Leading economist Tim Morgan identifies three major risks in the event that the Scots vote “yes” to independence.
- New data calculated in this report suggests that the North Sea revenue for the Scottish government would fall from £10.1bn in 2011-12 (but only £5.5bn in 2013-14) to £3.7bn in 2016-17, some £3.2bn adrift of the £6.9bn predicted by the “yes” campaign.
- The probable flight of a large proportion of the financial services sector from Scotland – as already indicated by this week in the announcements by RBD, Lloyds, Clydesdale and Standard Life – could leave 2016-17 ex-North Sea revenues (of £47.7bn) about £9.2bn lower than has been forecast by advocates of independence (£57.3bn).
- The rising cost of public sector pensions would be likely to impose significant pressures on a Scottish budget already straitened by declining oil revenues and the probable haemorrhaging of tax revenues from financial services. The impact is estimated at £1.1 billion in 2015-16.
Together, omission of these three factors results in a severe understatement of independence risk, both to Scots in general and to public sector workers and retirees in particular.
The cumulative impact of these three risks on Scottish government revenues would be £13.8bn in 2015-16. Total government revenues could be £50.4bn, far below the “yes” campaign’s own estimate (£64.2bn) and far lower, too, than the £63.3bn that Scotland is expected to spend in that year.
Tim Morgan also identifies a further significant risk for the rest of the UK which would see a sharp deterioration in its current account balance, from 5.5% of GDP to over 7%.
Morgan concludes: “Unfortunately for Scots, this, too, could have adverse implications for their own economy.”
Media Impact:
In Print:
- Daily Mail: “An Independent Scotland faces a £14 billion black hole in its finance, a prominent think-tank warns today in a report.”
- The Times: “The Centre for Policy Studies … claims in report being published today that an independent Scottish Government’s revenues in 2015-2016 would be £13.8 billion lower than the yes campaign has claimed”
- The Sun: “Meanwhile influential think-tank The Centre for Policy Studies predicted Scottish revenues of £50.4 billion in 2015-16 instead of the Yes campaign’s estimated £64.2 billion.”
- The Independent: “A report published today by a leading think-tank suggests that the Yes campaign has underestimated the financial risks of separation”
- The Daily Telegraph: “The triple-whammy of declining oil revenues, fleeing financial services and increasing pension costs would see Scottish Government revenues drop more than £13 billion after a Yes vote, according to the Centre for Policy Studies.”
Online:
- The Daily Mail: Salmond’s £14billion black hole: Damning report warns of ‘huge risks in oil, pensions and tax’ for an independent Scotland
- The Daily Telegraph: Scottish nationalists ‘severely underestimate the economic risks of independence’, says think tank
- The Daily Telegraph: Scottish independence would hurt UK economy, say FTSE 100 chairmen
- The Guardian: Scottish independence: the Queen makes rare comment on referendum
- Thisismoney.co.uk: Royal Bank of Scotland may be forced to plug £5.6bn deficit in its pensions scheme if Scotland votes Yes
- The Evening Telegraph: Economic risk ‘underestimated’
- The Yorkshire Post: Experts at odds over economic risks to independent Scotland
- The Scotsman: ‘Financial sector loss after Yes could cost £9bn’
- The Scottish Express: Expert warns Scots will be billions adrift
- FT Adviser: Economist warns of £1.1bn pension blackhole for Scotland
- The Independent: Scottish independence: Sterling on knife-edge as City braces for Scots vote
- ITV News: Scotland could ‘face risks in oil, finance and pensions’
- The Huffington Post: Scottish Independence ‘Would Make Britain Leaving European Union More Likely’
- Nettavisen: Kan bli 143 milliarder dyrere enn antatt
- Bloomberg Businesswork: RBS may have to pay off deficit is Scotland votes yes
- The Daily Mail: ‘I won’t be here forever… please don’t break this family apart’: Emotional Cameron issues final plea to Scots to save the United Kingdom from a permanent ‘painful divorce’
- Independent: Scottish independence live blog: Latest news as Scotland decides Yes or No
- Blue & Green Tomorrow: Scottish independence: ‘Yes’ vote could lead to £14bn hole in budget
- The Scotsman: SNP ‘underestimate’ economic risk of independence
- The Daily Record: Independence referendum: Top economists spell out 13 ways a Yes vote will hit us in the pocket
- The Drum: Fleet Street and the Scottish independence referendum: Queen’s comment dominates Monday’s newspapers
- CBC News: Scotland referendum: Warnings mount about economic harm
- Herald Scotland: Queen in referendum plea
- Re:locate: ‘No going back’ after independence vote, Cameron warns Scots
- LondonlovesBusiness: Scotland news in 60 seconds: What David Beckham, the Queen & Groundskeeper Willie from The Simpsons think
- The Daily Mail: ‘We’ll give you more powers AND more cash than England’: Desperate Cameron, Clegg and Miliband in last-ditch bribe to Scotland (but a parliament for the English is ruled OUT)
- IFA Magazine: Sunday newspaper round-up: RBS, Scottish independence, Prudential
- Express.be: ‘Vous n’obtiendrez pas le changement que vous voulez en mettant votre pays en pièces’
- Blue & Green Tomorrow: Scottish independence: Cameron describes a Yes vote as ‘painful divorce’ in emotional appeal
- Blue & Green Tomorrow: Scottish Independence: 76% of UK financial advisors would vote for Scotland to stay in the union – poll
- The Guardian: Scottish referendum: Cameron returns to Scotland – as it happened
- LondonlovesBusiness: How many billions would independent Scotland need to escape a recession?
