Over the past 5 years Scotland’s would have been £8.3 billion better off as an independent country, when taking account of the new report published into Scotland’s finances today.
The new report also demonstrates that Scotland generated £800 more in tax per person than the UK average during the last financial year. Scotland’s spending was also lower than the UK average over the past 5 years. Scotland’s spending was 44.2% of GDP over the last 5 years. The UK average was 45.4%.
Spending on social security last year was also lower in Scotland than the UK average. In Scotland it was 15.5% of GDP compared to 16% for the UK.
The front page of The Herald today reports that Scotland’s economy is 11% better off in terms of GDP per capita than the UK.
The Government Expenditure and Revenue Scotland Report continues 33 years of strong performances by the Scottish economy. Had Scotland been an independent country, it would currently have a net cash surplus of over £50 billion and no public debt.
Scotland’s economic position, relative to the UK finances, would have been £8.3 billion better off in the past 5 years alone. Scotland is clearly a wealthy nation with the resources to be a successful independent country.
Scotland is one of the world’s wealthiest countries
This means that an independent Scotland will be one of the world’s wealthiest countries.
Independence can make Scotland better off
However, without the full economic powers of independence Scotland cannot grow its economy, support domestic businesses or improve its economic competitiveness.
The extra £8.3 billion over the past 5 years would have allowed a Scottish Government to increase investment, reduce tax for key growth sectors and reduce overall government debt.
In contrast, Westminster has created a crisis in public finances with total debts of £1.3 trillion.
Westminster costs included in figures
Despite the strength of these figures, they still contain a number of substantial ‘Westminster costs’ which are placed on Scotland.
Scotland had to pay £4.02 billion in debt interest last year to Westminster. This is despite the fact that Westminster ran up this substantial debt. As a report by the Reid Foundation and the Fiscal Commission confirmed, an independent Scotland would not have needed this debt. This has cost Scotland £68.12 billion.
The Scottish figures also include service charges for spending outside of Scotland. This includes substantial costs for military services and nuclear weapons. Scotland also pays for the large civil service bureaucracy based in London. Scotland has paid £15.8 billion for military costs over the past 5 years, which will have been increased by the war in Iraq.
Scotland also has to contribute to the UK’s £3.5 billion tax administration costs, £1.5 billion border control costs and hundreds of millions in Westminster expenses. Through efficiencies and common sense, an independent Scotland can save money in these areas and improve the economy. This will provide a large independence dividend.
Growing business support for an independence is based on the knowledge that an independent Scotland will prioritise the interests of business in Scotland. This means that public policy will benefit distinct growth areas and allow Scotland to promote goods and services across the world.
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Category: Economics of Independence