Public Finances in Independent Scotland

Raisa Muhtar reflects on the latest "Transforming Scotland" lecture from Dr Craig Dalzell, on the potential financial circumstances and feasibility of an independent Scotland.

Photo: St Andrews University Students for Independence

On Tuesday 20 February, St Andrews University Students for Independence hosted an inaugural lecture entitled “Public Finances in an Independent Scotland”. It is part of a new lecture series called “Transforming Scotland”, which seeks to tackle the topical issues, challenges, and opportunities that Scotland faces today, as well as present a vision for what an independent Scotland may look like in the future.

The speaker, Dr Craig Dalzell, was born in Lanark, joined the University of Strathclyde where he received a MSci in Laser Physics and a PhD in Photonics. He gradually gained a keen interest in politics and spent two years campaigning for Scott ish independence. His interests lie primarily in the economic and financial aspects of the debate, and he is the administrator of the Facebook page “Yes to an Independent Scotland”, the largest referendum campaign page outside of the two “official” pages.

He continues to be politically involved, participating as an active member of the Scottish Green Party. He is also involved with the Common Weal project, a think tank and campaigning and advocacy organisation with aims of achieving social and economic equality and environmental sustainability by the restructuring of democracy and the development of infrastructure.

“Through the Greens and the Common Weal project I want to continue advocating the progress towards a better, fairer Scotland which puts all of us first,” said Dr Dalzell. His involvement with Common Weal began with a collaborative paper working on reimagining Scotland’s currency options. He said, “This sparked the inspiration to start the White Paper Project, a plan for the essential institutions and fi scal policy changes that an independent Scotland would need to become a viable, independent country.”

The recent “Government Expenditure and Revenue Scotland” (GERS) report in 2015-2016, showed Scotland’s fi scal defi cit to be in the region of £14 billion per year, thus marking it as a country currently experiencing some of the most challenging financial circumstances in Europe.

“The very act of independence will result in significant redistributions and reallocations of government resources which will likely result in economic benefi ts accruing to Scotland,” said Dr Dalzell.

The paper contains a variety of suggestions to make financing Scotland’s independence more feasible. In terms of defence spending, only a fraction of what the UK spends on defence for Scotland occurs in Scotland. A reorganisation of the defence spending might not only result in a modest economic boost, but also meet NATO’s two per cent defence spending target, if Scotland were to become an independent member of NATO following its independence from the UK.

To solve the problem of debt, all financial models such as the subtractive model, the additive model and the zero option model can all leave Scotland better off . Since most civil servant work occurs in London, repatriating reserved government would result in £1.3 billion additional revenue aided by the cheaper Scottish rent rates compared to those in London. Other suggestions include a modest £200 million for Scotland to run it.

“Overall, there will be a £2.5 billion savings total, cutting down the current fi scal defi cit by half if we were to implement it,” said Dr Dalzell.

Additionally, decisions on how to establish and govern new Scottish state institutions will also improve Scotland’s budget at the point of set-up, further strengthening the fiscal position vis-à-vis that presented in GERS and that of the rest of the United Kingdom.

“We’d improve Scotland’s budget, further strengthening its fiscal position and make a Scottish Independence much more feasible in the future,” said Dr Dalzell.

The talk by Dr Dalzell laid a solid foundation for those curious enough to wonder what a solid plan for independence in Scotland would entail — whether you are in the “Aye” or “Nay” camp of voters — should a second Scottish referendum occur in the near future.

For others, however, practical economics only serve to supplement a very deep dream for freedom embedded within centuries of Scottish history and is woven into the fabric of Scott ish pride. As Robert Burns put it in his poem “Scots Wha Hae”:

“By oppression’s woes and pains!

By your sons in servile chains!

We will drain our dearest veins,

But they shall be free!”

For those interested in the ongoing lecture series “Transforming Scotland”, follow the St Andrews University Students for Independence on Facebook.


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