Scotland's Economy

Scotland's strong financial foundations

March 6, 2013 by John Swinney MSP No Comments | Category Uncategorized

One of the most commonly asked questions in the debate over Scotland’s future is about our economy, whether we can afford to be independent and what it means for our economic future.

Over the coming months we will be answering those questions, setting out Scotland’s finances as they are, the economic opportunities ahead of us and the difference independence will make.

Today we’ve published figures that show the actual position of Scotland’s finances.  Essentially they show how wealthy Scotland would have been in the last year if we’d had full control of all our revenues and spending.

The document,  Government Expenditure and Revenues Scotland, show how much public sector tax revenue was raised  in Scotland and total public sector expenditure in Scotland in the five years to 2011/12.

Overall this report shows that Scotland has strong foundations to build on as an independent nation.

In 2011- 12 total public sector revenue in Scotland was estimated at £56.9 billion. That means tax revenue from Scotland accounted for 9.9% of all taxes raised from across the UK, despite making up only 8.4% of the population.

That figure alone shows that Scotland more than pays her way as part of the UK, and it’s not a one off.

In four of the last five years Scotland has paid in more to the Treasury, than has come back in public spending.

The report also shows how much is spent in Scotland, and that while we contribute 9.9% of taxes we receive only 9.3% of UK spending.

Again, that difference shows Scotland has the wealth we need not just to  be independent but to be a successful independent country.

And it shows the UK’s deficit of £121 billion or 7.9% of national GDP compared to only 5% of GDP or £7.6bn in Scotland.

But there’s more to independence than just having strong finances.  Independence for me is about taking the opportunities presented to you, and using your resources to build a stronger and more prosperous Scotland.

One of the most interesting things to come out of today’s report is the difference in the finances of Scotland and the UK.

Compared with the UK, Scotland is in a relatively better off position. Today’s figures show that in 2011-12 Scotland would have had £4.4bn extra, or £824 per head, compared to the UK, that we could have put to use in Scotland’s interests.

If we had been independent, we could have chosen either to pay off debt or cut borrowing with that money or to invest it in capital projects that would create jobs and boost the economy or to use it  to support households across the country.  As an independent nation, we would have made those choices in Scotland for Scotland.  Instead, as a part of the UK we are tied to economic plans from a Westminster government that are preventing real growth, hampering efforts to create jobs and increasing inequality.

There has been another financial paper in the news today.  As part of the detailed work the Scottish Government is undertaking on financial planning for independence we looked at the UK Government’s projections for the future, if there are no changes to the austerity agenda.  That paper is out of date, particularly as we are now looking at a second oil boom in the North Sea – but also as our preparations for independence have developed.

Since that paper was written the Fiscal Commission Working Group has been published – setting out how an oil fund could work and we have set our our budgets in areas like defence.  However one thing that paper did show us, is that even on the UK’s disastrous economic path between 2010 and 2016/17 Scotland would be a total of £16.9 billion better off than we are within the UK.  With independence that money could have been put to use in the interests of sCotland.

It’s for those reasons that I firmly believe that we can’t afford not to be independent.  Today’s figures demonstrate the strong foundations we have, from which to build independence.  There is no doubt that Scotland can afford to be an independent nation.  The opportunity we have in 2014 is to take on the powers that will allow us to build an even better economy, and a fairer and wealthier Scotland.

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