The familiar refrain of GERS (Government Expenditure Revenue Scotland), being the ‘Scottish Government’s own figures,’ will be well known to most of the Scottish twitterati, alongside the supposed fact that there was a ‘£10 billion black hole’ or deficit in these figures last year. Whilst on paper this figure is correct, this argument from the Unionists couldn’t be further from the truth.
The problem with the argument is that the Scottish Government only gets to decide the expenditure part of the accounts. The revenue part is collected by HMRC and, being a reserved policy area, is completely outside our control. This means GERS is only half, not a full, set of accounts. Each year Scotland is apportioned a population share of English departmental spending limits (in devolved areas) via the Barnett formula. If English departmental spending limits fall we get less money – since the Tories came to power six years ago around ten percent less money, with more cuts still to come.
Introduced by Lord Lang in the 1990s, GERS is a Conservative and Unionist construct. In place of the revenue side of the accounts we have a circus of smoke and mirrors – an array of guesstimates. Most of the time these guesstimates are based on small scale surveys of the Scottish population, or even worse, we are just allocated a notional share of statistics collected only in England. The truth is no one currently knows how much tax is generated in Scotland. HMRC just has one big pot that our money goes in. Whilst the new powers in the Scotland Act are woeful they will at least enable, for the first time, Scottish tax to be separated out from the UK pot in some areas. This administrative process is a big step forward in the journey towards an independent Scotland.
What we do know is that Scottish Gross Domestic Product (GDP) is one of the highest of any UK ‘region’ (the UKs Office of National Statistics counts us a region for statistical purposes). GDP is economic activity covering production, distribution, consumption and trade of goods and services. Scotland is a very productive wee country and is consistently ranked 3rd most productive ‘region’ next to London and the South East – and that’s without allotting us our rightful geographic share of Scotland only industries such as oil and whisky (i.e. mostly all of it and not sharing it out per person across the UK).
GERS does allocate Scotland a geographic share of oil so when the oil share plummeted and UK debt soared in the last few years (and our payment to UK debt is around £5billion a year – half of our supposed ‘deficit’) this and an accumulation of factors led to the apparent ‘deficit’ in our books. Anyone who is familiar with the McCrone report will know that this is further to Scotland historically demonstrating three decades of chronic surplus, regardless of the oil price. We also have to remember that the UK government has cut Scotland’s budget by billions yet the spend on public services in Scotland remains high as we are a rich country who values and can afford the ‘wee things’ like universal education and health services free at the point of delivery.
Anyone who isn’t a simpleton can begin to see how a ‘deficit’ can be engineered to denigrate Scotland by Westminster, which completely controls our economy. Furthermore, why the Unionists continue to brag about Scotland’s (and indeed the UKs) economy failing when they are entirely in charge of it is somewhat baffling. The UK economic deficit and debt (for these are two entirely different things) exceeds the EU targets of the Eurozone – if we had joined the Euro we would currently be subject to corrective measures like Greece. Scotland has no ‘debt’ and is not allowed to generate debt as it isn’t a sovereign country, yet.
With independence we would have the economic levers we require to generate jobs and growth in our key sectors. We could stand on our own two feet like a grown up country and have a full set of accounts, rather than this annual explanation of how we spent our pocket money.
The Butterfly Rebellion