Scotland spending more than we earn

The annual report of Scottish Government and Expenditure for 2004 - 2005 was published today.  I'm not a financial expert by any means, but the top figures tell me a lot about whether or not we should be considering independence.

In 2004 - 2005 Government revenue collected in Scotland (our taxes) was £36.4 billion excluding north sea oil revenue.  If you add all oil revenue in revenue would amount to £41.6 billion.  Now, of course Scotland wouldn't get all the north sea oil revenue so the figure would be lower than that.

In 2004-2005 Government expenditure (devolved and identifiable reserved money) was £47.7 billion.  So, under a best case scenario Scotland would have been £6.1 billion short in 04-05.

So, looking at this with the knowledge that oil revenue will decline over the years, just where would the nationalists get the extra cash?

Comments

[william macvean]

What is spending breakdown .What is earnings breakdown .Who supplied figure's.Are you seriously saying oil rich Scotland would be broke.I presume they are THE same people who worked out cost of Scottish parliament building.

[LeithWalker]

I must say I just don`t trust the figures in GERS. They are out of date and the document is riddled with warnings that the numbers are dodgy.

Its a political document and any idea that its somehow impartial is complete nonsense. Can you show me where the UK or Scotland's independent office of national statistics is?

[Alex Duffy]

What these figures tell me is that after nearly 10 years of New Labour economics, there has been no significant improvement in the Scottsih economy. What proposals do the New Labour Scottish Executive putting forward address this issue? Vote for us, you know it will be the same in another 10 years.

[Grant Thoms]

Could you please do the same analysis of the UK deficit? I think you'll find that having a deficit is a normal thing for most countries - though not necessarily healthy in the long run. GERS tends to reflect the UK budgetary position but doesn't allow for how alternative government's would manage their affairs and certainly hides the unidentified govt expenditure for defence which is mainly spent in the Home Counties.

[Stephen Hollinshead]

The substantial part of the £41.4 billion in all oil revenue comes from duty and VAT on petrol and diesel sales making up roughly 75% of the total, Scotland would only be entitled to the duty and VAT on sales of petrol and diesel in Scotland, which makes up less than £3 billion. Conceding that most North Sea oil is in Scottish waters, but Gas is mainly in English waters, Scotland would have to import gas. I believe under UN convention for borders the line it would follow is that of the land border so in the North Sea the border between Scotland and England would run on the north side of the Arbroath oil field. There is also the point to remember in an independent Scotland, Scotland although Scotland would have the oil revenue it would have to pay the pensions and benefits which is currently paid by Westminster and not part of the money sent to Scotland at present, there is no pension fund which can be split it is paid for out of current taxation. There is also the cost of EU membership which is currently just over 1% of GDP so there would go another £900 million, then there is UN membership and the other black hole which is funding of the rail network in Scotland which runs into billions, this would all have to come out of revenue raised in Scotland. If Scotland wanted to continue having armed forces, working on the current budget for UK's armed forces Scotland would be looking at a bill of £3.4 billion and the list goes on. Remember the funding Scotland currently gets is roughly equivalent to the money it raises in taxation and revenue all above which were mentioned are extra as would be any other powers that still remain at Westminster and would have to be paid for. Another hidden cost for Scotland would be the increased postal costs as Royal Mail(SCotland would not be able to subsidise the rural nature of a lot of Scotland with money especially from the more urbanised England, similarly I suspect the TV license fee would also have to increase.