The Hunter Foundation releases Stirling University report examining what’s changed in the year since the Scottish Independence Referendum and what the country would look like if it had voted Yes
Last year The Hunter Foundation (THF) set up scotlandseptember18.com to offer objective advice to voters on Scotland’s Yes-No vote for independence. A year on THF commissioned David Bell to conduct a review of what was promised, what was delivered – or is in the process of being – what was missing and where we would be had we voted Yes.
In summary, having voted No after the historic ‘pledge’ and establishment of the Smith Commission, will the new powers outlined to secure that vote be delivered? Yes and no.
Under new tax powers Scotland will take control of a further £17.4 billion of spending and need to find £2.7 billion for welfare support, so on tax, Smith will be delivered assuming the Scotland Bill is, as is likely, passed. However on Welfare the Scotland Bill falls short on two counts; the Scottish Government can create new benefits but only for those that are being devolved, thus they cannot for example create a new benefit for the unemployed. Secondly, the transfer of individuals from Disability Living Allowance to Personal Independence Payments is to go ahead even though these are to be devolved.
In effect this is a zero sum game and in fact Scotland may well be worse off economically. Whilst conferring new powers there is no new money in the pot and new funds under Scottish Government control require administering so costs, not savings will likely be the order of the day. For clarity the £17.4 billion will simply be deducted from the block Barnett payment.
As to the UK Government’s pledge that the NHS in Scotland would be safe – it’s vacuous as they have no authority over how the Scottish Government allocates funds to the NHS. In fact Scottish spending on NHS is 8% high per person versus the UK, however that percentage gap has been dropping year on year.
So where would our economy be had we voted Yes? The White Paper outlining the case for Independence estimated oil revenues consistently at £7.5 billion PA whereas, after the oil price crash, the OBR estimate for the next five years that it is more likely to be £0.5 billion.
Clearly Scotland would have faced either higher borrowings or increased austerity unless of course tax raising powers were deployed to offset the income loss.
Sir Tom Hunter, chairman of THF noted: “Are there any real conclusions one year on? Smith is in part being delivered; our NHS is as safe as the Scottish Government makes it and by delivering more powers we have reduced our overall budget more likely than not.
“In turn we sit in a bit of a beggars muddle where the Scottish Government is negotiating with HM Treasury over settlements; a negotiation that will undoubtedly fuel consistent sniping that Scotland is not getting enough of its share. One thing Robert Smith may have missed was establishing an independent entity to manage that negotiation.
“For me personally it’s time to move on, move forward and use the powers we have. The population decided, politicians are democratically elected and should and must respect the decision of the voters.
“We are all ambitious for Scotland and it’s time for us to come together, put our differences aside and focus upon building a more prosperous, productive and fairer Scotland where opportunity prevails for all.”