All the evidence demonstrates that Scotland is a wealthy nation. Scotland would be the 8th wealthiest nation in the world by GDP per head of population. Scotland’s wealth is also built on solid financial foundations, a diverse economy and substantial economic potential in new industries such as biotechnology and renewables, as well as current key sectors like food and drink, tourism and oil and gas
Voting for independence – to have control over taxation, regulation and global promotion – will give the Scottish government the tools to create greater opportunities for growth and a better business climate for Scottish business. In short, a Yes vote will improve Scotland’s economy. This will make people in Scotland financially better off.
Here are 10 key economic facts for why Scotland will be a wealthy independent nation.
1) Scotland has a rich and diverse economy
Scotland’s economy includes £21.4 billion in construction which employs 170,000 people, £11.6 billion in tourism which supports 292,000 jobs, £39 billion yearly turnover in manufacturing with a value added of £12.7 billion and 127,000 people employed. Scotland also has world leading expertise in life science, world class universities (5 in the world’s top 200), a multi-billion pound creative sector and vast energy (oil, gas, tidal, wave, wind and solar), fishing and agricultural resources.
In a broad context it is already clear that Scotland has vast economic wealth in resources, talent and business ingenuity.
2) Scotland is a net contributor to the UK
In 2011-12 Scotland provided 9.9% of UK taxes and received only 9.3% of total UK spending. This means Scotland would have been £4.4 billion better off as an independent country last year alone. We could have spent that money investing in our economy with the same debt levels as the rest of the UK or saved it and had £4.4bn less debt.
3) Scotland generates far more tax than the UK average
Scotland generated £1,700 more in tax per person than the UK as a whole in 2011-12. Scotland has generated more tax per head than the UK every year for the past 32 years. The graph below is for a shorter time period but produced by the UK Government. Even in the years where oil prices were lowest, Scotland tax generation was always been considerably higher than the UK average and England in particular.
4) Westminster has cost Scotland £64 billion in the past 30 years
Scotland has paid £64 billion in UK debt interest that Scotland didn’t need. An independent Scotland would have been far better off economically. This was reported recently in the Sunday Times after bespoke Business for Scotland research showed that Scotland has been subsidising the failings of Westminster economic mismanagement.
5) Scotland has a lower deficit and lower public spending than the UK
Scotland has a lower deficit than the UK. Scotland’s is at 5.4%, while the UK deficit is 8.5% of GDP, as of the 2011 IMF comparison. Scotland only spends 42.7% of Scotland’s GDP on public spending. The UK spends 45.5%. (page 22) This demonstrates that Scotland’s public finances are in a stronger position than the UK as a whole. The latest GERS figures place Scotland’s deficit at 5% compared to the UK’s 7.9%.
6) Scotland has strong exports
Scotland’s top export markets are USA, Netherlands, France and Germany, which are worth a combined total worth of £9.5 billion. (Table 9.1) Scottish whisky exports are valued at £4.27 billion last year. This is because Scotland exports 40 bottles every second! The food and drink market is key to Scotland’s exports across the world. Other key industries include chemical manufacturing, computer products, finance and insurance and other forms of equipment. (Table 9.1) With the powers of independence combining with the Scottish Government gaining direct control over international relations, there is a target to increase exports by 50%, which would create over 100,000 new jobs.
7) Scotland’s oil fields remain a massive financial asset
The oil in the North Sea is worth over £1 trillion. There are at least 15-24 billion barrels of oil remaining which will continue long into the 21st century. Over 90% of the tax revenue will go to an independent Scotland which can help to establish a national oil fund for future investment. Recently, Business for Scotland explained the potential for a West coast oil boom that is currently blocked by Westminster. Independence could revitalise the economies of Ayrshire and the Strathclyde region as a whole. Most oil price forecasts are upward, with one of the exceptions being the UK Government’s OBR which has a political motivation to underestimate oil revenue.
8) Scotland has huge potential in renewable energy
Scotland has 25% of Europe’s total tidal energy potential, 25% of total wind energy potential and 10% of total wave energy potential. This has the power to reindustrialise Scotland bringing more jobs and greater prosperity. Key examples include the Pentland Firth – the Saudi Arabia of renewable tidal energy – and the Moray Firth - a substantial offshore wind energy project. Small scale and often community owned renewable projects also have huge potential to provide low cost energy to revitalise Scotland’s rural communities.
9) Scotland is one of the top UK locations for inward investment
Inward investment into Scotland’s economy has hit a 15 year high. Last year Ernst & Young ranked Scotland as the most popular UK destination for global investment outside of London. Scotland secured 11% of all UK Foreign and Direct Investment despite being only 8.4% of the UK population. The report confirmed that far from uncertainty over Scotland referendum causing a slow down in inward investment that “it seemed to have the opposite effect”. A combination of lower corporation tax combined with a raft of other economic measures such as significant government investment in fast growing sectors should ensure FDI continues to be a strong contributor to Scotland’s economy. Indeed evidence suggests that newly independent nations enjoy significantly increased FDI.
10) An independent Scotland can support Scottish business in tax, regulation, the labour market, innovation and global exports
An independent Scotland will prioritise the interests of business in Scotland following decades of Westminster prioritising London and the South East. This includes the opportunity to create a simpler tax system that supports Scottish business; reforming the labour market to improve employer/employee relations; encouraging migration to Scotland to balance Scotland’s unique demographic needs; and supporting Scottish exports globally through a Scottish diplomatic and trade service. The opportunities of independence are vast and long-term.
11) More reasons?
These points provide a starting point for analysing Scotland’s numerous economic strengths and the reasons Scotland will be financially better off as an independent country.
There are 1000s of pages of detailed research by the Fiscal Commission, the Jimmy Reid Foundation, Scottish Government Papers like ‘Scotland’s Future’ or ‘Economic Policy Choices in an Independent Scotland‘, the Institute for Fiscal Studies, Jim and Margaret Cuthbert, which agree that Scotland is a wealthy nation that can do even better with independence.
There are also hundreds of other positive economic reasons for independence that can’t be covered in just 10 points such as controlling air passenger duty, retail support, Scotland’s independence asset windfall of £109 billion, the economic defence dividend that will save Scotland at least £500 million a year, improving Scotland’s pension system, the benefits to business of improving social mobility and equality or the Common Agricultural Policy dividend that Scotland would gain with independence.
There is overwhelming evidence that Scotland will be economically better off as an independent country. Even opponents of independence have conceded that Scotland can be a successful independent country. Their own negative economic forecast estimated that Scots would be just £1 worse off a year.
In contrast every single Government Expenditure and Revenue report for the last 30 years – compiled with official statistics – finds that Scotland generated more tax per head than the UK.
If voters are convinced that Scotland will do better economically a majority support independence. Yet astonishingly around 34% of the electorate currently believe that Scotland would fare worse economically as an independent country; while 37% believe Scotland is incapable of independence. There is absolutely no evidence to suggest this. Not a single economic expert supports such a doom laden proposition.
This demonstrates that truthful economic information like the facts contained in this article will change the result of the independence referendum.
With the knowledge that Scotland will benefit economically from independence, business and citizens will move towards voting Yes as it is the only way to ensure progress for themselves, their businesses and their communities.
Scotland will vote for independence because the economic case for independence is unanswerable.
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