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Scotland’s Balance Sheet published
Scotland’s Balance Sheet - a detailed assessment of Scotland’s public finances which shows that Scotland is in a stronger financial position that the UK - has been published yesterday. It provides detailed estimates of Scottish public spending, taxation, annual fiscal balance and share of UK net debt.
The paper considers two scenarios for allocating Scotland a notional share of UK debt following a vote for independence. Both of these scenarios are based on estimates from 2011-12, putting UK public sector net debt at £1.1 trillion or 72 per cent of UK GDP.
If the debt is allocated to Scotland on a simple per capita basis it would be equivalent to £92 billion or 62 per cent of GDP.
However, if UK debt is assigned to Scotland on an illustrative historical basis, using estimates of public spending and tax receipts in Scotland over the past thirty years, in other words, on the basis of what Scotland has actually contributed to UK tax revenues then Scotland’s share of UK net debt is estimated to be £56 billion, equivalent to 38 per cent of GDP.
This research forms part of a detailed analysis of Scotland’s long running financial position and contrasts Scotland’s position with that of the UK and the EU 15. It includes figures published last week which showed that pension and welfare costs account for a smaller share of the economy in Scotland than is the case for the UK as a whole and most of the EU 15 - and that tax receipts in Scotland, on a per capita basis, have been higher than those of the UK for the last thirty years.
Deputy First Minister, Nicola Sturgeon said:
“Scotland's share of the UK's public sector debt will obviously be a crucial part of the negotiations following a vote for independence and this analysis shows that Scotland will be in a strong position in these negotiations.
“It is clear that, whatever way we look at it, Scotland is in a much better financial position than the UK, including on the issue of national debt. Both of the methodologies show that Scotland's estimated share of national debt takes up a smaller proportion of our economy than is the case for the UK - which means that in all circumstances Scotland will be better off with independence.
“The analysis also shows that Scotland more than pays her way in the UK. The average tax receipt per person here has been higher in each of the last 30 years than it has been across the UK as a whole.
“The mismanagement of the UK economy by Westminster has led to a situation where we are all burdened with a massive UK debt - that is an argument for independence, not against it. What share of UK debt Scotland takes with independence will be one of the crucial areas of negotiation between the Scottish Government and the UK Government, and Scotland will be in a strong position
“There will need to be some hard talking on the debt issue and it stands to reason that Scotland's share of debt should take account of the substantial and disproportionately large contribution that Scotland has made to the Westminster coffers over the past thirty years.”
The EU-15 refers to the fifteen Member States of the European Union before the new Member States joined in 2004.