Scottish government challenged to set out start costs for independence
27 May 2014 12:23 PM
Independent research
based on Quebec setting up a new state estimates that it could cost up to one
percent of a country’s GDP to establish the new systems required to run a
newly independent state.
The Treasury has challenged the
Scottish government to publish estimates for the cost of setting up an
independent Scotland.
Up to now, the Scottish
government have failed to provide any costs for either setting up or running a
new independent state, and they have also failed to outline how these costs
would be met.
Find out more about the
Scottish Independence Referendum on GOV.UK
Independent research based on
Quebec setting up a new state estimates that it could cost up to one percent of
a country’s GDP to establish the new systems required to run a newly
independent state.
Treasury analysis published this
week will show that in Scotland’s case, one percent of its GDP would see
taxpayers face a £1.5billion tax bill – equivalent to £600
per household.
But, with the Scottish
government estimating roughly 180 public bodies will need to be established,
the costs are likely to be far greater.
The Institute for Government
(IfG) and the London School of Economics (LSE) have published independent
analysis which puts the average cost of setting up a new policy department at
£15 million. Applying this to the 180 departments the Scottish government
states it would need could see Scottish taxpayers fork out
£2.7bn.
Chief Secretary to the Treasury,
Danny Alexander, said:
The Scottish government is
trying to leave the UK but it won’t tell anyone how much the set up
surcharge is for an independent Scotland.
As part of the UK, Scotland
gains from a strong and stable tax and benefits system and our comprehensive
analysis, published this week, sets out how much better off Scottish taxpayers
are, that’s why we’re better off together.
While the UK government has not
published its own estimate, it has already published analysis which calculates
that a new benefit system could cost £400 million alone, and setting up a
new tax system could be as much as £562 million.
Comparing with other countries,
a report by the Institute of Chartered Accountants Scotland (ICAS) published on
Tuesday 20 May 2014 estimates the cost of setting up a new tax system alone in
an independent Scottish state could be ‘significantly greater’ than
New Zealand – which is currently undergoing less complex changes but
whose costs are around £750m.
An independent Scotland would
need a new welfare department, a significantly expanded tax collection
authority, a debt management agency, a security and intelligence agency, a new
Scottish defence headquarters and economic regulators such as the Competition
and Markets Authority, a financial regulator, a pensions regulator, transport
organisations such as the Driver and Vehicle Licensing Agency and a passport
office amongst others.