Wealth

Scotland's contribution to the UK economy

Stephen Richard — Mon, 18 Oct 2021 12:03:01 +0000

Scotland's contribution to the UK economy Stephen Richard Mon, 10/18/2021 - 13:03

Author or Creator

Business for Scotland

The more northern areas of the UK have suffered years of de-industrialisation, high unemployment and lower investment that followed the emergence of London-centric finance and service-led economic policy under consecutive Conservative and New Labour governments.

Put simply, when the UK runs a surplus Scotland contributes more to the surplus, and when the UK runs a deficit Scotland has to pay more of the debt back than it is responsible for. It’s a “lose/lose” situation for Scottish tax payers and especially for those in need of support from the state.

How does a political and economic system that drains billions in revenues from Scotland and leaves the poor unable to heat their homes make us better together? The current Westminster system leaves many Scots children in poverty and growing up in a culture of hopelessness. It leaves our nation’s families comparatively poorer despite the fact that we generate more tax revenue per head that the rest of the UK.

How can anyone justly claim that is worth fighting for? But then maybe that is why the No camp does not actually campaign on the economic and social record of the Westminster system but rather campaign against independence and, by extension, against the hopes and aspirations of those of us that see independence not as an end in itself but a means to an end whereby we build a stronger, safer, richer, fairer and all round better Scotland.

We can build a Scotland which gets the best of both worlds from remaining in partnership with our friends across the British Isles in areas where we share mutual interests, but most importantly being able to shape our own economic future and maximise our own resources to benefit more Scots today and in generations to come through self-government.

Keywords

Wealth

wealth distribution

Economy

Scotland challenges inequality, while UK falls behind

Stephen Richard — Fri, 05 Nov 2021 12:00:09 +0000

Scotland challenges inequality, while UK falls behind

Primary Author or Creator

Believe in Scotland

Stephen Richard Fri, 11/05/2021 - 12:00

Alternative Published Date

2021

Category

Economy

Wealth

Fast Facts

It is evident that inequalities and uneven levels of deprivation across the UK continue to be a significant problem. However, it is also clear that Scotland is continually challenging these inequalities and the Scottish Government is working to ensure that levels of GDP per head in Scotland match the average of EU countries

More details

Deprivation is a useful measure to identify areas of the country that are experiencing significant disadvantage. The Scottish Index of Multiple Deprivation (SIMD) uses statistics on income, employment, health, education, access to services, crime and housing to calculate the level of deprivation across all regions of Scotland. Last year, levels of deprivation fell in Glasgow City, Renfrewshire and City of Edinburgh compared to SIMD 2016. Glasgow City demonstrated the greatest fall, from 48% of data zones in the 20% most deprived areas in Scotland, to 44%.

However, the UK Government has not privatised solving deprivation and so, a UK-wide index of multiple deprivation does not exist. Therefore, it is difficult to compare levels of disadvantage in areas of Scotland and other regions of the UK. As a result, this article will offer a comparison of GDP per head of population, one of the common indicators of deprivation and disadvantage, within the UK and across the EU.

10 Regions of UK with lowest GDP per head (2018) RegionGDP per head

Tees Valley and Durham (England) 21,882

Northumberland and Tyne and Wear (England) 24,960

Merseyside (England) 24,464

South Yorkshire (England) 22,104

Lincolnshire (England) 23,322

Outer London – East and North East (England) 22,626

Cornwall and Isles of Scilly (England) 22,096

Devon (England) 23,858

West Wales and The Valleys (Wales) 21,274

Southern Scotland (Scotland) 19,937

As this table demonstrates, of the 10 regions with the lowest GDP per head in the UK, only one area is within Scotland. Meanwhile, 8 of the regions are within England and one is in Wales. This suggests that economic inequality is a greater problem in the rest of the UK than it is in Scotland.

Furthermore, it is interesting to compare these figures to the EU-27 countries average GDP per head of population. Indeed, it has been implied that regions within the UK have struggled to keep pace with the rest of Europe since the financial crash in 2008.

In 2018, GDP at market prices in the EU-27 was valued at 13.5 trillion euros, equivalent to an average of 30,200 euros per person (approximately £26,195.63).

UK NUTS 2 (Nomenclature of Territorial Units for Statistics)

Regions with GDP per head lower than EU-27 Average RegionGDP per head (£)% of EU-27 Average

Tees Valley and Durham 21,882 83%

Northumberland and Tyne and Wear 24,960 95%

Merseyside 24,464 93%

South Yorkshire 22,104 84%

Derbyshire and Nottinghamshire 25,367 97%

Lincolnshire 23,322 89%

Shropshire and Staffordshire 25,574 98%

Outer London – East and North East 22,626 86%

Dorset and Somerset 25,442 97%

Cornwall and Isles of Scilly22,09684%

Devon 23,858 91%

West Wales and The Valleys 21,274 81%

Southern Scotland 19,937 76%

Northern Ireland 25,981 99%

This table highlights that many regions across the UK continue to lag behind many European countries in terms of GDP per capita. Indeed, 14 NUTS 2 regions in the UK have a GDP per head lower than the EU-27 average. Of these regions only 1 is in Scotland, 1 is in Wales, 1 is in Northern Ireland and 11 are in England.

The major exception

While we have demonstrated that deprivation and inequality are rife across England, there continues to be one major exception – London. In fact, this is a huge part of the problem. In 2018, data from the Office for National Statistics showed that London recorded a 1.1% annual rise in output per person to £54,700. Meanwhile, in the North East, growth was only 0.4%, rising to just £23,600 per head. This shows a further widening of the per capita gap between the richest and poorest regions of the country.

We have recognised for years that the key issue at play here is that the UK is far too centralised around London and the South East. Seven years ago, at Business for Scotland, we said that “power, money, opportunity and influence has been drained from the rest of the country for generations towards a metropolis that has developed its own financial and capitalist culture which sits a world apart from the distant regions and nations that make up the wider UK” and unfortunately, this still applies today but to an even greater degree. Ultimately, this constant investment in London and the financial sector has resulted in huge disparity across England, and harmed the other nations of the UK, including Scotland, Wales and Northern Ireland.

Further mismanagement

The past year has undoubtedly been a challenging one for many countries across the world, with the COVID-19 pandemic having drastic consequences for economies and healthcare systems worldwide. However, adding a hard Brexit deal to the equation has only worsened matters, particularly with regards to deprivation. Indeed, studies have found that there is a high risk that the economic impacts of COVID-19 and Brexit will further increase regional disparities. In particular, already deprived areas such as the North East, Wales and Outer London are likely to be hardest hit by Brexit. Meanwhile, tourism dependent coastal communities and hospitality dependent cities such as Manchester and Liverpool are already facing drastic consequences as a result of COVID-19.

These struggles are only emphasised by the lack of support displayed by the UK Government. Indeed, new research has shown that if the Chancellor’s plans to cut Universal Credit go ahead, millions of individuals will be left without the income needed to afford the minimum living standard and the Scottish Child Payment will be undermined. Indeed, after years of austerity, followed by the chaos of Brexit and a global pandemic, such policy decisions will only cause further deprivation and inequality in the UK, particularly in England where great disparity already exists. This highlights that as a result of UK Government mismanagement and the already severe levels of inequality, certain impoverished areas in England are likely to suffer further in the coming months and years.

Southern Scotland

This region is the only area of Scotland that is within the 10 regions of the UK with the lowest GDP per head and holds a GDP per capita lower than the EU-27 average. However, it is important to note that this situation is gradually improving and the GPD per head of population in this region has significantly improved since 2011. In 2011, Southern Scotland’s GDP per head was £16,142. Meanwhile, the EU-27 average was approximately £22,346. This means that Southern Scotland’s GDP per head was approximately 72% of the EU-27 average in 2011. However, in 2018, this figure had risen to 76%, demonstrating the gradual increase of GDP per head and the closing gap between Southern Scotland and the EU-27 average.

Scottish Government Approach

So, let’s see why Scotland is leading the way in reducing such deprivation. One of the key ways to tackle deprivation is through education. Indeed, the Scottish Government recently announced the investment of £215million to benefit pupils in Scotland’s most deprived communities.

An area in which the Scottish Government has also invested in to reduce deprivation and inequality is affordable housing. Indeed, in the 2021-22 budget, £711.6 million was dedicated to affordable housing and a new £55 million programme was put in place to support town centres.

Another critical example that extends to the wider community is the Empowering Communities Fund. This programme was established in 2015 and has already had huge benefits for deprived communities in Scotland. To date, the programme has helped hundreds of projects that create change in disadvantaged communities through training, employment, healthy eating and volunteering opportunities.

It is clear that reducing inequalities and deprivation is a key ambition of the Scottish Government and one that is continuously being met, with levels of deprivation reducing across the country.

Conclusions

Resource Address (URL)

https://www.believeinscotland.org/scotland-challenges-inequality-while-uk-falls…

Keywords

Wealth

Economic inequality

Language English

Can Scotland afford to go it alone?

Stephen Richard — Wed, 29 Sep 2021 10:54:59 +0000

Can Scotland afford to go it alone?

Primary Author or Creator

Ruth Strachan

Stephen Richard Wed, 09/29/2021 - 11:54

Additional Author(s) / Creators

Investment Monitor

Date Published

Thu, 05/06/2021 - 12:00

Category

Economy

Type of Resource

Article

Fast Facts

With every passing election, Scotland seems to move closer to independence. Investment Monitor explores the obstacles the country would face should it leave the UK.

Resource Address (URL)

https://investmentmonitor.ai/analysis/who-would-pay-the-bills-in-an-independent…

Keywords

Language English

A Guide to the Government Expenditure and Revenue Scotland (GERS) Report

Stephen Richard — Wed, 29 Sep 2021 10:39:20 +0000

A Guide to the Government Expenditure and Revenue Scotland (GERS) Report

Primary Author or Creator

Fraser of Allander Institute

Stephen Richard Wed, 09/29/2021 - 11:39

Additional Author(s) / Creators

University of Strathclyde

Alternative Published Date

2021

Category

Economy

Type of Resource

Academic Paper

Fast Facts

The possible financial costs and risks, or savings and opportunities, of implementing a new constitutional framework are, naturally, not considered in GERS. Similarly, it does not report on the effects of faster or slower economic growth in an independent Scotland.

Resource Address (URL)

https://fraserofallander.org/gers-guide/

Keywords

Language English

Scotland has got what it takes to be an independent country

Stephen Richard — Wed, 29 Sep 2021 10:25:07 +0000

Scotland has got what it takes to be an independent country

Primary Author or Creator

Olaf Stando

Stephen Richard Wed, 09/29/2021 - 11:25

Additional Author(s) / Creators

Scottish National Party

Date Published

Sat, 11/28/2020 - 12:00

Alternative Published Date

2020

Category

Independence

Type of Resource

Political Party Paper

Fast Facts

Independence is about the right of people in Scotland to decide their own future

We’re the ideal size

Scotland is a wealthy nation with a big economy

We’re educated and talented

We have extraordinary energy resources

We export high quality produce and goods

We are at the cutting edge of the industries of the future

We’re big enough, rich enough and smart enough – even opponents of independence believe so

Resource Address (URL)

https://www.snp.org/scotland-has-got-what-it-takes/

Keywords

Language English

The Transformation of Scotland; the Economy since 1700

Stephen Richard — Sun, 26 Sep 2021 16:30:02 +0000

The Transformation of Scotland; the Economy since 1700

Primary Author or Creator

T M Devine

Stephen Richard Sun, 09/26/2021 - 17:30

Additional Author(s) / Creators

C H Lee, G C Peden, Edinburgh University Press

Alternative Published Date

2011

Category

Economy

Type of Resource

Book

Length (Pages, words, minutes etc...)

269pp

Fast Facts

There are issues, such as the distribution of income, which merit particular attention in Scotland's case. There are also contradictions in explanations of Scotland's economic performance that have to be addressed.

Resource Address (URL)

https://books.google.co.uk/books?hl=en&lr=&id=d28xEAAAQBAJ&oi=fnd&pg=PR5&dq=Doe…

Keywords

Economic History of Scotland

Language English

Investment in Scotland: A Common Weal Approach

Stephen Richard — Tue, 31 Aug 2021 14:24:48 +0000

Investment in Scotland: A Common Weal Approach

Primary Author or Creator

Iain Cairns

Stephen Richard Tue, 08/31/2021 - 15:24

Additional Author(s) / Creators

Christine Cooper, Gordon Morgan, Common Weal

Alternative Published Date

Septtember 2014

Category

Banking

Type of Resource

Policy Paper

Fast Facts

― Taking a look at UK debt over the long-term shows that it is historically at a very low level. It is also incorrect to claim that we cannot afford the interest on debt.

― The reality is that there has rarely been a more favourable time for the UK Government to borrow in order to invest in renewing its infrastructure and fostering new industries.

― It is testament to the outright failure of the Thatcherite project – the deregulation and privatisation of much of the UK economy and the increasing emphasis placed on the financial sector – that the UK’s growth has declined every decade since the former Prime Minister began the process in the 1980s.

― The case of Private Finance Initiatives (PFI), which has dominated infrastructure investment since the 1990s, exemplifies how private finance provides poor value for money.

― The financial system in the UK, which by its nature, distributes wealth from the productive economy to the financial sector from the indebted poor to the wealthy shareholders of banks and from regions to financial centres, is not capable of delivering the kinds of economic and social outcomes people have a right to demand.

― Investment is what the UK lacks, not money.

More details

The financial system in the UK, as this report has shown, which by its nature distributes wealth from the productive economy to the financial sector, from the indebted poor to the wealthy shareholders of banks and from regions to financial centres, is not capable of delivering the kinds of economic and social outcomes people have a right to demand. Moreover, it threatens to create a kind of‘perpetual state of crisis’which acts as a justification for the utterly destructive rounds of austerity to which all mainstream parties at Westminster have committed.

This report shows another way forward.

Governments and central banks must once again regard monetary policy as being about more than merely the quantity of money in an economy, which is supposedly controlled by the price of money (i.e. interest rates). Governments and central banks must also be concerned with the ‘quality’ of money in the economy, i.e. for what purposes the money is allocated, how it is allocated and what kind of institutions allocate it.

Central bank credit controls or guidance is a tried and tested method of improving productive investment while reducing speculation.

Also at the national level, a National Investment Bank should be the central component of a new and accountable financial architecture. But the financial sector must also be remodelled around democratically accountable, locally responsive banks and credit co-operatives, run by communities for communities.

Investment is what the UK lacks, not money.

Not only will this create stability in the financial sector. It will be a huge boost to the productive economy, including for co-ops and social enterprises which seek to put people before profit. It is self-evident that if we are to have an economy which is run in the interests of communities rather than shareholders, communities must be in control of directing the flow of financial resources towards their chosen outcomes.

Our current economy - characterised by low-skilled work, disempowered employees and enterprises concerned almost exclusively with profit - is to a large extent a reflection of the priorities of a financial sector which itself is dominated by the desire for profit above all else.

A Common Weal society needs a Common Weal financial sector. And considering the current debate about Scotland’s constitutional status, it is worthwhile emphasising that viewing monetary policy in these broader terms would allow Scotland, even without its own currency, to pursue its own independent monetary policy through the strategies outlined in this paper, which promote diversity in the financial sector.

Finally the austerity narrative must be challenged. The current rounds of austerity in the UK are justified neither by the level of debt nor the rate of interest paid on that debt, both of which are currently low by historical standards.

Investment is what the UK lacks, not money.

Resource Address (URL)

https://commonweal.scot/wp-content/uploads/2020/09/Investment-in-Scotland-A-Com…

Keywords

UK debt

UK Government Borrowing

Privatisation

Private Finance Initiative

Wealth

public investment

Profit

Language English