SCOTLAND’S NATIONALIST OVERDRAFT
The latest Government Expenditure & Revenue Scotland (GERS) figures, published yesterday, were predictably depressing. The figures are compiled by the Scottish government’s own senior economic advisers and estimate the difference between what Scotland raises in taxation and what we spend on public services. Total public expenditure increased in every nation and region of the UK last year due to the pandemic. In the 2021 Autumn budget, Scotland was rewarded with the largest annual funding settlement since devolution, a blockbuster £41 billion. But the UK’s gross debt at the end of 2021 rose to a staggering £2,382 billion. With inflation spiralling and interest rates rising, the cost of servicing this debt will be one of the key problems facing the incoming prime minister.
The 2021/22 GERS figures revealed that total Scotland-related public sector expenditure rose to £97.5 billion, while income from taxes fell to £73.8 billion, leaving a gap of £23.7 billion, or 12.3% of GDP, that had to be filled by a fiscal bailout from Westminster. The UK deficit was less than half that of Scotland at 6.1% of GDP. The dire GERS figures were revealed by the SNP’s Deputy Leader John Swinney, while Nicola Sturgeon attended a fringe event at the Edinburgh Festival. Despite the GERS report being the work of their own government officials, the SNP have repeatedly decried the findings. Desperately trying to gloss over their economic ineptitude, the party’s website even described GERS as “a snapshot but not the whole picture”. What Nicola Sturgeon and her SNP/Green cabinet ministers cannot do is describe how this enormous gap could be filled after independence. A prospectus based on such dishonesty is bound to fail. Right now, the Treasury at Westminster makes up the fiscal shortfall. With a hard border with England after the breakup of the UK, there would be no fiscal bailouts and we would face swingeing cuts in services like education and the NHS, or massive tax hikes, to make up the shortfall. With mortgages, rents and pensions already under severe pressure, the shock of separation would be catastrophic. Breaking up the UK would make the current cost-of-living crisis look like a picnic in the park.
As the battle goes on between Liz Truss and Rishi Sunak, it is at least reassuring that both have firmly pledged to preserve the union. The unedifying spectacle of nationalist activists brandishing ‘Tory Scum’ banners and throwing eggs and spitting at people attending the Perth hustings on 16th August, should have underscored exactly why Scottish independence would be a nightmare rather than a dream. Indeed, it is hard to understand why anyone would wish to sever our membership of the most successful single market ever created, where for centuries we have enjoyed the free movement of goods, services, capital and people, backed by a shared currency and the enduring stability of the Bank of England, with its capacity to intervene in times of crisis. Why erect a hard border with England, where we do 60% of our trade? Why wreck the force for good that we have created together on the global stage, defending the values of our liberal democracy? Why undermine our combined defence and security which has secured our leading position in NATO? People around the civilised world regard the UK as a successful, diverse, multicultural country in which different religious, ethnic and national identities have flourished. We have shared values and cultural traditions that even predate our formal union more than 300 years ago.
The shouting, spitting, banner-waving, nationalist morons who clamoured around the Tory hustings in Perth, revealed the sinister underbelly of nationalism that would be unleashed by a new referendum.
But the SNP/Green government’s obsessive determination to hold Indyref2 in 2023 remains undiminished. Nicola Sturgeon’s resolve to waste £20 million of taxpayers’ money on a fake and illegal poll if, as expected, the Supreme Court rules out Holyrood’s right to do so, simply confirms the shocking self-indulgence of the SNP’s separatist fixation. While we struggle with the cost-of-living crisis, soaring energy costs, spiralling inflation and post-pandemic supply chain disruption, it shows how sadly out of touch the SNP have become after 14 years in power. Scotland’s failing education, drastic NHS waiting lists, sky-high drug deaths, bankrupt councils, ferry shambles, public sector strikes and go-slows, should sound the alarm for those who think breaking up our union would be a good idea.
This growing litany of SNP failure is the reason why both Liz Truss and Rishi Sunak have vowed to subject the Scottish government to Westminster scrutiny. Sunak said that if he becomes prime minister, he will ensure senior civil servants at Holyrood will face examination by Westminster select committees, in the same way as Whitehall civil servants. Truss has pledged to provide MSPs with special legal protection that will enable them to scrutinise decisions taken by the Scottish government more closely. Such reforms are long overdue for a government that has become increasingly centralised and autocratic.
If Liz Truss gets the keys to Number 10 on 5th September, her plans to announce £30 billion of tax cuts will place the SNP/Green government in an invidious position. Having wailed endlessly about the need to get their hands on further financial levers, the Scotland Act 2016 extended the right to levy taxes on income, property transactions and certain goods and services. Scottish taxpayers now pay higher rates of tax than any other part of the UK. If Liz Truss becomes prime minister the tax gap north of the border will become a yawning chasm. But soaring taxation and failing services are not enough to satisfy nationalist demands. Nicola Sturgeon wants more borrowing powers, as if increasing Scotland’s debt could buy our way out of the cost-of-living crisis and looming recession. The latest GERS figures revealed the unpleasant truth about the state of our economy after 14 years of SNP misrule and underscored the clear message that providing full fiscal autonomy to the SNP government via devo-max, fiscal federalism or a vote for independence would be an historic mistake. Scotland is better off in the UK and the UK is better off with Scotland in it.