WHEN it comes to the debate over Scottish independence people still believe it’s fundamentally “the economy stupid”. But has the pandemic coming on top of Brexit shifted the parameters of the debate?

Earlier this week, the London School of Economics ruffled Nationalist feathers when it released a report suggesting the cost of independence to Scotland would be up to three times worse than that of Brexit with Scots facing the prospect of losing up to £2,800 a year if they said goodbye to the UK.

Its essential point was international borders do one thing: put up costs; as anyone in post-Brexit Britain since January 1 will have discovered if they have bought goods from the continent.

The implication, therefore, is that the “Boris tax” could in an independent Scotland become a “Nicola tax”.

The researchers pointed out that the timescale of the independence effect would be over a generation as a post-Britannia Scotland weaned itself off its reliance on UK trade and looked to Europe and elsewhere for the bulk of its business.

But Fiona Hyslop, the Scottish Government’s Economy Secretary, was keen to point out the analysis only looked at trade and did not take into account any changes in, say, migration policy, inward investment or, indeed, the economic levers the Government of an independent Scotland would actually have control of to boost the economy.

She and her SNP colleagues often point to how, in the independence debate, small is beautiful; littler nations fare so much better economically than their bigger neighbours.

The EU statistics appear on the whole to back this up with Luxembourg, having the highest GDP per capita, thanks to lots of rich foreigners living and working there, and the other nations in the wealth-creation league table featuring member states like Ireland, Denmark, Austria, Sweden and Belgium all outperforming the UK, which has roughly the same rate of wealth-creation as France.

But a key nub of the economic argument on independence is, and will be, that the sunny uplands of smallness will take a number of years to reach. Scotland might have to endure a deal of pain before it gets there; to put it mildly.

As with any constitutional debate hypothetical is loaded on hypothetical but another factor has now been thrown into the whirlpool of economic debate: the pandemic.

Last week, the Scottish Fiscal Commission calculated that Scotland’s economy was unlikely to reach pre-pandemic levels until 2024.

Which is a longer timescale than an FT survey of leading economists pointed to for the UK as a whole. They suggested it would take the UK economy until the second half of 2022 to get back to its pre-pandemic size.

As one forecaster noted we are facing the “groaning 20s, not the roaring 20s”.

Last August, on the back of the hotly contested Scottish Government Expenditure and Revenue Scotland or GERS figures, the highly respected and oft-quoted Institute for Fiscal Studies produced some eye-popping statistics on what the effect of Covid could have initially on the UK and Scottish economies.

It suggested a Scottish budget deficit of 8.6% of GDP for 2019-20, around six percentage points higher than the UK as a whole, could balloon to 28% and 19% respectively this year.

All of which led it to conclude that while the UK faced the need for tax rises or spending cuts, in an independent Scotland they would be starker.

“The likely long-run hit to the public finances as a result of the Covid-19 crisis would mean that spending restraint would have to be even more stringent and/or long-lasting or be accompanied by tax increases.”

The think-tank stressed this did not mean Scotland could not afford to be independent nor that there were not opportunities to improve performance and better address Scottish needs and preferences.

But it concluded it was just that the Covid-19 crisis had made the immediate public finance situation more challenging. To say the least.

It is interesting to note that, initially at least, an independent Scotland would be out of the EU and would need to negotiate specific trade arrangements with the UK to maintain ad open border with the rest of the UK.

But, once inside the EU, the threat of international border would materialise and, as we are seeing with Northern Ireland, resolving that situation could be a tad fraught with difficulty.

Whitehall insiders roll their eyes at the prospect of yet another gargantuan process of horse-trading and brinkmanship between Edinburgh and London if Scotland became independent. They fear uncoupling a 300-year-old Union would be far more tortuous than uncoupling a 50-year-old one.

The 2014 campaign was dominated by economics and Project Fear but it could be the pandemic has shifted the debate.

The argument going forward will be, for some, not an acceptance Scotland would be economically better off staying with the Union - at least initially - but, rather, the nation would, post Brexit and post Covid, be in a deep hole anyway and even if independence left Scots up to £2,800 worse off, this would be, to use Scottish peer Norman Lamont’s old phrase, a “price worth paying” to be free of the Conservative-run UK.