Independent Scotland setup cost row continues

Patrick Dunleavy said that the cost would be between �600 million and �1.5bn. Picture: TSPL
Patrick Dunleavy said that the cost would be between �600 million and �1.5bn. Picture: TSPL
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THe row over the cost of creating a new Scottish state intensified yesterday when an academic quoted by both the UK and Scottish Governments indicated the final bill for the transition to independence could be up to £1.5 billion.

A blog published yesterday by Professor Patrick Dunleavy 
of LSE said Scottish voters could be “relatively sure” that the cost of moving to an independent state would be between £600 million and £1.5bn over a decade.

Professor Dunleavy’s work has used by both sides in the independence debate to calculate the start-up costs of an independent Scotland.

Alex Salmond has used an estimate of £200m produced by Professor Dunleavy when attempting to put a figure on the immediate start-up costs.

And a controversial paper published by the UK Government referred to the academic when it came up with a start-up costs of £2.7bn. Professor Dunleavy took issue with the UK Government’s interpretation of his work describing the Treasury’s figure was “bizarrely inaccurate”. Professor Dunleavy’s blog was written in response to a critique by an Oxford University academic Iain McLean which put set up costs at between £1.5bn and £2bn. Professor McLean said that Professor Dunleavy’s £200m estimate only dealt with setting up new departments such as foreign affairs, defence and social security, which did not exist already.

But Professor McLean said the big costs of setting up a new state were tax collection and benefits distribution – figures that would “dwarf” the £200m estimate.

Professor Dunleavy’s blog said: “Scotland’s voters can be relatively sure that total transition costs over a decade will lie in a restricted range, from 0.4 of 1 per cent of GDP (£600m), up to a maximum of 1.1 per cent (£1,500m). This is a step forward in debate and I am grateful to Iain for helping to bring it out.”

Mr Salmond was challenged on the latest figures at First Minister’s Questions and urged to be “honest” about the costs.