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Montevideo, February 20th 2019 - 11:35 UTC
Irish Foreign Minister Simon Coveney has warned that the UK cannot afford to leave the EU without a deal. Speaking to the Today Program Mr Coveney described talk of the UK crashing out of the EU as bravado. Read full article
You are going to have to eat those words Mr Coveney and soon.
You meant to say Ireland can’t afford a no deal, but you’re still blocking a deal!
What would be the point of extending this farce for any longer than it has to go on for?
Tick tok, tick tok.
Buy northern ireland from the brits, reunite the country and go your own way.
Lets get this 'no deal' Brexit done and dusted on 29th March as planned. Cant wait ! Scottish Independence is inevitable now.
Difficult to see how when the country runs a £16Bn deficit, and rising, and that is just on the current spend.
Takes no account of the additional costs of running a country such as a diplomatic service, EU membership fees, a defence budget, state pensions etc. etc.
Simply not viable, overnight Scotland would be easily the poorest country in Europe.
chronic i.e pathological
“Buy northern ireland from the brits, reunite the country and go your own way.”
Oh! you mean that they should tear up the 'Good Friday Agreement' and ignore peoples right of 'self determination'
What an idiot.
That is a terrible argument. Ireland is comparably sized and populated to Scotland and manages to pay for all those things, and Scotland is already paying for a share of them as part of the UK. As for poorest country in Europe, Moldova has a per capita GDP of US$2280, and no, I didn't miss off a digit.
Why do you suddenly go all 'project fear' when the subject is Scotland's exit?
Clearly Ireland has more revenue or less spending or both.
When I say deficit I mean total income (all tax and revenues) vs total spend.
Or put another way Scotland spends £16bn pounds more every year (and rising) than its TOTAL income from everything payed in Scotland.
An independent Scotland would have to fund a lot of extra costs (it doesn’t have now) if it were independent. On top of its existing deficit.
These are the facts, no point in getting all emotional that won’t change them.
Emotional? You are the one claiming Scotland would be the poorest country in Europe. Please stick to the realm of the remotely plausible.
How about you list some of those extra expenses, with cost estimates, then we can judge if they are significant besides the existing deficit. Obviously, Scotland would need to cut spending or increase revenue if they became independent (though the UK as a whole currently has a significant deficit, so it doesn't necessarily have to be cut to zero immediately). But that in no way stops it from being a viable country.
“Takes no account of the additional costs of running a country such as a diplomatic service, EU membership fees, a defence budget, state pensions etc. etc.”
Basically the cost of everything needed to run a country which the Scot Gov does not already pay for like agricultural payments, a civil service. All non-devolved matters where there is a cost attached, which would be pretty much all of them.
Ireland would probably be a worthwhile comparison in terms of what it spends on “being a country”.
It’s going to be in the many 10s of billions, at the very least.
To run a deficit as an independent country you need at the very least a viable currency. Sheckles or Saltars anyone!
£16bn deficit with a 5 ½ million population means a £3,200 reduction in spending/increase in revenue for every single person in Scotland p/a.
Not viable before you add in the additional costs of running the country.
And as I already said, they are already paying for most of these as part of the UK. Defence would probably be a saving for Scotland as they would not join Nato and wouldn't aim to spend 2% of GDP. EU membership costs would also be the same as currently, or even lower, as the balance of payouts to membership fees would be in Scotland's favour. State pensions would be interesting as many Scots have spent time working in the RUK, and vice versa, but they would be paying them from current taxes, just like the UK does currently, so it's not a new cost. The diplomatic service is the only thing you've mentioned that would really be an additional expense, so the question is how much comparable countries spend on this.
Personally I think the disruption to trade and extra expenses of disentangling Scotland from the UK would dwarf anything else for quite a few years.
As for the currency, there are a few options, none of them good: either they keep the pound with no control over it, or create a new currency, possibly pegged to the pound temporarily, or to the Euro with a view to joining it later (which is technically compulsory if they want to rejoin the EU).
As a new country Scotland would surely have to pay a higher interest rate to borrow than the UK does, which would mean unpleasant austerity. The size of the issue depends greatly on what kind of deal might be done on the national debt. Anyway, if they had to drastically cut services and increase taxes they could do so. It would be unpleasant, but obviously you think it is worth suffering financially to be free of the EU, I daresay some Scots think the same about the UK.
You’re not getting this are you, every penny collected in Scotland from all sources of revenue in Scotland, is being spent in Scotland plus another £16bn from the rest of the UK.
They are not paying anything towards UK costs, zip, nada, zero.
Costs that they would have to pay as an independent country, as well as manage the deficit.
Few Scot are going to think that level of suffering is worth it.
Crystal ball says there will be no call for a referendum until the economics change.
Hence dear Nicola, a referendum is on the table, definitely an option, a referendum is definitely an option on the table, let no one be in any doubt, it is on the table, an option, table, referendum, etc etc ad infinitum ad nauseum.
No, you are not getting it. When they calculated that deficit, they included in the spending side of the equation an appropriate share of all UK expenses - defence, pensions, education, international services, national debt interest, everything. So they are already covered, you are trying to count those items twice.
As for what Scots think, maybe they are tired of experts telling them they'd be poorer if they voted for independence. Plus there's all those English people moving in and changing the culture, and they'd have that extra £350m oil money to spend on the NHS every week if they were independent, too.
The calculation is money raised in Scotland vs money spent in Scotland, nothing else is included in that, no “appropriate share” allocation is made for anything in the sum.
Or it would be, money raised in Scotland minus UK contribution vs money spent in Scotland.
When you spend more than you receive you are a net cost and contribute nothing.
Wrong. Here is a link to the GERS report for 2016-17, showing an overall deficit of £13.3 bn (somewhat less than you claimed), and listing in great detail what is included in the calculations.
The summary showing the total deficit:
This is the difference between total revenue and total public sector expenditure including capital investment. The net fiscal balance:
Excluding North Sea revenue, was a deficit of £13.5 billion (9.0 per cent of GDP).
”Including an illustrative geographic share of North Sea revenue, was a deficit of £13.3 billion (8.3 per cent of GDP).”
And here is the section on expenditure showing that all the things I mentioned are included:
I'm afraid that estimating Scotland's fiscal balance is in fact very complicated, but the conclusions are simple enough; if Scotland was independent it would need to borrow £13.3bn per year, or else raise taxes or cut spending to cover the shortfall. That is already a problem, you don't need to add any mythical extra expenses.
“And here is the section on expenditure showing that all the things I mentioned are included:”
Errr no its not.
It is a list of:
“Total expenditure for the benefit of Scotland by the Scottish Government, UK Government, and all other parts of the public sector was £71.2 billion.”
It is a list of money spent in Scotland by both Governments, not Scotland’s contribution to any UK budgets/spending.
Should have read the start, then you would have known what you were looking at.
It’s like this the total revenue does not cover the total expenditure in Scotland by the Scottish Government, UK Government, never mind contribute to UK Gov spending anywhere else.
An independent Scotland would have to not only make up its deficit and the loss of both UK and EU funding, it would also have to find the money for everything else mentioned you need to run a country.
Like I said not viable.
You should have read more than the start, this is what it says about calculating expenditure:
Public sector expenditure is estimated on the basis of spending incurred for the benefit of residents of Scotland. That is, a particular public sector expenditure is apportioned to a region if the benefit of the expenditure is thought to accrue to residents of that region.
This is a different measure from total public expenditure in Scotland. For most expenditure, spending for or in Scotland will be similar. For example, the vast majority of health expenditure by NHS Scotland occurs in Scotland and is for patients resident in Scotland. Therefore, the in and for approaches should yield virtually identical assessments of expenditure. However, for expenditure where the final impact is more widespread, such as defence, an assessment of 'who benefits' depends upon the nature of the benefit being assessed. Where there are differences between the for and in approaches, GERS estimates Scottish expenditure using a set of apportionment methodologies, refined over a number of years following consultation with and feedback from users.
The for approach considers the location of the recipients of services or transfers that government expenditure finances, irrespective of where the expenditure takes place. For example, with respect to defence expenditure, as the service provided is a national 'public good', the for methodology operates on the premise that the entire UK population benefits from the provision of a national defence service. Accordingly, under the for methodology, national defence expenditure is apportioned across the UK on a population basis.
As you can see, it explicitly says it is NOT counting only money spent in Scotland, but includes for example a population weighted share of defence spending.
Should have kept reading.
Other UK government spending
Other government includes all parts of the public sector not funded by the Scottish Government or Scottish local authorities. This includes spending by:
• UK government departments, such as social security spending by the
Department for Work and Pensions, defence spending by the Ministry of
Defence, and debt interest expenditure by HM Treasury;
• UK government bodies, such as Network Rail and the security and
• UK public corporations, including the Bank of England;
• Local government in England, Wales, and Northern Ireland.
Then there is this:
Table 3.2: Expenditure growth: 2015-16 to 2016-17 (£ million)
2015-16 2016-17 Growth UK growth
Current expenditure 62,135 63,188 1.7% 1.3%
Scottish Government 23,387 23,922 2.3% 2.3%
Local Government 12,360 12,425 0.5% -0.4%
Public Corporations - - - -
Other UK Government bodies 26,387 26,841 1.7% 1.8%
Capital expenditure 6,913 8,021 16.0% 10.6%
Scottish Government 1,982 2,107 6.3% 6.3%
Local Government 1,727 2,086 20.8% 4.9%
Public Corporations 1,011 1,563 54.7% 20.6%
Other UK Government bodies 2,193 2,264 3.2% 9.5%
Total expenditure 69,048 71,209 3.1% 2.2%
Scottish Government 25,369 26,029 2.6% 2.6%
Local Government 14,087 14,511 3.0% 0.1%
Public Corporations 1,011 1,563 54.7% 20.6%
Other UK Government bodies 28,581 29,105 1.8% 2.4%
According to this in a budget of £71bn, £29bn is Other UK Gov spend.
Like I said not viable.
Why are you so determined to misinterpret what the report clearly says? Other UK government spending is listed in the report precisely because they include it when calculating the deficit.
Spending on defence, public sector debt interest, and international services, which Scotland is allocated a population share of in GERS, is taken directly from PESA.
They simply can't be any clearer that those things are already included in the headline figure.
Now can we please stop wasting time on this and look at the reality of the situation? Obviously it would be infeasible for Scotland to become independent with a deficit of 8% of GDP. Cutting their spending to the average UK level would be a good start, and it must be possible, because the rest of the UK manages to survive. The question is how painful this would be, and how much would it affect Scotland's economy? Greece-style austerity that causes endless recession would NOT be an acceptable result, and the separation in itself would surely have unpleasant consequences for both sides (much like Brexit), that may be temporary or permanent.
I don’t think that report accurately shows the deficit:
These guys make it £15bn, others make it more.
Although it is somewhat academic, you’re right even at £13bn it unfeasible.
UK levels of spending would prove difficult in Scotland just look at NHS costs per patient, apart from the central belt country is mostly space, the cost in parts like the “Highlands and Islands” must be considerable.
This applies for a whole range of things, policing, education, almost anything you think of.
Don’t think it’s going to arise though, Scots are very unlikely go that way, and dear Nicola knows that very well, hence her threats of an Indyref2 are quite laughable, at the moment.
No doubt that would change with a change in the economic/fiscal situation.
Strange that that site gives a different figure, since it references the GERS report, but maybe they are using the UK government's estimate. At any rate, their description of how it is calculated is similar.
GERS is the report I have seen referenced the most, and I think it's the best one to use since it was prepared by the Scottish government and therefore harder for the nationalists to dismiss as UK propaganda.
I agree about higher costs in Scotland, it's not like they are just having a party with the extra money. Ireland has no NHS, though they do have some sort of health care, but I'm sure Scotland wouldn't be willing to give that up. There are some obvious areas for savings, eg forcing students to pay tuition fees like in England, and cutting military spending. They could also save on public sector spending by privatising utilities like water, or increasing the charges for them. A big unknown area is demographics. If independence resulted in more educated young people staying in Scotland, that would benefit the economy by increasing tax revenue, and those lightly-populated areas are probably some of the few in the UK that would really benefit from higher immigration. On the other hand, if the economy tanked it could all go the other way, with young people leaving to work elsewhere and a higher proportion of dependants remaining. That is what happened in Ireland for many years after independence.
Anyway, I think there is a pretty high chance of seeing a second referendum within a few years, depending on how disastrous Brexit turns out to be. IMO there are 3 main things stopping it now: the low price of oil, referendum fatigue, and the natural overlap between Brexit supporters and Independence supporters in Scotland.
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