Scottish independence: Row over start-up costs

Coins and flag The UK Treasury based its figures on research into the costs of setting up an independent state in Quebec

A row has broken out over the cost of setting up all of the public bodies needed in an independent Scotland.

It came after the UK Treasury published analysis which put the cost at £1.5bn.

It based the figure on research into the costs of setting up an independent state in Quebec, which were estimated at 1% of GDP.

But Scotland's finance secretary accused the Treasury of releasing "false information".

He has written to the senior civil servant at the UK government department calling for an investigation into the matter.

In its analysis, the Treasury said that the costs could be nearly twice as much as its own £1.5bn estimate, if based on a different study by the London School of Economics.

Start Quote

The Scottish government is trying to leave the UK but it won't tell anyone how much the set-up surcharge is for an independent Scotland”

End Quote Danny Alexander Chief secretary to the Treasury

The Treasury claimed Scottish ministers wanted to create 180 public bodies, which led the LSE to a figure of £2.7bn based on each new department costing £15m.

The UK government department said that, while it had used a more conservative figure in its own analysis, the £2.7bn costing was "reasonable".

Start Quote

The misinformation presented in this publication places serious doubts over the accuracy of the full Treasury analysis expected later this week”

End Quote John Swinney Scottish finance secretary

And it called on the Scottish government to publish its own estimates for how much it would cost to set up the organisations needed to run a country.

Treasury Chief Secretary Danny Alexander said: "The Scottish government is trying to leave the UK but it won't tell anyone how much the set-up surcharge is for an independent Scotland.

"As part of the UK, Scotland gains from a strong and stable tax and benefits system and our comprehensive analysis, published this week, sets out how much better off Scottish taxpayers are; that's why we're better off together."

But the Scottish government said it had never suggested that 180 public bodies would be needed, and pointed out that the UK government only had 24 departments.

Ministers also argued that start-up costs would be lower because they were planning to run a slimmed-down system, with many of the required public bodies already existing in Scotland.

'Simple comparison'

In a letter to the Treasury's permanent secretary, Sir Nicholas MacPherson, Finance Secretary John Swinney wrote: "It is essential that the public can make a balanced judgement on the referendum debate.

"The misinformation presented in this publication places serious doubts over the accuracy of the full Treasury analysis expected later this week and previous Treasury works on Scotland becoming independent."

Mr Swinney continued: "A simple comparison with the 24 departments of the UK government shows how ludicrous the claim was.

"The Scottish government has no intention of creating 180 government departments or even 180 public bodies as was later claimed by UK government press officers and special advisers. There is no mention of this in the Scottish government's white paper Scotland's Future.

"I would appreciate urgent clarity from yourself as to whether this material was approved by you and on what basis and an explanation of how such blatantly false figures came to be presented to the media on behalf of the Treasury."

Mr Swinney's complaint came ahead of the publication of the Treasury's latest analysis on the costs of independence over a 20-year period from 2016 to 2035/36.

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