I remember the days when August was the month of grouse shooting (I am old), when what we thought of at the time as newspapers were full of stories about landed gentry from the south of England coming up to Scotland to see how many they could “bag”, when there was a race to see which restaurant in London would be the first to serve Scottish grouse to their diners. Oh, the good old days!
Now August is the month of GERS, Government Expenditure and Revenue in Scotland, for those who may still think it has something to do with football (oh,no, not that old joke again). This is now the month that the BritNat media and politicians look forward to being able to show exactly how wee and how poor Scotland is and how stupid the Scots are for thinking that there is any chance they could survive as an independent nation.
Before we go on, let’s get an old chestnut out of the way. For those who delight in telling us that GERS are the Scottish Government’s own figures, sure the report is produced by the Scottish Government, but the majority of the data on which the report is based comes from Westminster/Whitehall, so no way is this a Scottish Government report.
Each year, virtually the same figures are produced which show that Scotland only exists thanks to the largesse of the English taxpayer. Thanks, guys. Of course this may not be the whole story, or even any part of the story. We know the report is full of errors, with many figures produced by guesswork, often not very intelligent guesses at that. For those interested in the figures, have a look at my blog from 2017. The numbers might be a bit old, but, unfortunately, the basic arguments haven’t aged as much. For those really interested in the figures, have a look at Richard Murphy’s blog, which gives much more factual information than I ever could.
However, looking at the history of the Scottish deficit, in 2013, the approach of the Scottish independence referendum gave Westminster a bit of a problem. On one hand, they want to continue to portray Scotland as a basket case which, they believed, would suppress the popularity of independence in Scotland. On the other hand, Westminster didn’t want to tell the English taxpayer that they were handing vast sums to Scotland, which would certainly encourage the BritNats to demand that they get rid of the burden that they believed Scotland represented.
So what to do? Obviously believing that Scottish independence was the more pressing problem, Westminster went for Plan A. But to show that Scotland had a continuing high deficit when the overall UK deficit was starting to reduce has had a surprising side effect. As you can see from the graph, it has cause the Scottish deficit, as a proportion of the whole UK deficit, to
increase to the point that it represent close to 60% of the total. In fact, adding the Scottish, Welsh and Northern Irish deficits together, they represent way over 100% of the UK total, meaning that, at least according to these figures, England is in surplus and are subsidising all the rest of the UK. Thanks, guys.
The total deficit for the UK, excluding England, is £35.5bn (Scotland £12.6bn, Wales £13.7bn, N.Ireland £9.2bn), while the corresponding figure for the UK as a whole is £23.5bn, which implies an England surplus of £12bn. (By the way, no GERE report is produced to show comparative England figures. I wonder why?). Of course, when I say an England surplus, I really mean a London and the South East surplus, as the regional figures show that nearly all the other regions in England run deficits as well. The latest figures, from 2018, show London with a surplus of £34.4bn, the South East £20.4bn, with all other regions in deficit, with the exception of the East, which has a small surplus. (These are based on the ONS figures, but will be close enough to show the trend).
The report has made people think of a number of questions, apart from the obvious one:
Why does the Scottish Government believe that this load of shite represents anything close to the current financial position in Scotland, even as a part of the UK, never mind as an independent country?
Only the Scottish Government can say. I only wish they would.
Others have asked:
How can a country with only 8.3% of the population generate 55% off the deficit?
though that question could perhaps be better expressed as
How come so much of the UK’s revenue comes from London and the South East?
That’s a harder question to answer, but it’s probably based on the desire of successive Westminster governments to concentrate activity there. Westminster governments like to have all the activity around them and to hang with the rest of the country.
But I have another question to add. Over the last five years, the UK deficit has significantly reduced, from about £90bn in 2014-15 to £23.5bn in 2018-19. During that time, the Scottish deficit has reduced by only about £1.4bn, while the other countries have had even smaller reductions, so that means Now, about 40% of Scottish spending is actually spent by Westminster on Scotland’s behalf, almost all of it in and around London. That being the case, my question is:
What has caused this sharp increase in the London and South East surplus over the last few years and why, at a time when the cost of public services in London and the South East is reducing, is this reduction not reflected more fully in the results for Scotland?
I’ll leave you to mull over that, but it may be caused by a huge increase in the revenue in these regions, at the expense of the other parts of the UK, or it may be caused by a significant improvement in the cost of delivering services, including those which are charged to Scotland, or it may be something else altogether.
So what does this all mean for Scotland? Do we (and by we I mean the Scottish Government) really believe the GERS figures? Do we really think a country with such large resources cannot stand on it own two feet? Do we really think that Westminster have been making the best decisions for Scotland? Do we really think PM Johnson won’t take every chance to prevent the loss of UK income that Scottish independence would mean? Do we really think he’ll wait for several years before taking action?