Revealed: The ACCOUNTING TRICK that Hides Scotland’s Wealth.

As an independent country Scotland would have enjoyed a massive cash surplus

As an independent country Scotland would have enjoyed a massive cash surplus

Every Westminster Government in my lifetime has knowingly diverted billions of pounds of Scottish revenue to Westminster.

This has led to lower investment in Scotland, higher unemployment, lower economic growth, lower standards of living, economic migration and growing inequality and poverty. This is the sort of government behaviour that often leads to demonstrations and makes headline news, and might have done so here if it wasn’t for the fact that the Scottish people have remained mostly unaware of the wealth draining south.

In this article, I will expose the accounting trick that hides Scotland’s wealth. I will also supply solid evidence that if Scotland was already an independent country our economy would be booming and public finances debt-free.

The confidence trick

For generations the people of Scotland have been fed a negative narrative on the health of Scotland’s economy. A depressing picture has been drawn by Westminster politicians of Scotland as a subsidised state dependent on the UK for charitable hand-outs with higher levels of debt and a dependency on the public sector. Scotland has been told that without the generosity of the UK to bail us out, Scotland would be a bankrupt nation, unable to meet the very basic needs and wants of its people.  The reasons given for this belief seem to be a mix of Scotland being too “small” a country, not having the skills, resources and infrastructure, the wrong type of industry (too much manufacturing and exporting) and therefore too much debt.

This narrative is fundamentally untrue. There is simply no evidence to support it whatsoever.

Cameron

So manifestly untrue, in fact, that all the available economic data entirely contradicts the age old, absurd and tired Westminster proposition that Scotland could not succeed as an independent self governing country.  The “too small, too poor and too stupid” argument has become so discredited recently that none of the major players in the No Campaign now dare to suggest it.

The reason that most anti-independence politicians have retreated from suggesting that “Scotland’s economy is a basket case”  is that the truth is now easily sourced.  Evidence such as the McCrone Report, classified as top secret for 30 years by the 1970s Labour Government but now publicly available, states that “the SNP had underestimated the nation’s oil wealth” and that an independent Scotland would “suffer from an embarrassment of riches”.  That report was written in 1974 and classified as secret due to worries about “restless natives” if its facts were known by the masses in Scotland.  It was eventually made public only after a Freedom of Information Act request in 2005.

Healey admission

More recently, former Chancellor Denis Healey in an exclusive interview with Holyrood Magazine said:

“Scotland “pays its fair share” and that “these myths” are simply perpetuated by those that oppose independence”. And that “Scotland’s oil wealth had been squandered by Westminster rather than invested, while being underplayed (in value terms) by the UK government to subdue calls for Scottish independence”.

Scotland pays its way

We also now know from Scotland’s national accounts – Government Expenditure and Revenue Scotland (GERS) – that every single year for the last 32 years Scotland’s tax revenue generation per head has been higher than all the other UK nations.  This is solid proof that oil price volatility isn’t a problem, for if it was, then at least once in 32 years Scotland’s revenues would have dropped below the average for the rest of the UK but it never did.

Latest regional tax revenue per head (Source UK government).

Latest regional tax revenue per head (Source UK government).

Last year, for example, Scotland generated 9.9% of the UK’s total tax revenue with only 8.4% of the UK population. When you add in the Barnett Formula, our share of the UK expenditure rises to around 9.3% last year, £4.4 billion short of the figure that Scotland would have had to spend if we had received 9.9%.  As Business for Scotland showed previously, the No Campaign is self-evidently wrong when it tries to claim that 9.3% is a larger number than 9.9%.

Having had to abandon the overarching “too small, too poor and too stupid” approach, the No Campaign has resorted to obfuscation in its latest attempt to undermine the people’s confidence in themselves. Now they pursue completely untrue micro-arguments to confuse and spread fear and doubt.  All of these scare stories have strength only in their complexity but are easily debunked in areas such as  bank bail-outs, border control, EU membership, defence and currency to name only a few.

Jackson Carlaw No Campaign a bit silly

The No Campaign’s accomplices in some of the mainstream metropolitan media have been giving headline status to even the most ridiculous of scare stories without even a perfunctory examination of the facts.  However even some of their own MP’s find some of the claims to be embarrassing.

The debt trick 

Looking at Scotland’s national accounts (GERS) you can see that there is an expenditure line labelled “Public Sector Debt Interest” in 2011/12. This amounts to £4.1 billion and begs the question. Why does an oil rich nation at a time when oil and energy prices are high have to pay so much interest on debt? No other similar nation with a strong onshore economy and the additional bonus of a large and well established oil and gas sector like Scotland is burdened with such payments.

Note: The £4.1 billion is simply the cost of servicing the interest on a much larger debt, there is no actual capital repayment element in that figure.

So I looked back at 32 years of historic GERS data and found the following quite staggering:

  • Every year for 32 years (the entire available data) GERS includes a deduction from Scotland’s block grant equivalent to Scotland’s population percentage share of Westminster debt.
  • Over the 32 years, Scotland’s share of UK debt interest amounted to £64.1 billion.
  • However, during that time had Scotland been an independent country with its geographic share of oil revenues established under international law (as would be the case under independence) Scotland’s’ borrowing over 32 years would have been zero, nil, nothing, no pounds sterling at all.

I hope that is clear but for absolute clarity let me put it in other words. Scotland paid £64.1 billion (sixty-four thousand one hundred million pounds) interest on debt that Scotland had no need for, simply because we are not an independent country!   As a result, on average, £2,000 million was ripped out of the heart of Scotland’s economy every year for 32 years, to pay interest on loans that Scotland didn’t take out and didn’t need.  How on earth does that make us better together?

If Scotland only had to pay its own way

If Scotland had only to pay for its own debts then we would have been building up massive surpluses of cash for at least a generation.  Cash that could have been invested in a sovereign oil fund to secure our pensions and to secure the NHS, cash that could also have been invested in infrastructure or the business of re-industrialising Scotland to create a larger, more successful and wealthier nation than we have now. When you look at GERS estimates of Historic Fiscal Balances with the interest on non-Scottish debt deducted it shows Scotland had a cumulative public sector surplus until 2004/05 and a cumulative deficit of £49 billion by 2011/12. The sharp decline from 2005-12 was generated by the banking crash during the stewardship of Westminster Chancellor Alistair Darling, who is of course now head of the No Campaign.

Accumulating a massive surplus

However, if the Scottish population share of UK debt interest payments are removed from the Net Fiscal Balances, we can see the figures as though Scotland were an independent nation for the past 32 years. In those circumstances Scotland would have had a cumulative operating surplus until 2010/11 and lets not forget that the Scottish Treasury would have received interest on each annual surplus which changes the picture significantly.  This assumes a 4% interest on the cash surplus, a very modest assumption since this is a nominal interest rate and much higher nominal interest rates were common during much of this period.

As an independent country Scotland would have enjoyed a massive cash surplus

As an independent country Scotland would have enjoyed a massive cash surplus

That would mean that Scotland’s cumulative surplus would have topped out at £68,718 million in 2008/9 and even after paying our fair and required share of the bank bailout (which was arguably caused by poor Westminster regulation but let’s include it anyway), Scotland would still had a cumulative surplus of £50 billion in 2011/12.  That £50 billion surplus is also after Scotland has paid for the cost of military spend such as nuclear weapons and action Scotland’s Parliament voted against, such as the illegal war in Iraq which cost British taxpayers at least £10 billion and ipso facto cost Scotland approximately £1 billion.

NOTE: With higher interest rate assumptions this would be a much higher surplus.  The 4% interest rate is even more conservative if you factor in that Scotland could have started a sovereign oil fund such as Norway’s which returned 14% growth last year, this means that Norway has succeeded in creating an oil fund worth £460 billion since mid-1996. In fact, out of the 20 largest oil-producing nations in the world, only the UK and Iraq have not established oil funds. A point agreed with only last week by former Labour Leader Neil Kinnock.

The impact on Scotland

Clearly, we can see that Scotland is a wealthy nation but being part of the Westminster system has stopped us from becoming a wealthy society. The fact that Scotland’s wealth does not stay in Scotland has led to a lack of investment  in business and infrastructure, created worries about pensions, more poverty, lower life expectancy, a slow down of our economy and a population decrease due to the need for economic migration (a brain drain to London and the South East).  These worries are the stock and trade of the No Campaign message – a bit like an arsonist complaining about a fire he started!

Respected former Scottish Office economist Jim Cuthbert and Margaret Cuthbert former economics lecturer and consultant recently wrote:

“In GDP growth, Scotland has been under-performing relative to the UK average and relative to other EU countries of similar size since at least 1963. The data showed that, over the period 1963 to 2011, in real terms, UK GDP increased by 329.3%, while Scottish GDP increased by 263%. In terms of average growth rates per annum, that for the UK was 2.514%, while that for Scotland was 2.04%: an average annual difference of 0.5%.  Or to put it more simply had Scotland’s GDP grown at the same rate as the average of the UK since 1963, Scotland’s GDP would be 25% larger than it is today”.

Conclusion

In the 2011/12 Scottish public accounts, 70% of Scotland’s nominal operating deficit was due to £4.1 billion of interest payments on debt we didn’t need.  If Scotland had been an independent country over the last 32 years we would have a cash surplus of around £50 billion even if we assume we would still have had the same expenditure including payments for banking collapse and nuclear weapons etc. If we had invested some of that £50 billion in a sovereign oil fund we would probably now have a much larger fund than Norway’s and our economy could be 25% larger than it is today.

The very fact that the No Campaign can point at Scotland’s economy and even remotely suggest that an independent Scotland would not have a massive advantage is testament both to a massive misinformation campaign over decades and to generations of economic mismanagement of Scotland’s resources by Westminster. Most culpable of all is Alistair Darling. Not only did Alistair Darling fail to reinvest Scotland’s oil wealth but was also asleep at the wheel during the banking collapse and the various banking scandals under his watch.

It is clear to all who investigate more deeply to establish the facts, that Scotland paying £64.1 billion of interest on debts taken out by Westminster to pay for its own failures – does not qualify us as better together.  A yes vote will release Scotland’s potential and remove the Westminster shackles, if we vote yes then Scotland’s economy will thrive.

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You may also like: Where does Scotland’s wealth go?

Notes on Data Sources and Methodology.

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Category: Business for Scotland, Economic Strengths, Economics of Independence, Gordon MacIntyre-Kemp, Prosperity, Scotland's Economy, Vision for Scotland, Yes Scotland

About the Author ()

Gordon MacIntyre-Kemp is the Chief Executive of Business for Scotland. Before joining Business for Scotland he ran a small social media and sales & marketing consultancy and was the founding member of Business for Scotland. With a degree in business and economics, Gordon has worked as an economic development planning professional, and in marketing roles specialising in pricing modelling and promotional evaluation for global companies (including P&G). Gordon benefits (not suffers) from dyslexia, and is a proponent of the emerging new school of economic thinking. Gordon Blogs for Business for Scotland and The Huffington Post.

Comments (65)

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  1. daryl reid says:

    lets break free from the money draining leech called Westminster

  2. Great read but to convince the majority of Scotland to vote either yes or no this article has to be put in a more simplified manner so it’s easy to read. I have read it and yes it is perfect for someone with a little time to read it but the majority of working people today will only read bits of it and still not either be bothered or fussed about its meaning. I myself like it short and sweet to the point in realistic reading to understand it. I for one did not go to university or college and the majority of voters will be the same. We are not stupid or thick but remember we can all vote as is our right so for the right of everyone involved let’s cut out the drivel and keep it nice and neat.

  3. Robert Hughes says:

    Great article. I’m following the independence debate with great interest. As a Welshman I will be sorry to see you go. I’ve watched the debates, read articles from both sides visited Better Together and Yes for Scotland soc net sites and spoke to anyone who knows more than me
    From what I can see and understand there will be a considerable number (between 40 & 60%) voting no. What I have been unable to understand is why. Maybe someone could help.

    • Katie says:

      Hi Robert, yes I understand what you’re saying, sad to see us leave too but Scotland has never been side by side with England’s Westminster, it has always been a subservient marriage soaked with inequalities. I rarely meet No voters here in Scotland, a lot of people unsure maybe. For me I can see a lot of fear being the reason for the NO statistic and ill fed information. Also, I’m not entirely sure of how accurate the figures are? For me it’s a no-brainer, I’ll be voting YES, and I pray that we can finally be free of Tory rule. I’m sad to sever a tie to our British family and friends who, like us, have had to endure a government that they didn’t vote for. Scotland has a chance, I hope England, Ireland and Wales don’t hold it against us but understand that it’s a way forward and perhaps a chance to follow change too?

  4. Stuart Clark says:

    Gordon,

    Thank you for all you are doing to shine a light on the shocking injustices that have passed for democracy in this country. I am one who remembers his teen years overshadowed by the Cold War and the threat of a nuclear winter. I was brought up with the notion that it was my duty to vote but I cannot remember many elections when I felt empowered and voting seemed to be a lottery between the ideologies of left and right. The exception is of course in recent past and my hunch that devolution would move Scotland from seemingly continually whinging (because the facts were concealed from us) to developing an action plan.

    For years we were told that removing the bridge tolls was impossible and economic development in Fife was penalised by tolls at both ends.

    A YES vote will only strengthen the sense of purpose because we will be much better able to hold our politicians to account and we WILL get the Scotland we want!

    I am not a party political animal because I always find the arguments around human behaviour too complicated to be simply represented by one side or the other. However, for the first time in my life, I have joined a political party – the SNP – as the white paper indicates an intent I fully agree with.

    I have now found this and various other groups arguing well for independence and I can barely contain my joy! This simply MUST happen!

  5. jim craig says:

    The way I look at it is this, If the Tories want to keep us, there must be something in it for them. They wouldn’t be trying to keep us because they love us. Also, there is no political gain in it for them, as the old joke goes, there are more pandas In Edinburgh zoo than Tory MPs in Scotland. Therefore it must be a fiscal matter………

    • Tribalscribble says:

      It’s fiscal alright. Uk debt is about 1.4trillion and rising. It is gradually crawling towards 85% GDP. It has only been allowed to go that high as its backed up by assets such as oil etc.

      So in the event of a YES vote. The UK loses 10% of its GDP. So the debt is now 95% GDP and not backed with any oil. The markets will not accept this and the UK will be on it knees financially.

      This in my opinion is why every major party leader has been here in the last week. Also Why Osbourne is giving the G20 a miss.

  6. Amicus Curious says:

    I really enjoyed reading this article Gordon and I admire how much time you have taken to reply to everyone. One thing that has always intrigued me about Scotland’s balance sheet is the question of how tax receipts are accounted for. I read somewhere once on another blog which argued that the figure for Scotland’s VAT for example is actually much higher, as VAT which is paid in Scotland to companies whose head offices are down south are accounted for as is they were paid in England? Is this true, and what of the case of the other taxes? The SNP always cite the GERS figures, but my hunch is that Scotland’s finances are actually much healthier because of this accounting problem in terms of VAT, and perhaps also Corporation Tax etc. Can you provide any insight here?

  7. Iain Walker says:

    Thanks for this article. This is a bit off-topic, but do you think the reason Westminster was so keen to prevent devo-max, was because that would have meant losing revenue. I’m surprised they took the gamble, because a vote for devo-max would have safeguarded Trident and Britain’s “place on the world stage”.

    • Gordon MacIntyre-Kemp says:

      Yes exactly the ability to tax and spend across the board would allow the Scottish Government to create a competitive advantage and also stop the subsidy that Scotland offers the Treasury. There are also issues around Devo max that make it easily to defeat – as a system of Government it hasn’t worked anywhere in the world (federalism does closest) and it transfers all powers to Scotland other than Welfare, Defence and international relations – along with taxation those are the three most important things you would actually want?

  8. helen wilson says:

    only one thing for it vote yes yes yes

  9. neil lepick says:

    cracking article,for years we have been lied to and cheated by each consecutive government.in 2014 we will have the chance to stand on our own.I never thought i would see it happen in my lifetime,it’s an exciting time ahead everybody should embrace it.

    • I agree,the time has come to break free from corruption and greed that goes on in Westminster.
      The unionist politians of all persuasions have let our country go into decline,now it is time to get our pride back,i’m voting YES.

  10. Wayne Johnston says:

    Hi Gordon

    I have a few points I’d like to make about your article.

    You state that Scotland has “a strong onshore economy” Using the historic GERS figures if you look at the onshore section you find that even after taking into account the £64Bn of debt interest payments an independent Scotland wouldn’t have paid Scotland’s onshore economy still ran a deficit of £140Bn.

    You also state “Scotland’s’ borrowing over 32 years would have been zero, nil, nothing, no pounds sterling at all.” But you also state Scotland would have had ” a cash surplus of around £50 billion” over the same period. Again I used the same GERS figures you did and subtracted the debt payments each year. A different assumption I made was that an Independent Scotland would have simply paid off its share of debt in the first 2 1/2 years. The figures I obtained show a surplus of £54.3Bn but also a debt of £46.5Bn from the years when there was a deficit. If an independent Scotland had simply used it’s surplus to make up for deficit years the total surplus over the 32 years would be £7.8Bn. Obviously this doesn’t take into account interest paid on the surplus or the debt. To back up my findings if you look at point 4.27 here http://www.scotland.gov.uk/Publications/2013/06/9241/5 the Scottish Government states Scotlands total debt since 1980 should be £56Bn this includes the £64Bn of additional debt payments. If you take into account the £64Bn you get a surplus of £8Bn approximately the same as the £7.8Bn I found. Are you claiming Scotland would have a £50Bn surplus and zero debt?

    • Gordon MacIntyre-Kemp says:

      Wayne

      First Scotland’s onshore economy is 99% of the UK average in GDP per head terms – this despite the fact that Scotland economy has been growing more slowly than the UK’s for generations, due to lack of investment from Westminster. As a result you can say that oil and gas is a bonus to Scotland and that we have both a strong (compared to UK average) onshore economy and a strong offshore economy. Scotland’s GDP per head is £28,500 compared to the UK average of £24,350 and this relates to Scotland generating £10,700 per head in taxes compared to the UK average of £9,000 per head.

      Taking oil out of Scotland’s figures and claiming that our economy looks bad is a regular trick of the Unionists but it doesn’t make sense, you would then be comparing apples and oranges – take finance out of England figures and hey presto we are back to Scotland’s figures looking better again. You can only compare whole picture with whole picture and oil and gas revenues form part of the whole picture for an independent Scotland.

      In my calculations I have assumed that the Scottish Government would not have paid back the debt due in 1980 in the first few years and that is why my calculations assume that Scotland continues to pay 1980/81 debt interest (to reflect population share of pre-1980 debt)] Population share: from ONS mid-year population estimates for UK and Scotland.

      My calculations do not look at UK debt or Scotland’s share of UK debt at all. They analyse Scotland’s public sector budget position and in particular what would have been the case in terms of a cumulative surplus or deficit had the Scottish public sector budget been managed independently. Had that budget been managed independently then the surpluses in the early time period would have been held by a Scottish Treasury and not have been spent in the rest of the UK – ipso facto you have to consider at a minimum that there would have been interest due on those surpluses and the cumulative interest on the cumulative surpluses would have been significant.

      By simply deducting net surpluses from net deficits you have failed to take into account the time value of money which is a basic economics principle. The older the surplus the more interest it accrues. I would also like to point out that I do not agree with the deficit calculations in GERS as much of the spend used to calculate the deficits were on items that Scotland would almost certainly not have had such as Polaris, V-bombers and Trident for a start- however I left those in just simply to show the effect of the interest payment accounting alone.

      The debt levels of an independent Scotland in 1980 would have depended on the outcome of negotiation just as they will in 2015. It is therefore not possible to add an accurate debt figure for pay back to these calculations. However, if you assume that Scotland would have inherited a population share of the UK’s debt in 1980, approximately £8 billion, then you also have to assume that the Scottish share of assets like the larger military facilities and resources of the time or far larger gold reserves held at the Bank of England would be higher.

      Some of those assets, particularly the expensive ones, such as the Polaris nuclear weapons system or Vulcan long-range bombers would not have been required for Scotland’s defence, even in a Cold War context, so the actual debt level could have been negotiated to at an educated guess of £6billion at most. Given the massive surpluses Scotland was generating at that time, that £6 could have been paid back in the first two to three years leaving Scotland with a £1.7 billion surplus upon which to begin accumulating interest, if the government of the time had been short sighted enough to choose this path.

      Off course if you add in complex assumptions such as paying back a share of the UK debt at 1980 prices you also have to factor in the very likely possibility that Scotland would have followed Norway’s example and started a sovereign wealth fund that may have reached similar values to Norway’s £450 billion fund. It is also entirely possible that the value of assets That the UK Government wished to retain would have wiped out the 1980 debt all together.

      The most important point in all of this is as follows:

      There is no way to look at the historic Scottish balance sheet figures and to come to any conclusion other than Scotland subsidises the UK through paying for debt that was generated and required outside of Scotland’s borders.

      Wayne even your simple calculation demonstrates a cash surplus without the time value of money calculated and with Scotland having paid back the 1980 population % share of debt which I think is too high / a wrong assumption as I would not have paid it back immediately from the 80s surplus’s.

      Scotland therefor subsidises the UK.

  11. “I believe we will see a reformation within Scottish politics with at least three new parties all willing to work together on project Scotland as the one thing that stops them collaborating “the Union V Nation” argument will be gone.” Gordon, that says it all…….regards,

    • Tedious Tantrums says:

      We need to review our current democracy. Perhaps we need to be brutal and go along th route of having NO political parties. No parties mean all of our MSPs would be independents with no WHIP to answer to. They would however have to listen to their constituents and action the needs and wants of the people they would represent. Localism would improve local democracy too.

  12. Chris Fyfe says:

    This article is interesting but ultimately it is navel-gazing.

    Do we need to go over the McCrone report? It was not ‘top secret’ it was simply civil service advice that would never be published (see Alex Salmond and ‘legal advice’ on EU’). It was revealed after the FoI Act came into force. Claiming a conspiracy is absurd.

    Back on to ‘navel-gazing’.

    First of all 1981 is a date of your choosing when North Sea oil first flowed. Why not start from 1945 or 1707? Why ignore all the years that Scotland benefited financially from the exploitation of the British Empire? Put simply you have chosen the date most suited to your argument.

    Secondly you speak as if Scotland has been forced into the Union against its will. Scotland has – so far – chosen to be part of the Union, and at the moment looks likely to continue to do so. What you call an Accountant’s trick is the reality of having consented to being part of the Union over these years, including those years you have drawn as evidence. If Scotland had voted for parties wanting Independence in 1979, 1983, 1987, etc., and this had been denied, you would have a stronger point. But we didn’t: we consented to being part of the UK at that time, including consenting to being part of the parliament that voted on those budgets.

    Looking back to what might have happened if we had voted for Independence back in 1981 is not a particularly strong argument to base the facts of the Independence argument today. And it is certainly not much of a basis to claim that the figures are an Accounting trick.

    • Gordon MacIntyre-Kemp says:

      Chris I assume you deliberately confuse legal advice which is never published not in the Scottish parliament of the Westminster one with civil servant advice which is almost never classified as secret.

      The McCrone report was classified as secret as the reports suggested that there could be civil unrest if the Scottish people new how wealthy they would be if Scotland were an independent nation. Former Chancellor (Heally) and former Energy Ministers (Benn) have admitted that attempts were made to hide this information from the electorate and so it wasn’t even released by Westminster after the 30 years rule came into force, only coming to light after a freedom of information request which was opposed by the then Westminster Government including Alistair Darling. It is therefor patently ridiculous and almost unbelievable that you should say there was no conspiracy – it is the very definition of conspiracy – its out, now lets just admit it and move on.

      1981 / 80 just happen to be the dates that we have accurate figures for, there is no reliable data before that time. If I had to guess, i would say that the figures before that time would be better as it was prior to the worse effects of deindustrialisation / Londonisation of the UK economy and so likely that Scotland more than paid its way within the Union at that time as well.

      The figures I have presented in this report do look at the past – a past she the Scottish people have been tole that independence was not economically viable when the opposite was true. A past when we were told we were heavily subsided by the rUK when in fact as i have demonstrated Scotland heavily subsidised the rest of the UK. You point about democracy is moot as the people of Scotland voted in favour of Unionists Governments only after being lied to about the wealth potential of the country – they may have voted differently with the true state of our economy in play.

      In 1979 the people of Scotland also voted for home rule and were denied that by a legal change to the conditions of the referendum that was only brought in when a yes vote looked likely.

      I may publish some more research that examine the historical data but I will absolutely cover projections of the future under independence as well.

      • Chris Fyfe says:

        It is not a moot point. It’s not as if we didn’t know that hell of lot of oil was coming in and as if the SNP weren’t using that very point to campaign on. All the time.

        Do you think the people of Scotland were so stupid that they were duped into not realising that there was a lot of oil coming out of the North Sea and accordingly didn’t vote SNP?

        The SNP campaigned on oil wealth on every election since 1974. Are you now claiming that this was a great secret which invalidates the result of every General Election since 1979?

        • Gordon MacIntyre-Kemp says:

          The UK Government campaigned against the SNP claiming they were overestimating the oil and telling us the usual story that it was soon to run out when they had made a report secret that claimed the SNP had significantly underestimated the value of oil to the Scottish economy.

          The SNP do not campaign on oil they say that oil is a bonus and point out all the strengths of the Scottish economy – they did major on oil in the past but not any more. The ideas that Scotland is dependent on oil and the idea that this referendum is all about oil is a political invention of the No camp.

          Business for Scotland do not suggest that people should vote for any political party, many of our members and directors do not support the SNP as whole but do support the move towards using self governance to build a better country and stronger economy.

          The yes campaign is based on the intelligent and worthy premiss that self determination, self responsibility and democratic accountability at a local level are worth having. The general onshore economy can be grown with investment and local control of economic levers and oil is just an economic bonus not the mainstay of the argument. We write about oil on this blog as it is one of the key areas where the people of Scotland have been misled and we want the truth out so that people know there is another side to the story.

        • Victor Bruce Biddulph says:

          Chris, I do not know how old you are, but I CAN well remember the scare stories, the lecturing about us being too small and too poor back in the seventies and yes, we were categorically told the oil would not last more than a decade, two tops. This was in the days when he huge shipbuilding yards, steelworks, all manner of manufactories and we were told the union was responsible for this good fortune, even though it was all ‘sunset’ stuff. The union we were told would safeguard what we had and give us more in the future. I really am not bothered about the economic sums, I am bothered about being willfully duped. As are many others. It will not happen again, we have had our eyes opened and the genie of truth and clarity is well and truly out of the bottle. To me and people like me, the Union stands for corruption in Westminster’s halls and duplicity. And the same lies are still being repeated almost breathlessly regarding oil and our economic strength and potential today. The game is up sir.

          • Jimcsc says:

            As far as McCrone is concerned, it is a case of :-
            Fool us once shame on us, fool us twice shame on you Westminster .

            I am old enough to remember the rubbishing of the SNP claims over oil reserves, and potential revenues, what we did NOT know was they were doing it, whilst at the same time, sitting on the McCrone report that proved the opposite.
            So not just a , cautious opinion, but a huge lie as we now know.

            But then Westminster, you have no shame, you will do anything you can to leech wealth not only from Scotland, but from all over Britain.

            Risks, yes there are risks,
            risks of voting No that is.
            If we vote No we will get no meaningful powers.
            (Because that is why they tried so hard to remove the Devo question from the ballot( why else)

            The promised ‘powers’ , will be useless sops, IF any come at all.
            Once the vote is over, and they get their No , there is nothing to incentivise them to deliver.
            On the contrary , there are already cries for the government to cut the funding to Scotland after a no vote, (no matter how much more we are putting into the pot than we get out. )

            And why will that happen?
            Well because if you just put yourself in the Westminster politician’s position day one of a No vote, you are now in NO danger of losing the lucrative revenues from Scotland,( that is secured, for no quid pro Quo)

            A No vote says Scotland has No negotiation position, and Westminster have made No guarantees of specific and meaningful new powers, just political ‘promises’ carefully worded by politicians and lawyers so you can walk away and ignore them.

            In fact they can then actually continue to milk Scotland , and now for even more than they had done before, and there is precisely nothing Scotland can do about it, they will have us well and truly by the short and curlys.
            (Well we can always beg for mercy, but that is about the size of it)

            I have been on plenty of negotiating courses, This is a particularly hopeless negotiating situation to hand to them on a plate, and rely on their better nature an honour to deliver. If it happens, this will go into the teaching materials of an example of what NOT to do in negotiations.

            Even more adventagious to Westminster will be that , the very people who you are now trying to get to support you in the next general election ,are going to be pushing you to ignore the vague promises you made on more powers etc, and to actually CUT the funding to Scotland.
            (It is not hard to find these voices and calls from down South to cut funding , they are online. )
            And these are just the ones stupid enough to speak out early before the vote- more will follow.
            They will start screaming Barnett cuts at the politicians after a no vote, and politicians ,we all know follow the votes, not political promises.

            Remember, the promises of more powers, are pathetically vague, and even if some trivial powers were given, nothing at all has been even promised about maintaining current funding,
            (but you CAN believe that they will meet their promises on more austerity and cuts)

            After a No vote Westminster’s politician’s ONLY concern , will be to win the UK elections, nothing else , the Scotland ‘problem’ has completely evaporated, and is immediately forgotten , ‘Scotland’ is kicked into the long grass to be ‘harvested’ for as long as the Scots will put up with it.

            Well they fell for it once, they just might fall for it again, more fool them…

    • Alexander Conn says:

      Chris

      At no time since 1707 were the Scots people given the chance to give or withhold their consent to being part of a union with any other nation. There were riots in Edinburgh amongst the “ordinary” people when they found out those “nobles” involved in the Darien project out of greed and commercial stupidity were put in a position to sell out a people and a country they did not own.
      What ever one’s view about staying or exiting the current union, no one with any decent principles can say that there is no need for a referendum (I note you did not say there was not)
      The Scots nation have never completely been comfortable with this alliance, there has never been a time when Scots thought of themselves as being precisely the same community as our southern neighbours. It’s written in history over the last 300 years. It never has been “fait accompli” That is why this question never goes away, it’s why Scots sing different anthems at sports events other than that prescribed by Westminster.
      During much of those 300 odd years many of our people (not least the female half) even had the opportunity to vote for anything never mind the opportunity to reclaim their nation.
      In 1979 the Scots voted 52% for devolution, an infamous Labour MP Cunninghame stabbed his own nation in the back to maintain his own lifestyle by assisting Westminster in rigging the vote so that despite a majority progress failed, let it not be forgotten that never was a Tory or Labour party expected to acheive to enter Westminster what had been demanded of the Scots people to get their parliament.
      The sad truth is that all through Scots history it has been the powerful, rich and greedy of our own people that have sold their nation for a bit of silver (Kings included)

      As you have said that was then and it’s done now, where I disagree is that it cannot be part of the argument for Independence now. It is INTEGRAL to the argument for Independence because history has shown us that people in power and great wealth, use it to grip on to power for their personal benefit, we remain and may yet remain in a union because the media; TV, Radio and certainly whats left of the Press us their influence to belittle, bully and scare the electorate with a bewildering array of lies and unexplained half truths. They work on a basis of “tell big enough lies often enough the people will believe it” Not for the first time has it worked as history has devastatingly shown us. The less astute have in the past fallen, but they fell because power mongers and liars fed them lies and those who wanted to tell the truths had no access to to the powerful propaganda machines that they had then and still use daily now.

      However this time, thinking Scots have the Internet. Go on Facebook, Twitter, Wings over Scotland and many other sites you will find tremendous debate and enthusiasm for Independence. The electorate can debate, get informed by so many different sources that they can work out an accurate picture of what the truths are. They can now watch TV News, read the Mail or Telegraph and work out the truth form the bull.
      They can download reports as I did yesterday from the “Institute of Fiscal Studies” compliments of “ESRC” and discover that contrary to what the powerful Westminster bully boys told us on BBC TV NEWS- the document was actually quite positive about Independence, Scotland would have it’s challenges but so would the remainder of the UK-got a bit silly when it was saying that the road would get really rocky if they weren’t careful 50 years down the line if a Scottish government didn’t make changes”
      We WANT an Independence government so we CAN make changes!

      If you choose to go on these sites something might strike you (one) is that contrary to what the polls shown in those news papers where it is propaganda worthy and in the news paper owners personal interest to say that the “YES” vote is tiny (applies to BBC management also) the declared (YES) voters online are vastly in the majority.

      What you also note is how many of the “No” voters are extremely belligerent and even abusive. Are YES voters never abusive or belligerent? Well of course it takes all kinds. I find that when you challenge the views of someone who is totally convinced they are right but have no argument to support it they often become extremely belligerent. But look at the numbers of who’s saying what and you will see the “Yes” voters are extremely positive and buoyant- Tim Berners Lee must be the biggest blessing to Democracy and freedom ever.

      It has been said many times recently that Independence must be a matter for the mind not the heart. Cobblers- the Wright brothers didn’t say “hey we’ve got a few thousand pounds how can we spend it? I know let’s invent the aeroplane we can afford it. It was Wilbur we’re going to make a flying machine and be the first men to fly and nothing is going to stop us, where can we get the cash to do it”

      I’m sure many businessmen on this site will recognize this and remember how their careers started with a dream and went on to have tangible benefit in their lives, but the dream and wish and the will came first.

      We want to run our own country, we dream of freedom to make our own decisions. We have it in our hearts that we want to vote our own Parliament in, and vote them right back out if they don’t perform for the nation. We have it in our dreams and in our minds that only our own people in our own elected parliament should send our children to die in wars abroad, seemingly futile, fruitless wars with no benefit either to our nation or the lands they are fought in.

      These dreams and principled desires come before any thought of how much will it cost.

      Nations such as India and umpteen South African countries and Asian countries at the end of the second world war did not wait to look at the bank balance to see if they could afford Indepenedence from the “British Empire” many more walked away from the USSR when it broke down I don’t remember any otf them nipping down to the cashline machine to see if it was cool to go for it- they just took it and none of them came back to say “listen we’ve made a bit of a boo boo here” they did come hell or high water.

      Scotland is different and lucky in that respect because we already know we are paying our bills and more, and we can do a lot better with Independence because with it the Westminster Parliament has to give us our cash line car back!

    • Doug Robertson says:

      Secondly you speak as if Scotland has been forced into the Union against its will. Scotland has – so far – chosen to be part of the Union?

      A Parcel O’ Rogues In a Nation

      Scottish ” nobles ” who sold out their country

      NAME Amount of Bribe £
      Duke of Montrose 200
      Duke of Athole 1000
      Duke of Roxburgh 500
      Marquis of Tweeddale 1000
      Earl of Marchmont 1104
      Earl of Cromarty 300
      Earl of Balcarres 500
      Earl of Dunmore 200
      Earl of Eglinton 200
      Earl of Forfar 100
      Earl of Glen Cairn 100
      Earl of Kintore 200
      Earl of Findlater 100
      Earl of Seafield 490
      Lord Prestonhall 200
      Lord Ormiston 200
      Lord Anstruther 300
      Lord Fraser 100
      Lord Polwarth 50
      Lord Forbes 50
      Lord Elibank 50
      Lord Banff 11 !!!!
      Provost of Ayr 100

      The Scottish people had no say in the mater.

      • Jimcsc says:

        You mention the bribes Doug, and you are of course right, but not only that, they paid off the debts of the rich and privileged, they also made them rich again, oh and yes they showered them with land and titles, but what did the ordinarily Scot get?

        Well, not only did the ordinary Scots not get a say in the deal, but they got to pay back these debts to England who themselves were in huge debt they actually also got to pay back ( through taxes ) the now huge ‘UK ‘ National debt. of 14 Million!!

        And if Darian,had been a success, would the wealth from that have been shared with the ordinary people?
        Of course not, they only get to pay back their losses, never share in their successes.

        Sound familiar?
        We are doing it again just now.

  13. Jim McLean says:

    Gordon,

    thanks for a good and analytical article. I could only raise a couple of comments

    1. I would expect North Sea oil revenue’s to be on a delclining trajectory. With fracking cheaper sources of extraction will prevail. Family members describe to me the low levels of capex which is being ploughed into North Sea fields. They see it with their eyes..

    2 having had personal experience of living and working in Denmark and working regularly working in Sweden,Norway, Finland. Some of these countries Denmark and Norway have oil revenues. All of these countries have eye wateringly high social costs and taxation rates. My ex danish employees for example are numb with 66% income tax as an example and not for a high salary.

    So the inevitable facts are your projections are historical. Short term perhaps Scotland would balance its books , longer term it will only with a massive rise in taxation never mentioned.

    That’s perhaps not a popular view on this website. But I will vote no but again I compliment you on the analysis.

    • Craig Murdoch says:

      Why do I keep reading about investment in North Sea being at record high levels?

    • Ben says:

      Public spending in Scotland counted at 42.7% of total GDP in the 2011-12. That is LOWER than the majority of EU-15 countries in 2011, significantly lower than countries such as Denmark and Finland.

      Among other countries that spend more on public spending as a percentage of GDP and have little or no oil revenues (with the exception of the UK) are;

      Greece, Italy, Portugal, Belgium, France, Netherlands Ireland and the UK.

      There’s nothing even remotely “eye watering” (as if having a strong efficient welfare state is something be mortified about in the first place!) about social spending in Scotland.

      DEFENCE on the other hand shows Scotland’s population share of UK defence expenditure is equal to 2.3% (£3.3 billion) this is higher than all other EU-15 countries bar the UK. And defence spending in the “longer term” as we all know is expected to have a “massive rise” managing the cost to maintain and upgrade trident.

  14. john gamble says:

    Please will someone bring these figures and facts into the public eye a bit more openly as we the public are very tired of being lied to and being spun at !

    • Gordon MacIntyre-Kemp says:

      Is that not what we are doing at Business for Scotland – this article has had well over 10,000 views in first 24 hours, 4,200 likes and 354 twitter shares. When all of our research is complete we will publish via our think tank and push to the mainstream press. In the main time please everyone don’t just read but share:-)

      • Craig Macfarlane says:

        Gordon,
        Few people if any, mention the billions of pounds in VAT payments that go directly to the treasury from Scottish businesses…perhaps you could highlight it in one of your blogs? When people become aware that this money will go into Scotland’s coffers post independence it could sway thousands of undecided’s…keep up the great work you are doing.

  15. Mike Shanks says:

    Great blog Gordon, good to see some informed discussions taking place. It is someway from being an unbiased view though and does have a selective data ‘cherry picked’ feel about it. Most certainly with a desired outcome in mind. I don’t have any other data to counter your well thought through arguments but I guess that is what is missing from this whole debate, some truly independent (forgive the pun) analysis of what will most likely happen. Not what has happened since 1970 because, like it or otherwise, it will be 2014 if it happens and thats all that really matters now.

    • Gordon MacIntyre-Kemp says:

      Mike there is no bias in the data – the facts of this blog in terms of the cumulative surplus Scotland would have had are not disputed by the other side.

      In fact leading economists from the No Camp (that is to say ones that work for the Labour party and their salary and position depend on painting the worse possible scenarios) have done the same calculations (one said Scotland’s surplus was higher than I have suggested, I used a more conservative methodology) but drew the confusion that being part of the UK meant it was worth it to be part of UK – “UK = word power”, “nuclear weapons give us a seat at the top table in UN”, “veto on security council” more influence in EU etc meant it was all worth the money.

      I simply draw a different conclusion from the same data I don’t think the price we pay is worth it at all as we use UN and EU influence in a way that the vast majority of Scots don’t agree with. Take a look at the data on debt interest and draw your own conclusions – you will see that the only counter argument is not that I have been selective with the facts but that “Scotland is no more a nation than say Shropshire” (Quote Tony Benn). If Scotland is not a nation neither is England, Northern Ireland, and Wales.

      Present any data that seems to show a different view of Scotland other than the one I support that we are more than capable of being a successful independent nation andy will show you how its calculated and where the flaws in those calculations are – i may respond here os write a full blog on it. Let me be clear – There is no macro economic case for Scotland being part of the UK.

      And finally re – selective and biased – I grew up in Hexham in Northumberland the place I still call my home town, a young conservative I came to Scotland to study business and economics. I decided to debunk the SNP economic claims and after only a few weeks realised that everything I had been led to believe about the Scottish economy was untrue. I didn’t change the data the data changed me, and the data will change anyone who looks at it with an honest heart and takes of their political blinkers will be changed too.

      • Mike Shanks says:

        Gordon, understand there is no bias in the data. You will accept however given the overall thrust of the blog entry and the whole point of the website is to support the case for an independent Scotland that there will always be a perceived bias however untampered you present the data. My other point was it is backwards looking, i.e. what would have happened had this been the case. It is not forward looking. What is the longevity of the North Sea reserves. What happens if oil price drops back to $50/barrel? Are we a one industry country (or two if whiskey counts) How will Scotland support a 25/75 public sector to private ratio etc.. I am sure you will cover these topics, or might have even done so. For me its how will Scotland fare in the future, not how it might have fared. I do applaud your website/blog though as it is one of the few which do not drop down to the usual pipe and drum banging and is very far elevated above the No campaign’s fear of the unknown/zero-good-argument tactics.

        • Gordon MacIntyre-Kemp says:

          Mike Can you please draw the conclusion from the data that Scotland is subsidised – if you can do so reasonably then my conclusions are challengeable, if not then they are not.

          You ask what if oil half’s in price – well what if we vote No and the financial markets lose half their value? It is not enough to point to a highly unlikely scenario and say that is reason enough to vote no. The UK is more dependent on the more highly volatile finance sector than Scotland is on oil. If you take oil out of the Scottish economy it has the same GDP p/head as England ipso facto oil is a bonus a jackpot and jackpots go up and down but you would never say no to getting one from the lottery would you.

          The OECD predicted an oil price of $158 per barrel in 2017 so why on earth is it plausible for you to suggest a price of $50. Please Mike all I ask is you think about the probability of these scare stories rather that repeat them without challenging them yourself.

          PWC has reported recently that £350bn of revenue has been generated for the UK treasury so far from the North Sea and that there is $450bn of revenue still to come. £100bn of new capital investment into the North Sea has been announced and 133 new wells are being sunk. The london based trade body UK oil and Gas states there is between 40 and 60 years of production left and as oil becomes scarce the most likely scenario is that the pice will rise.

          And finally Scotland public sector expenditure is less than the UK’s as percentage of GDP per head, in other words if you are worried about an independent Scotland public sector reliance worry more about the UK’s.

          We are not a one industry economy there are many strengths to Scotland economy and oil and gas is never more than the low teens % wise even with growth and investment straggled for 32 years as I have proven in the above research.

          Food and Drink, Tourism, Education, Creative Industries, Biotechnology, Exporting, Energy, Renewables (we have 26% of the EU’s renewable potential), yes oil and gas, but 40% of oil and gas related corporation tax comes from Scottish based firms exporting expertise abroad, not just from extraction, Non bank finance is also strong. We have a more balanced economy in Scotland that we do in the Uk as whole. http://www.scotland.gov.uk/News/Releases/2012/04/seveneconomicstrengths15042012

          The whole idea of independence is to have the ability to drive our economy forward using the economic levers not currently available to drive the other strong industries forward and grow our on shore economy and invest / plan for a long term future when oil revenues to start to run out. Investment that won’t happen and will destroy our economy in the long term if we don’t start planning for it now. Westminster will let the oil run out and never reinvest as it’s priority in London, the leaders on an independent Scotland’s main priority will be sustaining Scotland.

  16. Alasdair MacLean says:

    Excellent article it’s a subject I have been banging on for more years can you can shake a stick at that we have been lied too

  17. James Speirs says:

    Another excellent article Gordon.

    During the article you wrote:

    “Every year for 32 years (the entire available data) GERS includes a deduction from Scotland’s block grant equivalent to Scotland’s population percentage share of Westminster debt.
    Over the 32 years, Scotland’s share of UK debt interest amounted to £64.1 billion.”

    Considering that the same figures you cite also show that during this 32 year period, we actually contributed 10.29% of UK GDP from just 8.3% of the population, an effective over-contribution per head of 24% per annum, did we not therefore actually pay 24% more in debt interest each year than the 8.3% we are credited for in cumulative £64.1 billion you suggest?

    Or in other words, our economy was hamstrung by considerably more than even these figures stipulate, when you factor in the compounding effects of 24% extra interest actually paid by us each year on top of our 8.3% notional share.

    If I am missing something, I look forward to be enlightened. Thanks. :)

    • Gordon MacIntyre-Kemp says:

      James there are several ways of removing wealth from a region – for region is what Scotland is until next year – the major ways include:

      1) Applying a population percentage share of the UK debt to Scotland even though that debt was not generated or spent here.

      2) Applying a population share of capital spend / military spend and civil service spend to Scotland books that does not happen in Scotland and in some cases does not benefit and can even harm scotland. EG: HS2 when it could actually harm Scotland’s economy / London Olympics tax payer bill when the Glasgow Commonwealth games come exclusively from Scotland’s budget / London sewerage system upgrade paid for by public funds that are not effected by the Barnet Formula and it is owned by a privately owned company. On the upside this does mean that 8.4% of the Royal Navy, Airforce etc belong to Scotland after a yes vote – they can keep Trident and we will negotiate for some more conventional forces or less debt.

      3) Creating a set of books for Scotland that does not include north sea oil / gas / corporation tax / export duties – calling these UK revenues and not applying them to Scotland so that it looks like we are being subsidised (I think this is what you mean in your comment above). Looking at these incomplete books allows the No campaign to state that Scotland therefor doesn’t have enough revenues to be independent / that public sector spend is too high. When in fact with all the actual revenues we would have as an independent country not only is our revenues and GDP per head higher than the average for the UK our public sector spend is a lower % of GDP that the rest of the UK – go figure.

      And finally my all time favourite is when someone says ah yes but take the oil out… Well then Scotland’s revenues are the same as England’s! But wait if you are going to take oil out of Scotland books let me take finance out of England’s and – look – Scotland is in a better comparative financial position again.

      So essentially Westminster took £4.1bn from Scotland in debt interest last year when we should have been cash rich, they then gave us £4.4bn less than our % share of revenues (by calculating Scotland’s block grant on population not revenue %) and then applied costs that Scotland doesn’t directly benefit from to our accounts for shared services, wars that Scotland’s Parliament voted against etc and I can only guess as I haven’t done the numbers YET that could be another £1.5Bn.

      In 2011/12
      – The chancellor set budget for England (then allocated population share to other nations)
      – He then allocated 8.4% Population % share of spend to Scotland which happens to be aproximatley £11.4bn less than if calculated to match 9.9% fair share of revenues.
      – He then deducted £4.1bn in interest to service loans we didn’t need
      – He then deducted the costs of shared services whether they happen in Scotland or not, and whether we want them or not (maybe £1.5bn)
      – He then added £7bn via the Barnet formula and says it is a subsidy – Happy Days :-) and that brings the shortfall down to £4.4bn in latest year.
      – Westminster then implements policies such as the Bedroom Tax and failure to devolve Air Passenger Duties and Crown Estate powers etc that lower our revenues.

      As the blog demonstrates an independent Scotland (since the 70′s) would not be in debt or run a deficit and as the figures above demonstrate a newly independent Scotland would be in a far stronger financial position than as part the UK.

      If Scotland had to borrow money we would as an independent nation only have to pay back the loan and interest – but as part of the UK we have to pay that + the extra we contribute in revenues. So when Scotland runs a deficit we are worse off as part of the UK not subsidised.

      Think that explains it? There is no economic case for maintaining the union.

  18. Iain Gillespie says:

    Great article. GERS figures show that in 2012-13 6.3% of Scotland’s public spending (£4,072 million) went on ‘Public Sector Debt Interest’. I can’t find a comparable figure for the UK, but the UK deficit is something like 7.1% of GDP, UK public spending is about 45% of GDP, therefore a comparable figure for the UK has to be something like (45% of 7.1% =) 3.2%. Scotland therefore pays just about twice the interest rate for borrowing than the UK as part of the union. Puts in perspective claims by the NO campaign that Scotland would pay more interest on its borrowing if it were independent. But as Gordon says, this is interest on money borrowed the bulk of which is not spent on or in Scotland.

    One point though, if I may. I’m not clear as to why Scotland’s’ borrowing over 32 years would have been zero if independent? Scotland has run a deficit, albeit a smaller one than the rUK relatively speaking.

    • Gordon MacIntyre-Kemp says:

      Hi Iain the whole point of the blog is to show that Scotland’s cumulative surplus would have lowered in years where we ran a deficit and then risen again when we ran a surplus. The net result taking out the deficit years is a near £50bn surplus. If you pay for your deficits from a saved surplus then you don’t need to borrow.

      The only reason that it looks like Scotland runs a deficit for much of the time period is that the UK debt was removed from our block grant as a cost, if it was left in we would have a massive surplus now even after accounting for the bank bail out costs and making same cost decisions on nuclear weapons etc which of course we wouldn’t have but I left them in to make my figures conservative.

  19. So far from the UK government bailing out the banks Scotland has been bailing out the UK for the last 30 years.

    • Gordon MacIntyre-Kemp says:

      Correct see the Tony Benn quote in my repines to Ross. Also the cumulative surplus scotland had at the start of the crash was larger than the cost to the UK government to bail out the Scottish banks and as I have proven before Scotland would have paid roughly the same amount as is being applied to GERS for the bail out anyway. The cost of the bank bail out is still in the figures so the £50bn we should have in the bank right now is after the cost of the bail out. Would we have had a collapse if we were independent – would we have had the same lax regulation and London – who can tell? So I have to leave that cost in – I however personally lobbied members of the BoE MPC committee in face to face meetings and the BoE head of Scotland in 2006 and 2007 to curb unsustainable and uncontrolled lending to avoid a recession. They didn’t listen and I have always wondered if a Scottish central bank (which we would have had then) might have been more open to my ideas?

  20. Ross says:

    Does that graph also assume that our share of -what, £150 billion- national debt vanished in 1985 during this hypothetical split and that it cost us nothing to create our own currency, national services and infrastructure?

    • Gordon MacIntyre-Kemp says:

      Ross if you read the blog there are notes on the methodology that state that “calculations assume that Scotland continues to pay 1980/81 debt interest (to reflect population share of pre-1980 debt)] Population share: from ONS mid-year population estimates for UK and Scotland”

      As it happens if you can provide evidence that a fair share of that debt was spent on Scotland I would be interested (and surprised) to see it. I can only go back 32 years as that is how far back the historic GERS figures go.

      We already pay more than our fair shaw of the costs of national services and infrastructure costs see http://www.businessforscotland.co.uk/breaking-news-9-3-is-a-smaller-number-than-9-9-indyref/ and http://www.businessforscotland.co.uk/the-hidden-cost-of-the-union-hs2/ For example if we make up 8.4% of the population and pay 9.9% of the cost of running the UK then surly there is a saving to be made in terms of lower salaries than the London civil servants and lower rent / taxes on buildings in London as well as the £60m a year saved on Westminster salaries and expenses and well over a billion a year saved in moving from nuclear to conventional defence forces http://www.businessforscotland.co.uk/defence-in-an-independent-scotland-spend-less-to-get-more/

      Independence costs less than voting No!

      As for launching own currency we won’t be we will be using sterling as rest of UK needs us to I have explained that here http://www.businessforscotland.co.uk/euro-pound-or-scottish-pound/

      And as for the UK debt in 1985/6 Scotland was sitting on a cumulative £38.4bn surplus in that year – but it wasn’t was it because it was used to pay off the UK’s crippling debt. Tony Benn the former Labour Energy Minister admitted on the BBC’s Truth, Lies, Oil and Scotland “it was these very oil revenues that saved the UK economy from bankruptcy for 30 years”.

      Thank you for asking the question.

  21. Stuart Murdoch says:

    I’m encouraged by this article but concerned that, following independence, the more money we have the more Salmond will squander on carpeting Scotland with useless wind turbines!

    • Tom Kelly says:

      So don’t vote for him! Doh

    • Peter Johnston says:

      In an independent Scotland you will be able to vote for your party of choice, Salmond will not neccesary be our first primeminister.

    • Paul says:

      After independence you are free to vote for whatever party you prefer. It doesn’t have to be the SNP. And unlike no,w the party voted for by the people of Scotland is the one you’ll get.

      • Gordon MacIntyre-Kemp says:

        Indeed the SNP may not even exist after a few independent Scottish Parliaments – they are bound together by one policy which will disappear after a yes vote. I believe we will see a reformation within Scottish politics with at least three new parties all willing to work together on project Scotland as the one thing that stops them collaborating “the Union V Nation” argument will be gone.

    • Jimcsc says:

      Salmond is but another, ‘here today gone tomorrow ‘ politician. ( to steal a Robin Day quote)

      Scottish politics as been said, will change, and over many years of careful husbandry, the Scottish electorate can vote in a new breed of politicians that actually deliver what we want this country to be .
      In our children I believe there are future generations who will be inspired by such an opportunity.

  22. Craig Murdoch says:

    ….and had this wealth remained in Scotland there is little doubt we would have had higher average incomes (increasing the tax take), lower unemployment and a better health record (reducing benefit payments) so surpluses would infact have been significantly higher.
    All water under the bridge now, but are we going to let this situation continue?

  23. I would like to say,that if a company has its head office in London and all its workforce in Scotland in the fish farming business the wealth gets attributed to London.Just another way of making it look better in London and not so good in Scotland.Hope I wrote it correctly.

  24. Donald Maclean says:

    An excellent article Gordon. Your figures are very conservative, since there is no way Scotland would have continued to waste money on useless nuclear weapons.

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