Scotland has a trade surplus

POTS and kettles come to mind when reading James Quinn’s letter (April 16). The Scottish Government does not have a fiscal deficit and it is obliged to balance the books each year with very limited borrowing powers Last year GERS charged Scotland £9.1 billion for notional interest payments on the UK National Debt. The Bottom Line think tank pointed out that “two-thirds of Scotland’s notional current account deficit in 2022-23 was due to two aspects of poor UK economic management: the cost of living support that was necessary due to inflation in the UK that was higher than other advanced economies, and the significant increase in the cost of servicing public sector debt. These result from UK policy mistakes including Brexit, and its impact on inflation, greater exposure to global oil and gas prices than other countries and the decision to index-link a much higher proportion of government debt than any other country, increasing the exposure of UK public finances to inflation”.

Scotland has a balance of trade surplus and there is no logical reason why Scotland couldn’t be a successful independent nation. Scotland’s GDP per capita was £38,622 in 2022 and, based on World Bank figures, is around the European Union average and higher than in Italy, Spain or Portugal. With our vast energy surpluses, including £10bn in oil and gas revenues, plus £4bn worth of electricity transferred south last year, it is not in England’s interest to impose a hard border with an independent Scotland which is England’s fourth largest trading partner.

Fraser Grant, Edinburgh.

SO James Quinn wants discussions absent of falsehoods.

First of all, when he writes about “nationalists”, is he referring to British or Scottish nationalists?

Secondly, there are always two figures produced in any calculation over Scotland’s deficit, one with a geographical allocation of the oil and gas money, and one with a population share. Which one did he use for his deficit figure?

Thirdly, Scotland’s deficit is not based on revenues received, but on a statistical calculation of the money Holyrood receives plus an estimate of the money Westminster spends on Scotland for unallocated costs and retained matters. Not all of that money is spent in Scotland. So it is not all money Scotland receives.

Finally (and I’m sure I’ve pointed this out to Mr Quinn before), there are no fiscal transfers between UK economic regions. The system doesn’t work like that.

Iain Cope, Glasgow.