January 13, 2012 • 6:04 pm

 

On Thursday, Alex Salmond repeated claims made in October that Scotland would be the sixth richest country in the OECD if it were to gain independence from the Union.

Writing in the Independent, the Scottish First Minister argued that an independent Scotland could more than hold its own in the world economy, and its citizens would be better off than the average UK citizen. So what is the evidence for this?

The data being referenced by Mr Salmond is the OECD’s league table of nation’s GDP per head (expenditure approach), which shows that the UK is currently in sixteenth place with a figure of $35,512 per capita. Australia currently sits in sixth place with $40,179 meaning that Scotland would have to exceed the UK’s current GDP per capita by $4,665.


Transaction Gross domestic product (expenditure approach)
Measure Per head, US $, current prices, current PPPs
Frequency Annual
Time 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Sort ascendingSort descending Sort ascendingSort descending Sort ascendingSort descending Sort ascendingSort descending Sort ascendingSort descending Sort ascendingSort descending Sort ascendingSort descending Sort ascendingSort descending Sort ascendingSort descending Sort ascendingCancel descending sort/Annuler tri descendant Sort ascendingSort descending
Country                        
LuxembourgInformation on item   53 923 57 559 60 728 64 998 68 372 78 573 84 559 89 156 82 973 86 226 ..
NorwayInformation on item   37 085 37 052 38 262 42 479 47 640 53 846 55 874 61 332 54 708 57 231 ..
SwitzerlandInformation on item   32 098 33 391 33 269 34 524 35 478 39 141 42 746 45 641 44 773 46 622 ..
United StatesInformation on item   35 866 36 755 38 128 40 197 42 414 44 522 46 227 46 647 45 087 46 588 ..
NetherlandsInformation on item   30 783 31 943 31 705 33 197 35 111 38 088 40 736 42 929 41 089 42 175 ..
AustraliaInformation on item   29 234 30 441 32 090 33 507 35 115 37 105 39 067 39 058 39 971
(E)   40 719
..
IrelandInformation on item   30 776 33 274 34 768 36 796 38 896 42 522 45 418 42 575 39 750 40 458 ..
DenmarkInformation on item   29 432 30 756 30 430 32 290 33 196 36 048 37 723 39 841 38 299 40 170 ..
AustriaInformation on item   29 025 30 463 31 319 32 856 33 637 36 586 38 073 39 785 38 834 40 017 ..
CanadaInformation on item   29 332 29 911 31 267 32 837 35 106 36 863 38 350 38 989 37 853 39 070 ..
SwedenInformation on item   28 226 29 278 30 420 32 494 32 701 35 703 38 478 39 613 37 192 39 024 ..
BelgiumInformation on item   28 524 30 054 30 292 31 190 32 195 34 240 35 646 37 005 36 698 37 676 ..
GermanyInformation on item   26 707 27 446 28 354 29 684 31 117 33 552 35 559 37 115 36 048 37 411 39 377
FinlandInformation on item   26 531 27 531 27 616 29 863 30 708 33 140 36 167 38 077 35 848 36 585 ..
IcelandInformation on item   30 438 31 084 30 776 33 731 34 992 35 831 37 171 39 521 36 718 35 642 ..
United KingdomInformation on item   27 573 28 888 29 851 31 779 32 724 34 992 35 712 36 175 34 511 35 512

Data extracted on 13 Jan 2012 18:09 UTC (GMT) from OECD.Stat

The SNP has predicted that Scotland would reach £41,348 per capita, based on their own calculations.

So how has the SNP come to this conclusion?

According to the the SNP press office the calculation was made by the Scottish Government and was based on the following data:

Unfortunately, the exact calculations are at this time unclear although Full Fact will be continuing its enquiries to discover more details.

However, the SNP has previously indicated that North Sea Oil will be the driving force behind Scotland’s progression. When John Swinney MSP first made the claim that Scotland could be six richest nation, he explicitly acknowledged that calculations were based on Scotland acquiring its ‘geographical share (of) offshore resources’.

A quick look at figures for North Sea oil revenue demonstrates the boost that a geographical share of oil, rather than the current per capita share, could give to Scottish finances.

Whilst the figures below are Government revenue statistics,and therefore not directly comparable with the OECD’s GDP per capita figures, the fact that the Scottish Parliament calculates a windfall of over £5.3 billion gives some indication of the boost that it expects to receive from the move. This figure is the equivalent to £1,000 per head.

Table 5.5: Current Revenue (Per Capita Share of North Sea Revenue): Scotland 2009-10

 

Scotland

UK £ million

Scotland as % of UKrevenue

£ million

% of total revenue

Total current revenue (excluding North Sea revenue)

42,201

98.7%

506,669

8.3%

North Sea revenue

545

1.3%

6,491

8.4%

Total current revenue

42,747

100.0%

513,160

8.3%

Table 5.6: Current Revenue (Geographical Share of North Sea Revenue): Scotland 2009-10

 

Scotland

UK £ million

Scotland as % of UKrevenue

£ million

% of total revenue

Total current revenue (excluding North Sea revenue)

42,201

87.7%

506,669

8.3%

North Sea revenue

5,931

12.3%

6,491

91.4%

Total current revenue

48,132

100.0%

513,160

9.4%

(http://www.scotland.gov.uk/Publications/2011/06/21144516/7)

So while these figures do give some credence to claims that Scotland would benefit from an economic windfall, by themselves they cannot prove claims that Scotland’s economy would out-perform the UK by over $5,000 per head.

Full Fact will continue to investigate the calculation undertaken by the Scottish Government to reach the figure of $41,348 per head and update this factcheck in due course. As the debate over independence rumbles on, we will of course be keeping a close eye on the claims profuced on both sides of the debate.

 

UPDATE: 17/01/2012

Full Fact has managed to contact the Scottish Government in order to gain more insight into how the figures were calculated.

A Scottish Government spokesperson commented:

“Government and Expenditure Revenue Scotland 2009-10 figures show that, including a geographical share of UK North Sea oil and gas revenues, Scotland contributed 9.4 per cent of UK public sector revenue and received 9.3 per cent of total UK public sector expenditure, including a per capita share of UK debt interest payments. Including a geographical share of North Sea revenues, Scotland’s estimated current budget balance in 2009-10 was a deficit of 9.0 billion pounds, or 6.8 per cent of GDP – stronger than the UK-wide deficit of 107.3 billion pounds, or 7.6 per cent of GDP for the same year, including 100 per cent of North Sea revenues.

“Scotland generated 9.4 per cent of UK tax with 8.4 per cent of the population – the equivalent of 1,000 pounds extra for every man, woman and child in Scotland.”

The Government goes further in explaining that:

“Some 40 per cent of reserves remain in the North Sea, with over half of the value still to be extracted – representing an asset base with a wholesale value of one trillion pounds.  While this is no more than equivalent to the scale of the UK’s national debt, it is over ten times a pro-rata Scottish share of UK debt – reflecting Scotland’s stronger asset base and bankability.”

Conclusion

According to the Scottish Government, there is currently a £1,000 per capita discrepancy between the tax generated by Scots and the proportion of the population for which they account. If we add this to the extra revenue that would be generated for an independent Scotland responsible for its geographical share of North Sea oil and gas – estimated to be another £1,000 per head – then we start to approach the $5,000 per capita boost to GDP needed to reach the sixth spot in the OECD tables (although by our calculations there remains something of a shortfall).

Of course, whether these figures would be borne out in the eventuality that Scotland gained its independence would very much depend upon the terms of the break with the Union, so for now these calculations must remain speculative.

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