The Scottish Deficit Question – How To find £2223 per head?

I keep asking the question below of politicians and keen supporters of Scottish separation, I have yet to receive a reasonable answer that is considered, not a deflection, not abuse and sensible, I’ve not even had the semblance of a sensible debate.

“Which cuts to spending will an iScot make to offset a £15bn annual deficit?”

I think its ignored and avoided as being to direct a question which they do not want to contemplate the possible answers to.

The stock responses are “that is not how Scotland would look if independent”  “Scotland does not have a deficit” “Scotland by UK law must balance it’s budget”

We do of course have a deficit and only those with a lack of knowledge, or who are not prepared to listen, conflate our budget with our income and expenditure, two completely separate things. Our budget reflects devolved spending, not the reality of devolved and reserved total spending. Thats what GERS is, a full account of our income and expenditure.

The hard fact is unless in an iScot we radically changed our spending decisions (or massively increased taxes), the current deficit level would indeed be Scotlands deficit going forward.

The First Minister knows this and has publicly, on many occasions, confirmed we do have a deficit, she acknowledges that at 9% of GDP it is three times the aggregate UK deficit level of 3%.

However, other than the woefully poor White Paper, no attempt to explain how we would manage the deficit has been made by the governing party and main proponents of separation.

I don’t even want, at this stage, to add the additional but undeniable burdens that setup costs, debt servicing costs, currency/central bank costs would add. But, for clarity, if we borrowed at say 3% these together might add another £5bn to our annual spend.

Setup £20bn Debt costs £140bn, currency/bank £10bn £170bn total.

These are definitely arguable figures, but have a look at The Common Weal’s “White Paper 1.0”  to get their take on it.

Common Weal White Paper 1.0

It will roughly be £5bn over say 20 years to borrow this amount ignoring capital payback.

But I’m ignoring that, as it could be 2 or 6 billion, who knows yet.

So, back to the question, how to offset £15bn annually. You may not think it’s £15bn, but, like it or not, our run rate and projections show that it is, its certainly the starting point for an iScot right now.

I know I won’t get answers yet and you won’t see my suggestions here either, I would hate to have to deal with this unavoidable economic reality if I had led a successful separation from the UK, or indeed if I was planning one.

Even to match the spending deficit per head in England we would have to offset £12bn.

Screenshot 2017-08-09 14.27.37

 

For the data used in this blog see the official links below;

UK & Regional Population Statistics

UK Regional Spend Breakdown

UK Regional Deficit Split

To match the UK and ignore about £940 per head of ongoing setup costs, we would need to cut spending (or increase taxes) by £2223 per head, thats tricky, its that amount for every man woman and child in Scotland.

To help, laid out below, is the spend per head in Scotland now, split by all the spending sectors, this will allow you to make your own choices, good luck.

Steve Sayers 17/7/17 updated 9/8/17 – Please share, thanks.

PS if you think defence is the answer, if we eradicate it totally and abandon NATO we would save £625 per head. Stay in NATO? we save zero at required 2% of GDP.

Screenshot 2017-07-17 15.06.50Screenshot 2017-07-17 15.07.01Screenshot 2017-07-17 15.07.13

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