The referendum on Scottish independence draws ever nearer and the debate is intensifying on both sides. As part of that debate, the UK government has published its 14th paper in a series of analyses, which set out the case for Scotland’s continued Union with the rest of the UK.
The focus of this latest paper is fiscal policy and sustainability. It states that Scots would be around SEK 14,000 better off per person, per year, over the 20 years from 2016-17 if Scotland remained in the UK. This “UK Dividend” is possible thanks to pooling financial resources and managing financial risks at an aggregate UK level. If Scotland were independent, it is estimated that spending would need to go down 11%, or taxes would need to go up 13%, to avoid losing this benefit.
Other independent bodies, such as the Institute for Fiscal Studies and the National Institute for Economic and Social Research, have also analysed the fiscal prospects for an independent Scotland. They all point towards greater fiscal challenges e.g. a continued decline in oil and gas revenues, and a more rapidly ageing population than the rest of the UK, reducing tax revenues and growth whilst putting more pressure on age-related spending.
It is not just the UK government setting out the case for Better Together. Separately, researchers at the University of Glasgow have challenged the facts behind the argument that Scotland can be successful as a small, independent country as it is one of the richest nations in the world. In pure GDP terms, the wealth claim might be true (USD 39,600 per capita). However, the academics suggest that GNI (USD 37,400 per capita) is a better measure of wealth, as this identifies wealth that stays in the country. And given the high levels of foreign (including Swedish) ownership, if foreign companies’ dividends and profits are discounted, the figure goes down to USD 34,600 per capita, rendering Scotland a middle-ranking economy.
The business community themselves are also getting directly involved in the debate, with everyone from the CBI (Svenskt Näringsliv equivalent) through to individual companies saying they think Scotland would be better off staying in the UK. They are concerned that companies will pull out of an independent Scotland, although of course, they may not. But it is a risk, and it could be an expensive one.
A lot of this might sound rather dull, simply quoting numbers and acronyms, and there are plenty more if you click on the link above. Some might also say this sounds like a negative argument, that “London” and others from the outside are saying Scotland can’t go it alone. But that is categorically NOT the message. The message is that we are Better Together. The facts and figures stack up much more in Scotland’s favour as part of the UK. Scotland and all the constituent parts of the UK make a stronger whole, building on each other’s respective strengths and capabilities, pooling resources, and constituting a coherent, outward-facing entity in an increasingly globalised world.