onsdag 25 april 2007

Should Scotland go independent?

salty and the scottish parliament
Originally uploaded by Lord Voldemort.

An article in Sunday's Observer discussed the prospect of Scottish indpendence, which the author, Ruaridh Nicoll, was against. Unwittingly, however, he was actually helping to promote
the break-up of the Union through perpetuating the myth of Scotland as a net recipient of revenue. (As a Scot, I hate this idea of a neutered nation – Observer 22 April)

The notion of Scotland as dependent has come about through a
superficial interpretation of revenues and subsidies.

Productivity in Scotland, as in other parts of Britain remote from
centres of population, is inevitably lower than in the more favourably
located regions. This is due to a variety of factors, the most
important of which are transport and energy costs. The difference is
apparent in rents across the country. The high rental values in London and the South East are the market value of the better infrastructure available there. This is a value that is sustained largely by public spending. The real subsidy recipients are landowners in the better-off areas who enjoy steady rental growth on the backs of taxpayers at large.

The problem for Scotland is that it suffers from a national tax policy
that ignores these realities of locational advantage and disadvantage. The tax take, as a proportion of the the wealth produced, is almost the same regardless of whether a business is running in the far north of Scotland or Central London. But in the more distant locations, the burden of tax is critical and can preclude successful production. More tax is demanded from Scotland than it can afford. The same applies also to pockets of geographical disadvantage – East Kent, and even parts of Greater London – within the most prosperous regions.

This explains why some areas suffer from persistently high
unemployment. The problem is tacitly recognised through the programmes of grants and "subsidies" that have been funneled into the regions for many years. But they are not really subsidies, since all they are doing is to feed back, in part and at considerable cost, resources that should not have been taken out in the first place.

If the tax system is not reformed so as to take account of the facts
of geography, the Union indeed cannot endure.

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