The Times says:- "ENGLAND’S GREAT RIVER OF CASH KEEPS NATIONS AFLOAT"!

 

The Times says:- ENGLAND’S GREAT RIVER OF CASH KEEPS NATIONS AFLOAT

 

On Sunday David Smith, the Economics Editor of the Times wrote in the Sunday Times (24.2.21) this article which I thought was important enough to reproduce here so that everyone can read it. 

 

Here is the article:-

 

“ENGLAND’S GREAT RIVER OF CASH KEEPS NATIONS AFLOAT

 

The tide has turned politically in favour of independence in Scotland but the economics remains firmly against it.  As part of the UK, Scotland’s high levels of public spending are, in effect, subsidised and made possible by English taxpayers, particularly those in London and the southeast.

 

The picture for the UK, confirmed in figures from the Office for National Statistics, is that London, the southeast and the east of England are the big revenue generators.

 

In a normal year, they all run budget surpluses, while every other region and nation runs a deficit, in some cases a substantial deficit.

 

The Scottish government’s own figures, contained in its annual government expenditure and revenue Scotland exercise (Gers), tell the story in 2019-20, the last fiscal year, public spending per head of population in Scotland was £14,829, 12.4 per cent above the UK average of £13,196. 

 

In contrast, revenue raised in Scotland, including a so-called geographical share of North Sea oil (Scotland receives the oil that would fall within its notional share of the UK North Sea), is below the UK average. Scottish revenue per head in 2019-20 was £12,058, 2.5 per cent below the UK average of £12,367.

 

The difference between spending and revenues is borrowing, or the budget deficit, and even before the great explosion of borrowing in the current fiscal year as a result of the coronavirus crisis, Scotland had a budget deficit of more than £15bn.

 

Expressed as a percentage of gross domestic product, the Scottish deficit was 8.6 per cent, compared with 2.5 per cent for the UK as a whole; more than three times as big.

 

Supporters of independence say these figures bear no relation to what the state of the public finances would be for an independent Scotland, but it is hard to see why.  To make its public finances manageable, Scotland would have to reduce public spending significantly or raise more in taxes.  The Gers figures were used as the basis for the work of the Scottish Fiscal Commission, established by the SNP (Scottish National Party) administration.

 

For Wales and Northern Ireland, where the political picture is different in terms of support for breaking away from the rest of the UK, the economics is also against any such move.

 

Wales, the poorest part of the UK with the exception of northeast England, has lower public expenditure per head than Scotland, but also the lowest level of revenue per head in the UK.

 

In 2018-19, the latest year for which official figures are available, Welsh spending per head was £13,698, 6.7 per cent above the UK average for that year.  In contrast, revenue per head in Wales was £9,391, just 77 per cent of the UK average.  An independent Wales would have an even bigger budget deficit per head than Scotland.

 

There is a similar picture for Northern Ireland.  It combines the highest public spending per head in the UK – more than 15 per cent above the UK average – and low levels of revenue.  Its budget deficit per head is the biggest of any part of the UK, according to ONS figures.

 

This raises an additional issue for Northern Ireland.  Those who favour breaking away from the rest of the UK would want, not independence, but reunification, a united Ireland.  But the Irish economy, less than a seventh of the size of the UK, could not take on the burden of high-spending Northern Ireland.

 

A united Ireland would require a very long engagement and, in all likelihood, a substantial dowry for Northern Ireland to take with it from the British Government.  There would have to be a big shift in the policy position of the Westminster parties for that to be possible.”

 

Here is a link to the pay walled original article >>> https://www.thetimes.co.uk/article/englands-great-river-of-cash-keeps-nations-afloat-t95q65567

 

 

 

 

 

On Sunday David Smith, the Economics Editor of the Times wrote in the Sunday Times (24.2.21) this article which I thought was important enough to reproduce here so that everyone can read it. 

 

Here is the article:-

 

“ENGLAND’S GREAT RIVER OF CASH KEEPS NATIONS AFLOAT

 

The tide has turned politically in favour of independence in Scotland but the economics remains firmly against it.  As part of the UK, Scotland’s high levels of public spending are, in effect, subsidised and made possible by English taxpayers, particularly those in London and the southeast.

 

The picture for the UK, confirmed in figures from the Office for National Statistics, is that London, the southeast and the east of England are the big revenue generators.

 

In a normal year, they all run budget surpluses, while every other region and nation runs a deficit, in some cases a substantial deficit.

 

The Scottish government’s own figures, contained in its annual government expenditure and revenue Scotland exercise (Gers), tell the story in 2019-20, the last fiscal year, public spending per head of population in Scotland was £14,829, 12.4 per cent above the UK average of £13,196. 

 

In contrast, revenue raised in Scotland, including a so-called geographical share of North Sea oil (Scotland receives the oil that would fall within its notional share of the UK North Sea), is below the UK average. Scottish revenue per head in 2019-20 was £12,058, 2.5 per cent below the UK average of £12,367.

 

The difference between spending and revenues is borrowing, or the budget deficit, and even before the great explosion of borrowing in the current fiscal year as a result of the coronavirus crisis, Scotland had a budget deficit of more than £15bn.

 

Expressed as a percentage of gross domestic product, the Scottish deficit was 8.6 per cent, compared with 2.5 per cent for the UK as a whole; more than three times as big.

 

Supporters of independence say these figures bear no relation to what the state of the public finances would be for an independent Scotland, but it is hard to see why.  To make its public finances manageable, Scotland would have to reduce public spending significantly or raise more in taxes.  The Gers figures were used as the basis for the work of the Scottish Fiscal Commission, established by the SNP (Scottish National Party) administration.

 

For Wales and Northern Ireland, where the political picture is different in terms of support for breaking away from the rest of the UK, the economics is also against any such move.

 

Wales, the poorest part of the UK with the exception of northeast England, has lower public expenditure per head than Scotland, but also the lowest level of revenue per head in the UK.

 

In 2018-19, the latest year for which official figures are available, Welsh spending per head was £13,698, 6.7 per cent above the UK average for that year.  In contrast, revenue per head in Wales was £9,391, just 77 per cent of the UK average.  An independent Wales would have an even bigger budget deficit per head than Scotland.

 

There is a similar picture for Northern Ireland.  It combines the highest public spending per head in the UK – more than 15 per cent above the UK average – and low levels of revenue.  Its budget deficit per head is the biggest of any part of the UK, according to ONS figures.

 

This raises an additional issue for Northern Ireland.  Those who favour breaking away from the rest of the UK would want, not independence, but reunification, a united Ireland.  But the Irish economy, less than a seventh of the size of the UK, could not take on the burden of high-spending Northern Ireland.

 

A united Ireland would require a very long engagement and, in all likelihood, a substantial dowry for Northern Ireland to take with it from the British Government.  There would have to be a big shift in the policy position of the Westminster parties for that to be possible.”

 

Here is a link to the pay walled original article >>> https://www.thetimes.co.uk/article/englands-great-river-of-cash-keeps-nations-afloat-t95q65567