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Scotland - Economy

Scotland’s economic output per head, even without oil and gas, is virtually the same as the UK as a whole. So oil and gas is a bonus. Including the output of the North Sea, Scotland produces almost a fifth more per head that the UK average. Oil and gas revenues make up 15 per cent of Scotland’s overall public sector receipts, compared to 30 per cent for Norway and yet Norway has prospered and has a oil fund worth £470 billion.

Scotland is a wealthy country and can more than afford to be independent. Scot public finances have consistently been healthier than those elsewhere in the UK, giving a strong platform upon which to build economic success and maintain strong services. Over each of the 32 years since 1980, estimates showed Scotland had contributed more tax per head of population than the the UK as whole. Total Scottish tax receipts in 2011/12 were equivalent to £10,700 per head. This compares to a figure of £9,000 per head in the UK as a whole.

Scotland is one of the wealthiest nations in the world. In terms of our total economic output per head we ranked eighth out of the 34 developed countries in the OECD in 2011. Scotland raised more tax and public finances had been stronger than those of the UK as a whole over the previous three decads.

Taking tax and spending together, over the five years 2007-2021 Scotland’s public finances had been stronger than the UK as a whole by a total of £12.6 billion – almost £2,400 per head. Over the period from 2007/08 to 2011/12 the ratio of public spending to GDP was estimated to be lower for Scotland than in the UK as a whole.

Scotland’s Food and Drink sector contributes 18 per cent of our overseas exports, but less than 1.5 per cent of overseas exports for the UK as a whole. Scotland’s food and drink industry does an excellent job promoting the Scottish brand, but Scotland is constrained by the current constitutional settlement from directly engaging on a level footing with other countries. Independence will boost Scotland’s international profile, delivering new opportunities for food and drink exports, as well as attracting new visitors to our country to enjoy our produce.

Scotland is an energy-rich nation. We have the largest oil reserves in the EU as well as huge renewable energy potential. But under successive Westminster governments our energy wealth has not been invested, instead it has gone straight to the UK Treasury.

Production is expected to extend beyond the middle of the century, with the industry estimating remaining reserves of up to 24 billion barrels of oil and gas that can still be recovered. In terms of wholesale value, North Sea reserves could be worth £1.5 trillion – a greater value than the amount extracted to date. As the vast bulk of the reserves are beneath Scottish waters, that gives Scotland one of the best financial safety nets of any country in the world.

Independence gives Scotland the opportunity to harness this energy wealth for the people of Scotland. With independence we can ensure that taxation revenues from oil and gas support Scottish public services, and that Scotland sets up an Energy Fund to ensure that future generations also benefit from our oil and gas reserves. The principles of stability and certainty that will guide this Government’s approach will guarantee new investment in energy: we have no plans to increase the overall tax burden on the oil industry and no changes will be made to the fiscal regime without consultation.

A well-functioning energy market, delivering the best outcome for consumers, is a prerequisite for a flourishing economy and society. With plans for independence, Scotland’s substantial energy resources and balanced generation mix will provide enhanced security of supply, greater long-term stability in energy prices, decarbonisation of electricity generation, the protection and creation of jobs and further community empowerment. We propose that a single GB-wide market for electricity and gas will continue, helping the rest of the UK secure its supply and meet its renewables obligations, provided that the system also meets Scottish requirements for security of supply.

Even without North Sea oil and gas, GDP (national economic output) per head in Scotland is virtually identical to that of the UK as a whole. With oil it is almost one-fifth bigger. The Scottish economy has key strengths in growth industries such as food and drink, energy, creative industries, tourism and life sciences. Per head of population Scotland had more top universities than any other country in the world. Scotland perform strongly as a location for inward investment and Scotland had a strong financial services industry.

The gap between rich and poor, the increasing concentration of economic activity in one part of the UK and the imbalances in the structure and composition of the UK economic model all suggested that continuing as a regional economy would hamper job creation in Scotland and reduce economic resilience and security in the long-term.

By 2008 many Scots were "embarrassed" over the struggle of banks with a "Scottish identity," like Royal Bank of Scotland and Bank of Scotland. For a while, Scotland was "punching on the world's stage" in the financial sector. The "thinking classes" in Scotland were depressed about the banks' slump, and that is likely going to put a damper on Scottish nationalism.

The pound is Scotland’s currency just as much as it is the rest of the UK’s. The expert Fiscal Commission Working Group concluded that retaining Sterling as part of a formal Sterling Area with the UK would be the best option for an independent Scotland and the rest of the UK.