Public Debt

What is the financial impact on Scotland of independence?

Stephen Richard — Thu, 28 Oct 2021 11:14:09 +0000

What is the financial impact on Scotland of independence? Stephen Richard Thu, 10/28/2021 - 12:14

Author or Creator

Common Weal

What is the financial impact on Scotland of independence?

There are three aspects to this – the initial debts inherited, the cost of the work to become independent and the ongoing financial position of Scotland after independence. The last of these is not part of the process of establishing a new country and so has not been considered here.

So what is the debt aspect of this?

As was discussed under negotiations above, that is not something we can know until negotiations are complete, but there isn't really a scenario where Scotland's debt liability is any higher than it already is inside the UK and there are a number of scenarios where it could be less – and even significantly less. As we have seen through two periods of very large scale 'quantitative easing' right across Europe and indeed the wider world, debt size in comparison to the size of the economy when you are in charge of your own currency is not a major concern. The issue is the cost of servicing it which will not be higher than it currently is for Scotland.

But these questions reveal a lot of set-up costs do they not?

Yes, but this should be put into perspective. If you add up all of the above costs then the total comes to about £25 billion and this is not particularly large when we think about the bank bailout or the emergency Covid measures. And it is dominated by two major costs – the cost of setting up a Foreign Currency Reserve and cost of setting up a Scottish Defence Force. The first of these is a cost but it is also an asset (this is real money you can spend and invest) and the second would be spent over a decade and much of it would come from annual spending on defence which would actually be less than what we are spending at the moment as part of the UK. These are all one-off costs and in the end are no more than a small proportion of how much Scotland's share of the bank bailout cost.

So that is how much the national debt would rise by to become independent?

No, that is the total cost of the set-up and doesn't include Scotland's likely share of the UK's assets. About £15 billion of the £25 billion total would come to Scotland as a share of assets (or would be subtracted from debt). The additional cost to Scotland which would be borrowed is only £10 billion which, as a one-off, really isn't that substantial.

How would we pay for it?

To go back to the beginning, the National Commission would be given bond-issuing powers so would use this to borrow the money as it does its work. At the end this would be consolidated and added to the national debt.

What do we get for our money?

Well, our own country – and a giant economic stimulus. An awful lot of the money it would cost to set Scotland up as an independent country would be spent on goods, services and wages inside Scotland would would help to boost Scotland's economy.

Keywords

Cost of independence

Public Debt

Government bonds

England does not subsidise Scotland

Stephen Richard — Sun, 17 Oct 2021 08:42:25 +0000

England does not subsidise Scotland Stephen Richard Sun, 10/17/2021 - 09:42

Author or Creator

Believe in Scotland

The UK Government has diverted Scotland’s wealth to the UK Treasury to pay off its debts. Thus it creates 100% of Scotland’s supposed debts and 100% of its phoney deficit. This is the impact of Westminster’s debt loading alone, and upon that accounting trick, rests the entire economic case for the Union. Would an independent Scotland have to pay the rUK a population share of the UK’s historical debt? No – there is in fact a very strong case for Scotland to be compensated for having already paid more than it’s “fair share” of the UK’s debt

Keywords

Scotland's economy

Public Debt

GERS

The Accounting Trick that Hides Scotland’s Wealth

Stephen Richard — Fri, 15 Oct 2021 22:10:54 +0000

The Accounting Trick that Hides Scotland’s Wealth Stephen Richard Fri, 10/15/2021 - 23:10

Author or Creator

Business for Scotland

It is common to see the report used as evidence of the size of deficit that would befall an independent Scotland but this would only be the case if one imagines public finances being set up exactly as they are within the rest of the UK. An independent Scotland would almost certainly look to control tax, spending and borrowing powers differently than the current set up, and that makes it more difficult to predict what the country’s finances would look like.

Scotland has everything that it takes to be an extremely prosperous and successful independent nation, and more. Scotland with only 8.4% of the UK population possesses 34% of the UK’s natural wealth.

This prompts the question – why does a naturally wealthy nation with a strong, resilient and diverse onshore economy, booming exports, a highly educated population, low unemployment, a wealth of oil and renewables, and a wide range of strong economic sectors have a set of accounts (GERS) that suggest that Scotland’s finances are weak? That is a trick question, it doesn’t. GERS is not a set of accounts for spending in Scotland it contains spending outside of Scotland that doesn’t benefit Scotland economy and that Scotland didn’t generate. GERS also contains clear evidence of mechanisms for removing wealth from Scotland’s accounts which then creates a phoney deficit. There are actually several hidden mechanisms for stealthily removing Scotland’s wealth.

Keywords

This is why the Westminster myths about independence are wrong. Open minds on independence #18

Stephen Richard — Sun, 10 Oct 2021 10:18:19 +0000

This is why the Westminster myths about independence are wrong. Open minds on independence #18

Primary Author or Creator

The National

Stephen Richard Sun, 10/10/2021 - 11:18

Additional Author(s) / Creators

Believe in Scotland

Date Published

Wed, 04/14/2021 - 12:00

Category

Independence

Type of Resource

News Media

Fast Facts

This looks at three myths about Scottish independence:

MYTH 1: You'll have had your referendum.

MYTH 2: Scotland has a huge deficit because we spend too much on public services.

MYTH 3: The costs of establishing Scotland as an independent country will be huge.

Resource Address (URL)

https://www.thenational.scot/news/19230554.westminster-myths-independence-wrong/

Keywords

Public services

Public Debt

Independence referendum

GERS

Language English

TRANSITION TO A SCOTTISH CURRENCY

Stephen Richard — Fri, 01 Oct 2021 22:18:02 +0000

TRANSITION TO A SCOTTISH CURRENCY

Primary Author or Creator

Peter Ryan

Stephen Richard Fri, 10/01/2021 - 23:18

Additional Author(s) / Creators

Scottish Independence Convention

Alternative Published Date

2020

Category

Currency

Type of Resource

Policy Paper

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

12pp

Fast Facts

The decision on Scottish independence is a decision for the people of Scotland. When making that decision it should be clear which currency an independent Scotland would use. If the people of Scotland vote for an independent Scotland with its own currency, that democratic mandate should be respected.

More details

Scottish Independence Convention (SIC) Transition Paper No. 6 Currency

Resource Address (URL)

https://independenceconvention.scot/transitions

Keywords

Money

Modern Monetary Theory

Scottish Central Bank

Language English

PARTING WAYS How Scotland and the remaining UK could negotiate the separation of debts and assets

Stephen Richard — Fri, 01 Oct 2021 11:37:39 +0000

PARTING WAYS How Scotland and the remaining UK could negotiate the separation of debts and assets

Primary Author or Creator

Craig Dalzell

Stephen Richard Fri, 10/01/2021 - 12:37

Additional Author(s) / Creators

Scottish Independence Convention

Alternative Published Date

2020

Category

Public Finance

Type of Resource

Policy Paper

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

11pp

Fast Facts

All of the plausible negotiating strategies represent clear advantages for an independent Scotland. Even the least advantageous (the Annual Solidarity Payment) presents a scenario where Scotland would save around £1.5 billion per year in debt interest payments compared to that currently assigned to Scotland in GERS.

More details

Scottish Independence Convention. Transition Papers, no.3 Debts and Assets

Resource Address (URL)

https://independenceconvention.scot/transitions

Keywords

Public Debt

Public assets

Language English

Can Scottish independence backers win economic argument?

Stephen Richard — Wed, 29 Sep 2021 19:03:34 +0000

Can Scottish independence backers win economic argument?

Primary Author or Creator

Mure Dickie

Stephen Richard Wed, 09/29/2021 - 20:03

Additional Author(s) / Creators

Financial Times

Date Published

Sat, 06/20/2020 - 12:00

Category

Economy

Type of Resource

News Item

Fast Facts

While opinion polls in the past few months have recorded unprecedented and sustained support for independence in Scotland, economists said the short to medium term economic and fiscal difficulties of leaving the UK look substantially greater than they did when voters rejected the idea in 2014.

Resource Address (URL)

https://www.ft.com/content/2f298c24-36e1-48c3-b401-0ac0066c18b4

Keywords

Language English

How would an independent Scotland pay for it?

Stephen Richard — Wed, 29 Sep 2021 14:02:31 +0000

How would an independent Scotland pay for it?

Primary Author or Creator

Cameron Archibald

Stephen Richard Wed, 09/29/2021 - 15:02

Additional Author(s) / Creators

Bella Caledonia

Date Published

Sat, 02/08/2020 - 12:00

Category

Economy

Type of Resource

News Media

Fast Facts

It’s that time of year again when unionists start spreading lies about how an independent Scotland is subsidised by taxpayers money from the rest of the United Kingdom.

Resource Address (URL)

https://bellacaledonia.org.uk/2020/02/08/how-would-an-independent-scotland-pay-…

Keywords

Public Debt

Public revenue

Taxation

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

What are the implications of independence for public revenues and spending?

Stephen Richard — Sun, 26 Sep 2021 11:13:33 +0000

What are the implications of independence for public revenues and spending?

Primary Author or Creator

Graeme Roy

Stephen Richard Sun, 09/26/2021 - 12:13

Additional Author(s) / Creators

David Eiser, Centre on Constitutional Change

Alternative Published Date

2021

Category

Finance

Public Finance

Type of Resource

Assessment report

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

11pp

Fast Facts

There is no question that an independent Scotland could run a sustainable budget. But like the UK, an independent Scotland would face major fiscal challenges both in the short and long run. Based upon the latest data, an independent Scotland is likely to face greater challenges than the UK as a whole (at least in the short-term).

More details

Page 91-101 in "Scotland’s new choice Independence after Brexit" Edited by Eve Hepburn, Michael Keating and Nicola McEwen

Resource Address (URL)

http://www.centreonconstitutionalchange.ac.uk/sites/default/files/2021-03/Scotl…

Keywords

Language English