So an independent Scotalnd would quickly go broke then

Taxpayer Scotland, which is linked to the London-based Taxpayers\’ Alliance organisation, estimates Scotland\’s debt could be as high as £189bn, even before taking into account its share of the national debt.

Adding in Scotland\’s £80bn share of the UK\’s £940bn national debt suggests it might face a £269bn burden, costing more than £10bn in annual interest payments.

What the actual debt burden would be would be a matter for negotiation, of course. But that\’s not actually the problem.

The Barnett formula hands 10p of every £1 the Government distributes to Scotland. To replace this money at present would require Scotland to borrow £7.5bn every year and Taxpayer Scotland says the country\’s annual deficit would be \”much nearer\” to 30pc of GDP than the 15pc calculated by the latest Government Expenditure and Revenue Scotland report.

\”Clearly, the present Keynesian overspend in response to the \’credit crunch\’ downturn is unsustainable, but even our normal year overspend of between 10pc and 15pc (depending on how you view the Barnett subsidy) is above the OECD average and, in our view, unsustainable,\” said the report.

They\’re running a 30 % of GDP deficit? And a structural one of 10-15%?

So, either austerity of Greek scales of heroic endeavour or they go bust in a decade.

All of which means that we English should kick them out as fast as we can. For it\’s our pockets they are currently draining, no?

18 comments on “So an independent Scotalnd would quickly go broke then

  1. The North Sea oil and gas money should be sufficient to look after a small country like Scotland for the next decade or so. Unless there’s something unexpected in the (apparently unpublished) report the Telegraph’s story is based on.

  2. Report isn’t on the website, but pretty damn sure it’ll be rectally sourced. Last I checked (which was only a couple of years ago so won’t have changed much), Scotland’s share of oil revenues if allocated under Law of the Sea exceeded the Barnett grants by about a billion quid.

  3. @john b: even if thats correct (and I think is probably is) and Scotland would initially be no worse off under full independence, North Sea oil and gas revenues are a declining asset. They will fluctuate from year to year as well. Any Scot who thinks that relying on the North Sea is a sustainable basis for a large percentage of a nations finances needs their head examining.

    As an Englishman I say cut them free. Give them the oil revenue they want, it’ll be revenue neutral for England. Let them sink or swim on their own. They’ll be bankrupt inside 25 years.

  4. Thinking through that the only solution to the Eurozone crisis is direct payments from Germany to the periphery has made me see the Barnett formula in a different light. I used to regard it as infantilising the Scots into a dependency culture, but now I realise that we have to love and support them indefinitely if we really want the northern part of our island to be ‘ours’, and I do.

  5. what are the chances of an independent Scotland doing what the Netherlands and Norway do – using the North Sea money as an offshore investment fund to avoid smashing their domestic economies? Just asking

  6. It’s likely most parts of the UK are running at a significant deficit, who would have thunk that public spending might crowd out the private sector?

    If Scotland leaves the UK, they’ll very quickly have to wise up to the unsustainability of social democratic tax-and-spend policies or face bankruptcy. I’m pretty sure they won’t starve.

    I can’t see the Scots voting for independence in the near future, but since discussion on the subject tends to take on the form of English threats against the subsidy junkie Scots and Scottish resentment of England hoovering up their oil wealth, the long term future of the UK looks bleak.

    Does anybody believe in the United Kingdom or did that die out with the Empire?

  7. what are the chances of an independent Scotland doing what the Netherlands and Norway do

    None whatsoever. The massive public sector up here and the fact that the SNP have a significant, albeit somewhat covert, dark-red socialist wing means that any money that exists will be spaffed ineffectively on huge vanity projects and arbitrary rewards to the faithful.

  8. @Steve: Surely every British subject would get to decide for themselves if they want to be Scottish or UKish, so you can be them and them’s can be us. I’d argue I’m just as Scottish as anyone who has actually, ahem, ever been there.

    It’s all irrelevant as Darling will save the union.

  9. Rub-a-dub –

    The SNP seems more keen on importing people from east of the Suez or south of the Mediterranean and declaring them to be “new Scots”.

  10. This report is nonsense. It asserts that “could be as high as £189bn” but doesn’t mention where this comes from.

    “The Barnett formula hands 10p of every £1 the Government distributes to Scotland. To replace this money at present would require Scotland to borrow £7.5bn” Yes but Scotland’s Barnett spending is already accounted for in the GERS report. This is therefore adding 7.5bn twice.
    The 7.5bn would imply that the Barnett Payment to Scotland is 82.5bn which is nonsense. The actuall figure is around 30bn if memory serves me.

  11. If Scotland think it’s all theirs, this North Sea oil, what happens if the Shetlands hold a refrendum to split from Scotland, and take “their” oil with them….

  12. Nope, it’s all nonsense. By and large, the not-=very-big Barnett formula extra which Scotland gets but would lose (£6 billion-odd) plus the interest on their share of the national debt they’d have to pay £4 billion-odd) would be covered out of their (supposed) 90% of North Sea oil tax revenues of £10 billion-odd.

    This is all storm in a tea cup stuff.

    The RBS thing is no big deal either. None of this points in the slightest to England or Scotland being particularly better or worse off post-independence.

  13. Plus sa change, plus c’est le meme. Or something.

    Wasn’t it a disastrous bit of business which caused the worthy burghers of Edinburgh to lobby for the Act of Union in the first place?

  14. Nautical Nick – “If Scotland think it’s all theirs, this North Sea oil, what happens if the Shetlands hold a refrendum to split from Scotland, and take “their” oil with them….”

    Why wait? The government ought to hand over the revenue to them now. Say that all the revenue from the oil goes to the locals.

    Sure, the Treasury might loose some revenue but on the other hand, Harrods would be flooded with wealthy fishermen’s wives with Norse names, so it would work out the same in the end anyway.

    And the SNP would be f**ked. Well worth it.

  15. Actuallly the National Debt should be split on the Barnett formula too , not simply on population, since it has been run up to its present level by historically spending more per capita onthe Scots than on the English. You’ve had the benefit lads – here comes the bill…

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