Friday 2 November 2007

Will this smash or save the Union?

I was down in London last weekend and read the now infamous article in the Daily Mail (English edition only!). It was another of those tiresome outbreaks of Jockophobia that have become all too common recently and one that contained the usual number of schoolboy howlers. It all makes things difficult for those of us who remain Unionists.

Today's Glasgow Herald has a rather interesting response.

Thanks to Cassilis for the image.

The main article by David Leask is here and the Herald's commentary is here.

Unfortunately the Herald's web links usually go dead after a day or two so read now if you're interested.(*)

The message is same as I've always thought: Scotland isn't the economic basket case often portrayed, is more productive than most of the UK outside the southeast and could survive perfectly well if forced into independence. I say, "forced", because that's beginning to look like the most likely way that it could come about.

With apologies for the formatting, these are the figures (from Oxford Economics) for per-capita tax paid and government spending for 2005-06:

Tax Spending Surplus
Scotland 9593 9631 -38
NI 6059 10271 -4212
Wales 5979 8969 -2990
Northwest 6913 8645 -1732
Northeast 6029 9162 -3133
Yorks and Humberside 6524 8170 -1646
West Midlands 6998 7929 -931
East Midlands 7174 7359 -185
Southwest 7373 8351 -978
East 8172 7256 916
Southeast 9397 7544 1853
London 10947 9748 1199
But here's the killer quote:
Where does all this money come from? The big figure includes the UK's entire North Sea revenues of £9.7bn for 2005-06. That could be controversial: there is dispute about how much oil and gas is from Scottish waters. The exact size of Scotland's oil bonanza has always been open to question, a key battleground in the statistical war between Nationalists and Unionists.

How North Sea revenue might be divided is also questioned. There are extensive gas fields off the coast of north-east England. A split might mean 75% or even 95% of the total coming to Scotland. It should be borne in mind that the £9.7bn figure came at a time when Brent crude was trading at as much as $50 per barrel. Today it is more than $90.

So without all of the oil, Scotland's screwed?

Well, let's see.

Ignoring today's price of $94.85 per barrel, Scotland's lowest share for the North Sea is 75%. That worst case would mean a loss of "Scottish" taxation amounting to £2.425 billion, or 4.95% of our current total of £49 billion. On that basis the per-capita Scottish tax take falls to £9,118 and our deficit rises to £513 per person (5.33% of spending). With 80% of North Sea revenues, Scotland's deficit is 4.34% of expenditure. In other words, a difference that could easily be eliminated by a spending freeze for a couple of years or so.

Needless to say, I could achieve a breakeven by rather more robust methods.

And it's not as if the UK itself doesn't have a deficit.

(*) (UPDATE: Neil Craig has pointed out that the Herald's webpages are now remaining live)

1 comment:

David Farrer said...

Comments made on previous template:

David Farrer

I think I'll do a longer and separate reply to that.
4 November 2007, 10:29:02 GMT – Like – Reply

And so, David, what conclusion do you draw from all this?
3 November 2007, 21:02:08 GMT – Like – Reply


Perhaps the most interesting Govt. statistic I read recently was that of the UK's annual £520billion budget, 15%, or £78 billion of this is spent in 'unidentifiable' areas.

These 'unidentifiable' areas tend to be Whitehall, of which Scotland's attributable share is another £6.5 billion. Now, surely a small independent state with no world-stage ambitions could achieve similar value, even at present levels of taxation for much less than £6.5 billion?
3 November 2007, 12:01:39 GMT