Asking the experts: What are economists saying about indyref figures?
Are people in Scotland better off in the United Kingdom, or as an independent country?
On Wednesday, both the UK and Scottish governments put forward their cases for why they believe they provide the best economic path for Scotland.
Here, we take five claims from each side and ask a panel of economic experts to weigh up whether or not they stand up to scrutiny.
Experts, Prof John McLaren, Prof David Bell, and Dr Roger Cook give their thoughts.
The case for the Scottish government
1. Scotland's finances in 2016-17 will be similar to, or stronger than, both the UK and the G7 industrialised countries as a whole.
Prof John McLaren (Economist, University of Glasgow): "Scotland's relative position will depend on, difficult to predict, future oil revenues and debt interest payments. The latter will be affected by future negotiations over the sharing out of UK debt.
Prof David Bell (Economist, University of Stirling): "The key issues would be how much of the UK debt Scotland agrees to shoulder, and whether North Sea oil revenues are as buoyant as the Scottish government hopes."
Dr Roger Cook (Head of Research, Scotland Institute): "This is realistic on several grounds. First, the current proposal is for independence to occur in April-May 2016. On this basis, in 2016-17 it will be unlikely that the main underlying figures (tax revenues, public expenditure) will have varied substantively. Since Scotland is a net contributor to the UK, then simply retaining more revenue will ensure a short term improvement over what would have happened if Scotland votes to stay in the UK."
2. Scotland's public finances show debt on a downward trajectory, enabling future Scottish governments to start an oil savings fund.
Prof John McLaren: "Such a trajectory depends on positive shifts in long term economic trends coming about. Even with these trends, the choice to start an oil savings fund would be at the cost of higher debt. Whether this would produce a net benefit depends on the rates of interest paid and received, attached to each."
Prof David Bell: "This would require Scotland to implement a substantial rebalancing of the public finances (i.e. an austerity programme) in order to create enough fiscal room to start building up the oil fund."
Dr Roger Cook: "In part this is related, as an immediate effect is the retention of additional revenues, even despite the likelihood of one-off costs around independence. The extent that this really means that debt is on a downward trajectory over the longer term is less clear. That depends on the gains (ie, not funding Trident, and lower defence spend in general), costs (ie, a move to a more generous social welfare system); economic performance and the contribution of North Sea Oil)."
3. Scotland's fiscal position between 2008-09 and 2012-13 is estimated to have been worth £8.3bn, equivalent to £1,600 per person.
Prof John McLaren: "This is in line with the figures published in the latest GERS publication."
Prof David Bell: "Scotland's fiscal deficit was smaller than that of the UK as a whole over this period. It was still large in relation to its historical level and in comparison with other countries, but it wasn't as large as that of the UK as a whole."
Dr Roger Cook: "As with all these estimates, this depends on the allocation of revenues and costs to Scotland. However, the methodology is well used and generally accepted, so on that basis, the sum claimed is realistic."
4. An independent Scotland could see tax income increase by £2,4bn a year by 2029-30, under a predicted 0.3% productivity increase.
Prof John McLaren: "A benefit of this order of size might arise. However, the difficulty is in achieving such an improvement in productivity, which is the holy grail for all economies."
Prof David Bell: "It would increase even more if there was a 0.5% productivity increase. The key question is what are the new mechanisms and policies that we can be confident will bring about these changes."
Dr Roger Cook: "The Office National Statistics has been reporting for some time that UK productivity has dropped substantially since 2008 and the UK as a whole lags badly by EU and OECD comparisons. Thus there is scope (and a need) to improve productivity and if it increased by 0.3% then the potential revenue gain is realistic. This question is really one of public policy. Does the SNP approach offer the means to avoid the problems that have plagued the UK in recent years?"
5. A 3.3% increase in Scotland's employment rate would move it up to the level of the top five performing countries in the OECD and could increase revenues by £1.3bn a year, by 2029-30.
Prof John McLaren: "A benefit of this order of size might arise. However, the difficulty arises in putting in place policies that will result in such an improvement in Scotland's employment rate."
Prof David Bell: "Again this is true. But we need to have some evidence as to what policies could be put in place that are not already available to the Scottish government that might help bring it about."
Dr Roger Cook: "The figures are perfectly true. In my estimate, the SNP has a more realistic policy around improving employment than it does in terms of productivity, mainly as it plans to address the ageing population issue through encouraging migration. It is also worth noting that the restructuring of the Scottish public sector by creating a full range of departments and agencies in Scotland will also create more jobs. Other realistic areas of net job creation lie in the renewable energy industry (and exporting the skills could be a valuable source of export earnings)."
The case for the UK government
1. Scotland, as part of the UK, was projected to be able to have lower tax or higher spending than under independence. This "UK Dividend" is estimated to be worth £1,400 per person in Scotland in each year from 2016-17 onwards.
Prof John McLaren: "This figure is based on a number of assumptions which could be questioned, including over future oil revenues and debt interest payments, any future borrowing premium, demographic trends, start up costs, etc. It is a possible figure but only one in a wide range of potential results."
Prof David Bell: "Again, this depends on the assumptions made about oil revenues. In the longer term, there is certainly an issue around somewhat greater costs of ageing in an independent Scotland. This could in theory be offset by very high net migration into Scotland. But firstly, the only recent experience of substantial net migration into Scotland was when the A8 countries joined the EU in the early part of this century and secondly, would the rest of the UK be willing to share open borders with Scotland if there were large numbers of immigrants coming into Scotland that could potentially move to the rest of the UK (rUK)?"
Dr Roger Cook: "There are two major problems in this claim. First it relies on the claims of setting up the governance of an independent Scotland that has already been debunked - not least by the experts the Treasury claims to have used. Second the table on page 10 is based on a series of assumptions. In effect, yes the number is valid if you believe the logic behind it. But even in its own terms, it assumes that an independent Scotland will carry on paying for things (such as Trident's renewal) that the SNP has indicated will not be the case. The analysis also depends heavily on the allocation of debt."
2. Under independence, the loss of the UK Dividend would mean £1,400 per year for each Scottish person in higher taxes and lower public spending.
Prof John McLaren: "This depends on the £1,400 figure being accurate and there are many questionable assumptions attached to it."
Prof. David Bell: "This follows, based on the assumptions about oil. See my blog for further details."
Dr Roger Cook: "There is no real evidence for this. At the moment, Scotland is a net contributor within the UK, so the most likely short term position will be fiscally neutral and the longer term is as much a matter of the consequences of public policy rather than based on simple financial models."
3. The "direct costs" of independence would include higher interest rates for an independent Scottish state to borrow, the net costs of setting up new institutions, and the net costs of funding the Scottish government's White Paper policies (including the potential economic benefits).
Prof John McLaren: "All of these higher costs could potentially arise. However, their scale is very uncertain and depends on decisions made by an independent Scottish government. Equally the UK would also be subject to some extra start up costs after the allocation of various UK assets."
Prof David Bell: "Small states tend to have to pay a "liquidity premium" on their interest rates. This arises simply because their markets are small and therefore it's more difficult to match buyers and sellers. Clearly, many of the policies listed, or hinted at, in the White paper would involve additional costs. The funds for these would have to come from higher taxes levied on Scottish taxpayers."
Dr Roger Cook: "One major criticism of the SNP's White Paper is that it rarely addresses set up costs. The figures used in the Treasury paper have been discredited, but that is not to deny they will exist and maybe substantial. The Scotland Institute has done some work (due to be published soon) on the approach to regulation of public utilities and estimated that the unitary regulator that is being proposed would cost £80m-£110m (depends mostly on whether a new office would be built or leased). A lot of this is the cost of a merger with considerable voluntary severance. Of course, the other side of the coin will be the creation of 180 or so jobs in Scotland."
4. If the UK debt was split according to population at the end of 2015-16, an independent Scotland would take on debt of about 74% of its GDP, which could reach "unsustainable levels without policy action".
Prof John McLaren: "The very fact that it would reach 'unsustainable levels without policy action' suggests that there would indeed be such policy action. The Scottish government have put forward proposals with respect to productivity, the employment rate and migration that they see would give a very different outcome."
Prof David Bell: "Some countries quite happily exist with much higher levels of debt - Japan, for example. The difficulty for Scotland would be that, unlike these countries, it has no 'credit history' so it will be difficult for the market to price its debt. If the market takes a very negative view about Scotland's capability to repay its debts, it might be charged punitive interest rates. It would then have no option but to adopt very tough policies aimed at reducing the debt."
Dr Roger Cook: "The basic assumption in the UK paper is that debt would be allocated on the basis of population but there are alternatives such as per GDP or on a historical basis. All of these give different starting positions. Fundamentally, there is no agreement between the Scottish government analysis which shows Scotland with a lower debt/GDP ratio and the UK government's claims.
"The variance is partly due to the Treasury analysis not taking account that Scotland is currently a net contributor to the UK and partly their assessment of the costs of the proposals in the White Paper, and an assumption that an independent Scotland could not manage to solve the issues of an ageing population, productivity and employment rates. These are essentially political judgements dressed up as dispassionate numerical analysis (on both sides of the argument)."
5. Scotland's fiscal position already relies on spending all of the revenues from a geographic share of the North Sea. So there would be no fiscal benefit from independence.
Prof John McLaren: "Most of the analysis put forward by the Scottish government includes North Sea revenues within the annual fiscal balance figures. Its removal would worsen the balance. The potential to use such revenues elsewhere e.g in an Oil Fund, would be a policy decision. The key variables which currently determine whether Scotland would see a fiscal benefit or loss from independence remain future North sea revenues and future debt interest payments."
Prof David Bell: "Oil revenues are likely to decline in the future. But if Scotland can find policies that increase the productivity of the average Scot (better skills, new products etc) the Scottish economy could grow more rapidly and generate more taxes. This would make its spending plans more affordable."
Dr Roger Cook: "This is of no particular importance. Scotland is currently a net contributor to the UK (so will gain in the short term on independence) and it doesn't really matter in the first instance if this is driven by oil revenues or other economic activity.
"Again, this is a political argument. Successive UK governments have found it expedient to treat oil revenue as a means to fund current expenditure (or cut taxes) so the assumption is that an independent Scottish government will do so too. However, there will be real set up costs and these could well absorb the immediate gain of no longer contributing to the rUK, and in turn that could make it harder for the Scottish government to make an early start on creating a long term oil fund."