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Scottish independence: Will people in Scotland be better off? Scottish independence: Will people in Scotland be better off?
(35 minutes later)
Being better or worse off in an independent Scotland is the million dollar question - and both sides of the referendum debate claim to have the answer.Being better or worse off in an independent Scotland is the million dollar question - and both sides of the referendum debate claim to have the answer.
The UK Treasury published a report saying there was a £1,400 per person, per year reason why voters north of the border should remain in the Union.The UK Treasury published a report saying there was a £1,400 per person, per year reason why voters north of the border should remain in the Union.
Countering that argument, and those figures, was a document from the Scottish government saying that after independence, Scots would be £1,000 per person, per year better off.Countering that argument, and those figures, was a document from the Scottish government saying that after independence, Scots would be £1,000 per person, per year better off.
Here, I dissect the figures........Here, I dissect the figures........
Why are the two sets of figures different?Why are the two sets of figures different?
Well, it's because they are looking at different things and of course they're each trying to prove a very different point, and you can prove either side of this debate depending on which numbers you use.Well, it's because they are looking at different things and of course they're each trying to prove a very different point, and you can prove either side of this debate depending on which numbers you use.
What are the Treasury figures based on, and are they correct?What are the Treasury figures based on, and are they correct?
The team from the UK Treasury have put together what they are calling the cost of independence made up of five different elements.The team from the UK Treasury have put together what they are calling the cost of independence made up of five different elements.
They say;They say;
What are the Scottish government figures based on?What are the Scottish government figures based on?
On a per capita basis annual tax receipts in Scotland have averaged £10,000 over the past five years, £1,200 per person higher than the UK as a whole. This is based on the GERS economic figures, which is guaranteed by the UK Statistics Agency. This figure is often disputed because it all depends on how many years you cover, last year Scotland had a bigger deficit than the rest of the UK, but over a five year period it's slightly smaller.On a per capita basis annual tax receipts in Scotland have averaged £10,000 over the past five years, £1,200 per person higher than the UK as a whole. This is based on the GERS economic figures, which is guaranteed by the UK Statistics Agency. This figure is often disputed because it all depends on how many years you cover, last year Scotland had a bigger deficit than the rest of the UK, but over a five year period it's slightly smaller.
They say that Scotland's economy is the 14th wealthiest country in the world. Now, that is true, but it's based on OECD figures looking at GDP per person by country. It's essentially measuring how much money is created in the Scottish economy each year, rather than how much the government takes or spends.They say that Scotland's economy is the 14th wealthiest country in the world. Now, that is true, but it's based on OECD figures looking at GDP per person by country. It's essentially measuring how much money is created in the Scottish economy each year, rather than how much the government takes or spends.
The Scottish government say Scotland will benefit from a share of £1.3 trillion of UK assets. There is agreement that an independent Scotland would get a chunk of all the things belonging to the UK, which is likely to be offset against Scottish debt. However, the Treasury point out that until negotiations take place, the exact figure can't be known.The Scottish government say Scotland will benefit from a share of £1.3 trillion of UK assets. There is agreement that an independent Scotland would get a chunk of all the things belonging to the UK, which is likely to be offset against Scottish debt. However, the Treasury point out that until negotiations take place, the exact figure can't be known.
Scottish ministers say they will improve productivity and grow the population. The Scottish government say if they had the full powers of an independent country then they could improve productivity and population growth. This is very much the area of future possibilities. It's certainly possible to implement policies which could encourage migration and boost production, but there's no way of guaranteeing that this would happen even if it was implemented.Scottish ministers say they will improve productivity and grow the population. The Scottish government say if they had the full powers of an independent country then they could improve productivity and population growth. This is very much the area of future possibilities. It's certainly possible to implement policies which could encourage migration and boost production, but there's no way of guaranteeing that this would happen even if it was implemented.
Will we be better off or not?
The difficulty here is that it's almost impossible to know whether either figure is correct. When we're dealing with economic projections 20 years into the future, there is a huge amount of things that could make the figure go up or down.
The UK figure does not reflect any possible cuts to Scotland's budget if the amount of money Scotland gets from the UK through the Barnett formula is reduced.
The Scottish government has focussed most of its attention further down the line, saying that the tough elements for the economy could be offset by making different choices, and without giving a figure for setting up a new country.
And for both sides, it very much depends on how those crucial post-independence negotiations would pan out.