Scotland has not created the UK’s debt, but we have to pay for it.
Every year the Westminster Treasury deducts a sum from Scotland’s block funding grant to pay for a share of the UK’s rising debt, none of which Scotland ran up. In the latest figures the amount removed from Scotland budget was £4.02bn or 33% of Scotland’s deficit in 2012/13.
Independent Scotland would have had no debt
If Scotland had been an independent country for the past 33 years (as the UK debt mountain grew) Scotland’s higher revenues would have meant that we would not have had to borrow a single penny. In fact Scotland would by now have a cash surplus of at least £50bn. All of the UK debt was generated outwith Scotland.
Scotland subsidised the UK
Over 33 years Scotland has subsidised the rest of the UK by paying interest on loans we didn’t take out. This enormous subsidy from Scotland adds up to nearly 72 thousand million pounds (at the point of writing this blog) and that subsidy is growing at approximately £127.00 per second (see above).
The press have ignored this, but there is no debate about the figures; they have been sourced from official government reports. Two think tanks – Business for Scotland and the Jimmy Reid Foundation – have published research that proves these figures to be correct.
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1) This £50 billion cash surplus has been described as a conservative estimate by the leading economics think tank the Jimmy Reid Foundation. The figures include the assumption that an independent Scotland would have made all the spending mistakes of Westminster such as having nuclear weapons and it also includes our share of the bank bail out cost – hence one of the reasons the figures are deemed conservative.
2) Scotland’s century of lost wealth This blog describes how prior the publication of reliable historic GERS figures (Scottish accounts, that go back to 1981/2) that Scotland still subsidised the rUK with higher per head tax generation and has done for a century.