“To preserve a distinctively open-handed Scottish social model”, the UK may be the safest choice…

As per, Northern Ireland not included in these details, but The Economist as something of a rarity amongst London based papers notes that Scotland is the third most prosperous region in the UK:

Scotland’s accounts of revenue and expenditure, based on Treasury data, show that it is not a ward of the state, grossly subsidised from Westminster. In fact it performs better than all regions outside the south-east of England, and has done particularly well in the past decade (see chart). In 2010-11 Scotland’s GDP was £145 billion ($225 billion) including a geographical share of North Sea oil and gas, around 10% of Britain’s, with 8.4% of the population.

Historically Scotland has received bigger grants per head from central government than Wales, for example—in part a tacit acknowledgment that it contributes handsomely to oil revenues, which in 2010-11 amounted to £8.8 billion. An independent Scotland would lose that subsidy, but gain the right to collect taxes on hydrocarbons locally. For the moment, Scotland’s day-to-day accounts would look little different to now. But the argument does not end there.

Indeed. The article pulls out three issue for concern: one, the unpredictable and limited lifespan of North Sea oil; two, the capacity of wind and wave power to replace it as a primary economic activity; and three the degradation of performance (and loss of central control) Scotland’s financial services. The problem, the Economist argues, is that as Scotland’s economic staples fade there are not many rising options in evidence.

And, interestingly, it points to a new political dispensation that may be familiar to seasoned observers of the Irish Republic, but is not yet featuring in nationalist discourse in Scotland, that is the possibility that the many social protections currently in place in Scotland in the UK, may not be guaranteed come the tough choices independence will almost inevitably bring:

Scotland would take a per capita share of the national debt, reckons Mr Salmond. The tab for decommissioning its nuclear power stations is £4 billion. Other practical questions abound, such as who would pay out pensions agreed under Westminster’s auspices—as those of Scotland’s teachers and NHS staff currently are.

Such arithmetic calls into question not just Scotland’s economic future but its political one. Spending per head is currently 13% more than in Britain as a whole, supplying free university tuition, for example, which is not available south of the border. Welfare spending, which consumes a third of public funds, is 11% higher than in England and is rising faster as a share of public expenditure than any other category. The SNP hopes to extend state paternalism further, promising free universal childcare and more generous state pensions. Public sector employment, already 24% in Scotland compared with Britain’s 20%, would presumably increase. Mr Salmond hopes to fund all this by adopting low corporation taxes to pull in investment.

It remains a matter of judgment whether Scotland could go it alone. But after the banking and euro-zone crises, Scotland would be far more vulnerable to shocks as a nation of 5m people than as part of a diversified economy of 62m. There is an irony here: to preserve a distinctively open-handed Scottish social model, staying in the union might be the safest choice.

  • HeinzGuderian

    Huh ? You mean Akex hasn’t spelled it out yet ?

  • Republic of Connaught

    “As per” is right. But Northern Ireland isn’t in Britain so you can understand why GB folk deliberately forget the unruly little Irish province across the sea.

    Scotland won’t be making a decision on their independence solely on economics. They’re a nation, not just an economy. Choosing the best for one’s country and culture isn’t just about money. Not that many in a NI audience could comprehend that.

    But I’m sure the Scots do.

  • Alanbrooke


    I realise out in the far West life can get a bit quiet and removed from the mainstream , but are you seriously saying people won’t think about their pockets ? A recent survey showed numerous Scots would change their vote for the price of an iPad. Cynical perhaps, but it does show paying the bills is a serious matter.

    The issue for Scots today isn’t what is the economy like, but what will it be like in 10 years time when oil runs out ? Salmond’s plan is a good one if it was 1975; but isn’t. Personally I have no doubts that if Scotland splits off the SNP will become like FF a party of graft and pork barrel deals for their mates. Like FF it will bang the anti english drum to make up for its domestic failings and say nothing as its brightest and best emigrate to England and become English within 3 generations. Behind the rhetoric Salmond has done surprisingly little to build a nation.

    ps how are you going to vote in the referendum ?

  • Angus McLellan

    Well I’ll be voting Yes. I’ll take the risks.

    Certainly there are basic things we can learn from Ireland, like what the government of a small country might look like. And there are cautionary lessons too, although we hardly need to look as far as Ireland or Fianna Fail for cronyism and graft. We’ve got the Labour Party and their fifty glorious years here in Glasgow after all.

    As for Alanbrooke’s vision of a brain drain, that’s our past and our present. And we can pretty much guarantee that it’s our future inside the Union too.

  • JPJ2

    ” Salmond’s plan is a good one if it was 1975…”

    I am sure if this was 1975 you (as did all those who favoured the union in 1975) would be denying that which you are prepared to accept now that it is in the history books.

    The ongoing unionist position now seems to be-yes, the SNP were right about the oil and the prospects for an independent Scotland in the 1970s (in spite of unionists-notably Dewar saying Scotland at the time would be like Bangladesh (shades of the economists “Skintland” eh?) but they are not right now.

    So given the track record of unionists, I say the SNP have much more credibility than unionists on the future prospects of Scotland-and I have history on my side 🙂

  • Alanbrooke


    good to see you’re still alive ! I assume you’re still sulking with Mike Smithson as you haven’t posted for a while.

    As for history on your side well all we’ve seen is that the SNP have always a great view of the past and are noticeably quite about the future. Just about every bandwagon Salmond jumps on has it’s wheels fall soon after.