Economics of Independence

You paid £64 billion of interest on debt Scotland didn’t need


You paid £64 billion of interest on debt that Scotland didn’t need and wasn’t told about.

Independence referendum reporting in some quarters of the press is failing both the people of Scotland and the very reputation of journalism.

Business for Scotland is committed to challenging the media when they distort the truth or spin negative worst case scenarios. The most recent example was this week’s unsourced claims that supermarket prices would rise in an independent Scotland, claims which were immediately discredited both by Business for Scotland and other business people, then by the supermarkets themselves.

Business for Scotland has on a number of occasions provided reasoned fact-based analysis which debunks weak media assertion – see my piece published in the Financial Times.

Yet the platform given to these assertions is dragging down the quality and value of Scotland’s national conversation.  For this reason a substantial proportion of Scots – around 35% according to recent polling – think Scotland is uniquely incapable of success as an independent nation.  This despite the fact that there is ABSOLUTELY no evidence to support that view.

Even the leaders of the self-styled “Project Fear” in the No Campaign, who often originate the negative scare stories, say Scotland would be a successful independent country.  However, when accurate and well thought through economic evidence is provided making the case for independence it often seems to go unpublished.  One such example is the Business for Scotland research that identified the massive cost to Scotland of debt that Scotland did not generate – a total of £64 billion in Westminster borrowing. The story was only covered by a few of the better newspapers. Indeed, unionist commentator Peter Jones writing in the Scotsman went out of his way to suggest our research was flawed but unfortunately he got his facts totally wrong.  To their credit the Scotsman accepted this and printed my response, you can see it below.

The Scottish people need the truth. They need evidence not false negatives. They need facts and figures so they can make up their minds in an informed manner. Anyone who cares about the democratic and societal worth of journalism must surely question both sides of the debate and in doing so begin to highlight the lack of any vision from the No Campaign.

In order to win and protect its special interests, the No Campaign wants to deny Scots the truth. Its strategy of fear is an assault on fair and open democracy itself.  The No Campaign is not a campaign “for the Union” but a campaign against the very confidence and self respect of the Scottish people.  It has to be beaten next year for the sake of every generation to come.

My piece in The Scotsman

The unionist myth that the UK subsidises Scotland is one of the greatest confidence tricks in political history.

In a recent article, “Yes, intelligent analysis is lacking”, Peter Jones furthers the kidology. In so doing, he is guilty of ignoring the facts.

Business for Scotland’s analysis of Scotland’s financial position is based on official government data and has been verified by one of the country’s leading independent economic brains.

It proves two key things. First, that every year for the past 32 years – the period covered by the Government Expenditure and Revenue Scotland (GERS) report – has included a deduction from Scotland’s block grant equivalent to our population percentage share of UK debt. Over that period, that amounted to £64.1 billion.

Second, during that time, had Scotland been an independent country with its geographic share of oil revenues established under international law (as would be the case under independence) Scotland’s borrowing would have been zero.

Ipso facto, Scotland has paid £64.1bn servicing debts it did not need. Bang goes the great unionist myth. Peter Jones claims that my analysis does not consider the interest on debt prior to 1980, but in the footnote of the study he was critiquing it plainly states that this was factored in.

As an independent country Scotland would have enjoyed a massive cash surplus

As an independent country Scotland would have enjoyed a massive cash surplus

Hard though many in the pro-union camp may find it to bear, Scotland subsidises the UK – not the other way round. Unfortunately, the myth has been perpetrated for so long that many people have come to believe it and it has damaged the confidence of Scottish people.

Further, if Scotland inherits a population percentage share of UK debt, that would be 8.4 per cent, but if we stay in the UK and continue to generate 9.9 per cent of UK revenues then we effectively overpay for the debt.

The No Campaign does not like this analysis because it is powerful, solid and the data is correct. It is keen to sustain the great financial con trick because it fits very well with its relentless scaremongering and negativity – but it does not stand up to intelligent scrutiny.

There is no positive analysis or even positive message from the No Campaign, which is one of many reasons why David Cameron is refusing to debate with Alex Salmond.

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About the author

Gordon MacIntyre-Kemp

Gordon MacIntyre-Kemp is the Founder and Chief Executive of Business for Scotland. Before becoming CEO of Business for Scotland he ran a small social media and sales & marketing consultancy.

With a degree in business, marketing and economics, Gordon has worked as an economic development planning professional, and in marketing roles specialising in pricing modelling and promotional evaluation for global companies (including P&G).

Gordon benefits (not suffers) from dyslexia, and is a proponent of the emerging New Economics School. Gordon contributes articles to Business for Scotland, The National and The Huffington Post.


  • In the sentence “Second, during that time, had Scotland been an independent country with its geographic share of oil revenues established under international law (as would be the case under independence) Scotland’s borrowing would have been zero.” do we mean that borrowing would be zero as revenue and expenditure over this period are the same? If so doesn’t this mean that Westminster has allocated exactly the same amount of money for spending to Scotland as all Scotland’s tax revenues including oil revenues (as if Scotland were independent) then notionally just added an amount to service debt?

    • It says in the article that Scotland’s borrowing would be Zero, this is not because expenditure and revenue were the same but because Scotland would have been building massive cash surplus upon which it would have been receiving interest – ipso facto it would have no need to borrow.

  • Grateful thanks for all your information Gordon. My highly intelligent husband requires exactly this level of information because like so many, his focus is on the business case. Our SNP MSP has impressed with responses to his questioning, but there is a limit to the breadth of information even the most diligent of MSPs can assimilate.

  • Excellent piece Gordon with strong analytical, factual information. This type of information needs to get into the mainstream and be repeated and reinforced so that every voter is fully aware of the reality and positive opportunity that is within their power to give to Scotland.
    Without a more “aggressive” campaign, against the negativity and untruths which have blinded a lot of people in Scotland and indeed rUK, I am concerned that the establishment will benefit.

  • All comments on this blog seem to have disappeared – we are looking into it apologies for the inconvenience. Will reinstate when we know why / if we can.

    • my thoughts go out to the people of England and wales, has it not occurred to Westminster they should tell the people south of the border what changes there will be if Scotland votes yes, surely they have a right to know how much they will be better off without us, or more so how much more in tax they will be paying as Scotland were really the ones doing the subsidising.

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