The Unionists have got a new phrase, “GERS deniers”. It’s a nice wee soundbite which attempts to equate people who view the GERS figures with suspicion, and people who deny the reality of climate change. But as ever, our Unionist friends are not comparing like with like. Climate change is based upon multiple scientific works and studies. There is abundant data from many different and independent sources. The GERS figures (Government Expenditure and Revenue Scotland), are a single data set, and moreover they’re a single data set which relies very heavily on figures produced by a body which it is scarcely conspiracy theoristish to suspect may not be entirely neutral in the Scottish debate – the UK Treasury. The difference between denying climate change and denying GERS is simple. One is science, the other is politics. Only a fool is sceptical about a scientific reality. Only a fool isn’t sceptical about a political claim.
The GERS figures were instituted in the early 1990s by the then Scottish Secretary of State, the Conservative Iain Lang, as a means of providing the Tory government with ammunition to use against those campaigning for a Scottish parliament. According to a leaked memo, Lang wanted GERS as a tool to “undermine” the opposition. The figures were designed to show Scotland’s deficit, which could then be spun as a fiscal transfer from England to Scotland. Their purpose was political from the very beginning. That’s the opposite of science. Science seeks data and then develops a theory to account for that data. GERS starts off with the theory of an English subsidy to Scotland and then seeks data to account for that theory. It’s anti-science. It’s politics.
Unionists want us to accept GERS uncritically and without any rigorous examination of the methodology used to produce the figures which are presented in the newspaper headlines. They’re the only figures which exist, we keep getting told. And this would be true. However that’s all the more reason to examine the way in which those figures are produced and the data collected with a critical and sceptical eye. It is scientifically illiterate to accept without criticism a single data set, all the more so when that data set is the only data which exists and it’s data which relies on estimates made by people who can reasonably be suspected of having a vested interest in a particular outcome. It’s a bit like saying, “Well we don’t actually know how life developed on Earth, but we do have the account in Genesis, so let’s go with that. Now give me one tenth of your income. The bible tells us to tithe too.” And then you call evolutionary scientists Genesis deniers and claim that they’re a cult.
The claim is frequently made by GERS fundamentalists that the figures are Scottish government figures. But that’s not exactly true. The Scottish government has a legal obligation to produce the GERS figures, but the statisticians of the Scottish government have no means of knowing how much is spent on non-devolved matters in Scotland or (allegedly) spent on Scotland’s behalf outwith Scotland. The statisticians of the Scottish government know nothing about say, how much of defence expenditure, or the expenditure of the Foreign and Commonwealth Office is allocated to Scotland. For those figures they rely entirely upon information supplied to them by the UK Treasury.
Imagine a bank robber who rushes out of a bank and then puts a gun to the head of a passing motorist and forces them to drive him away. Saying that the Scottish government is responsible for the GERS figures is a bit like saying the motorist is responsible for the bank robbery. Unionist analyses of GERS want us to focus solely on the actions of the motorist, and not on the actions of the bank robber. That motorist owes a fortune to the bank you know. How are they ever going to repay that huge deficit?
The paroxysms of GERS denier accusations this week are because a proper economist had the temerity to examine the figures with a sceptical eye and found them wanting. According to the economist Richard Murphy, with the exception of local government income there are no reliable figures at all for Scottish revenues, and figures for Scottish expenditure are seriously deficient. He points out that it is normal for economic figures to rely on certain estimates, but it’s not normal for 25 out of 26 sets of income figures in a set of accounts to be based on estimates and consumer surveys. He says, “Estimates may be a part of financial life but this is ridiculous.” The SNP MP George Kerevan, who was a lecturer in economics before entering politics, likewise believes that the GERS figures underestimate Scottish revenues.
Unionists want the GERS figures to do something that not even Iain Lang wanted them to do. They want to use the GERS figures in order to make claims about the financial position of an independent Scotland. GERS tells us, in theory, about the financial situation of Scotland within the UK, but independence means we do things differently. In the most recent GERS figures, revenues from the North Sea oil industry were a paltry few million, but Norway continued to extract billions from its oil sector even though it had been hit by the same decline in oil prices. The difference is due to different tax regimes and regulatory regimes. Unionists assume that Scotland would continue to indulge the oil corporations in the same way as the UK Treasury. That assumption is made across the board by the GERS fundamentalists, their vision of an independent Scotland is one which spends and raises revenues exactly the same way the UK does just now. That’s an obvious nonsense.
According to the financial services company Deloitte, “GERS data is produced for Scotland as part of the UK – it does not model scenarios for an independent Scotland in which the Scottish Government would be enabled to make its own fiscal choices.” And that’s the whole point of independence, to do things differently. To do things better for the people of Scotland.
The GERS fundamentalists make some even more outlandish assumptions. Literally outlandish. According to the GERS figures Scotland spends some £3.3 billion on defence which it allocates to Scotland. It is universally agreed that the amount spent within Scotland on defence does not approach this figure, most estimates place defence expenditure within Scotland at around £1.7 billion, a figure which includes spending on Faslane. Much of the remainder is spent in the south of England where the UK has concentrated the MoD offices and its military bases. No independent country in the world spends over half of its defence expenditure in someone else’s country, especially not a small country like Scotland which has no pretensions to Empire 2.0. In an independent Scotland defence expenditure would be spent within Scotland, and so boost Scottish revenues accordingly by generating economic activity within Scotland.
Another large contributor to the GERS deficit is Scotland’s contribution to interest payments on the UK’s eye-watering national debt. We don’t know what the national debt of an independent Scotland would be. What we do know is that there is no financial institution anywhere in the world which possesses a piece of paper saying “IOU squillions of quid, xx Scotland”. The debt is legally the responsibility of the UK government, and during the first independence referendum the UK Treasury issued a statement to reassure the markets making it clear that it would continue to be legally responsible for that debt. If the rUK wants to be the continuator state to the existing UK, then they likewise continue with the debt.
That doesn’t mean that Scotland will start life as an independent nation debt free, although Ireland did exactly that. What it means is that when Scotland becomes independent it will only take on such debt as pertains to the share of the joint UK assets that it receives, and that will be subject to negotiation between Scotland and the rUK after a Yes vote in a referendum. No assets, no debt. It’s that simple. There are certain UK assets that Scotland has no interest in, such as our share of the energy and other resources of the Falkland Islands. Not taking our share of those assets reduces any debt we might need to take on.
The reality is that GERS tells us next to nothing about the financial situation of an independent Scotland. But even if we were to take the GERS figures at face value, they still add up to something that smells pretty fishy. According to the GERS figures, Scotland has a deficit of £14.8 billion a year. The equivalent figures for Wales and Northern Ireland allocate deficits of £14.7 billion and £9.16 billion respectively. Yet the entire annual deficit for the whole of the UK is £67 billion. The GER figures would have us believe that Scotland, Wales and Northern Ireland, with a combined 16% of the UK population between them, are responsible for a whopping 58% of the entire UK annual deficit. That figure alone ought to raise suspicions that the methodology of GERS is suspect and invite a critical examination with a sceptical eye. But Unionists don’t want us to do that. They want us to accept Scotland’s supposed £14.8 billion deficit as if it were holy writ.
So let’s do just that. Let’s accept for the purposes of the argument that Scotland does indeed have a deficit that’s considerably larger than that of Greece. Yet Greece doesn’t have Scotland’s resources. Greece isn’t a net exporter of energy. Greece doesn’t have oil, gas, a massive renewable energy potential, the hundreds of years worth of coal that Scotland has agreed to leave in the ground. Scotland is so rich in energy that we can afford to have a national conversation about fracking and whether or not we want it. We don’t need the energy from fracking ourselves. We can afford to leave it in the ground. Most countries don’t have that luxury. Energy is the motor of any economy, and Scotland possesses it in abundance.
Unlike Greece Scotland has fertile soil and no shortage of water. We have enormous fish stocks. We are more or less self sufficient in food, what we import we make up for in exports. We have a tourism industry worth £11 billion annually, a whisky industry worth almost £4 billion. We have a computer games industry, four of the top 100 universities in the world, and a highly educated English speaking population. We have advantages we just take for granted, like the fact that what passes for a national disaster in Scotland is the national football team, we are spared the earthquakes, volcanic eruptions or tsunamis that strike less fortunate countries – like Greece. Those are disasters that mean entire towns and cities have to be rebuilt. Nothing like that happens in Scotland. This is a lucky country.
But it doesn’t end there. We are in a geopolitically stable and quiet part of the globe. No one wants to invade us, no one has territorial claims on us, and we have no territorial claims on anyone else. Not even Berwick. We are that rare beast, a country that no one hates except David Starkey, and since pretty much everyone hates David Starkey that’s fair enough. Unlike Greece we have government institutions which actually function. Ordinary people pay tax, unlike Greece where tax evasion is a national sport. And we have impeccable democratic credentials, to the extent that we were able to hold a national debate on independence and the only casualty of the independence movement was Jim Murphy’s egg stained shirt. Let’s face it. If you wanted to list the ingredients for a peaceful, prosperous, stable, democratic country, you’d list what Scotland has. And yet, according to the GERS fundamentalists, Scotland is an economic basket case which is worse off than Greece. That’s not an argument for remaining under the rule of those whose economic mismanagement has produced this lamentable situation, it’s an argument for running away from the clowns who have created this mess as fast as our hairy little Caledonian legs can carry us.
The fundamental truth that the GERS fundamentalists refuse to accept is that either the GERS figures do not represent an accurate picture of the financial position of an independent Scotland, or that their beloved Westminster has been criminally negligent in its economic management of this country. They can’t have it both ways.
The clowns of Westminster show no sign that they are aware of the damage they’ve done and are now intent on taking us into the financial catastrophe of Brexit where things are only going to get even worse. The question facing Scotland is how do we get out of this mess we are currently in. Do we trust in the selfish arrogant fools who caused the mess in the first place and who are bent on continuing the damage and making it worse, or do we trust in our own skills, our own talents, and our own abilities. Do we think it will be easier to repair the damage in an isolationist Brexit Britain, or in an independent Scotland with full access to the European single market and the trade deals that enables? Do we trust those who don’t care about Scotland, or do we trust those who do? That ought to be an easy question to answer, except if you’re a GERS fundamentalist.
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