Sunday, December 03, 2006

Scottish Conservative Party hopes scotched!

Can Scottish Conservatives ever win power when "just 163,000 Scottish taxpayers, from a population of 5m, make any net contribution to the British exchequer. The rest receive more than they pay out in reliefs, subsidies and benefits"?

Why offer tax cuts when so few people actually pay any tax!?!


Nick said...

I'm a Scot, and I'm utterly scandalised by that particular quote in that article re: the number of taxpayers who are 'in surplus'. I'm trying hard to find the source.

If it's true, I'm utterly ashamed, and I think it's a shocking indictment of how turgid our economy has become. But I'd really like to see how that figure was arrived at, as I'll only heed it if I can see that it's wildly out of kiltern when compared to other countries.

Snafu said...

Nick, I'm also disappointed there was no direct link to the quote. Please let me know if you find it!

Nick said...

I'll do that, not found it yet though . Been thinking about it some more, and it's perhaps not so shocking as it sounds. Scotland runs a deficit (as does the UK as a whole, Scotland's is just proportionally bigger).

Now, in any country running a deficit, there is less revenue generated than being spent. Thus, in such a country (which is most countries), the average citizen must cost more than he generates for the economy, since the economy as a whole is 'losing' money. It may well be that in most countries the median value sits just below break even, and only the top earners push it back up again - in other words, the majority of taxpayers in defecit economies (which is most) do not reach this 'break even' point, which would put the Scottish figure back into perspective. Other considerations:

- Scotland has more public sector workers than the rest of the UK, a consequence of many government departments setting up where it's cheapest (having somewhere cheap to employ public sector staff benefits the UK as a whole). Do public sector employee income tax/NI get discounted from the figures because the money comes from the public purse? If so, this would bias the figures 'against' Scotland.

- Income tax is the single greatest source of government revenue, but off the top of my head accounts for something like a third of the total. The rest comes from corporate tax, VAT, other excise etc etc. Scotlands income tax contributions tell only part of the story.

I'm speculating, of course. It'd be a far more enlightening statistic if I could find the damn source, and more importantly, try to compare it with other countries.

Snafu said...

Nick, that the income tax rate would need to increase to 48p in the pound if Scotland was independent should be enough to suggest that most Scots are net beneficiaries of English largesse!

Why should Scottish public sector workers be cheaper than anywhere else in the UK when unions always press for national pay levels to be standardised? I recall 60% (?) of Scottish workers work directly or indirectly for Government agencies.

It is also likely that fewer Scots are net tax contributors as per capita spending in Scotland is £1,500 higher than in England too!

Richard Thomson said...

48p? You're having a laugh! Given the UK deficit of £37bn this year, how much should UK income tax be going up by to cover that deficit?

The argument that Scotland gets £1,500 more per head than England so is therefore 'subsidised' is just plain wrong. First, it takes no heed of revenues raised in Scotland to cover it. And second, since the UK is in deficit itself, that renders any kind of domestic subsidy to Scotland impossible.

Spending in the East Midlands is £750 per head below the UK average of £7,000, while in London it's over £1,000 above the UK average. Does that mean the East Midlands is subsidising London? People of Nottingham arise! :-)

When it comes to the size of the state, official Scottish GDP figures always miss out oil revenues. Put them in, and the size of the public sector falls to 40% of GDP - lower than the overall UK figure, which in contrast is calculated including North Sea revenues.

Given Tim 'nae' Luckhurst's eccentric take on Scottish politics amd tendency to make things up when it suits him, I'd be very interested to know where he gets the figure that there's only 163,000 taxpayers making a net contribution. Since there's currently around 2.5m people in work in Scotland, it seems exceptionally unlikely.

I can't believe that guy was ever editor of 'The Scotsman'. It's yet more deluded witterings from a frustrated Tory Unionist who never quite got over the temerity of the natives voting for home rule.