Political Crossfire Forums

[Sawney]

Robin Hood wrote: First you say that England can not be propping up Scotland, justifying it with the non-sequitor that the UK (i.e Scotland and the UK) is in deficit.

Drawing from this, as a conclusion, you say that England would be in deficit anyway, which may be true; but is also irrelevant. Since it's quite obvious that it'd be in less of a deficit at least.

:lol:

How is the English deficit irrelevant? Your claim, that there is a subvention from England to Scotland, is based on your belief that English taxpayers are bailing out Scotland. How can that be if England is in a situation where public spending has exceeded that of income? No matter what you say the £38.9 billion decicit figure is not all attributable to the “Celtic Fringe”.

And why do you believe that England’s share in the deficit is less? Do you have figures to actually prove that? Over the last 30-odd years, England has long held a deficit for most of the time so why would the present be any different? :?

As I have said, the English taxpayer could not have paid for Scottish public spending because, even in England, public spending outweighed income. England couldn‘t even support herself, so how can she be a benefactor? I would actually see your point if you are basing your argument on a hypothesis that England is holding a surplus. Can you actually prove that England has a surplus, then?

As such, there can really be no English taxpayers' dosh to give to Scotland. Gordon Brown infact had to borrow money due to the deficit:

http://news.bbc.co.uk/1/hi/business/5097706.stm

Unless you actually do believe that the £38.9 deficit, last year, is mostly attributable to “The Celtic Fringe”, not England? Can you actually prove that? I would like to see you try.

Anyways, as I stated above, the GERS claim of the Scottish deficit is based on very flawed analysis. The most recent GERS Report worked out the Scottish deficit as being around £11.2 billion, which really is a gross underestimate, as the figures excluded oil revenues and that the authors seriously underestimated the true Scottish Corporation tax figures. It is also still wrong in so many levels, so there is a very great doubt about the veracity of theirs claims and, as such, the true fiscal picture of what Scotland actually raises to the pot.

Quote: Your economic calculations are then based on what? 3 companies. You discredit my figures whilst offering me this!

The GERS Report deserves to be discredited.

Anyways, as you would have seen above the amount of tax those “3 companies” raised exceeded what the GERS authors claimed was Scotland’s share of the UK’s corporation tax and as you know, there are far more companies operating up here than those “3 companies”, so what does that say about the truth of the GERS authors claims? That they are really a lot of crap? I know what I think! :)

Also, you are forgetting my point about the North Sea oil fields as well, where 97.1% of them are located in territory under Scottish legal jurisdiction. One truly wonders why the tax revenues from them are always excluded from Scotland’s contribution to the Treasury? :?

Quote: Quite simply: It's undenied by even the most fervent Scottish Nationalist that England's GDP per capita is significantly higher. Yet the rules of taxation in the two places are pretty much the same. This means that the people in England get taxed significantly more. Even more importantly, though this may be contested, poorer people tend to receive more state money - which means Scotland receives more state money of which it pays less!

Well, that really depends on what Scotland’s GDP per capita really is. You do realise that the “official stats” exclude the revenue raised the “Extra-Regio” regions from Scotland’s share. As these areas make up the lions share of the oil revenues, Scotland’s true GDP is actually misrepresented to the world. :evil:

Despite that, Scotland’s GDP is still ranked ‘officially‘ - if the Office for National Statistics is believed - to be the 3rd richest UK region (after London and the South-East). When compared to London, Scotland is not even considered that poor when compared to other English 'regions'. Also, if you look at Scotland’s GDP per capita, the trend is not as bad, but still lagging London.

Also, another thing: For the GERS expenditure and revenue figures much of the definitions and figures described in the GERS publication as "estimated", "assessed" or "calculated". So about 50% of their numbers actually have no veracity. And as the GDP is related to income and company tax raised, it follows that assessments of Scotland’s GDP must also be called into question; so it is facile to relate our suspect expenditure data to our suspect GDP position and come out with any worthwhile conclusion to contrary.

Quote: Yet the rules of taxation in the two places are pretty much the same. This means that the people in England get taxed significantly more. Even more importantly, though this may be contested, poorer people tend to receive more state money - which means Scotland receives more state money of which it pays less.

That’s a nice claim about Scotland having more poor people. Funnily enough, if the Office for National Statistics are to be believed that, per average, is actually more people working in Scotland than there is the case in England. I suggest you actually check their figures before reaching that conclusion.

I must admit you are right that more people in England pay more income tax (well in the South-East really, as everyone not from there has a lower average income tax level) but what does that actually mean exactly? That everyone in the South-east of England is harder working or something? :?

Have you ever asked yourself why the tax intake is higher in the southeast than in the rest of the country?

There are many reasons for this, for example:

- The Government is based in London. The mass majority of Civil Servants live there are as a result.

- Almost all major companies headquartered in and around London (thus concentrating senior and the higher paid jobs there) due to getting extra perks in being in closer proximity to the Government.

- The concentration of jobs there drawing the skilled and well educated from the rest of the country.

- Most large companies declaring their taxes in London despite the economic activity which generated them took place in other parts of the UK.

- Media mostly based in London and presenting the world with a London-centric view of Britain.

- Continual preferential treatment of London for major “National” investments e.g. Channel Tunnel rail link, the London airports, the Olympics, the Millennium Dome, Wembley Stadium, Jubilee Line, Docklands Redevelopment, etc. You actually wonder why they are called national investments, when they, most patently, are concentrated in one area of the UK.

- People retiring from the south-east to other parts of the UK, where they push up property prices and consume local services but contribute little in the way of economic activity.

Anyways, the “income tax” retort of yours doesn’t really mean anything. After London, the UK's next 2 richest cities (in the amount they contribute in terms of Gross Value Added per capita and taxation revenue per capita) are Edinburgh and Aberdeen.

Another thing: About London’s economy. It doesn't always mean what you think it means. For example, tax collected from a company’s London-based HQ, may actually be being levied on economic activity taking place in areas as far apart as Birmingham or Inverness. Not all public expenditure can be regionally or nationally identified, and there is no sure way of actually determining where the cash was actually generated, due to it.

So, much of London’s share of the UK’s GDP may very well be bogus, but, I suppose you already knew that, didn’t you? :P

Quote: Having said that, this system has ruined Scotland. It has allowed Scotland - even forced Scotland - to sink further into stagnant socialism whilst shielding it in a fleeting heroin glow from what may seem like scary economic liberty. If Scotland were independent its necrotizing socialism would have been unsustainable, as in Ireland. Leading to strongly capitalist reforms, as with Ireland, and a resurgnent - perhaps incredible economic growth - as in Ireland.

What system? Do you actually mean the Union? Well then I fully agree with you.

Scotland, due to the Union, is not even fully in charge of her own economy. Holyrood has very little control of Scotland's economy. Economic decisions are taken at Westminster with little regard for the nuances of Scotland's economy. Interest rates are set by the Bank of England according to how the economy is performing in London and the South East. Often this has meant a rise in interest rates to curb an over-heating South-East economy with no cognisance taken of the fact that this would damage the rest of the UK’s economy (especially Scotland’s). As such, these policies are actually really harming Scotland (and the rest of the UK either; why are their growth rates poorer than London‘s?).

Also, I need to laugh at your "stagnant socialism" drivel. You have obviously not looked at the SNP’s latest manifesto and checked their policies. The SNP is fully committed to lowering business rates and corporation tax. As you should this will have the effect of encouraging business to start, grow or relocate to Scotland - increasing the overall tax yield. Not very socialistic minded are they?

Anyways, here is a nice article from the Glasgow Herald that I found that you should, at least, read.

Scotland beats rest of UK in entrepreneurial stakes

PAUL ROGERSON

Scots are accustomed to being criticised about the nation's allegedly statist mindset and risk-averse attitude to business, but a new survey suggests such barbs are grossly unfair.

The nation has a higher proportion of venture-backed companies per capita than anywhere else in the UK, according to a study by private company researcher Library House. This makes it Britain's most entrepreneurial region.

Commissioned by UBS Wealth Management, the report "Beyond the Chasm: The Venture-backed Report – UK 2006", analyses every existing company in the UK that is currently venture-backed. It shows that 1437 companies received £6.6bn in disclosed capital.

While London has almost 53 venture-backed companies per million head of population, Scotland that leads the way with 54, attracting an average of £3.2m per company.

Edinburgh and Glasgow rank alongside London, Cambridge, Oxford, and the Thames Valley as Britain's foremost innovation hubs. Library House attributes Scotland's success to the pool of experienced entrepreneurs who have previously received venture financing.

"It is these serial entrepreneurs who are essential in encouraging new ventures by others and are often active in backing these ventures as angels," it stressed.

Doug Richard, chairman of Library House and panelist on BBC's Dragon's Den programme, added: "We were delighted finally to be able to pinpoint exactly where the UK's entrepreneurial talent exists.

"We have long known that Scotland is a hotbed of innovation, generating world-class companies. However, with the hard evidence we can now confirm that Scotland is the UK's most entrepreneurial region."

Yep, we too much socialist minded to make a good go of independence. :roll:

[Robin Hood]

Quote: How is the English deficit irrelevant? Your claim, that there is a subvention from England to Scotland, is based on your belief that English taxpayers are bailing out Scotland. How can that be if England is in a situation where public spending has exceeded that of income?

'cos it's borrowing huge amounts of money....duh!

Quote: And why do you believe that England’s share in the deficit is less? Do you have figures to actually prove that?

In the previous thread I provided you with figures...you provided me with none. My figures stated the obvious - that GDP per capita in England is higher.

Quote: As I have said, the English taxpayer could not have paid for Scottish public spending because, even in England, public spending outweighed income. England couldn‘t even support herself, so how can she be a benefactor?

Like the man who piles himself into massive debt in order to prop up his family....

Quote: Also, you are forgetting my point about the North Sea oil fields as well, where 97.1% of them are located in territory under Scottish legal jurisdiction.

That's debatable, but in the previous thread I factored them in.

Quote: That’s a nice claim about Scotland having more poor people. Funnily enough, if the Office for National Statistics are to be believed that, per average, is actually more people working in Scotland than there is the case in England. I suggest you actually check their figures before reaching that conclusion.

Are you going to support those with figures? How about subtracting all those on the state's payroll from those?

Quote: I must admit you are right that more people in England pay more income tax (well in the South-East really, as everyone not from there has a lower average income tax level) but what does that actually mean exactly? That everyone in the South-east of England is harder working or something?

It doesn't matter what it means, at least not in relation to this debate, other than it means that people in England make a greater contribution to government spending (and conversely receive less of it) than people in Scotland.

Quote: - Almost all major companies headquartered in and around London (thus concentrating senior and the higher paid jobs there) due to getting extra perks in being in closer proximity to the Government.

um...it could have something to so with London being the financial capital of the world.....

Quote: - Continual preferential treatment of London for major “National” investments e.g. Channel Tunnel rail link, the London airports, the Olympics, the Millennium Dome, Wembley Stadium, Jubilee Line, Docklands Redevelopment, etc. You actually wonder why they are called national investments, when they, most patently, are concentrated in one area of the UK.

London loses a great deal of money through state taxing and spending.

Quote: - People retiring from the south-east to other parts of the UK, where they push up property prices and consume local services but contribute little in the way of economic activity.

THey bring MONEY, and lots. Furthermore how many people from London retire to Scotland. France, Spain....but Scotland!

Quote: Anyways, the “income tax” retort of yours doesn’t really mean anything. After London, the UK's next 2 richest cities (in the amount they contribute in terms of Gross Value Added per capita and taxation revenue per capita) are Edinburgh and Aberdeen.

THe poorest areas, like the Highlands, are in Scotland.

Quote: The SNP is fully committed to lowering business rates and corporation tax.

and government spending, whilst (at least) not raising other taxes? If so.....then I'd place my vote for them.

[DSwain]

Sawney wrote: DSwain wrote: Very interesting Sawney - thanks for posting that; it's given me some things to think about. But what's your opinion of Barnett?

Thanks for the reply.

If you want to know I really believe that far too much is made about the Barnett Formula and it is really media hype which paints a quite inaccurate picture of it.

The idea that the Scots receives more public spending, needs to be examined a bit more closely.

For instance, the Barnett Formula only applies to ‘identifiable’ public expenditure. Despite a presumption held by most media commentators, the figures presented to us do not accurately record the differential between government spending in Scotland and England. "Identifiable public spending" makes up only about two-thirds of government spending. A considerable proportion of this spending, that is assigned to Scotland (in the annual GERS Reports), is made up of unsupportable assumptions as there are no separate figures for Scotland in many areas (perhaps deliberately so).

Anyways, the other third of government spending – the unidentified bit – is the important part. It comprises, among other things, the huge spending on government jobs concentrated in the Home Counties, the huge domestic procurement programme concentrated in the same area and the even larger defence procurement spending. Scotland gets less than one-third of its proper share of all of this.

As the majority of the ‘unidentifiable’ spending is spent in England, and is it does not factor in the equation of the Barnett Formula, this gives a really false impression of how much of public expenditure total is actually spent in Scotland. If the 'unidentifiable spending' is added to the equation, does that actually mean that the South-East of England the biggest beneficiary of public spending in the UK, not Scotland?

Also, here’s another thing. Do you realise that ‘National’ spending (i.e. For projects considered for the good of all UK citizens) is also excluded from the Barnett Formula, as all parts of the UK are considered in contributing to it.

As that is the case, why do many of these ‘National’ projects been done in the South-East of England? You actually do realise that in the last 10 years alone, the British capital has actually been awarded a jaw-dropping £26 billion for a certain number of projects, stated below:

* London 2012 - £1.75 billion in funding from the lottery or general taxation
* Crossrail - £13.9 billion to £14.8 billion
* Channel Tunnel rail link - £5.2 billion
* Jubilee line extension - £3.2 billion
* British Library - £0.5 billion
* DLR extension - £0.5 billion
* East London line extension - £0.8 billion

A question: What tangible benefits does Scotland (which has a pro-rata population share of these projects) have, when these ‘national’ projects are located so very far away from her own borders?

As both the ‘identifiable public spending’ and ‘National spending’ are not factored when it comes to the Barnett Formula it poses the question: Does Scotland actually do get more public spending?

Lastly, if you do indeed find doubt on the merits of my case and you believe that Scotland does get more public spending than she does deserve, could it actually be that it really is deserved anyway. Could it actually be considered that Scotland actually gives more to the Treasury, pro-rata, and therefore deserves a larger percentage of government funds? :?

As I have shown in my above post, there would be a very good case for the “Scots are subsidised” brigade, if it can be proved that England actually does give Scotland money, but as I hope to have shown above, there really is much doubt if that is the case.

Thanks for your very full post.

1) Barnett - while it might not cover all areas of govt spending, it does seemingly cover 2/3 of it - meaning that in those areas, Scotland does receive rather more money per capita than England (similarly, Wales and NI receive more funding).

2) Non-identified areas of spending - well, on defence projects, Scotland does pretty well (with BAe at Glasgow gaining a share of the Type 45 programme while Swan Hunter has been left to wither). And all of those civil service jobs that have shifted up to Holyrood, either as a product of departments' responsibility devolving to the Exec or by policy areas being duplicated, must also count for something by this meter?
3) Re London. London has the highest per capita income in the UK. London pays substantially more into the Excheqeur than it takes out. "Reform" lists a few points on relative tax take between the regions and nations:
http://www.reform.co.uk/website/pressroom/news.aspx?o=25

Projects such as Crossrail and the DLR are national projects (as indeed are the Channel Tunnel rail link and the BL); the City of London earns substantial sums that are taxed and spent for the benefit of the whole of the UK. The City is not without competition - without a working infrastructure, those companies will relocate to Frankfurt, losing the UK a lot of money. This report, prepared for Office of the London Mayor, is worth a look:
http://www.london.gov.uk/mayor/case_for_london2001/pdf/cfl_pt3.pdf#search=%22city%20of%20london%20invisible%20earnings%20UK%22

I would admit that such a report, prepared for the London Mayor, does warrant the refrain: "Well, he would say that wouldn't he?" BUT, once you see past the inevitable London cheer-leading, it's clear that spending in London benefits the local and the wider national economy. Likewise, however, I would argue that spending on infrastructure projects elsewhere in the UK similarly benefit both the locality and the nation: a better flowing M8 or an improved West Coast Mainline don't just benefit locals but the rest of us too.

4) The per capita spending on the NHS is higher in Scotland than in England and Wales; drug treatments that you can receive in Scotland, we do not receive in the rest of the country. Is this fair?


That Scotland is a significant contributor to the UK economy is obvious and is supported by your research. However, to in one moment criticise London for taking (in your opinion) too much out of the pot, and then to say that maybe Scotland deserves to take more than England because of your greater contributions (as you see it) smacks of hypocracy. As a nation we pay taxes to central government and then that government allocates the funds. Central funding does not depend on some sort of reverse hypothecation - where those who pay more, get more - and nor should it.