BBC view: Scotland is a subsidised nation

It is now understood in Scotland that we put more in to the Union treasury than we receive back in our block grant.

However over my lifetime it has been maintained in the popular press, media and Westminster that Scotland is subsidised by the UK treasury.

Wilful ignorance and intellectual conceit as always play a significant roll in maintaining such a magnificent deceit on a population.

As Only 1 in 10 MPs can understand how money is made and consequentially how our economy functions, it comes as no surprise that Parliament have little interest in the actual truth of the mater regarding the Scottish fiscal relationship in the Union.

They instead amplify rhetoric regurgitating statistical per capita spending differentials through out the UK as seen by Crispin Blunt the house of commons on 14/10/14.

To date I have seen no legitimate arguments made to counter the proposition that Scotland is in fact a net contributor to the UK treasury.

Yet after the referendum the same old talking points that perpetuate the Subsidy myth are regurgitated in the same manner as before the referendum.

The BBCs economics editor today Robert Preston chooses to frame the economics of the UK union purely in terms of equivalent public spending figures and talks of “how far this would bringing an end to the subsidy of Scotland”

So what is used to maintain this myth.?
Well as I have pointed to so far it is the use of

per capita public spending

If this is all news to you and you believed Scotland is still a net drain on the UK treasury I would suggest you widen your reading materials.
We now live in a Scotland that requires you to educate yourself.

I would start with a presentation by Ivan McKee.

Key points. GERS (2011-12) (billions)

image

Scotland is running a deficit. But the UK runs a significantly higher deficit.

Per capita income.
image

So we have higher income and higher expenditure.
image
So yes we do receive a higher per capita spending
Scotland’s per capita spending is £1,215 higher than the UK.

But

Scotland’s per capita income tax raises £1,687 . so more than the UK average.

So our Scottish per capita contribution / subsidy to UK treasury was for GERS 2011-2012 was this.

Per capita we in Scotland contributed to the Westminster Treasury
£1687

Per Capita we spent
£1212

=

Scotland subsidised the UK that year by £472 per capita.

So when it is proposed that Scotland spends more on public services it is true.

But it is never mentioned that we raise more in taxes than we receive for public spending.

Because MPs and the Media focus on predominantly English issues they are served by constantly pointing out that Scotland receives more public spending than England. They do not care at all that we pay nearly £1,700 more tax per capita to the Westminster exchequer than England do.

GDP. GERS 2011-2012
image

We create %18 more GDP per person in Scotland that the UK average.

Even without the oil and gas money we would only be 1% short of the UK average.

But it is how our Debt and Deficit compare with our GDP that is used to
Qualify our relative position as an economy.
image

Average Debt / GDP ratio for industrialized country’s is -6.5%

So a wee % summary of Scotland’s economic contribution to the UK
image

So Scotland has 8.4% of the UK population but generates 9.9% of UK revenue. In return Scotland gets 9.3% of public UK public spending.

If we received back our 9.9% income as 9.9% expenditure that would be an extra 4.4 billion to spend on Scotland.

For the last 30 years this characteristic has been true. Scotland has put more in to the union than it has received.

Professor of Economics, Andrew Hughes Hallett Estimated the since 1980 Scotland has contributed £150 billion more to the UK treasury than it receives back.

Further responses to Robert Preston on Bellacalidonia

And an interview with Prof Andrew Hughes Hallet

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