Indyref2: Scotland will face economic challenges, according to an expert
David Blake, Professor of Economics at City, University of London, was speaking on the day the Scottish Government released the Scottish Government’s (GERS) annual expenditure and revenue figures. These indicate that the country’s budget deficit more than doubled to 22.4% of GDP in 2020/21, the highest annual figure since the government’s annual accounts began two decades ago.
Reflecting the impact of the pandemic, spending rose 21% over the year, while average public spending per capita also rose above the UK average of £1,828.
The Scottish prime minister insisted: “Having a deficit – obviously – is not an obstacle to the independence of a country in the world.”
In an apparent attempt to blame London, Ms Sturgeon said: “Scotland’s financial situation is now a hallmark of the way it is governed in the UK, does nothing to indicate what the UK will look like. One Living in an independent Scotland. And there is no reason why Scotland, as an independent country, does not have the potential to be as successful as countries around the world – many of which, of course, have far fewer resources than Scotland There are more features.”
Nicola Sturgeon’s Scotland will struggle outside Boris Johnson’s UK, Professor Blake has said (Image: GETTY)
Nicola Sturgeon with Scotland’s new Capricorn or Nation poet Kathleen Jamie today (Image: GETTY)
However, Mr Blake was not at all convinced of his arguments, especially in the context of the SNP’s pursuit of independence and its stated goal of joining the European Union.
He said: “The Scottish National Party has an answer to the question: who would pay the bonus if Scotland became ‘independent’ and joined the European Union?
“Do they expect Poles, Hungarians and other Eastern European countries – where wages are much lower than in Scotland – to pay on their own? Somewhere, I don’t think so.
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The potential cost of Scottish independence (Image: EXPRESS)
“Scotland is really expected to be a net contributor to the EU – paying membership fees of around £1 billion a year.”
Professor Blake asked why the SNP expected Brussels to join Scotland ‘with open arms’ given the size of the budget deficit, given that a maximum of 3% was allowed under Maastricht rules.
He added: ‘Furthermore, it is estimated that Scotland’s share of the UK’s net liabilities is around £300bn, or 200% of its current GDP.
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Ursula von der Leyen, President of the European Commission (Image: GETTY)
Construction workers in Warsaw, Poland – where wages are lower than in Scotland (Image: GETTY)
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“This compares to the maximum allowed under Maastricht rules of 60% of GDP. Will the EU allow Scotland to bear this level of debt?
“But, of course, the SNP never answers these questions – because it cannot.
“It’s living in a fantasy world where a fairy godmother will send a check for £2,210 to everyone living in Scotland. Dream.”
Professor Blake insisted: “The benefits of being part of the UK from tackling the Covid crisis have been clearly shown.
Nicola Sturgeon fact sheet (Image: EXPRESS)
“Not only were we ahead of the curve in terms of vaccine development and deployment (the world’s first vaccine was delivered in the UK), we were also able to find the financial resources to cover the economic fallout.
“Paying for the National Health Service and the scheme that paid 80% of workers on leave, which covers 930,000 Scottish workers.”
In the case of Scotland, the Scottish government spent £99.2bn on critical public services during the crisis, or 9.1% of the UK’s total public spending, while the Scottish population accounted for just over 8.2% of the British population, Professor Blake said.
He added: “In contrast, tax revenue collected in Scotland was only £62.8 billion, or 7.9% of the UK’s total.
AstraZeneca was developed in collaboration with the University of Oxford (Image: GETTY)
“The difference between expenses and taxes would have been financed by borrowing from the British government.
“This has resulted in a massive deficit of £36bn in Scotland’s budget, equivalent to 22.4% of GDP.
“This is eight percentage points higher than the UK-wide deficit which equals 14.2% of GDP.
“This equates to a bonus of £2,210 for every person living in Scotland.”
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