One of the many peculiarities of the Scottish independence debate is the potential upside for English Conservatives should the vote for secession succeed: it would then be highly likely that Labour will be out of government, in whatever is left of the UK, for at least a generation. The Labour vote in Scotland returns 40 seats to the Westminster parliament; in crude terms, their removal would, if voting patterns elsewhere remain the same, (very unlikely, given the rise of UKIP), give the Tories an absolute majority.

The reason why the opinion polls on independence are narrowing is that the Labour vote seems to be shifting towards the anti-unionist camp. David Cameron is no doubt sincere in his desire for a No vote but should Alex Salmond's nationalist party succeed, the changed electoral map will be just one of many consequences.

A suggested reason for the Labour desertion of the No campaign is because of a desire to express, again, a Scottish anti-Conservative vote.

Financial markets have reacted to all of this, most obviously with a small fall in the value of sterling and a marginal rise in the cost of financial protection for various assets. Shares with exposure to Scotland have slightly underperformed but it has hardly been a mad rush for the exit.

Bookmakers are still offering odds-on for a No vote, but those odds are lengthening. The threats issued by politicians and some prominent businesspeople appear to have backfired: the loss of sterling and the potential movement to London of well-known Scottish-based companies, particularly in the financial sector, appears to have not frightened the electorate at all.

A view is probably being taken that it is all bluster and that a negotiated settlement will reach a conclusion that will not involve anything too apocalyptic.

The Westminster government has continued to assert that there is no plan B, that no contingencies have been laid in the case of a vote for independence.

Speculation about what might happen next now runs from an immediate resignation (firmly denied) by David Cameron to the first postponement of a UK general election since the second World War.

Labour collapse

Next year’s scheduled poll, it is argued, could hardly be fair, or sensible, if, as seems likely, it returns a Labour government that will immediately collapse once those 40 MPs decamp to Edinburgh. Better to get the independence negotiations out of the way and then hold the election in

England

, Wales and Northern Ireland.

For financial markets the politics will be inextricably linked with economics: how much of the UK’s national debt will Scotland take? What are the implications for the balance of payments and sterling? There is a long list of questions with few obvious answers.

The truth is that few investors have given much thought to what Scottish independence might mean. That’s partly because the polls until this week suggested there was no need to think about it. But it’s also because many of the consequences are unforeseeable.

Would what’s left of the UK be stable, either economically or politically? Scotland would find out what it is like to live without fiscal transfers from London. Wales and Northern Ireland might find themselves in an uncomfortable spotlight, one that reveals just how much cash is shovelled their way from the English.

Unlike the euro, the currency union that is the UK works only because so much money finds its way from the south-east of England to the rest of the Union. Questions might well be raised in England, suggesting that if the Scots can do without London’s money, so could one or two other troublesome and ungrateful neighbours.

It is said that the Scottish independence referendum is but one aspect of a broader loss of British identity felt throughout the union. London’s remarkable transformation into a quasi city-state might well be accelerated by Scotland’s forthcoming decision.

And how would Europe react? Amidst all of the recent economic and financial turmoil inflicted upon the continent's citizens, it has been easy to lose sight of the fundamental, almost visceral, force underlying the European project. The euro still exists despite many forecasts to the contrary, because of Europe's detestation and fear of petty nationalism.

There is absolutely nothing about Scottish nationalists that endears them to Europe’s elites. They should expect a very cold welcome in Brussels and Frankfurt.