Skip to Content

Blogs Coffee House

The latest economic statistics are a disaster for the SNP (not that it matters)

11 March 2015

11:41 AM

11 March 2015

11:41 AM

12

That, pictured above, is what the Scottish government wants you to remember about the latest GERS (Government Expenditure and Revenue Scotland) figures released today. It’s not, at least according to these calculations, an untruth. Per capita revenues from Scotland are indeed higher than per capita revenues for the UK as a whole once – importantly – a geographical share of North Sea revenues are assigned to Scotland. Hurrah! Winning!

Except, of course, these are Revenue and Expenditure figures. And the latter confirm that, once again, per capita spending in Scotland is significantly higher than in the UK as a whole. Some £1,200 per head higher.

1200 is a larger number than 400.

As always, it is useful, even necessary, to note there are some good reasons why spending is often higher in Scotland than elsewhere. It costs more, per capita, to provide health, education, transport and other services in less densely populated areas. Equally, Scottish water costs are counted as public expenditure in Scotland but not in England.

Nevertheless, these figures are chiels that cannot ding. Scotland, according to the figures released by the Scottish government, enjoys a decent return from being part of the United Kingdom. It is one of the wealthiest parts of the realm and it enjoys greater levels of identifiable public spending than most parts of the country.

Look, revenue (including a geographical share of oil receipts) was £54bn in 2013-14 and expenditure was £66bn. That £12bn shortfall represents a deficit of 8.1 percent of GDP compared to an overall UK deficit of 5.6 percent of GDP. Next year’s figures will likely be even worse, thanks to the fall in oil prices. And also because, from 2009-10 to 2013-14 non-oil revenues grew, in nominal terms, by 15.3 percent in Scotland but by 17.5 percent in the UK as a whole. Scotland’s more elderly population will likely continue to act as a drag upon its overall, and relative, performance.

 

Still, as Nicola Sturgeon says ‘the fundamentals of our economy are strong’ and ‘Scotland is and will continue to be a very wealthy country’. This is true, though a cynic might be tempted to observe that, this being the case, the argument that Britain is irretrievably broken and, consequently, holding Scotland back, loses some of its lustre.

More than one thing may be true at a time. Scotland could, doubtless, do reasonably well as an independent country (albeit after some years of painful adjustment). Scotland also receives a good deal – indeed a generous one – from the current division of UK expenditure. That is, Scotland does well from being a part of the United Kingdom.

Even so, right now, swapping the Barnett Formula for control of North Sea revenues does not look such a great deal for Scotland (conversely, it’s a decent bargain for England though, of course, the benefit England might accrue from such a swap is much smaller, per capita, than the disadvantages Scotland would face on the same basis). This, however, is essentially what the SNP propose.

On the face of it, then, this is a bad day for the Nationalists. The numbers – produced, remember, by a government they control – are against them. But this may not matter very much.

The independence cause is a faith-based initiative. That’s fine, but it’s also why when you scratch a so-called utilitarian nationalist you tend to find an existential nationalist underneath. The distinction is, most of the time, cute but impossible.

And, again, this is reasonable. Part of the faith is that an independent Scotland would do some things—everything, in fact—better. All that matters is that it be shown Scotland has the resources to remain a fertile independent country. Once independence is achieved, all the flowers will bloom. Future projections, even future comparisons with what’s left of the UK, do not matter very much because by then we’ll be doing things differently. And better.

This helps explain why, according to a recent YouGov poll, 56 percent of SNP supporters believe collapsing oil prices are neither good nor bad for Scotland. Hell, they’re only numbers and numbers can change. (Besides, as the screenshot above demonstrates, they have their own numbers too.)

Granite-hearted Unionists scoff at this kind of magical thinking and, in many instances, they have reason on their side. The figures make that pretty clear. But it is not enough. Unionism needs to be armed with something more than pocket calculators. It is not sufficient, in the long-term, to win the battle of accountancy even if it is also certainly necessary.

I doubt these latest GERS figures will change many minds. Many No voters will be relieved by them; many Yes voters will reckon them irrelevant to the bigger questions. They are important, however, because they are a further reminder that all things are not equal. People are, often sensibly, risk averse. If it could be proved, to universal satisfaction, that all things being equal an independent Scotland would be better off financially then I expect that independence would command majority support. The idea is always intuitively appealing.

Which is why Unionism still needs to make a case based on something other than cold, hard, economic facts. It needs to find a way to be intuitively appealing too. That means making arguments that are bigger, more generous, and more imaginative than ones that carry the subtext, Jings, aren’t you – financially-speaking – damned LUCKY to be part of the United Kingdom? It needs to think of ways that demonstrate that good fortune that go beyond just a rote recitation of economic statistics. Because, remember, Unionism needs to keep winning whereas Nationalism needs only win once. For as long as independence commands the allegiance of at least 40 percent of Scots, support for the Union can only be reckoned provisional.

Yes, these numbers confirm that independence in 2016 would have been a prickly, ticklish proposition. A £12bn deficit in a place the size of Scotland is no small impediment to be overcome. Nonetheless, you rarely win a battle for hearts and minds by shouting about a balance sheet. Britain, and the Union, needs to be a matter of faith as well as reason too.

And England? What about England? Well that’s a matter for another post, another day.


Show comments

Comments

Please read our Comment Policy before commenting.

Close