independence Her Majesty’s Treasury should offer the Norwegian government the opportunity to settle the outstanding balance of the dowry in return for a release 0of the pledge.
I estimate that 58,000 Rhenish guilders would be worth approximately £1,392,000 in modern currency, but it would also be reasonable to charge a rate of interest on top of that sum. Assuming a real interest rate of 2.125%, payable since the death of Christian I in 1481, that would give an outstanding balance £98,348,595,286.
While that might seem a very large sum, I understand that there are oil reserves around the islands which might make that an attractive proposition for the Norwegians. Nor is it beyond the capacity of the Norwegians to pay such a sum. The Statens pensjonsfond - Utland (commonly known as the Oil Fund) currently holds investments valued at $570 billion. Spending some of that to acquire oil fields adjacent to their existing oil industry would seem to make sense for them. For this country it would represent not only a satisfactory settlement of a long standing dispute, but it would generate a substantial reduction of the National Debt.
This would obviously be to the benefit of an independent Scotland because they would see a reduction in the proportionate share of the National Debt that they would be required to assume on independence.