SNP anger at revelation of Scotland’s £75bn “devolution dividend”

A briefing paper published by the Scotland Office has concluded that since devolution in 1999, spending by both Westminster and Holyrood has outstripped total revenue from across Scotland to the tune of £75.8 billion, in what has been dubbed as a “devolution dividend”.

The paper also found that:

• If Scotland was independent, even if they did receive all North Sea oil and gas tax receipts, it would still have built a £23.5 billion deficit;

• In 2007-08, the last year for which figures are available, combined spending on Scotland by both Westminster and Holyrood equalled 145% of tax raised in Scotland;

• A fiscally autonomous Scotland would have to raise £2,700 from every Scottish household in order to cover UK Government spending on welfare from Scottish tax receipts;

• Welfare spending is the single largest item of expenditure in Scotland, totalling £12.6 billion; and

• UK Government spending makes up roughly 40% of total public spending in Scotland.

Publishing the document, Scottish Secretary Jim Murphy said:

“You don’t need to be an economist to know that Scotland benefits from being part of Britain or that Britain is better because of Scotland. Occasionally it helps however to look at the economics of devolution.

“Scotland has two governments spending billions of pounds of public money and there is a clear and quantifiable ‘devolution dividend’. Scotland gets the best of both worlds from devolution.

“Edinburgh takes decisions on devolved spending priorities while the UK Government continues to invest in priorities like welfare and defence. The UK Government provides help for many of Scotland’s vulnerable when they need it most.

“UK defence spending supports jobs in Scottish shipyards, jobs at RAF bases and jobs at Faslane. Scotland plays a vital part in UK national security and our brave armed forces in Afghanistan are fighting the Taleban alongside their colleagues from the rest of Britain.

“Devolution works for Scotland and trying to undermine it is unpatriotic.”

Responding, the SNP Government in Holyrood dubbed the document a “dodgy dossier”, with a spokesperson for Finance Secretary John Swinney arguing that the numbers on oil and gas revenue were wrong:

“Our oil and gas industry is the only thing keeping the London Treasury afloat. Over the next six years, £50billion worth of North Sea revenues will flow to the London exchequer.

“That alone represents over £20,000 for every household in Scotland.”

Industry body, Oil and Gas UK, estimates that output from UK Continental Shelf could, over the next couple of decades, equal £1.25 trillion under the “right regulatory climate”.

Mr Swinney continued:

“The Scotland Office should change its name to the ‘ministry of anti-Scottish propaganda’, given that its sole purpose these days seems to be issuing fantasy figures that do Scotland down.

“Government Expenditure and Revenue Scotland (GERS) is the official report, and it contains the real figures for 2007-8 – not this inaccurate dross from Jim Murphy.

“The GERS report demonstrates that Scotland recorded a current budget surplus over the three years to 2007-8 of £2.3bn, while the UK ran up a deficit of £24bn over the same period.”

Meanwhile, a spokesperson for the Taxpayer’s Alliance was quoted in The Scotsman as saying:

“The whole issue of English taxpayers subsidising Scotland is huge, especially now we are in recession.

“Whichever party wins the next election will have to implement a huge reduction in public spending, so English taxpayers will not be too happy if the devolution dividend and the unfairness of the Barnett Formula continue.”