Post independence surplus ‘could run to billions’
AN INDEPENDENT Scotland could “abolish the bedroom tax” and still be better off than the remainder of the UK, finance secretary John Swinney has said.
John Swinney fired the opening salvo in the battle over an independent Scotland’s cut of the £1 trillion UK debt mountain tonight, saying that decades of oil and gas wealth could reduce the country’s liability.
The finance secretary likened the independence movement to an “employee buyout”, but admitted that the full extent of the debt Scotland would inherit from the massive black hole in the UK’s public finances may not be known until after a Yes vote in next year’s referendum.
Estimates have ranged from £80 billion to £100bn, but these have usually been a per capita split based on population numbers.
Mr Swinney claimed last night the “starting point” may be Scotland’s contribution to Treasury coffers over the past 30 years – since the oil and gas boom in the North Sea.
He said the Edinburgh Agreement, struck last year between David Cameron and Alex Salmond which paved the way for the referendum, commits both governments to share “necessary information”.
The Scottish Government has been trying to get figures from the Treasury on this issue to help “inform the debate”, but if no agreement can be reached, it will be subject to negotiation in the aftermath of the vote.
Mr Swinney said there are a “number of choices” which could be made when working out the level of debt Scotland would inherit from the UK.
He said: “You could make a calculation which looked at the financial health of Scotland over, let’s say, the last 30 years and the financial health of the UK over the last 30 years and assess who had contributed more or less to overall UK debt and use that as a starting point.
“Alternatively, you could use per capita shares, but in the absence of a negotiation prior to the referendum that would be a subject of negotiation thereafter.”
The SNP believes that Scotland has consistently been in a stronger fiscal position than the UK as a whole in recent decades. Nationalists point to the latest official GERS figures on Scotland’s finances which show that the country contributed 9.9 per cent of all UK revenues in 2011-12, with only 8.4 per cent of the total UK population.
The figures also show Scotland ran a deficit of 5 per cent of GDP in 2011-12, about £7.6bn, while the UK ran a larger deficit of 7.9 per cent in the same year.
This leaves a relative surplus of £4.4bn and it appears this kind of shortfall could be taken into account when assessing the liability for inherited debt.
The UK’s public debt level soared past the £1 trillion mark last year and the coalition’s struggle to cut into the annual deficit led to the UK recently losing its prized triple-A credit status . Mr Swinney was addressing the Scottish Council for Development and Industry in Edinburgh last night and compared the independence movement with an “employee buyout.”
He said: “I think in terms of the characterisation of the debate and the proposition I’m behind, it’s quite helpful to look at it as an employee buyout – it does rather capture where we are and what we’re doing.”
He also played down the prospect of greater home rule in Shetland resulting the oil and gas revenues being shared by the island. He said: “We’re very responsive and attentive to dialogue with the island communities in Shetland about their of degree of autonomy.”
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Sunday 19 May 2013
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