Someone asked us yesterday for some facts and figures to help them with a debate, and it got us remembering one that we never see being brought up, perhaps because it’s buried in the archives of the Herald under Sport > SPL > Aberdeen (no, really).
It’s a piece that pre-dates the Scottish Parliament (and is written in a style that makes it seem older still), but it’s a complete mess of broken formatting, clearly the victim of numerous website redesigns, and painfully hard to read even when rescued from behind the paper’s paywall.
So we’re going to preserve it for posterity here in a cleaned-up, more user-friendly presentation, because it’s pretty much dynamite.
Figures explode subsidy myth: Scotland gave £27bn more than was received (Robbie Dinwoodie, 27 March 1997)
Exclusive CLINCHING evidence that there has been a huge net flow of funds from Scotland to the Treasury since 1979, came in an answer from the Government in the final hours of the old Parliament last Friday, the SNP will reveal today.
Not only do the latest figures destroy the last main argument against the suggestion that Scotland paid £27bn more than was received in public spending, they suggest that the actual figure was nearer to £31bn.
Mr William Waldegrave, Chief Secretary to the Treasury, has been forced to concede figures in Commons questioning in recent months, which show that if Scotland’s share of North Sea revenues had been allocated since 1979, then the net flow in favour of the Treasury from north of the Border ran to £27bn – a figure which the SNP used to refute previous claims that Scotland was subsidised.
As soon as Mr Waldegrave saw the implications of the figures he had released in January, he attempted to backtrack, and Tories in Scotland fell back on trying to question one key figure – Scotland’s share of the UK deficit.
This was 17.9% in 1994-95, almost double the per capita share, and disputed by the SNP. But Scottish Secretary Michael Forsyth called the assumption that this figure of 17.9% was constant over the 18 years a ‘‘ludicrous assumption” which ”hugely distorts calculations”, and his objection was picked up by right-wing commentators, and even by Labour campaign co-ordinator Henry McLeish, who described it as a ”heroic assumption, a fundamental flaw”.
But last Friday, as MPs were leaving Westminster – some for the last time – a final written answer to a question from Mr Andrew Welsh, SNP MP for Angus East, emerged. Mr Waldegrave gave the figure for Scotland’s deficit share for every year since 1979, and the average turned out to be almost exactly the 17.9% first identified.
A jubilant Alex Salmond said last night: ”The Treasury answer – wrung out of it on the very last day of Parliament, and after a month’s delay – has blown the last shreds of the Tory subsidy myth out of the water.
For the second time, William Waldegrave has been caught out telling the truth. This new Waldegrave admission proves beyond doubt that it is Scotland which subsidised the rest of the UK – not the other way round.”
He claimed the Scottish subsidy to London now worked out at £6,200 for every man, woman, and child in Scotland. The same Treasury analysis, showing an upturn in oil and gas revenues, shows a projected surplus over the next five years of a further £12.5bn.
Now that that key figure disputed by the Conservatives has been shown to be accurate, the only other line of attack for critics of the SNP analysis will be to dispute Scotland’s share of oil and gas revenues, and only last week, the Government suggested that the North Sea belonged to a ”region” of its own, the Continental Shelf, rather than to Scotland or England.
Right there, in a short few hundred words, is the hard evidence for an assertion routinely made by Yes supporters (and indeed by politicians on the wider left) – that the Tory governments of the 1980s and 1990s used North Sea oil revenues to prop up the UK economy, and all Scotland got in return was to be attributed a disproportionately big share of UK debt.
(Right-click to enlarge these images, or left-click to go to the Hansard page.)
As you can see, and as mentioned in the article, the chart lists Scotland’s allocated share of the UK deficit as 17.9% for every year. The chart below is the corrected set of figures released by Waldegrave in March 1997. They appear to average 21.7%, which would mean that the 17.9% attributed in the first table was an understatement, and that in fact Scotland’s net contribution to UK finances was therefore roughly 20% MORE than the £26.7m identified by Waldegrave that January.
(Scottish Labour had, of course, taken the side of the Tories.)
Because with 8.4% of the UK population, obviously Scotland shouldn’t have been being held responsible for almost 22% of the UK’s deficit – in the 1980s and 1990s that deficit certainly wasn’t being run up in Scotland. The fifth column in the above table, “implied estimates”, indicates that with a geographic share of North Sea oil revenues factored in, Scotland was actually running a very healthy surplus for most of the years in question, only going into the red when the price of oil hit record lows of around $20 a barrel in the years after the first Gulf War.
That ties in with recent analysis undertaken by Professor Brian Ashcroft – no nationalist he – and examined in greater detail both by ourselves and, more expertly, by Business For Scotland, all concluding that had Scotland voted for independence in the referendum of 1979 (rather than the devolved “Scottish Assembly” that was subsequently denied anyway despite having won the vote) it would currently be free of debt and sitting on an oil fund of a minimum of £68 billion.
(Prof. Ashcroft, in keeping with his political allegiances, attempted to downplay that figure as representing only 5% of Scotland’s total revenues over the period, but £68bn is a non-trivial amount of money, especially when compared to the tens of billions in debt an independent Scotland is likely to inherit from the UK.)
But while it’s all very well having academics say this sort of thing, Waldegrave’s admission is just about the only known example of an actual serving government minister accepting that Scotland’s been subsidising the UK by tens of billions of pounds for decades. And, y’know, that seems worth keeping handy.