Scotland doesn't "send more to Westminster than it gets back"
Polling for These Islands in 2023 found that 76% of SNP supporters believe that “Scotland sends more to Westminster than it gets back in public spending” and that they consider this claim to be very important to their constitutional view.
The waterfall chart below illustrates why its hard to square that belief with the fiscal reality described by GERS.
Presumably people making this claim would argue that Scotland "sends to Westminster" all the revenues raised by the Scottish economy, including a full geographic share of North Sea revenues. That is the first bar on the chart below.
The red blocks on the chart shows what Scotland "gets back" in terms of public spending.
The two figures most commonly cited as "what Scotland gets back" are devolved spending and reserved social protection spending (pensions, universal credit, etc.).
This chart show what else has to be considered to make a fair judgement of what Scotland "get's back":
- Accounting adjustments: required to state the figures on a National Accounts basis (ESA 2010), consistent with ONS Public Sector Finances. These adjustments are mirrored by accounting adjustments on the revenue side, so excluding them would reduce revenue by a similar amount- they cannot simply be assumed away
- Identifiable spending: judged by the Scottish Government's Chief Economist to be money spent for the benefit of Scotland - includes things like Network Rail, research grants, energy bills support, Renewable Heat Incentive, DWP operational delivery and various tax credits and reliefs
- Defence Spending: a simple population share of the MoD's costs (which are broadly in line with NATO commitments)
- Other non-ID: the cost of UK functions that are typically (but not exclusively) allocated to Scotland on a population share basis - with a few exceptions these represent core government functions and services that Scotland clearly benefits from and/or would need to pay for or replace if operating fiscally autonomously: FCDO (foreign aid, overseas embassaies & consulates), HMRC, Home Office (asylum & protection, border force, immigration enforcement, etc.), Cabinet Office, DWP corporate overhead, National Crime Agency, Maritime & Coastguard Agency, etc. If Scotland were to separate from the UK, what it would cost to operate dedicated, stand-alone government departments to replace those whose costs are currently allocated to Scotland on an 8% population share basis is an open question
We deal with the question of reserved spending in Scotland (as opposed to for Scotland shown here) in a [separate Insight: suffice to say it doesn't materially change the picture.]
If we stop at this point we get to Scotland's GERS deficit before debt interest and it's clear that Scotland has already "got back" much more than it has "sent to Westminster".
If we carry on to allocate Scotland its population share of UK debt interest and recognising the population share of the UK's deficit scotland is (implicitly) assuming a liability for, we get to the Fiscal Transfer figure - this is by definition how much more Scotland "gets back" than it "sends to Westminster". See Fiscal Transfer section for further discussion around this concept.