Scotland ‘better off’ in the UK

A £1,750 ‘dividend’ per head north of Border for Scotland being part of UK Official figures show that Nationalists’ cash claims on independence don’t add up

THE economic case for tearing Scotland out of the UK is lying in tatters after new figures showed the value of the Union.

Official figures published by the Scottish Government show the ‘Union dividend’ is higher than ever – £1,750 a year for every man, woman and child in Scotland.

The Government Expenditure and Revenue Scotland (GERS) report showed Scotland’s net deficit was £13.3billion in 2016/17, which is 8.3 per cent of total gross domestic product (GDP). Although lower than £14.5billion the previous year, it is still the largest of any European Union country.

SCOTLAND is more reliant on being part of the UK than ever before, with every man, woman and child benefiting from a ‘Union dividend’ worth £1,750 a year.

Official figures published by the Scottish Government yesterday revealed far greater spending per head of population north of the Border than across the UK.

They also show that if the SNP had succeeded with its bid to break up Britain, an independent Scotland would have been up to £10.5billion worse off in its first full year than Alex Salmond and Nicola Sturgeon had forecast.

The figures are a hammer blow to the SNP’s hopes of tearing Scotland out of the UK – and reveal that many of its key current spending commitments are reliant on being part of the Union.

The new Government Expenditure and Revenue Scotland (GERS) report showed that Scotland’s net deficit was £13.3billion in 2016-17, which is 8.3 per cent of total gross domestic product (GDP).

Although the spending gap was slightly lower than £14.5billion a year earlier, the UK cut its borrowing by much more and Scotland has the highest deficit of any EU country.

Opponents accused the SNP of selling ‘false hope’ and ‘fakeonomics’ to the people of Scotland in the run-up to the 2014 referendum by hanging the country’s entire economic future on the hugely volatile incomes from oil and gas.

Scottish Tory finance spokesman Murdo Fraser said: ‘In 2014, Alex Salmond and Nicola Sturgeon looked Scottish families in the eye and insisted we’d be better off.

‘The truth is when times are tough, as they have been in Scotland over the last few years, we can rely on the weight of the whole UK to ensure schools, hospitals and public services remain decently funded.’ Miss Sturgeon yesterday said she wanted to cut the deficit to ‘sustainable’ levels – but it emerged it would take £9.5billion of cuts to public services, or tax rises to bring it into line with the UK’s deficit.

The GERS report shows that expenditure per person in Scotland was £13,175, £1,437 higher than the rest of the UK. Tax revenue per person was £10,722, £312 lower than the UK – giving a ‘Union dividend’ of £1,749.

If there had been a yes vote in the 2014 referendum, Scotland would have formally become independent in March 2016 – meaning 2016-17 would have been the first full year of a separate Scotland.

In the independence white paper, the Scottish Government’s ‘central projection’ was the total deficit in 2016-17 would be between £4.3billion and £5.5billion. But it also referred to a best-case scenario of only £2.7billion. yesterday’s GERS figures show the true figure was £13.3billion – £10.6billion higher than the optimistic scenario put to voters ahead of the referendum.

The white paper also claimed that total receipts from oil and gas would be up to £7.9billion. But the GERS report shows the value of Scottish revenue from the North Sea was only £208million in 2016-17.

That led to claims that an independent Scotland would have to make massive cuts to public services or impose tax rises on hard-working Scots.

Pamela Nash, chief executive of the Scotland in Union campaign group, said: ‘It looks like the fake-onomics used in the referendum to make the case for independence have been exposed by reality.’ Scottish Labour leader Kezia Dugdale accused the SNP of selling ‘false hope’ to voters, saying ‘Scotland’s own accounts show the first year of an independent Scotland would have meant unprecedented levels of austerity.’ She added: ‘The Nationalists’ plan would have taken a sledgehammer to the welfare state as we know it.’

yesterday, Miss Sturgeon said she did not accept ‘in any way, shape or form’ that she had misled voters with the oil projections in the white paper.

She said: ‘Nobody foresaw the decline in the oil price.’

Asked how she will tackle the deficit, Miss Sturgeon said her government would try to grow the economy but insisted she would not follow the UK Government’s ‘austerity agenda’.

Scottish Secretary David Mundell said: ‘It is vital we grow the economy and we want to work with the Scottish Government to achieve that.’

‘Selling false hope to voters’

IT is good news that Scotland’s public spending deficit has been cut to £13.3billion over the past year, though it is a little like the captain of the Titanic declaring that the torrent flooding the engine room has eased slightly.

Yesterday’s Government Expenditure and Revenue Scotland (GERS) figures show the gap between what Scotland generates and what it spends is a yawning 8.3 per cent. Yes, the UK deficit is grim too, yet it is only 2.4 per cent.

The SNP likes to say GERS reflects only the position ‘under current constitutional arrangements’ in which it is denied the ‘levers of power’. The canard is that Scotland’s dire position is only because we are not independent.

But the ‘levers’ come down to two things the Government can directly influence – tax and spending.

So perhaps First Minister Nicola Sturgeon could tell us how she would tackle the deficit. Would she implement tax rises of around 16 per cent? Or would public spending – on welfare, health and education – tumble by around 14 per cent?

Perhaps a combination of both might be the favoured option. Would she go to the country on a ‘pay more/get less’ ticket?

The Nationalists are wriggling in the iron grip of the reality that Scots enjoy considerable benefits from remaining in the Union.

They baulk at calling the £1,750 that accrues for every man, woman and child a ‘Union bonus’ but that is exactly what it is.

Scottish Secretary David Mundell rightly says it underscores the value of pooling resources around the UK.

He warns too: ‘Scotland’s deficit is falling at a slower rate than the UK as a whole and economic growth is lagging behind. It is vital we grow the economy and we want to work with the Scottish Government to achieve that.’

It is a positive message compared with the SNP’s agitation for another independence referendum.

The party insists its 2014 independence white paper was not misleading, that no one foresaw the collapse in oil prices.

In fact, John Swinney was predicting a second dawn for the industry and Alex Salmond declared oil revenue was ‘just a bonus’.

GERS indicates only £208million of revenue came from the North Sea. That’s up from £56million in 2015-16, but nothing compared to £8billion in 2011-12. And it’s also a fraction of the SNP white paper guess of £7.9billion.

The SNP still has no credible explanation for how it would fund an independent Scotland. The ‘grow the onshore economy’ ambition is noble but hard to square with the highest rates of income tax in the UK and usurious business rates rises.