The New Fat Scotland 'Thanks for all the Fish' Thread.

TrickyTree83

HAMISH_MCTAVISH wrote: »

This explains it rather succinctly.

http://chokkablog.blogspot.co.uk/2015/02/scotlands-economy.html

At the time of that article's writing the gap was around £6bn.

But around £3bn revenue was from oil.

If we now assume oil revenue as zero the gap becomes £9bn.

Thanks for that.

Having read that this morning it appears that a deficit of £15bn still remains whatever happens, but a target of finding £6bn so that Scotland is no worse off than the UK but still running a £9bn deficit each year.

"Now whether or not Scotland is fully fiscally autonomous (or indeed independent) the economic challenges we face are clear (and largely shared with rUK). To put absolute numbers against this - the GERS deficit for Scotland in 2012-13 was £12.1bn and the Oil & Gas revenues in 2014-15 are likely to be another £3.2bn lower giving us roughly a £15.3bn deficit problem to address.

The graphic below (a work in progress) attempts to put the sources of revenue (in Green) and areas of Expenditure (in Red) is some kind of relative context. All you have to do (given we know the oil & gas number is now much lower) is work out how you might find £15.3bn through higher taxes or lower expenditure to eliminate the deficit.

If that defeats you - on the basis that we appear set on devolving away Barnett benefits and driving to full fiscal autonomy - try and find £6.0bn or so to make us at least no worse off than being within the UK."

This article suggests that the deficit will remain at £9bn (including oil revenues) even if Scotland managed to find £6bn to continue to enjoy services comparable to what Scotland gets now that implies that tax rises are inevitable. Is that not the case when looking at the Scottish economy as it is right now?

Going back to what you said about pulling business away from the UK and how that needs to happen before the UK concludes article 50. It looks like a goal of the UK negotiations will be to keep single market membership and to limit any impact on financial services. As that won't be known until nearer the time a 2nd indy ref in early 2017 will surely jump the starting gun for whether or not business is actually going to leave the UK and travel to Scotland. Should it transpire that the UK gets this access, an independent Scotland will be dealing with this situation without that influx of business and tax revenue you proposed as the solution to this fiscal black hole.

HAMISH_MCTAVISH

TrickyTree83 wrote: »

Going back to what you said about pulling business away from the UK and how that needs to happen before the UK concludes article 50. It looks like a goal of the UK negotiations will be to keep single market membership and to limit any impact on financial services.

And I've stated quite clearly that if the UK retains full single market membership/access there is no need to break up the UK.

However single market membership comes with a lot of issues that the Brexit camp would not be happy with, financial contributions, free movement, etc.

As that won't be known until nearer the time a 2nd indy ref in early 2017 will surely jump the starting gun for whether or not business is actually going to leave the UK and travel to Scotland.

The PM has made it quite clear that the UK govt will seek to agree a desired outcome in the EU negotiations with all relevant devolved govts by the end of this year.

If full single market membership is on the table then I'd suggest Scottish Indy is off the table.

If a limited trade deal is what the UK is after then Indy is firmly back on the agenda.

TrickyTree83

HAMISH_MCTAVISH wrote: »

And I've stated quite clearly that if the UK retains full single market membership/access there is no need to break up the UK.

However single market membership comes with a lot of issues that the Brexit camp would not be happy with, financial contributions, free movement, etc.



The PM has made it quite clear that the UK govt will seek to agree a desired outcome in the EU negotiations with all relevant devolved govts by the end of this year.

If full single market membership is on the table then I'd suggest Scottish Indy is off the table.

If a limited trade deal is what the UK is after then Indy is firmly back on the agenda.

It would appear that SNP supporters/Scottish nationalists don't share this view and that an independence referendum to join the EU as a full member is the minimum they expect? If Nicola Sturgeon wants to hold an independence referendum in early 2017 you'll be asked the question without knowing if the UK has secured that access or not.

I voted leave, but freedom of movement and the contribution (or clawing back ~£250m/£100m w/e per week) doesn't really interest me.

Since the next independence referendum (if it happens) will be on becoming independent to join the EU, something else that isn't in those figures is that Scotland will be required to pay a membership fee to the European Union, whether it would be a net contributor or net beneficiary I don't know, do you?

HAMISH_MCTAVISH

TrickyTree83 wrote: »

It would appear that SNP supporters/Scottish nationalists don't share this view and that an independence referendum to join the EU as a full member is the minimum they expect?

I don't much care what they expect.

The baseline for Indy support prior to the Brexit vote was consistently around 45%.

It's now 53.7% after the Brexit vote - as enough people feel strongly about the EU to move an Indy vote over the line.

But if a deal can be done where Scotland retains full access to the Single Market and almost all of the benefits of EU membership then I suspect Indy support will fall below 50% again and Indy won't happen.

So now it's up to the PM....

HAMISH_MCTAVISH

TrickyTree83 wrote: »

Since the next independence referendum (if it happens) will be on becoming independent to join the EU, something else that isn't in those figures is that Scotland will be required to pay a membership fee to the European Union, whether it would be a net contributor or net beneficiary I don't know, do you?

Doesn't much matter.

Our population share of the EU contribution is already allocated to the Scottish figures I linked to. If we became net beneficiaries it's a bonus.

TrickyTree83

HAMISH_MCTAVISH wrote: »

I don't much care what they expect.

The baseline for Indy support prior to the Brexit vote was consistently around 45%.

It's now 53.7% after the Brexit vote - as enough people feel strongly about the EU to move an Indy vote over the line.

But if a deal can be done where Scotland retains full access to the Single Market and almost all of the benefits of EU membership then I suspect Indy support will fall below 50% again and Indy won't happen.

So now it's up to the PM....

Yes but as I was saying, the SNP with their vested interest appear to be heading for an independence referendum in early 2017, whereas negotiations with the EU will probably only crystalise closer to the end of 2017 - mid 2018 if not even later than that.

The SNP don't appear to want to give the people of Scotland that choice.

TrickyTree83

HAMISH_MCTAVISH wrote: »

Doesn't much matter.

Our population share of the EU contribution is already allocated to the Scottish figures I linked to. If we became net beneficiaries it's a bonus.

That's with the UK concessionary deal though isn't it.

HAMISH_MCTAVISH

TrickyTree83 wrote: »

That's with the UK concessionary deal though isn't it.

And excludes all the business that will be lost and/or increased costs if we leave the single market.

The UK pays in a net £8bn a year but takes £80bn in economic benefits... Scotland would be in a similar position just on a smaller scale.

TrickyTree83

HAMISH_MCTAVISH wrote: »

And excludes all the business that will be lost and/or increased costs if we leave the single market.

The UK pays in a net £8bn a year but takes £80bn in economic benefits... Scotland would be in a similar position just on a smaller scale.

I don't agree, especially when 64% of Scottish trade is with the rest of the UK, including services.

The membership fee will be an additional cost to the Scottish exchequer whilst at the same time damaging trade with almost two thirds of Scottish trade. Tax revenue will drop in an independence scenario, increasing any deficit that already exists. There would need to be a truly dramatic shift from the UK to Scotland or a re-orienting of Scottish trade to the EU in order to just compensate for that, then there's the need to improve upon your current situation to deal with the fiscal black hole that you acknowledge exists.

HAMISH_MCTAVISH

TrickyTree83 wrote: »

Yes but as I was saying, the SNP with their vested interest appear to be heading for an independence referendum in early 2017, whereas negotiations with the EU will probably only crystalise closer to the end of 2017 - mid 2018 if not even later than that.

The SNP don't appear to want to give the people of Scotland that choice.

Again - the UK negotiating position and desired outcomes will be clear by the end of this year - if they enter negotiations in good faith to at least keep Scotland (or the UK for that matter) fully in the single market the there will be no indyref.

If the UK wants to stay in the single market then they will end up staying in the single market. There is no appetite in Europe to exclude them. Pragmatism will win the day.

If the UK govt seeks only a trade deal and will not allow Scotland, NI, Gibraltar, etc, to stay in the SM then a UK break up is the likely outcome.