An independent Scotland will inherit a fair share of the UK’s £1.3 trillion assets. This is of huge significance. These assets will generate a huge economic windfall for the people of Scotland of £109 billion. It will make Scotland far wealthier and allow us to reshape our institutions’ towards priorities that suit Scotland.
How will this happen?
After a ‘Yes’ vote negotiations will share UK assets between Scotland and the rest of the UK. This is because Scotland’s taxes have contributed to UK assets for generations. Hundreds of billions of pounds of our taxes have poured into infrustructure, equipment and property. As an independent country, Scotland is entitled to its share of these resources.
Why does this affect me?
These resources will provide strong foundations for an independent Scotland. Scotland has vast natural resources and a highly skilled workforce across a range of sectors.
These assets will enhance those strengths and ensure that Scotland will be a rich and successful nation. This means the tax system will have the resources to operate effectively; defence services will have resources and equipment; social services will have infrastructure to ensure health, education and pensions can be improved. Beyond a ‘Yes’ vote, these assets ensure that you can have confidence in Scotland’s economic future.
Calculating Scotland’s assets
There are two methods of calculating what assets Scotland is entitled to. By a current population share, Scotland is entitled to 8.4% of UK assets. By this estimation, Scotland would receive £109 billion of UK assets. A second method would be to distribute assets on the basis of Scotland’s tax contribution to those assets since figures were available in 1980/81. Last year Scotland paid in 9.9% of total UK taxation. That would equal £129 billion of assets for an independent Scotland.
A conservative estimate
These figures are calculated from the UK Whole of Government Accounts. (page 178) £109 billion is a conservative estimate.
The full UK Asset Register – which is based on UK tangible, intangible and fixed assets – has not been fully compiled since 2005. A more detailed reading of recent UK acquisitions has therefore not been given a full breakdown. For instance, between 2000 and 2005 defence acquisitions were £30.3 billion higher than disposals.
Westminster suppressing the figures?
Previous Asset Registers were compiled by Westminster in 2001 and 2007. Yet there remains no plans for a 2013 register. This delay appears to have political motivations as without an asset register Scottish voters will lack up to date information on the huge range of assets than an independent Scotland is set to inherit.
Asset Scotland facts: good for negotiation and the economy
Through the Asset Register 2007 and the UK Whole of Government Accounts, which have been studied by Business for Scotland, we can generate outline figures and provide certain details on Scotland’s position.
This information adds up to two important facts. One, Scotland will be in a strong negotiating position after a ‘Yes’ vote. Two, our share of UK assets will place Scotland in a strong economic position. This is significant when establishing a framework of cooperation after a ‘Yes’ vote.
This is the case for a number of reasons.
A) It will be in Westminster’s interest to negotiate in good faith when sharing assets and on wider issues such as defence, common trade and common travel cooperation. Scotland’s balance of payments is crucial to the UK economy. Scottish trade and exports are crucial for UK business. Scotland also contains assets of significance for the rUK government. Defence ministers have already stated that Scotland will be entitled to its share of defence assets. The Department for Work and Pensions has already confirmed that state pension provision will be unaffected by independence.
B) If Westminster refused to negotiate fairly, it would be a disaster for the rest of the UK. Without a fair deal on UK assets, Scotland can drop UK liabilities. This includes UK national debt. Scotland would then save over £80 billion immediately. The rest of the UK would be far worse off as a result.
C) £23 billion of assets were attributed to Scotland in the old UK Asset Register. (half of this is the valuation of the road network) Yet an independent Scotland would inherit a far greater value of assets. This gives Scotland substantial room for negotiation in decided what assets are best for Scotland.
D) Scotland does not need all the assets currently stationed in Scotland. For example the Trident nuclear submarines are valued at £2.1 billion. This will strengthen Scotland’s position in negotiation as UK politicians are desperate to move the missiles.
E) Scotland does not need certain high cost items located outside Scotland. Scotland’s share of UK defence assets equals £8 billion, as of the UK Asset Register.
This will include assets like the UK aircraft carriers (currently without aircraft) constructed to project UK power and influence. Capital spare military items were valued at £5.6 billion in 2007. Apache helicopters were valued at £2 billion. UK guided missiles and bombs were valued at £1.5 billion. Tornado Aircraft, Merlin HMI Helicopters, Trafalgar Submarines and Frigate Type 23s were worth a total of £5.5 billion.
Scotland will have a defence policy that suits Scotland’s interests. Relinquishing the Scottish share of certain assets will therefore have a substantial and positive impact on Scotland’s financial accounts.
F) There are many assets that it will make perfect sense for Scotland to control. These include Dover House in Whitehall, Abercrombie House in East Kilbride, military bases situated in Scotland, Jobcentre buildings in Scotland and Dungavel detention centre. Scotland’s share of UK Embassies and British Council resources will also provide the foundations for international engagement. This, incidentally, is the position that was proposed in the White Paper on page 341.
G) Therefore the Scottish Government has proposed that Scotland’s assets are “realised in a combination of ways – through physical assets, cash transfer and continued use of assets through shared service agreements.” (pages 341-45 of the White Paper)
Assets and liabilities
The No Campaign has sought to highlight the liabilities that an independent Scotland will inherit to scare people away from bringing more powers to Scotland. While these liabilities were accumulated by Westminster’s economic misjudgements, it’s a basic error to focus on liabilities in isolation.
Every business person and accountant knows to look at both sides of the spreadsheet. When you consider your personal finances you also consider your incomings and your outgoings. Even if you have debt, it is crucial to count your assets. Focusing solely on Scotland’s liabilities is a con which ignores the other side of the story. The assets matter too!
Sharing assets fairly makes sense
Scotland has been an owner of the UK and investor in its projects. It’s like being partners in a business. Often business people decide that they can gain greater control and freedom through cashing in their share of a business and establishing independent enterprises. The assets are shared. The new organisations can focus on new opportunities.
At a government level this is not a new experience. After devolution, vast assets were transferred from the Scottish Office to the Scottish Executive. In an international context, almost every issue of asset sharing between the Czech Republic and Slovakia was agreed through negotiation. This was part of a peaceful and short transition between June and November of 1992.
An independent Scotland will inherit around £109 billion pounds worth of UK assets. While Scotland already has strong economic foundations, this windfall will be of great benefit. As a result, the people of Scotland can have confidence in the financial position of an independent Scotland.