Cost of the Banking Crisis

American Government Bailout RBSs American Operation. Bank of Scotland Taken Over by Halifax - Never a Merger.
Much was talked about the banking crises and how an Independent Scotland would have coped with the problems of the two large banks that are registered as headquartered in Scotland, the Royal Bank of Scotland and HBOS. Why they never mention Lloyds TSB which is also registered in Scotland I do not know. However, it is the country in which the saver lives that guarantees that amount not the country where the bank is headquartered. For instance, the US Government gave bailout money to the Royal Bank of Scotland for their US operation. The governments decided to bailout the banks because they guarantee the money of every single savers up to, at that time, 50,000 for each different banking group. Therefore an Independent Scottish Government would only have responsibility for savers who were citizens of an Independent Scotland whichever bank operating in Scotland they had an account with.

Scotlands Accounts

Financial Year 2011 - 2012

Bank of Scotland Buy Out

Unlike RBS, the Bank of Scotland did not set out to increase its size. They were continually told they had to merge with another or be swallowed up. An independent Scotland could have blocked any hostile take-over of the Bank of Scotland, something the UK Government with one eye on the London Stock Exchange would have refused to do. Eventually the Bank of Scotland was found a partner, the Halifax, and they merged in May 2001 to form Halifax Bank of Scotland (HBOS). Those of us who have an account with the Bank know it was nothing other than a take over by the larger Halifax. The three gentlemen who have now been singled out as the culprits of bringing HBOS down were all employed by Halifax prior to the merger and retained those positions with HBOS. Sir James Robert Crosby - Chief Executive of Halifax became Chief Executive of HBOS Andy Hornby - Chief Executive Retail Halifax became Chief Executive Retail HBOS. Lord Stevenson - Chairman of Halifax became Chairman of HBOS.

The following figures are taken from Government Expenditure and Revenue Scotland 2011 - 2012 (scotland.gov.uk/gers) issued March 2013 Scottish National Accounts Project 2011 - 2012 (scotland.gov.uk/snap) issued March 2013 Public Expenditure Statistical Analyses 2012 (hm-treasury.gov.uk) issued June 2013 H.M. Revenue & Customs (uktradeinfo.com) issued March 2013

Every figure tells a story

Royal Bank of Scotland Bail Out

Royal Bank of Scotland was one of the biggest beneficiaries of the $700 billion bail-out courtesy of the US tax-payer, which will enable it write off a significant portion of its dodgy assets, transferring billions of dollars of non-performing loans and sub-prime tainted assets in the USA to the US taxpayers - not the Scottish taxpayer.

All four nations in the UK are running at a deficit. Scotland alone is running at a surplus before the interest payments for the UK deficit is included.

Foreword You will see from the following pages, Scotland is in a better financial position than the UK, according to the latest figures - 2011/12. This is not only the case for this year, it is also the case for last year and the year before, in fact it has been the case for each and every one of the last 30 years. Yet for each and every one of those 30 years we have been told Scotland is subsidised, when the facts tell us the exact opposite is true. Unfortunately for those that are put off by a mass of figures, they are the only way to demonstrate that an Independent Scotland would be in a far better position economically than we are as part of the UK.

Government Subsidies
which can be achieved both directly and indirectly
This issue of Scotlands Accounts was delayed awaiting the UK Treasury - Public Sector Statistical Analysis (PESA) issued 17 July 2013 which carries the most up to date public expenditure figures broken down by Country or English Region. The idea was to demonstrate that London received a higher direct subsidy than Scotland, as had been the case in previous year only to find that this years showed London as receiving a lower direct subsidy in 2011-12 than Scotland. Not only that, but the figures from previous years had been altered to also show London receiving a lower subsidy than Scotland. You may well wonder how accounts that are more than two years old can suddenly change so drastically or in the case of Defence spending disappear altogether? Public Expenditure per head of population Financial Year PESA % of UK issued 2012 Average
10,146 9,945 10,198 10,165 116% 113% 115% 114%

PESA issued 2013

9,931 9,929 9,850 9,972

% of UK Average
114% 114% 112% 114%

2009 - 10
Financial Year

London Scotland London Scotland

2010 - 11

Direct subsidy - higher than average public spending on such things as Social Protection (Pensions and Benefits), Health and Education etc. London weighting is also a subsidy, which pays everyone on the public payroll in that city higher wages (table above). Indirect Subsidy - such as Defence spending which includes the placing of an order for a ship or an aircraft, the siting of an army camp or a naval base etc. All these things bring direct and indirect financial benefits to an area. For some reason the UK Government stopped producing country and regional breakdowns of Defence spending in 2007/8.

The Vote for an Independent Scotland is a Vote of the Heart and the Head
While for some of us the vote for an Independent Scotland is a vote of the heart, we fully understand that others have to satisfy themselves that their future will be financially secure if they vote YES. This is understandable. We have responsibilities, bills to pay. It is only right that people should be concerned about their economic future if they vote for an Independent Scotland. Well plough your way through these figures and your heart and your head will be saying YES to Independence.

Indirect subsidy (Defence Spending per head of population 2007- 08) Defence Spending Spending (per head) % UK average London & South England Nth Ireland Scotland Wales 664 450 371 300 130 158% 107% 88% 71% 31%

Other Indirect Subsidy - such as the siting of Civil Service jobs (particular the senior levels) which tend be to disproportionately based in London and brings a considerable financial benefit to that city. These are much harder to obtain.

Current & Capital Expenditure 2011 - 2012

(expressed as a % of Income )
Scotland million Income Tax Corporation Tax Capital Gains Tax Other Taxes on Income and Wealth National Insurance Contributions VAT Fuel Duties Stamp Duties Tobacco Duties Alcohol Duties Betting and Gaming Duties Air Passenger Duty Insurance Premium Tax Landfill Tax Climate Change Levy Aggregates Levy Inheritance Tax Vehicle Excise Duty Non-Domestic Rates Council Tax Other Taxes (royalties and adjustments) Interest and Dividends Gross Operating Surplus Rent and Other Current Transfers North Sea Revenue Total Revenue 10,790 2,976 246 265 8,393 9,554 2,296 506 1,129 981 115 213 251 97 64 52 164 475 1,933 1,987 1,028 237 2,498 47 10,573 56,870 % Total 19.0% 5.2% 0.4% 0.5% 14.8% 16.8% 4.0% 0.9% 2.0% 1.7% 0.2% 0.4% 0.4% 0.2% 0.1% 0.1% 0.3% 0.8% 3.4% 3.5% 1.8% 0.4% 4.4% 0.1% 18.6% 100% UK millions 146,588 32,900 4,336 2,976 101,597 109,803 26,798 8,919 9,878 10,180 1,221 2,637 3,002 1,075 678 283 2,915 5,937 23,968 25,964 12,831 2,807 23,564 529 11,250 572,636 % of UK 7.4% 9.0% 5.7% 8.9% 8.3% 8.7% 8.6% 5.7% 11.4% 9.6% 9.4% 8.1% 8.4% 9.0% 9.4% 18.4% 5.6% 8.0% 8.1% 7.7% 8.0% 8.4% 10.6% 8.9% 94.0% 9.9% General Public Services Public and Common Services International Services Public Sector Debt Interest Defence Public Order and Safety Economic Affairs Enterprise & Economic Development Science and Technology Employment Policies Agriculture, Forestry and Fisheries Transport Environment Protection Housing & Community Amenities Health Recreation, Culture and Religion Education and Training Social Protection Accountings Adjustment
(see Note below)

Scotland Expenditure % of million Income

UK Expenditure % of millions Income

1,477 750 4,072 3,281 2,558 893 335 130 987 2,648 1,237 1,719 11,066 1,608 7,702 21,656 2,338

2.6% 1.3% 7.2% 5.8% 4.5% 1.6% 0.6% 0.2% 1.7% 4.7% 2.2% 3.0% 19.5% 2.8% 13.5% 38.1% 4.1%

12,699 8,952 48,613 39,119 32,319 3,320 3,583 1,959 5,839 20,205 11,218 10,406 121,286 13,198 91,650 242,291 26,945

2.2% 1.6% 8.5% 6.8% 5.6% 0.6% 0.6% 0.3% 1.0% 3.5% 2.0% 1.8% 21.2% 2.3% 16.0% 42.3% 8.7%

Total Expenditure Total Income Deficit

(2011 - 2012)

64,457 56,871 7,586

113.3%

693,602 572,636

121.1%

13%

120,966

21%

Scotland provides 9.9% of the UK income from a population share of 8.4%

After paying 8.4% of the interest due on the UK National Debt and an above average spend on Capital projects Scotlands deficit is 13% of income, 8% lower than the UK.

National Debt & Deficit

Scotland had a surplus of 674 million on its current budget before having to pay interest on 8.4% of the UK National Debt. Scotland was only responsible for 0.8% of the Current Budget Deficit over the past 6 years (2006/07 - 2011/12)
The UK has always borrowed money, prior to this present crisis that debt stood at over half a trillion pounds. But now the UK is borrowing money to keep day to day services going. Shown below are the Current Budget and the Capital Budget for both Scotland and the UK for the financial years 2006/07 to 2011/12, which is an extract from the Government Expenditure & Revenue Scotland report - issued March 2012 & 2013. The Current Budget contains the day to day expenditure such as Health, Education Benefits etc but also includes Capital Consumption - the amount of assets used up in that financial year. The Capital Budget includes investment which may bring long term benefits and for fixed assets which have an economic life of more than one year. Current Budget
Current Income Current Expenditure Capital Consumption Deficit(-) / Surplus(+) before interest added Interest Payment Deficit(-) / Surplus(+)

Current Budget - Revenue

As can be seen from the Current Budget, Scotland has run up a budget deficit over the six years shown, excluding interest payments, of 1,279 million (or 242 per person in Scotland) but during the same period the UK has run up a deficit of over 151,221 million bringing the debt to 2,379 per person in Scotland. An additional 2,137 each and every one of us in Scotland is paying interest on a debt we did not accrue.

Capital Budget - Investment

During the period shown (2006/07 to 2011/12) Scotlands expenditure on Capital projects and investment has been at an above average level per head of population of 11.5% of the UKs capital expenditure. Which is the equivalent of investing 4,671 per head of population in Scotland as opposed to 3,407 per head of population in the UK, the result of additional investment by the Scottish Government. Current Budget
Current Income Current Expenditure Capital Consumption Deficit(-) / Surplus(+) before interest added Interest Payment

Scotland
(millions) including Geographical share of North Sea Oil
2006-07 49,776 45,200 1,595 2,981 2,428 553 2007-08 51,927 48,030 1,684 2,213 2,666 -453 2008-09 55,254 49,791 1,748 3,715 2,681 1,034 2009-10 47,573 52,775 1,863 -7,035 2,614 -9,649 2010-11 52,330 54,245 1,912 -3,827 3,857 -7,684 2011-12 56,871 54,191 2,006 Total % of UK

UK
(millions) including Geographical share of North Sea Oil
2006-07 2007-08 2008-09 2009-10 513,338 572,468 19,345 -79,237 2010-11 551,663 587,606 20,310 -56,534 2011-12 572,636 595,186 21,134 Total

519,184 548,899 532,730 478,468 505,319 534,068 16,988 23,728 17,683 23,966 18,649 -19,460

+674 -1,279 0.8%

4,072 -3,398 -19,597 5.3%

-43,684 -151,221
48,613 -92,297 -369,070

28,749 -5,021

31,596 -7,630

31,830 -51,290

31,091

45,970

Deficit(-) / Surplus(+)

-110,328 -102,504

Capital Budget
Expenditure Less Capital Consumption Net Investment Deficit

Scotland
(millions) including Geographical share of North Sea Oil
2006-07 5,044 -1,595 3,449 -2,896 2007-08 5,229 -1,684 3,545 -3,998 2008-09 6,481 -1,748 4,733 2009-10 6,660 -1,833 4,827 2010-11 5,928 -1,912 4,416 2011-12 6,193 -2,006 4,187 24,757 11.5% 7.6% Total % of UK

Capital Budget
Expenditure Less Capital Consumption Net Investment Deficit

UK
(millions) including Geographical share of North Sea Oil
2006-07 40,888 -16,988 23,900 -28,921 2007-08 46,772 -17,683 29,089 -36,719 2008-09 64,898 -18,649 46,249 2009-10 67,944 -19,350 48,594 2010-11 58,778 -20,315 38,463 -140,967 2011-12 49,800 -21,134 28,666 -120,963 214,961 -584,031 Total

-3,669 -14,476 -11,700

-7,585 -44,354

-97,539 -158,922

While Scotland is in the black - the UK is 24 billion in the red

Balance of Trade
Export
( millions)

GDP (Gross Domestic Product)

Scotlands International GDP Per Capita Ranking (www.scotland.gov.uk) Published March 2013 GDP is a measure of the total wealth of a country. It is useful as a comparison with other countries when it is converted to GDP per capita by simply dividing it by the population of the country. GDP per capita is often considered an indicator of a countries standard of living. It is not a measure of personal income. It is widely used by the World Bank, the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD) etc to ascertain a countrys credit rating. The table opposite was issued in March 2013 and compares Scotlands GDP per capita with the 34 OECD countries (Organisation for Economic Cooperation and Development). It clearly shows an Independent Scotland relative to a Scotland as part of the UK.

One very important indicator when assessing the financial well being of Scotland is to look at the balance of trade with other countries. It is necessary to import goods required from other countries but you have to balance that with exporting goods too

2011 per head of population

Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Country Luxembourg Norway Switzerland United States Netherlands Ireland Austria Scotland Australia Sweden Denmark Canada Germany Belgium Finland Iceland United Kingdom France Japan Italy Spain Korea New Zealand Israel $ $88,601 $61,047 $51,507 $48,043 $42,781 $42,329 $42,186 $42,124 $42,060 $41,485 $40,945 $40,418 $39,465 $38,874 $37,485 $36,483 $35,607 $35,387 $34,483 $32,659 $32,121 $30,286 $30,208 $27,958

Trade in Goods - Exports & Imports 2011

(H.M. Revenue and Customs March 2013) Import
( million)

Surplus / Deficit (-) - 104,645 + 5,427 + 5,139 + 201 - 5,325 Oil and Erractics are not allocated to any one country

England Wales Scotland Nth Ireland Unallocated

212,207 13,458 17,362 5,733 46,714

316,852 8,031 12,223 5,532 52,039

Unallocated - where goods are not or cannot be allocated to any one country. The two unallocated budgets here are Erractics (ships, aircraft, precious stones and silver) and North Sea Oil. One explanation for the unallocated region is where Oil is processed on rigs in the North Sea and dispatched directly to other countries without entering the UK.

Unfortunately a similar regional breakdown cannot be obtained for Services which redress the deficit in UK trade in Goods to some extent. The following figures for Trade in Goods differs slightly from those above although they were obtained from the same source. Export
( millions)

The Arc of Prosperity

The much-used phrase the arc of prosperity is still doing well with ten small European countries scoring higher than the UK including the muchmaligned Ireland and Iceland. We are often told that Ireland and Iceland are basket cases. Well, using this internationally agreed method of assessing the financial standing of countries, Ireland finds itself two places above Scotland but 11 places in front of the UK, while Iceland is one place above the UK.

Import
( million)

UK Trade in Goods UK Trade in Services

299,073 193,933

399,303 117,294

Surplus / Deficit (-) -100,230 + 76,639

The UK deficit is therefore 23,591 million

Note :- Scotland of course has another important trading partner - the rest of the UK. While we have been able to obtain the exports to the rest of the UK, we have been advised that there are no accurate or safe figures for imports from the rest of the UK.
The above information was taken from HMRC Exports & Imports 2011 published in March 2013.

The full list can be seen at clydebanksnp.org/yes

Benefits & Pensions

Both the State Pension and Benefits received in an Independent Scotland will come from Taxation and National Insurance contributions made by fellow Scots just as it does at present. Under the heading of Social Protection, Benefits and Pensions are less of a draw on Scotlands economy than is the case in the rest of the UK.

Defence Spending
B.A.E. Systems - Clyde, better known to us as Yarrows and Govan mainly specialise in building naval ships for the British Navy and a number of other national fleets. Over the last few years they have been completing one Type 45 Destroyer each year.

Type 23 Frigate - hull costs around 130 million (excluding the cost of weapons systems)
Displacement 4,900 Tonnes, 133M (436ft), Beam16.1M

Cost of Benefits as a percentage of Income.

Benefits included are :Scotlands Personal Social Service, Benefits are Incapacity, Disability, Injury Benefits, Survivors, Family Benefit, Income Support, Tax credits, other Unemployment Benefits, Housing. of Scotlands Income

Type 45 Destroyer - costs around 600 million (excluding cost of Sea Viper anti aircraft missile system)
Displacement 8,000 Tonnes, 152M (500ft), Beam 21.2M While the accounts for 2011/12 show a per capita share of 8.4% allocated to Defence spending for Scotland, less than two-thirds of that is actually spent here. Also in reality it should be the same as Scotlands contribution to the British economy i.e. 9.9%.

Rest of the UKs

Benefits are

24.1%

26.4%
of UKs Income

Total Defence Budget = 39.1 billion (including procurement) Scotlands input to the Defence Budget = 3.9 billion (9.9%)

Cost of State Pension as a percentage of Income.

Scotlands
Pensions are
All figures are taken from the Government Expenditure and Revenue Scotland 2011-12 published in March 2013, with a little help from H.M. Treasury - Public Expenditure Statistical Analyses 2011/12

The Procurement Budget = 13.9 billion (35%) Scotlands input to the Procurement Budget = 1.33 billion (9.9%) Scotlands contribution to the Department of Defence procurement in the financial year 2011/12 is the equivalent to the following:Type 23 Frigate

Rest of the UKs

Pensions are

14.0%

15.9%
of UKs Income

of Scotlands Income

Type 45 Destroyer

Type 45 Destroyer

Public Sector Pensions Schemes - are either administered or regulated by the Scottish Public Pension Agency on behalf of the Scottish Government. This covers NHS, Teachers, Police, Firefighters, Local and National Government all paid from funds administered in Scotland at the present time.