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21 May 2008

Independent Scotland: £4Bn budget surplus

SOARING oil prices would give an independent Scotland a £4.4 billion budget surplus, making it one of Europe's richest countries, according to a new study.

The surplus would allow Alex Salmond to maintain existing levels of public spending, while cutting corporation tax from 28% to 12.5%, reducing income tax by 5p in the pound and still having £2 billion every year to invest in a Norwegian-style oil fund to safeguard Scotland against a future decline in North Sea oil revenue.

The study, based on Treasury oil revenue forecasts and official spending figures, has calculated that, without money from the taxation of oil and gas, an independent Scotland would have an underlying deficit of £7.8billion. But when £12.2billion of oil and gas revenues are included, Scotland would have a surplus of more than £4billion.

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