Open Minds on Independence #2: How Scotland’s been tricked into thinking it’s too poor

There are two slight problems with this main Unionist argument. Firstly it’s just not true. Secondly, we are not prospering within the UK. Other smaller independent northern Europe nations are prospering, Scotland isn’t.

It’s is a simple economic fact that Scotland has an embarrassment of economic advantages over the rest of the UK and indeed over almost all the other smaller independent northern European nations that an independent Scotland would be benchmarked against. Just look at Scotland’s natural wealth. The UK Government’s own figures show that with 8.4% of the UK population Scotland possesses between 20% and 34% of the UK’s natural wealth dependent on the price of oil.

Looking to the future we possess 26% of the UK’s renewable energy generation – 90% if it’s hydropower capacity – and a mind-boggling 10% of Europe’s wave power potential, 25% of Europe’s offshore wind resources and 25% of its tidal-energy resources. Before the Westminster Government harmed our economy with its next-to-no-deal Brexit, Scotland also exported £17,456 of goods per head, more than twice the UK’s goods exports of only £8648 per head.

READ MORE: Open Minds on Independence #1: 21 reasons to Believe in Scotland

Of course, that isn’t all Scotland contributes to the UK. We produce double our population share of the UK’s food – about 16.1% – including about 70% of the UK’s fish landings which are now threatened by the mess Westminster has made of Brexit. So why are some Scots voters still worried about our economy? To be frank, they are being lied to by Westminster politicians. Those politicians need to keep Scotland’s economy within the UK as, without our energy resources, oil and gas (regardless of the oil price) and massive trade surpluses effectively subsidising and supporting the rest of the UK, its economy would struggle.

Pretty much the only argument for the Union is contained in the Government Expenditure and Revenue Scotland (GERS) annual report, which those politicians suggests proves that Scotland has a higher budget deficit than in England.

In fact, the report suggests no such thing. GERS is not a set of accounts showing spending in Scotland. It does not tell us anything about the finances of an independent Scotland (it states that very clearly in the report itself). GERS is the state of Scotland’s finances as part of the UK, even with all of these massive economic advantages. If being part of the UK is an advantage why is Scotland poorer than similar-sized independent nations that would kill for our economic advantages and natural wealth?

The answer is that GERS includes spending outside Scotland, spending on debt that was not generated by Scotland and spending that does not benefit the Scottish economy and would not be required in an independent Scotland. In other words, if GERS shows a deficit it is proof that being part of the UK is holding Scotland’s economy back and harming the wellbeing of our nation.

Take, for example, the Public Sector Debt Interest (PSDI), which is the fifth-largest expenditure item for the Scottish Government. This is interest to be paid on UK debt and pays back precisely none of the capital. Regardless of where in the UK the debt was incurred it is distributed among the nations of the United Kingdom, based on population. For most of the period while that debt was being built up, Scotland had no borrowing powers and so could not run up any debt of its own. The Scottish economy has been either in surplus or operating with a lower deficit than the UK.

The UK debt interest allocated by GERS in 2019-20 was £4.5 billion. That doesn’t mean Scotland had to pay that sum to service its own debt. It had no powers to borrow any money at all until 2012 and has had only limited borrowing powers since. The share of the debt bears no relation at all to the spending in Scotland.

Let’s be clear – Scotland does not have a financial deficit, the UK does and it dumps a population share of its deficit onto Scotland’s accounts. If Scotland didn’t have to pay off the rest of the UK’s debt it would have no debt and no deficit at all. We would be as wealthy as Norway, our identical twin nation, which is the wealthiest in the world and has a sovereign pension fund with more than US$1 trillion in assets, including owning 1.4% of all global stocks and shares, making it the world’s largest sovereign wealth fund.

The UK has no sovereign wealth fund and pays the lowest pension in the developed world, as a percentage of final earnings, at retirement. Don’t just take my word for it, leading Westminster politicians don’t deny it, they even make jokes about it. After the last referendum at The Times CEO summit during a Q&A, George Osborne said: “As Finance Minister over the last six years, quite often I’m asked why can’t we be more like Singapore or Switzerland. These are much smaller countries, there are many fewer people living in them. Four million people live in Norway, 65m people live in this country, and they have the same amount of oil as us”.

In comparison, the money generated from Scotland’s oil has been frittered away by Westminster. Former UK Chancellor Dennis Healy was been candid about how the money generated by oil has been misused. “He said oil wealth had been squandered by Westminster rather than invested and underplayed to dampen called for independence”.

READ MORE: Four fascinating findings from the latest Scottish independence poll

He was referring to the UK Government hiding evidence which showed how wealthy Scotland really was. The McCrone report, written in 1974, which stated that an independent Scotland would suffer from an “embarrassment of riches”.

The UK Government, which had commissioned the report, was so worried about the effect of its findings on the Scottish people that it classified it as top secret. We didn’t know its contents until a request was made under the Freedom of Information Act in 2005. If you want to read the full report you can do so here: www.thenational.scot/news/17461406.westminster-doesnt-want-read-mccrone-report-full.

GERS says absolutely nothing about the expected performance of an independent Scotland. Any suggestions that it does are wrong and made simply to undermine our confidence in our own ability to thrive as an independent country.

Westminster has mismanaged Scotland’s economy and with Brexit continues to do so. Norway has the money to invest in its renewables capacity and herald in a new age of green energy-led prosperity as oil and gas reserves reduce over the next 40 years – Scotland will be left with nothing as our wealth went south to London and wasn’t reinvested in Scotland. We missed out on the full benefit of the oil boom, let’s not make the same mistake again by allowing Westminster to fail to invest and reinvest in our economies potential.

Why wouldn’t we want to take control of our own economic resources and the decisions over how best to use them to promote Scotland’s prosperity?