Analysis: Scotland’s families won’t get rich on this statistical quirk

WOULD an independent Scotland be the sixth-richest country in the developed world in terms of GDP (gross domestic product) per head – compared to the UK’s 16th place?

That is the claim consistently made by the Scottish Government. But what does it actually mean?

The calculation is based on OECD data for GDP per capita. Figures for 2010 show the UK to be at almost $36,000 per capita (15th amongst OECD countries), while the sixth richest is Australia, at $40,600 per capita. In other words, such a shift would improve GDP per capita for Scotland by 13 per cent. It is worth noting this is a considerably larger sum (about £3,000 per person) than the extra £500 survey evidence suggested would sway a considerable number of people’s views on the desirability of economic independence.

There is little dispute that, measured in terms of GDP per capita, Scotland’s position would improve considerably, based on it inheriting 80-95 per cent of North Sea activity. What is disputed is the impact this would have on Scottish prosperity or on a typical Scottish household. Most North Sea operations are non-Scottish-owned and so profits, excluding taxes, are likely to end up being remitted outside of Scotland. In reality, this “boost” to GDP per capita would not feed through to raising the living standards of ordinary Scots.

A better way to measure wealth in such circumstances is to use GNP (gross national product), as Ireland does, or the similar GNI (gross national income), as the OECD does. Both measure the output generated by a country’s firms, regardless of where those firms are based.

Unfortunately, no figure for Scottish GNP or GNI exists, so we cannot be sure what the final position in terms of any change to living standards might be. However, what is clear is this surge up the leader-board in terms of national wealth would be largely a statistical quirk. There may be, potentially, many benefits from becoming independent, but overnight enrichment isn’t one of them.

• John McLaren is a professor at the Centre for Public Policy for Regions at Glasgow University.