Scotland being harmed by Westminster debt burden says Swinney

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By G.A.Ponsonby
 
Finance Secretary John Swinney has warned that staying in the Union would cost Scotland over £50 billion as a result the UK’s massive debt problem.
 
Mr Swinney warned that Scotland currently faces seven years of cuts imposed by Westminster and that it could take 18 years before public spending returned to pre-recession levels.

Addressing delegates at the SNP conference at the SECC in Glasgow, the SNP’s Finance Minister said:

“Under the current constitutional settlement the UK’s austerity programme means Scotland’s public spending faces a further seven years of cuts.

“As part of the UK it could take 18 years before public spending returns to pre-recession levels and spending in Scotland could fall by £51 billion in the meantime.”

Mr Swinney highlighted the UK’s growing debt burden which he said was in danger of reaching over one trillion (£1000,000,000,000) pounds.

“In ten days time we will find out if the UK’s long term debt has smashed the trillion pound barrier.  A trillion pounds that we are all liable for.

“Debt that every citizen in Scotland will have to repay – independent or not.  That’s the real story of the finances of the United Kingdom.”

In his speech Mr Swinney also pointed to the latest official figures that showed Scotland again in surplus relative to the UK. 

The GERS report, published this week, showed that Scotland would have been better off to the tune of £2.3 billion had it been independent last year.  This, said Mr Swinney, increased to £8.6 billion over the last five years – equivalent to £1600 for every man, woman and child in Scotland.

“Scotland contributed 9.6 per cent of UK taxes, but we received only 9.3 per cent of UK spending in return.  With only 8.4% of the UK population we paid more than our share and got less back.

“Two years ago in 2009-10 Scotland paid in 9.4% of UK taxes, but again only 9.3% came back.  Even when North Sea revenues fell by 50% Scotland paid in more money to the UK Treasury than came back.” he said.

In a speech that stressed Scotland’s healthier state when compared to the rest of the UK, Mr Swinney repeated the argument put forward by the First Minister on Saturday that Scotland could do even better with full control over resources and the full fiscal levers that independence would bring.

Mr Swinney attacked Westminster for the failure to regulate the banking system properly, and for what he termed the profligacy of investment schemes like PFI.

Responding to claims that the referendum timetable was creating uncertainty and was harming business investment Mr Swinney cited companies who had already committed major investment in Scotland – Amazon, Michelin, Dell, and Avaloq.

Mr Swinney added:

“We have seen major global players in renewables and manufacturing like Mitsubishi and Samsung make real commitments to Scotland that will deliver jobs and opportunities.

“This week Dunfermline based company Burcote Wind announced plans for a billion pounds worth of renewable energy investment and the transformation of the Nigg Yard in the Highlands to a renewable energy hub is beginning.

“According to leading accountants Ernst and Young, in a report now spread widely through Channel 4’s fact check blog, international inward investment is now more successful in Scotland than any other parts of these islands, including London.”

Mr Swinney pointed out that the UK Government itself had acknowledged the strength of Scotland’s Green energy credentials by siting the Green Investment Bank in Edinburgh.

The Finance Secretary also quoted the Financial Times, which had described uncertainty claims as “disingenuous”.

“The Financial Times described Westminster’s pretext for accelerating the poll – that uncertainty is damaging the economy – as ‘disingenuous at best’.  They said that as threats go, any risks posed by a referendum were ‘as a fleabite’ compared with the all-devouring Eurozone crisis.” he said, and added:

“If there is any uncertainty facing Scotland’s economy, it comes not from the talk of a positive future with investment in the economy but from the policies of austerity and negativity being pursued by the UK Government.”

Mr Swinney warned that the challenges of the global recession would not disappear with independence, and stressed the importance of educating Scots on the economic strength of their country in the run up to the independence referendum.

Citing a report from the Centre for Economics and Business Research he said:

“And it’s not just me that says that Scotland is strong enough to stand on our own two feet.  Contrary to what we sometimes hear, a recent study by the independent Centre for Economics and Business Research confirmed that Scotland receives no net subsidy from the rest of the UK. 

And they worked that out whilst allocating Scotland less than our full share of North Sea Oil and Gas.”

Mr Swinney then took a light hearted swipe at the SNP’s political opponents who he suggested had conceded Scotland was more than capable of making a success of independence.

“David Cameron – ‘It would be wrong to suggest that Scotland could not be another such successful, independent country.’

“Ruth Davidson – ‘I believe Scotland is big enough, rich enough and good enough to be an independent country.’

“Scottish Labour deputy-leader Anas Sarwar – ‘Scotland would probably be a successful country if it was an independent country.’

“Iain Gray – ‘I do not think Scotland is too small, too poor or too stupid to stand on its own’

“David McLetchie – ‘An independent Scotland would be viable’

“And who could forget Michael Moore ‘You’ll never hear me suggest that Scotland could not go its own way.’

Mr Swinney ended the list with a quote from Michael Saunders, Chief Economist at Citigroup who said “you have to get over any misconception that Scotland cannot be a viable economy because it clearly can be.”

The Finance Secretary argued that the fiscal case in favour of independence was already clear and called on Unionist parties to address what he called the consequences of staying in the Union.

“Conference there can no longer be any argument about whether Scotland can afford to be independent. 

“The answer is yes and the case is closed.  The question our opponents have to answer is can we afford the consequences of remaining part of the UK.”