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  By Martin Kelly 
 
Labour MSPs at Holyrood have cheered and clapped claims by their leader Johann Lamont that the Scottish people rely on subsidies from Westminster and that Scots get "more money out of the United Kingdom than we put in it".
 
The Labour MSP made the claim during First Minister's Questions at Holyrood where she said that Scotland received £64.5bn from the UK Treasury but contributed only £56.9bn.

"There would be even less money to spend if Scotland votes to go independent." She said, to resounding cheers from her backbenchers who appeared to relish the 'subsidy junkie' theme of Ms Lamont's questioning.

However Ms Lamont's interpretation of the fiscal position of Scotland was challenged by the First Minister who pointed out that over the last four years, Scotland has been relatively better off to the tune of £12bn.

He said: "We have had a smaller deficit over the last four years than the UK, that is beyond doubt."

Mr Salmond added: "And for the people of Scotland, we would have been able to use Scotland's massive resources to benefit the people and the economy of this country."

The First Minister also revealed that the total amount borrowed by former Chancellor Alistair Darling and current Chancellor George Osborne was greater than all of the previous Chancellors put together.

The dispute over funding follows a blow for the anti-independence campaign earlier this week when the UK Treasury issued a shock announcement confirming that the rest of the UK would remain solely responsible for UK debt after independence.

The news was seen by many observers as strengthening the hand of the Scottish Government on the issue of a possible currency union between Edinburgh and London in the event of independence.

Ms Lamont's claim that Scotland contributed less than it got back from the UK was called into question when it emerged she had not factored UK borrowing into her figures.

Newsnet Scotland spoke to a specialist in economics who explained that the Scottish Labour leader appeared not to have understood the figures she quoted.

He said: "The £64.5bn figure quoted by Ms Lamont as representing the amount of funding Scotland receives from the UK Treasury, includes a proportion of borrowing by the Treasury to make up for the current UK deficit. 

"In order to determine which direction any relative subsidy is flowing, we must first strip away the amount made up through borrowing.  Stripping the UK borrowing away reveals that Scots contribute more per head into what's left than their UK counterparts.

"To put it simply, as things stand, if Scots pay in £9.90 then they get £9.30 back."

The borrowing powers of the Scottish Government are strictly limited by the Scotland Act 1998.  Any such borrowing aimed at increasing public spending must only be from the UK Government.  In effect, this means that the Scottish Government has no authority to raise extra resource by borrowing or sanctioning borrowing except for in exceptional circumstances.

The UK Government is able to borrow to fund public sector expenditure across the UK, including the Scottish Government block grant.

He added: "An independent Scotland would still have to borrow, as most countries do, in order to maintain public spending.  However, with a lower deficit, the amount needed to make up the difference would be less than at present.

"Johann Lamont's claim that a newly independent Scotland would have less money to spend than it does at present is an indication of how little she understands government finance and deeply worrying for someone who has ambitions to be First Minister"

Analysts have predicted that by 2016-17, borrowing will see UK debt grow to £1.6 trillion which will be over 100 per cent of its GDP.

Scotland's share of that debt would be around £130bn which will be between 75 and 80 per cent of Scotland's GDP.

Comments  

 
# DonaldMhor 2014-01-16 20:39
We pay more for the UK borrowing on our behalf than the UK does. Gordon MacIntyre-Kemp has a good article here. www.businessforscotland.co.uk/.../


[Admin - Can posters please check their contributions for typos and/or spelling mistakes. It would be greatly appreciated.]
 
 
# call me dave 2014-01-16 20:43
I watched the show and heard the clapping and cheers from the camp followers, how shameful.

It soon became embarrassingly evident that she was only ‘covering the class’ for the math teacher who must have been off sick but left her a question to ask the FM.

Unhappily for her Mr Salmond has passed his SVQ maths module.

Lamont is 'project fear' imagine her getting her hands on the levers of power in the Scottish Parliament...
 
 
# Aplinal 2014-01-16 20:49
Which is probably the only good reason to vote no. Save an iScotland from the current C-class Labour politicians. Part of me in "conspiracy" mode thinks that this is the ultimate "No-Better-Together" plan. Convince Scots that a potential government of Labour is SO BAD that they recoil in horror at the thought.
 
 
# goldenayr 2014-01-16 20:45
This was lifted from 'The Scotsman' today.

"Catalonia is one of the country’s most powerful regions and represents roughly a fifth of Spain’s 1.1 trillion euro ($1.5 trillion) GDP. Its population of 7.5 million is greater than those of EU members such as Denmark, Ireland or Finland."

What I want to know is this.

Catalonia has no discernible oil industry,does not have the wealth of minerals or resources,has a comparable if not slightly less finance sector,comparab le tourism,wine instead of whisky,,less than 2 million more of a population,yet.....

Catalonia has,according to Westminster figures,4x the GDP of Scotland?

Something smells,and it ain't the squid ink.


[Admin - We have edited this post to remove dead space. Please do not pepper your posts with large amounts of white space.]
 
 
# Marga B 2014-01-16 23:05
What smells, goldenayr?

Catalonia has a lot of manufacturing, including car plants, chemicals, biomedicals, pharmacy, immense tourism and world conference facilities. Same GDP as Denmark.

Ernst & Young sets Catalonia as the third region in Europe for FDI. The number of projects show an increase of 16% over the previous year. Barcelona stands as the 6th most attractive city in Europe for business.

What else do you want to know?
 
 
# goldenayr 2014-01-17 08:21
You've picked up the wrong ene of the stick Marga.
It's not the Catalonia figures I question.It's the Westminster treasury figures for Scotland.They appear to be a bit light.Apologies for any misunderstandin g.
 
 
# rabb 2014-01-16 20:48
I had the same problem explaining this to a management colleague. I think it sank in with her eventually.

It does make you wonder sometimes the calibre of the people we elect to serve us in parliament.

Johann is a teacher, she's an educated woman. Surely to god she and others are capable of grasping this? It's not rocket science!
 
 
# snowthistle 2014-01-16 21:18
Problem is they don't want to grasp it. I'm not convinced that Lamont understands but I'm pretty sure her advisers do which makes it all the more sinister.
 
 
# Arthur G 2014-01-16 23:37
There are many who have knowledge of her, who would, question your assertion that:
"Johann is a teacher, she's an educated woman..."


When she worked as a sub in the High School in Castlemilk, Glasgow she was infamously lazy and considered, not very clever.

Lamont owes her position as Labour leader in Scotland, not to being the best candidate of an admittedly poor field but because she was enthroned by the union block vote.
 
 
# daveniz 2014-01-16 21:23
I think Johann Lamont and her labour party Msps knows this to be a lie and a playing this card for two reasons:

1) To scare people against independence
2) To justify Westministers £4 billion cut from the Scottish budget

its utterly disgraceful and shows how low they will go to save there careees!
 
 
# Macart 2014-01-16 21:30
Dear Lord, just how far have Labour fallen that they take pleasure in any such claim?

Utterly appalling that they cheer at the thought of their country being reliant on the 'charity' of others.

Not fit for office and not fit for purpose. They are certainly not fit to represent the Scottish people at any level.
 
 
# Fungus 2014-01-16 21:39
Quote:
the Scottish Labour leader appeared not to have understood the figures she quoted.


No shit Sherlock
 
 
# theycantbeserious 2014-01-16 21:41
Is this all they have got? Regurgitate and spout the same old crap, hoping some will stick.

Wake up Scotland. This is not the labour party of the past. These shysters will take the shirt off your back and also expect you to pay for it, knowing that they were happy to officially open the food bank you will be visiting. They will take your jobs, benefits, NHS, free education, health care and travel etc. At what point will the grey cells scream and the penny drop that they do not have your best interest at heart, only those of their masters in Westminster?
 
 
# millie 2014-01-16 22:04
New tactic by Labour for FMQs.
Labour knows the ‘arithmetic’ fine and well.

The BBC just wanted the ‘right’ piece for 5.12pm Radio Scotland Newsdrive (when everyone is driving home from work). People who are not up to speed with the facts will have heard Ms Lamont sounding quite authoritative with her little piece of mischief and will have heard the FM utter the word ‘DEFICIT’- this is all Labour/BBC wanted.

Further, Cameron Buttle (BBC) didn’t highlight that Ms Davidson was very firmly ‘shown up’- he did, however use that word ‘TRUST’ which seems also to be a word rarely off Brian Taylor’s lips. It appears to be the ‘in word’ at the BBC just now.

Hmm, say a word often enough etc?

www.bbc.co.uk/.../b03nhs7m at 01:12:53hrs.
 
 
# gfaetheblock 2014-01-16 22:33
Who is the economic expert that you have quoted? You have missed off their name, qualifications and any body or employer that they represent.


[Admin - If you disagree with his summary then please explain why. We do not reveal the names of contributors if they indicate they would rather not be named.]
 
 
# gfaetheblock 2014-01-18 00:20
I am afraid I only have first year university economics education and a career in financial services, so I don't feel qualified to call myself an economics expert.

Good journalistic practice is to quote sources and references, you are doing a great job in citizen journalism I think it would help the cause the have these standards.
 
 
# Northesk 2014-01-22 04:19
Quoting gfaetheblock:
Good journalistic practice is to quote sources and references, you are doing a great job in citizen journalism I think it would help the cause the have these standards.


I would equally suggest if you are to employ "standards" then you ought to consider the parsing/punctuation of that paragraph.
 
 
# johannes 2014-01-16 22:59
I listened to Lamont on Radio Scotland today.

Totally incredible, a total embarrassment that the leader of a main political party in Scotland either cannot understand simple arithmetic, or has sunk so low that she would lie and hope the media and masses swallow it.

An embarrassment for Scotland, Scotland's people, and all those who struggled for the working class in years gone by.
 
 
# CharlieObrien 2014-01-17 01:37
I watched it on the box and I was trying to eat lunch at the time,aye just gave up.She is not good material for a ministers post,her questions drag on until she works out where she was on the script.
 
 
# martin morrison 2014-01-17 10:06
"...the main political party in Scotland...." ???
Er, I think not. If they were still the main political party in Scotland, we wouldn't be holding this debate.
 
 
# alanski 2014-01-16 23:09
Seriously, what does this say about the quality about the Labour Party in Scotland? Cheering and clapping over the false statement that England subsidises Scotland - they must love their country then? I guess that what they want is Scotland to be dragged down to their level, a level that sits way, way below mediocrity. A parcel of brainless rogues.
 
 
# thejourneyman 2014-01-17 00:16
I actually think it has been a good day for YES. JOLA clearly doesn't grasp the basics of these simple economic arguments or when to stop digging, AD stutters his way through various interviews summed up by stronger together. Despite all the pro-union air time the most telling points came from AD being interviewed by Gordon Brewer when it became clear BT have information that's concerning them about the polls.
MSM continue to spout the NO still clearly ahead but BT can see that the flow from undecided is in one direction, to YES! I believe they can see this and are struggling to stem the flow, despite thinking they are stronger together.
The determination of YES to maintain positive campaigning tactics is demonstrably creating a positive current towards YES - long May it continue.
 
 
# call me dave 2014-01-17 00:21
Will the Barnett formula be extinguished.
looks like our betters are working on it.

publications.parliament.uk/.../...

(use red buttons to navigate when opened)
 
 
# deepthroat 2014-01-17 00:32
If you are going to make assertions about figures in official statistics it is a requirement to have some understanding of what the numbers mean rather than picking up on the work of a junior Labour Party researcher.

The GERS figures in total comprise the spend of the Scottish Government and a share of Westminster Government expenditure. The Westminister spend is based on Westminister priorities and decisions. The Scottish Government has no power or influence over how Westminster allocated the UK spend. In recent years, as we crawl our way out of a global recession, most western governments have run an annual fiscal deficit.
Russell Bruce
 
 
# call me dave 2014-01-17 01:24
Cochrane in the Telegraph.

He is not pleased that Ruthless was shown the ‘yellow card’ at FMQ’s. The comments are worth a glance.

archive.is/SMFTx
 
 
# staypos+ve 2014-01-17 01:43
The UK National Debt growing every month as Westminster continues to borrow. And that after the cuts to date. Osborne has confirmed £billions more cuts after the 2015 Westminster Elections. Network Rail borrowing will shortly be included by a european ruling in the UK's statistics overnight the UK Total Debt will grow by a cool £30Billion ish. Watch out for the impact ! Lamont has no idea just like the erstwhile Lord McFall - Economic dunces. Brown, Darling,McFall and Lamont would you trust either of them with your borrowed pocket money! Seriously silly stuff today scoring a spectacular own goal. Many more to follow. giggle ha ha!
 
 
# cjmasta 2014-01-17 01:52
So many people still need to be explained to about Scotland`s economic strengths and then your Alistair Darling`s, Lamont`s etc will be shown up for the back stabbers they really are.
When the penny drops it`s amazing to see folks faces, I know how angry I was to find out the extent of not just the lies but the assault on my very self confidence as an individual and as a Scottish citizen.
The people of this country have every right to feel angry about the way we have been treated over the years, Lets turn that anger into passion and use it to build the kind of country we`ve been held back from creating for a long long time.
 
 
# Breeks 2014-01-17 02:00
I'm not letting Labour off the hook, but whether Scotland is in credit or deficit isn't the point. We are tied to a monster careering headlong into unmanageable volumes of debt. Whatever the running total, whatever the current economic capacity, the "management" of the UK has brought us all to the brink of the abyss. It is quite academic how well the motor is running when it's the current carrying your boat over the waterfalls.
Whether we are a couple of clicks in surplus or deficit is a minor distraction to the catastrophic mismanagement and withering incompetence of Westminster economics. + or - in close detail, the Scottish economy is a half starved anaemic waif in comparison to the economy we should be enjoying blessed with the bountiful resources we have, but of which we meekly allow ourselves to be ruthlessly dispossessed. Life can be so much better than this, and all we need to do is vote for it.
 
 
# EphemeralDeception 2014-01-17 07:18
O/T but related.
oilprice.com/.../...

"British economists are looking wistfully at the Oljefondet’s roaring success, contrasting it with the reckless spending habits of a succession of governments that largely squandered the country’s North Sea oil windfall.
...
Sukhdev Johal, professor of accounting at Queen Mary University of London, thinks the total might well have been $1.39 trillion by now."
 
 
# flyingscotsman 2014-01-17 08:08
"To put it simply, as things stand, if Scots pay in £9.90 then they get £9.30 back."

Even though the deficit in the Scottish figures is around £8bn, the rUK deficit is around £114bn (UK is £122bn) Scotland has 8.3% population but we only account for 6.5% of the debt (8bn/122bn).
 
 
# call me dave 2014-01-19 00:26
Mr Salmond sends Lamont a billet-doux it's not over till the fat lady sings! rsvp.

archive.is/b3SGE
 
 
# nelsterm 2014-01-19 22:35
I am going to vote Yes I think but Ms Lamont is right as far as I can see. Scotland pays a greater proportion of UK tax than the proportion it gets back. However, this only true if you assume that all oil revenues are Scotland's (see page 5 of scotland.gov.uk/.../... ). Also some areas of the UK like N. Ireland have a lot of tax payers money spent on them so this brings down the average. On top of tax a big additional chunk is borrowed to fund Scotland because Westminster has to as the UK runs a trade deficit. To say that money flows from Scotland to the UK is false unless you only count tax revenues but Scotland could never live on the tax revenues it generates as couldn't most regions of the UK. Alex Salmond will have to find this borrowed money too if Scotland is to maintain its standard of living. The fact that we have to always run a trade deficit is worth voting Yes for I think. Germany runs at a surplus so why not the UK?
 
 
# snowthistle 2014-01-19 23:39
Sorry nelsterm, she is not right. The only way 9.3% can give a bigger figure than 9.9% is if the UK runs a deficit, which, of course, it does.

So part of the money we get as a block grant is borrowed money. We have to pay that borrowed money back + interest.

We get 9.3% of the borrowed money and we pay back 9.9% of that money + the interest. So in the end we are not getting more out than we put in.
 
 
# bringiton 2014-01-20 01:01
British Labour do not agree that Scotland is a country.
 

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