New research conducted on behalf of the Scottish Research Society (SRS) by Walbrook Economics concludes that the cost of Scottish independence has risen from a minimum of £850 for the average Scot in 2014 to at least £2000 in 2017.
The evidence is revealed in a new report “Saving Scotland from Financial Meltdown” published by the SRS, which is an update of its previous report “Much cost – Little benefit” published in advance of the independence referendum of 2014
The large rise in cost is explained by the dramatic fall in oil revenues that an independent Scotland could be expected to receive (from £6660 million in 2014 to £60 million in 2016) and the poorer performance of the Scottish economy – which is on the brink of a recession – relative to the UK economy, which is the fastest growing in the top seven economies of the World (G7).
Commenting on the report its chairman, Cameron Buchanan, said:
“Despite the ‘once in a generation’ claims of the SNP government we are facing the prospect of a second independence referendum. Ewen Stewart, who wrote the acclaimed paper “Much sot – Little benefit” in 2014 was again commissioned by us to look at the economic impact and has written cogently about the risks and weaknesses an independent Scotland would face.
“Saving Scotland from financial meltdown is a factual and tightly argued research paper that lays bare the financial black hole that Scotland’s public finances would face and how this would now cost every Scot at least £2000 per person per year – that could only be found by raising taxes and cutting public services.”
The Scottish Research Society is a pro-Union, non-Party aligned body that seeks to get to the core of current issues that affect the whole of Scotland.
1. A PDF of the report can be found here.
2. A summary commentary of the report is attached below.
3. The SRS website can be found here: http://scottishresearchsociety.com.
4. The salient economic details from the report are:
What would the cost of separation be?
In our paper of 2014 we argued that separation made no sense and would make the average Scot worse off by between £850-1400 per annum. Since then Scotland’s economic position has deteriorated significantly in three principle areas.
• The price of oil has collapsed from over $120 a barrel to $51 today. This has cut North Sea Petroleum Tax revenues from £6.66bn in 2014 (peak £12bn in 2009) to £60m today. That is a ‘hit’ from the 2014 level of £1200 a head.
• Scottish GDP has continued to underperform UK GDP as a whole, thus widening the Scottish scal de cit relative to the rest of the UK. This lack of growth threatens long term prosperity and services. Poor policy choices and a xation on constant constitutional uncertainty from the SNP are largely to blame.
• The decline in educational standards is starting to bite. While this may not greatly impact prosperity in the short term the relative decline of educational standards, compared with the rest of the UK and globally, creates longer term challenges and, if allowed to continue, will impair long term growth. Again the SNP have failed to address this.
The case for separation was weak in 2014. It is even weaker today. We estimate the cost, per head now would be a bare minimum of £2000 a head, very nearly equivalent to the entire expenditure of the NHS in Scotland and very probably substantially more, given the austerity a new Scottish Government would be forced to impose to balance the books, such would be the scale of the spending/ tax revenue imbalance.