Sturgeon crushed as independence will blow instant £12bn hole in Scottish budget

Martin Lewis grills Nicola Sturgeon over independence bid

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Speaking the day before the start of this year’s SNP conference, Kevin Hague emphasised the “great deal” he believes Scotland currently has – and urged separatists to think twice before jeopardising it. SNP MSP Alyn Smith yesterday claimed rejoining the EU would put the “rocket boosters” on an independent Scotland’s recovery from the coronavirus pandemic.

It’s a case of careful what you wish for

Kevin Hague

However, businessman Kevin Hague, chairman of the These Islands think tank suggested it was a case of “careful what you wish for”.

Mr Hague published a lengthy analysis of the Scottish Government’s Government Expenditure and Revenue Scotland 2020-21 report (GERS), which estimates the revenue raised in Scotland and the goods and services provided for the benefit of Scotland.

This indicates Scotland raised £62.8billion in revenues in 2020/21 – but spent £99.2 billion in other words a £36.3 billion difference between revenues raised and the costs of these public services.

GERS also reveals an “implied fiscal transfer” between the rest of the UK and Scotland of £12.1billion – equivalent to £2,210 for every man, woman and child in Scotland, and money which would be lost to an independent nation.

Mr Hague told Express.co.uk: “It’s a case of careful what you wish for – for people who don’t believe that £12billion pounds exist – they will believe it when it has gone.

“Scotland will be £12billion a year worse off to start with.”

He explained: “Scotland continues to benefit by getting our fair share of public expenditure and the scale of that is £12billion pounds a year – that is how much Scotland benefits from being in the Union.

“And that’s not you know some bizarre snapshot – I think for the last six years at least, we’ve been getting £10billion a year-plus from the Union dividend if you like.

“So in terms of getting our fair share of public spending, it works really well for Scotland.”

Mr Hague said: “People say ‘why should we need to rely on money from England?’

“But it’s the equivalent of when the oil revenues boomed in the Eighties and Scotland was putting into the pot.

“Right now, Scotland is taking out of the pot.”

For those – such as Mr Smith – who believed rejoining the EU would dramatically benefit Scotland’s economy, Mr Hague had words of caution.

He said: “The European Union requires the countries to stand on their own two feet.

“There are some subsidies but ultimately you have to manage the deficit which in the UK they don’t.

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“People get exercised about how much Scotland’s deficit is. But you can equally argue how much bigger the deficit of the North East is or the deficit of Devon and Cornwall.

“In any part of the union, some will be better off, some will be worse off in terms of fiscal deficit.

“It doesn’t matter – it only matters if you break that part away and ask it to stand on its own.”

As things stood, the GERS deficit was only a “paper exercise” Mr Hague said, but warned: “The only thing that makes that scary number real would be separation.

“The other thing I think is really interesting is what drives that fiscal transfer, what drives that movement of money basically from England to Scotland.

“More is spent on public services in Scotland than in the rest of the UK and the gap has grown over the last 20 years.

“I can be very boring about the mechanics of the Barnett formula and why that’s happened.

“But the bottom line is, Scotland’s got a really good deal, and you can see that in the numbers. “

Mr Hague said: “What’s really fascinating over the last few years in particular, is that the Scottish Government issued de prioritised spending on health.

“With health, it used to be something like £300 per capita more spent on health in Scotland, and now it’s less than £50 per capita more.

“So we no longer spend far more on health yet, we’ve got all these reasons why we need to spend more on health.

“People used to say why Scotland spend so much more on health and Nicola Sturgeon would say ‘because we need to’.

“Those reasons haven’t gone away. But under her stewardship, we are no longer prioritising health.”

“They spend money elsewhere and they get a lot of political kudos from that and they’re very good at bigging up where they spend money, but with all of these things it’s a question of where they are taking it from.

“And what the GERS figures show is, they’ve taken it from health.”

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