Does Scotland have what it takes be independent?
The question is not whether Scotland can afford to be independent. We have the people, resources and ingenuity to prosper. Instead we should be asking, why isn’t Scotland doing better, given all the natural and human wealth we enjoy?
Being an independent country is all about making Scotland a better place to live, with greater prosperity and higher standards of living. That is the purpose and the reason why so many Scots are passionate about an independent Scotland.
People ask, can we afford to be independent? Many have heard the claim that spending in Scotland is much higher than elsewhere in the UK. What is less well known is that tax revenues generated by Scotland are much higher too.
The 2011-2012 Government Expenditure and Revenue figures show that Scotland got 9.3% of UK spending, but generated 9.9% of UK taxes (due in part to high oil revenues in that year). When we take into account all parts of the financial equation, spending, revenue and borrowing, this means we contributed £4.4 billion more than 'our share'. This pattern has been repeated over the last 6 years: Scotland’s finances have been stronger than the UK. And looking over a period of 30 years, we have had a relative surplus of £19 billion.
The UK government has published figures on Scotland's finances since devolution began in 1999. They showed that Scotland's accounts matched the UK's to within £1 per person for each year. If the UK government were to rerun the same calculations in light of the 2011-12 figures, they would now show that Scotland's public finances have been stronger than the UK's looking at the whole period since devolution.
Taken together, these figures for the most recent years, the devolution years and over a 30 period tell us that Scotland has sufficiently strong financial foundations. These figures are not about forecasting the future, because one of the reasons for becoming independent is to grow our economy faster and improve our financial position. However they do confirm that Scotland is wealthy enough to be an independent nation, if we so choose.
Some people worry that an independent Scotland wouldn’t be able to deal with the high level of debt, but figures released in January 2012 by City firm M&G Investments showed that, at the time, Scotland’s debt as a percentage of national wealth was smaller than the UK’s. For Scotland it was 56%, for the UK 63% - as the report said, Scotland’s starting point looks better than the UK as a whole.
The Scottish Government's Fiscal Commission working group, which includes two Nobel Laureates, has provided updated estimates in February 2013. These look forward to a point after Scotland would be independent. They say that if Scotland assumed a population share of UK public sector net debt, in 2017-18 our debt would be equivalent to 72% of Scotland's national wealth. This would be lower than the equivalent UK figure of 77%.
Thanks to North Sea oil and gas, an asset worth well over £1 trillion, we have one of the best safety nets for the future. The wholesale value of this asset is as much as ten times our share of the national debt.
But oil and gas aren’t our only guarantees for the future. Scotland has 25% of the EU’s offshore tidal and wind energy potential, which will be worth billions every year. For our size, we have the strongest university research base in the world. We have key and growing industries including tourism, food & drink (including whisky), the financial sector, engineering and life sciences. These are firm foundations for success.