Leading economist Tim Morgan identifies three major risks in the event that the Scots vote “yes” to independence:
- New data calculated in this report suggest that the North Sea revenue for the Scottish government would fall from £10.1bn in 2011-12 (but only £5.5bn in 2013-14) to £3.7bn in 2016-17, some £3.2bn adrift of the £6.9bn predicted by the “yes” campaign.
- The probable flight of a large proportion of the financial services sector from Scotland – as already indicated in the announcements by RBD, Lloyds, Clydesdale and Standard Life – could leave 2016-17 ex-North Sea revenues (of £47.7bn) about £9.2bn lower than has been forecast by advocates of independence (£57.3bn)
- The rising cost of public sector pensions would be likely to impose significant pressures on a Scottish budget already straitened by declining oil revenues and the probable haemorrhaging of tax revenues from financial services. The impact is estimated at £1.1 billion in 2015-16.
Together, omission of these three factors results in a severe understatement of independence risk, both to Scots in general and to public sector workers and retirees in particular. The cumulative impact of these three risks on Scottish government revenues would be £13.8bn in 2015-16. Total government revenues could be £50.4bn, far below the “yes” campaign’s own estimate (£64.2bn) and far lower, too, than the £63.3bn that Scotland is expected to spend in that year.