Dream on, Nicola! Sturgeon living in ‘fantasy land’ as dire £300BN national debt laid bare
Indyref2: Scotland would face economic challenges says expert
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David Blake, Professor of Economics at City, University of London, was speaking on the day the Scottish Government published its annual Government Expenditure and Revenue Scotland (Gers) figures. These indicated the country’s budget deficit had more than doubled to 22.4 percent of GDP in 2020/21, the highest yearly figure since the Government’s annual accounts began two decades ago.
Spending increased by 21 percent during the year, reflecting the impact of the pandemic, while average public spending per person also rose to £1,828 above the UK average.
Scotland’s First Minister insisted: “Having a deficit is not – self evidently – a barrier to any country in the world being independent.”
In an apparent attempt to shift the blame to London, Ms Sturgeon added: “The fiscal position of Scotland now is a feature of how we’re governed within the UK, it is not any indication of what life would be like in an independent Scotland and there is no reason whatsoever that Scotland as an independent country wouldn’t have the same ability to succeed as countries across the world – many of whom, of course, have far fewer resources, and attributes than Scotland.”
However, Mr Blake was entirely unconvinced by her arguments, especially in the context of the SNP’s quest for independence and her stated aim of rejoining the European Union.
He said: “The Scottish National Party has the answer the question: who would pay for the bonus if Scotland became ‘independent’ and joined the European Union?
“Are they expecting the people of Poland, Hungary and the other countries of Eastern Europe – where salaries are much lower than in Scotland ‒ to willingly pay up? Somehow, I don’t think so.
“Scotland would actually have to be a net contributor to the EU – paying a membership fee of nearly £1billion per annum.”
Prof Blake asked why the SNP expected Brussels to let Scotland join “with open arms”, given the size of budget deficit, given the maximum allowable under Maastricht rules was three percent.
He added: “Further it has been estimated that Scotland’s share of UK net liabilities is around £300billion, or 200 percent of its current GDP.
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The SNP never answers these questions – because it can’t
Professor David Blake
“This compares with a maximum allowable under Maastricht rules of 60 percent of GDP. Will the EU let Scotland in carrying this level of debt?
“But, of course, the SNP never answers these questions – because it can’t.
“It is living in a fantasy world where some fairy godmother will send a cheque for £2,210 to every person living in Scotland. Dream on.”
Prof Blake emphasised: “Dealing with the Covid crisis clearly showed the benefits of being part of the United Kingdom.
“Not only did we have a head start in terms of vaccine development and roll out ‒ the world’s first vaccine was given in the UK ‒ we could also find the financial resources to cover the economic fallout.
“Such as paying for the National Health Service and the scheme which paid 80 percent of furloughed workers, including 930,000 Scottish workers.”
In Scotland’s case, the Scottish Government had spent £99.2billion on vital public services during the crisis, amounting to 9.1 percent of total UK public expenditure, whereas Scotland’s population was only 8.2 percent of the UK population, Prof Blake said.
He added: “By contrast, tax revenues collected in Scotland amounted to only £62.8billion or 7.9 percent of the UK total.
“The difference between spending and taxes had to financed by borrowing by the UK Government.
“This resulted in a huge deficit of £36billion in Scotland’s budget – which equals 22.4 percent of GDP.
“This is eight percentage points higher than the UK-wide deficit which equals 14.2 percent of GDP.
“It is equivalent to a bonus of £2,210 for every person living in Scotland.”
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