Scotland avoided an extra £2,000 ($2,800) national debt per person by voting to stay in the United Kingdom at last year’s referendum.
Scotland’s deficit would have ballooned to more than £10 billion if it had gone it alone, the Institute for Fiscal Studies said in a report published on the day Scotland would have officially left the union.
Here’s the IFS (emphasis ours):
In 2016-17, for instance, the “fiscal gap” is projected to be 6.5% of national income (9.4% less 2.9%), which in cash terms is equivalent to about £10.6bn, or around £2,000 per person in Scotland.
That is the size of the Scottish deficit
of its share of the overall UK deficit (which is £850 per person in the UK in the same year).
The optimistic predictions of last year didn’t factor in the crashing oil price, which has hit government revenues hard. Oil has gone from triple digits in 2014 to a low of below $30 in January this year, halting investment in Scotland’s energy industry.
Here’s the IFS again:
But while the precise numbers would almost certainly differ if Scotland were independent, the recent weakening in Scotland’s public finances — driven to a significant extent by falls in oil revenues and associated economic activity — clearly would have made it more difficult for an independent Scotland to manage its public finances.
The oil revenue and public finance forecasts produced by the Scottish Government in the run up to the referendum also look increasingly further away from what is now expected.
And here’s the chart: