The UK unionists in the shape of Michael Moore MP, last(?) Sec. of State for (a.k.a. Viceroy of) Scotland, has wheeled out UK Treasury stats like a good boy to prove that, taken over the 30 years North Sea oil has flowed, Scotland has a accumulated a debt of £41bn (see today’s Hootsmon). He appears to have included all elements of income and outlay, including oil (normally conveniently excluded by Whitehall in financial stats).
As a number, £41bn is hard to grasp. More easily conceived is to calculate indebtedness per person = £8,167. Compared to the actual average personal debts in Scotland of £20,000 per head, this amount seems serious but manageable.
But, what of the UK as a whole? The Treasury’s equivalent figure for accumulated debt for all the UK over the same 30 years is £715bn. That’s £11,910 per head, or almost 50% higher than if Scotland had been a country in its own right. The “dividend” for being in this union is that Scots each now have an additional £3,472 of debt. Since Mr Moore thinks that £41bn of debt would scupper Scotland as a country, then how can he think that the UK is viable carrying a burden 50% greater?
Last March, his government set out a budget to spend £711bn with revenues of only £589bn, a deficit of £121bn or a whopping 20.5% shortfall. This is the economics of the madhouse. Anyone in the cabinet responsible for this should not lecture anyone else on economic viability. So, let’s see how Scotland could do better away from such nonsense.
Oil revenues to the UK Treasury this year will total at least £13bn, with $2bn of that new, coming from Osborne’s ‘escalator’ introduced just last March and not in the above figures (for 2009/10). Between higher oil prices and new proven reserves (e.g. BP’s Celtic Sea announcement this week), this scale of revenue is not going away for at least four decades yet.
Scotland’s proportionate (i.e. 7%) share of the UK defence budget is £2.8bn and of debt interest payments is £3.5bn. The Irish defence budget of £0.9bn is small. If Scotland doubled it, that still leaves a total of £3bn per annum (£2bn from the escalator; £1bn off defence) that could be used to repay Scotland’s share of UK debt (7% 0f £900bn = £63bn). Using mortgage payback of £6.5bn per annum, all would be paid off in 15 years.
If we then chose to add the £6.5bn thus freed up to an oil fund annually, in a further 15 years, Scotland would accumulate £100bn, with a decade of oil revenues still to come. Scotland could then enjoy the luxury of an extra £12bn in revenues to spend, without touching the fund itself.
So, in three years’ time, when the referendum question is posed, simply ask yourself this: which would you rather do:
- Stay mired in the deeply indebted world of Osborne, Moore et al where the UK deficit will stay above £1 trillion indefinitely, with some £60bn (equivalent to Scotlands’ total budget) being wasted on interest payments each year, or…
- Follow the path above, be free of debt by 2030 and be sitting on a £100bn nest egg by 2045, dispensing 50% more money on public services and investment per head than our poor English cousins can afford?
By the numbers, it’s a no-brainer.