Is Scotland Better Off Outside The UK

The recent announcement of your referendum on Scottish independence has reignited the debate about whether Scotland would be more satisfied by its self or as part of the UK. However this is not a simple question.

We should get a couple of facts out of the way;

[1] Westminster spends £1000 1 year much more about each person in Scotland than you are on each person in England.

[2] Inside 2008/2009 tax year Scotland gave more to Westminster in taxes than it got back in spending.

The truth is, a big chunk of Scotland's revenue derives from North Sea oil. This revenue relies upon around the cost of oil so that it will vary wildly from year upon year. The easiest way to check out it is to exclude oil revenue and discover the structural deficit without. That turns out to be about £10bn 1 year (prior to crisis). So years when North Sea oil taxation is above £10bn Scotland runs a surplus then when it can be below Scotland runs a deficit. So what are classified as the tax revenues?

There only have been 3 years in the good reputation for North Sea oil the location where the tax revenues where above £10bn, two in early eighties plus the infamous 08/09. So what does this say around the future? Well not significant. That's because we realize very little in what the expense of oil come in the future. It could be higher priced because of global shortages. It usually is cheaper as alternatives you have to be popular. That which you can say for sure is that some day it will eventually come to an end.

If we create a wild assumption and say that future oil prices will probably be similar to past prices we can easily then say that historically Scotland has operate a deficit around £3.5bn 12 months (ahead of the crisis). So does which means that that they would be worse off out from the UK? Not necessarily. All of those other UK also runs a deficit most years. Therefore the question for you is, 'is Scotland's "normal" deficit bigger or small compared to the rest of the UK?'

The deficit for your on the UK for 2012 is projected to be £120bn, that's roughly £2000 for each person. Scotland's deficit for 2011 was £10.6bn (including North Sea oil), that's about £2020 per capita.


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