SELECT COMMITTEE ON ECONOMIC AFFAIRS - Parliament

British Academy—Written evidence
discussions had at the two conferences. Not all points would have been accepted by all
speakers, but the below attempts to give a consensus view.
HOW DO THE NUMBERS ADD UP? TAXING AND SPENDING
6. One of the most hotly contested areas in the debate around Scottish independence is
the impact it would have for the financial positions of both Scotland and the rest of the
UK. Financial implications also appear to be central to the degree of support for
independence from within the Scottish electorate. There are a number of disputed areas
in the debate on finance, which it would be pertinent to look at in more detail. Broadly,
these related to the overall fiscal situation in Scotland, relative to that of the UK, the
rates of public spending in Scotland, and the potential sources of tax revenue in an
independent Scotland.
What are the differences between the Scottish economy and that of the UK as a
whole?
7. To begin with, it is important to establish how far the state of the current Scottish
economy deviates from that of the UK as a whole. We can examine this issue by forming
an aggregate index based on seven representative indicators. 1 Comparing the aggregate
difference of each region’s ranking from the median (see figure 1) in fact reveals that the
Scottish economy is well-matched to that of the UK as a whole, being one of the closest
regions to the median. Far greater deviations can be found in the English regions of the
South East (performing relatively better across the indicators) and the North East
(performing relatively worse).
1 The seven indicators used are: Knowledge intensive services (as % of total employment); R&D Spending by business as
share of GDP; House Prices; Average Weekly Earnings; Unemployment Rate; Gross disposable household income (£ per
head); Workplace-based gross value added (GVA) per head at current basic prices
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