UK split to lead to tax troubles
A recent Institute of Fiscal Studies report records North Sea revenues as almost 50 per cent of tax receipts in the 1980s but only 3 per cent in 1991-2. More recently it was 20 per cent in 2008-9, falling to 12 per cent the following year.
This does not matter within the Union as such risks and resources are pooled. At present, North Sea revenues have fallen to 10.5 per cent of Scottish tax receipts, compared with 1.5 per cent for the UK.
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Hide AdFor the record, Scotland has consistently spent more than the UK average on social protection – £4,169 per head at the moment, 7 per cent above the UK’s average. Although Gordon Brown used pensions as an illustration, his point applies to public spending as a whole, at £10,152 per head, or 15.5 per cent above the UK average.
With this combination of high spending, volatile North Sea revenues and structural fiscal deficit, an independent Scotland would face more serious fiscal problems than the rest of the UK. Scotland does not need another period of fiscal austerity that independence would bring just as we emerge from the current one. Rachel Holmes’ dodgy accounting is best ignored.
Professor Arthur Midwinter, Falkirk