Scotland's oil Print
Written by Dr Madsen Pirie   
Saturday, 03 November 2007
Could Scotland be up there among Europe's richest nations as Alex Salmond suggested, or is it a welfare-dependent basket case? David Leaske and Douglas Fraser report on a special investigation by Scotland's Herald newspaper. They try to scotch (their pun, not mine) five key myths about spending in Scotland. Their case is that public spending per head in Scotland is less than that in London or Northern Ireland, and that the tax take from Scotland is higher than from anywhere else outside London. And
While cities such as Glasgow have high levels of incapacity benefit, the overall welfare bill at £3086 per head is actually lower in Scotland than in swaths of northern England.
Their conclusion is that far from being 'subsidy junkies,' the Scots actually pay their own way.

 Then, of course, there is North Sea oil and gas, and "there is no doubt revenue from the natural resources found in waters off Scotland is being used fill the coffers of the UK exchequer." This is true, and does suggest a way forward. We could end the Barnett formula, perceived by many English taxpayers to be a misuse of their money. In its place we could make up the difference by giving Scotland a much larger share of the oil and gas revenue derived from off its shores.

Even without this, Gabriel Stein has calculated for the Adam Smith Institute that if an independent Scotland pursued a low tax policy like that of the Republic of Ireland, the average Scottish household would soon be £8,000 better off. We think that an independent Scotland could and would be better off financially if it pursued the tax policy advocated by Alex Salmond. It might be time now to adjust the financial strings in a way that allows Scotland to raise and spend more of its own revenue.
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