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The economics of an independent Scotland don’t add up
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RH156RH
2020-08-02 08:57:49 UTC
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me (RH156RH change)
9:57 AM (less than a minute ago)
Telegraph
The economics of an independent Scotland don’t add up
Although Covid has strengthened the political desire for change, it has laid bare the economic case

ByTom Rees
2 August 2020 • 7:00am
The Union and Saltire flags blow in the wind
Support for Scottish independence has risen recently CREDIT: Jeff J Mitchell /Getty Images
Pandemic was, for once, not top of Boris Johnson’s agenda on his flying visit to Orkney last week. To mark an eventful first year in power, the prime minister dashed north of the border to grapple with the prized local crabs and help produce the Scottish islands’ protected cheddar cheese.

Trailed from photo op to photo op by a smattering of pro-independence protesters donned in masks, Johnson was already eyeing the next major battle of his premiership.

The Covid-19 crisis had demonstrated the “sheer might” of the union, Johnson claimed in one of the few parts of Scotland not controlled by the SNPs. The nationalists said the visit smelled of panic and recent polling suggests why nerves in Westminster are beginning to fray.

Support for Scottish independence has risen into the lead in recent opinion polls with one putting those in favour of a breakaway eight points clear at 54pc. Holyrood elections next year could make calls for a second referendum difficult to ignore.

Few disagree that the crisis has helped to advance Nicola Sturgeon’s cause, allowing the First Minister to plot a different course for Scotland through lockdown.

But it has also delivered another blow to an already dubious economic case.

“If there is another referendum, the 2014 line of argument, making the rational case versus the emotional one, is going to be even harder but both still matter,” says Prof Jim Gallagher, a former secretary to the Commission on Scottish Devolution and a Better Together adviser.

“There never was an economic case for independence, there was an emotional case and some nonsense made up to make it sound economically good. That’s even truer now.”

In six chaotic years since the vote, the economic case for independence has been flipped on its head but Scotland has edged further away from the rest of the UK politically.

The economic case has deteriorated on several fronts in 2020. Nationalists claim the SNP’s long-term economic vision is more important but more difficult and pressing questions remain.

First Minister Nicola Sturgeon, wearing a Tartan face mask
First minister Nicola Sturgeon is widely perceived as having dealt with the coronavirus crisis better than Boris Johnson CREDIT: Jeff J Mitchell /PA
The jump in public debt makes the task of stabilising the country’s finances even more tricky. Another oil price crash has exposed the vulnerability of what little revenue the UK still makes from the North Sea. The Covid shock has underlined the importance of fiscal credibility and a proactive central bank.

And Brexit has complicated the calculations further. While the 2014 referendum was dubbed a “once-in-a-generation” chance for the nationalists, they now argue Brexit has radically changed the rules of the game.

“The whole issue comes down to one thing: public sector debt,” says Angus Armstrong, director of Rebuilding Macroeconomics at NIESR and former head of macroeconomic analysis at the Treasury.

“If the debt is divided by population, a newly independent Scotland would start life with a public debt burden of over 100pc of GDP, which would have consequences for its currency options.”

Armstrong says an independent Scotland would have to “work hard to establish financial credibility” and could try to win confidence by running budget surpluses.

Like many governments, the UK’s public debt has skyrocketed to fight the economic fallout of the pandemic, rising from around 80pc of GDP to above 100pc – levels not seen since the Sixties.

Ultra-loose Bank of England policy and bond yields at record lows have capped the debt’s risk while Britain already has a solid reputation on financial markets. The Bank has calmed gilt markets by snapping up hundreds of billions of pounds of UK government bonds. Scotland’s public finances would be on rockier ground, however.

In 2018-19, Scotland’s notional deficit was at £13bn, or 7pc of GDP, and rises to almost 9pc without North Sea oil revenue, the annual Government Expenditure and Revenue Scotland report revealed.

If independent, that deficit, which economists believe would be unsustainable, would be higher than any other developed economy in normal times.

Flagship SNP policies from free tuition fees to free personal care for older people have made independence more alluring for voters but has damaged their fiscal credibility by keeping the notional budget shortfall high. The extra spending has been financed by the rest of the UK.

Armstrong says: “An independent Scotland would start with bigger deficits than the rest of the UK, the same debt burden and you want to use someone else’s currency? Do you really think that is credible?

Read more at

https://www.telegraph.co.uk/business/2020/08/02/economics-independent-scotland-dont-add/
p***@gmail.com
2020-08-02 12:48:10 UTC
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Post by RH156RH
me (RH156RH change)
9:57 AM (less than a minute ago)
Telegraph
The economics of an independent Scotland don’t add up
Although Covid has strengthened the political desire for change, it has laid bare the economic case
ByTom Rees
2 August 2020 • 7:00am
The Union and Saltire flags blow in the wind
Support for Scottish independence has risen recently CREDIT: Jeff J Mitchell /Getty Images
Pandemic was, for once, not top of Boris Johnson’s agenda on his flying visit to Orkney last week. To mark an eventful first year in power, the prime minister dashed north of the border to grapple with the prized local crabs and help produce the Scottish islands’ protected cheddar cheese.
Trailed from photo op to photo op by a smattering of pro-independence protesters donned in masks, Johnson was already eyeing the next major battle of his premiership.
The Covid-19 crisis had demonstrated the “sheer might” of the union, Johnson claimed in one of the few parts of Scotland not controlled by the SNPs. The nationalists said the visit smelled of panic and recent polling suggests why nerves in Westminster are beginning to fray.
Support for Scottish independence has risen into the lead in recent opinion polls with one putting those in favour of a breakaway eight points clear at 54pc. Holyrood elections next year could make calls for a second referendum difficult to ignore.
Few disagree that the crisis has helped to advance Nicola Sturgeon’s cause, allowing the First Minister to plot a different course for Scotland through lockdown.
But it has also delivered another blow to an already dubious economic case.
“If there is another referendum, the 2014 line of argument, making the rational case versus the emotional one, is going to be even harder but both still matter,” says Prof Jim Gallagher, a former secretary to the Commission on Scottish Devolution and a Better Together adviser.
“There never was an economic case for independence, there was an emotional case and some nonsense made up to make it sound economically good. That’s even truer now.”
In six chaotic years since the vote, the economic case for independence has been flipped on its head but Scotland has edged further away from the rest of the UK politically.
The economic case has deteriorated on several fronts in 2020. Nationalists claim the SNP’s long-term economic vision is more important but more difficult and pressing questions remain.
First Minister Nicola Sturgeon, wearing a Tartan face mask
First minister Nicola Sturgeon is widely perceived as having dealt with the coronavirus crisis better than Boris Johnson CREDIT: Jeff J Mitchell /PA
The jump in public debt makes the task of stabilising the country’s finances even more tricky. Another oil price crash has exposed the vulnerability of what little revenue the UK still makes from the North Sea. The Covid shock has underlined the importance of fiscal credibility and a proactive central bank.
And Brexit has complicated the calculations further. While the 2014 referendum was dubbed a “once-in-a-generation” chance for the nationalists, they now argue Brexit has radically changed the rules of the game.
“The whole issue comes down to one thing: public sector debt,” says Angus Armstrong, director of Rebuilding Macroeconomics at NIESR and former head of macroeconomic analysis at the Treasury.
“If the debt is divided by population, a newly independent Scotland would start life with a public debt burden of over 100pc of GDP, which would have consequences for its currency options.”
Armstrong says an independent Scotland would have to “work hard to establish financial credibility” and could try to win confidence by running budget surpluses.
Like many governments, the UK’s public debt has skyrocketed to fight the economic fallout of the pandemic, rising from around 80pc of GDP to above 100pc – levels not seen since the Sixties.
Ultra-loose Bank of England policy and bond yields at record lows have capped the debt’s risk while Britain already has a solid reputation on financial markets. The Bank has calmed gilt markets by snapping up hundreds of billions of pounds of UK government bonds. Scotland’s public finances would be on rockier ground, however.
In 2018-19, Scotland’s notional deficit was at £13bn, or 7pc of GDP, and rises to almost 9pc without North Sea oil revenue, the annual Government Expenditure and Revenue Scotland report revealed.
If independent, that deficit, which economists believe would be unsustainable, would be higher than any other developed economy in normal times.
Flagship SNP policies from free tuition fees to free personal care for older people have made independence more alluring for voters but has damaged their fiscal credibility by keeping the notional budget shortfall high. The extra spending has been financed by the rest of the UK.
Armstrong says: “An independent Scotland would start with bigger deficits than the rest of the UK, the same debt burden and you want to use someone else’s currency? Do you really think that is credible?
Read more at
https://www.telegraph.co.uk/business/2020/08/02/economics-independent-scotland-dont-add/
Assuming for the sake of argument that the economics of an independent Scotland don’t add up (and I don't think they do), the Brexit experience does show that people are willing to at least consider political (independence, sovereignty) factors as well as economic.

I'm also enjoying watching the illogicality of the UK government's position that a union is beneficial and essential (UK), except where it isn't (EEA).

Patrick
abelard
2020-08-02 12:58:07 UTC
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Post by RH156RH
me (RH156RH change)
9:57 AM (less than a minute ago)
Telegraph
The economics of an independent Scotland don’t add up
Although Covid has strengthened the political desire for change, it has laid bare the economic case
ByTom Rees
2 August 2020 • 7:00am
The Union and Saltire flags blow in the wind
Support for Scottish independence has risen recently CREDIT: Jeff J Mitchell /Getty Images
Pandemic was, for once, not top of Boris Johnson’s agenda on his flying visit to Orkney last week. To mark an eventful first year in power, the prime minister dashed north of the border to grapple with the prized local crabs and help produce the Scottish islands’ protected cheddar cheese.
Trailed from photo op to photo op by a smattering of pro-independence protesters donned in masks, Johnson was already eyeing the next major battle of his premiership.
The Covid-19 crisis had demonstrated the “sheer might” of the union, Johnson claimed in one of the few parts of Scotland not controlled by the SNPs. The nationalists said the visit smelled of panic and recent polling suggests why nerves in Westminster are beginning to fray.
Support for Scottish independence has risen into the lead in recent opinion polls with one putting those in favour of a breakaway eight points clear at 54pc. Holyrood elections next year could make calls for a second referendum difficult to ignore.
Few disagree that the crisis has helped to advance Nicola Sturgeon’s cause, allowing the First Minister to plot a different course for Scotland through lockdown.
But it has also delivered another blow to an already dubious economic case.
“If there is another referendum, the 2014 line of argument, making the rational case versus the emotional one, is going to be even harder but both still matter,” says Prof Jim Gallagher, a former secretary to the Commission on Scottish Devolution and a Better Together adviser.
“There never was an economic case for independence, there was an emotional case and some nonsense made up to make it sound economically good. That’s even truer now.”
In six chaotic years since the vote, the economic case for independence has been flipped on its head but Scotland has edged further away from the rest of the UK politically.
The economic case has deteriorated on several fronts in 2020. Nationalists claim the SNP’s long-term economic vision is more important but more difficult and pressing questions remain.
First Minister Nicola Sturgeon, wearing a Tartan face mask
First minister Nicola Sturgeon is widely perceived as having dealt with the coronavirus crisis better than Boris Johnson CREDIT: Jeff J Mitchell /PA
The jump in public debt makes the task of stabilising the country’s finances even more tricky. Another oil price crash has exposed the vulnerability of what little revenue the UK still makes from the North Sea. The Covid shock has underlined the importance of fiscal credibility and a proactive central bank.
And Brexit has complicated the calculations further. While the 2014 referendum was dubbed a “once-in-a-generation” chance for the nationalists, they now argue Brexit has radically changed the rules of the game.
“The whole issue comes down to one thing: public sector debt,” says Angus Armstrong, director of Rebuilding Macroeconomics at NIESR and former head of macroeconomic analysis at the Treasury.
“If the debt is divided by population, a newly independent Scotland would start life with a public debt burden of over 100pc of GDP, which would have consequences for its currency options.”
Armstrong says an independent Scotland would have to “work hard to establish financial credibility” and could try to win confidence by running budget surpluses.
Like many governments, the UK’s public debt has skyrocketed to fight the economic fallout of the pandemic, rising from around 80pc of GDP to above 100pc – levels not seen since the Sixties.
Ultra-loose Bank of England policy and bond yields at record lows have capped the debt’s risk while Britain already has a solid reputation on financial markets. The Bank has calmed gilt markets by snapping up hundreds of billions of pounds of UK government bonds. Scotland’s public finances would be on rockier ground, however.
In 2018-19, Scotland’s notional deficit was at £13bn, or 7pc of GDP, and rises to almost 9pc without North Sea oil revenue, the annual Government Expenditure and Revenue Scotland report revealed.
If independent, that deficit, which economists believe would be unsustainable, would be higher than any other developed economy in normal times.
Flagship SNP policies from free tuition fees to free personal care for older people have made independence more alluring for voters but has damaged their fiscal credibility by keeping the notional budget shortfall high. The extra spending has been financed by the rest of the UK.
Armstrong says: “An independent Scotland would start with bigger deficits than the rest of the UK, the same debt burden and you want to use someone else’s currency? Do you really think that is credible?
Read more at
https://www.telegraph.co.uk/business/2020/08/02/economics-independent-scotland-dont-add/
Assuming for the sake of argument that the economics of an independent Scotland don’t add up (and I don't think they do), the Brexit experience does show that people are willing to at least consider political (independence, sovereignty) factors as well as economic.
I'm also enjoying watching the illogicality of the UK government's position that a union is beneficial and essential (UK), except where it isn't (EEA).
uk gov't accounts benefit from brexit...they lose from the union
RH156RH
2020-08-02 20:53:05 UTC
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Apples and orange. Unions have different characteristics
... RH
p***@gmail.com
2020-08-03 15:31:57 UTC
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Post by RH156RH
Apples and orange. Unions have different characteristics
... RH
Yes, unions have different characteristics. However the characteristics of union lauded in the government's white paper - free movement of labour, single market et al - apply to both unions, one of which they have left and one which they're defending. It's chutzpah or blindness

Patrick

RH156RH
2020-08-03 06:14:31 UTC
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← Escaping the European Union (Withdrawal) (No. 2) Act 2019.
How England subsidises the Celtic Fringe
Posted on April 18, 2020by Robert Henderson
Robert Henderson
Population estimates – Office for National Statistics
https://commonslibrary.parliament.uk/research-briefings/sn04033/
Public spending by country and region
Published Friday, December 13, 2019 Philip Brien
This note provides information on levels of public spending per head in the countries and regions of the UK.

Download the full report
Public spending by country and region (PDF, 386 KB)
In 2018/19, public spending per person in the UK as a whole was £9,584. In England, it was £9,296 (3% below the UK average). This compares with:

Scotland: £11,247 (17% above the UK average)
Wales: £10,656 (11% above the UK average)
Northern Ireland £11,590 (21% above the UK average).
Among the English regions, public spending per person was lowest in the South East and East Midlands at £8,601 (10% below the UK average) and highest in London at £10,425 (9% higher than the UK average).

Extrapolations from the official figures
Scotland gets £1951 more than England per capita
Scotland has a population of 5,438,100
£1951 x 5,438, 100 = £10,609,733, 100 more than Scotland would get if their per capita Treasury funding was the same as England’s

Wales gets £1360 more than England per capita
Wales has a population of 3,138, 600

£1360 x 3,138, 600 = £4,268,496,000 more than Wales would get if their per capita funding was the same as England’s.

NI has £2,294 more than England per capita
NI has a population of 1,881,600

£2,294 X 1,881,600 = £4,316,390,400 more than NI would get if their per capita funding was the same as England’s.

Total of the direct annual English subsidy to the Celts £19.3 Billion approx


The English subsidy to the Celts is considerably more for various reasons:

– the tax take of the Celtic Fringe is less per capita than England

– The Barnett Formula

-The large number of English public service jobs which have been exported to the Celtic Fringe.
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