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Enough of the Scottish subsidy myth - Scotland pays its way in the Union

Scotland pays its way in the Union - it's time the London commentariat acknowledged that.

The notion that Scottish public services are subsidised by English taxpayers has become so commonplace in UK politics that not even David Dimbleby, the supposedly neutral presenter of BBC Question Time, thinks twice about repeating it. During an exchange on a recent show with Liberal Democrat Jo Swinson about her decision to vote as a Scottish MP to impose tuition fees on English students, Dimbleby said, "You voted for England to have fees, whereas Scotland, as we know, with the amount of money that comes from England, doesn't need to have them."
 
This view is based on the discrepancy between levels of public spending per head of the population in Scotland and England. According to the Treasury's latest Public Expenditure Statistics, Scots gets an average of £10,212 spent on them every year by the UK government, compared with around £8,588 -- £1,624 less -- for people in England.

In line with narrative of the Scottish welfare subsidy, the extra cash allows Scotland to provide its students with free higher education, its elderly with free personal care and concessionary travel, and its sick with free prescription medication, while their English equivalents are forced to go without.
 
This so-called "Union dividend" is also used by many London-based journalists and politicians -- many of whom would describe themselves as social democrats -- who argue that current levels of public expenditure in Scotland would be unsustainable were it to break away and become an independent country.
 
Yet, if the London commentariat took the time to examine the figures a little more closely, they would discover what a large number people north of the border already know: not only does Scotland more than pay its way in the Union, but its overall fiscal position would actually be stronger as a fully sovereign nation.
 
Let's tackle the subsidy charge first. Scots represent 8.4 per cent of the UK's total population, but they generate 9.4 per cent of its annual revenues in tax -- equivalent to £1,000 extra per person. The remaining £624 is easily accounted for by decades of UK government under-spending in Scotland on defence and on other items which are not routinely broken down by region, such as foreign office services.
 
Second, there's the claim that Scotland's "bloated" welfare state could not be sustained outside the Union. This is nonsense. Including its per capita share of revenues from North Sea oil and gas production, Scotland's public expenditure probably does not exceed the OECD average and is almost certainly lower than that of the Scandinavian social democracies. The fact that the Treasury cynically refuses to class those revenues as part of Scotland's overall annual economic output inflates the level of public sector expenditure as a proportion of GDP relative to that of the private sector.
 
Finally, one of the most common -- and least well-considered -- claims made by supporters of the Union is that the 2008 global financial meltdown shattered the economic case for independence. How, they argue, would the economy of tiny, independent Scotland have been able to cope with the burden of debt needed to rescue its financial sector from collapse? It wouldn't, of course, but according to George Walker, professor of financial regulation and policy at the University of Glasgow, Scotland would only have had to take on a proportion of the total cost of the bail-out based on the subsidiaries and business operations of HBOS and RBS in Scotland. This would probably amount to no more than 5 per cent.
 
For the sake of argument, nationalists might also wish to note that Scotland's 2009 - 2010 deficit was, at 6.8 per cent of GDP, a full 3 per cent lower than England's, and that the likely defence expenditure of an independent Scotland would, at around $1.8bn per year in line with Nordic average, be roughly £1bn less than what the UK currently spends on its behalf.
 
But why should Unionists let the economic facts ruin the image they have built up of Scotland as a nation of selfish, indulged welfare "mendicants"?The subsidy myth is too politically useful to be simply abandoned. Of course, if they ever do come to terms with the reality that Scotland could survive on its own - and even prosper - it will probably be too late anyway.

James Maxwell is a Scottish political journalist. He is based between Scotland and London.

Photo: Getty
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Emmanuel Macron can win - but so can Marine Le Pen

Macron is the frontrunner, but he remains vulnerable to an upset. 

French presidential candidate Emmanuel Macron is campaigning in the sixth largest French city aka London today. He’s feeling buoyed by polls showing not only that he is consolidating his second place but that the voters who have put him there are increasingly comfortable in their choice

But he’ll also be getting nervous that those same polls show Marine Le Pen increasing her second round performance a little against both him and François Fillon, the troubled centre-right candidate. Her slight increase, coming off the back of riots after the brutal arrest of a 22-year-old black man and Macron’s critical comments about the French empire in Algeria is a reminder of two things: firstly the potential for domestic crisis or terror attack to hand Le Pen a late and decisive advantage.  Secondly that Macron has not been doing politics all that long and the chance of a late implosion on his part cannot be ruled out either.

That many of his voters are former supporters of either Fillon or the Socialist Party “on holiday” means that he is vulnerable should Fillon discover a sense of shame – highly unlikely but not impossible either – and quit in favour of a centre-right candidate not mired in scandal. And if Benoît Hamon does a deal with Jean-Luc Mélenchon – slightly more likely that Fillon developing a sense of shame but still unlikely – then he could be shut out of the second round entirely.

What does that all mean? As far as Britain is concerned, a Macron or Fillon presidency means the same thing: a French government that will not be keen on an easy exit for the UK and one that is considerably less anti-Russian than François Hollande’s. But the real disruption may be in the PR battle as far as who gets the blame if Theresa May muffs Brexit is concerned.

As I’ve written before, the PM doesn’t like to feed the beast as far as the British news cycle and the press is concerned. She hasn’t cultivated many friends in the press and much of the traditional rightwing echo chamber, from the press to big business, is hostile to her. While Labour is led from its leftmost flank, that doesn’t much matter. But if in the blame game for Brexit, May is facing against an attractive, international centrist who shares much of the prejudices of May’s British critics, the hope that the blame for a bad deal will be placed solely on the shoulders of the EU27 may turn out to be a thin hope indeed.

Implausible? Don’t forget that people already think that Germany is led by a tough operator who gets what she wants, and think less of David Cameron for being regularly outmanoeuvered by her – at least, that’s how they see it. Don’t rule out difficulties for May if she is seen to be victim to the same thing from a resurgent France.

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.