DCSIMG

Brian Wilson: Independence numbers game fantasy

John Swinneys figures for our oil wealth were inflated by a �26bn. Picture:  Joey Kelly

John Swinneys figures for our oil wealth were inflated by a �26bn. Picture: Joey Kelly

  • by BRIAN WILSON
 

YES, the numbers game is stupefying. But too much is at stake for us to be bamboozled by invented figures, writes Brian Wilson

THE numbers games of the past week have scarcely enhanced the prestige of the referendum debate. Amidst the confusion, there is a danger that sight is lost of the exceptionally serious stakes being played for.

For example, I took part in a debate in Aberdeen the other night with Fergus Ewing, the Scottish Government energy minister. Fergus followed the Nationalist script by hanging his case for the economics of independence on a forward price for oil of $110 a barrel.

As you might expect in Aberdeen, it was a knowledgeable audience and an authoritative voice from the floor told him that the entire oil industry is working on a forward curve of $90 a barrel: “Your numbers are not taken seriously. Your numbers are simply wrong”. Nobody demurred.

Personally, I don’t have a clue what the price of oil will be in five years’ time. Neither does Fergus. History teaches us that the only certainty is uncertainty. But what I am sure of is that it is irresponsible to build an economic case for creating a separate state on numbers which nobody else uses or believes.

To put this in context, it is necessary to go back to March last year and the leaking of John Swinney’s paper for Cabinet colleagues on the economic risks of independence. It remains by far the most significant document in the whole economic debate, precisely because it was not intended for the eyes of the electorate.

Swinney warned that oil price volatility could jeopardise an independent Scotland’s ability to meet the costs of pensions and benefits and also that our gains from the Barnett formula – which would be lost – have for many years exceeded the additional oil revenues which might have been gained.

Recognising the scale of problem which these admissions entailed, now they were in the public domain, Alex Salmond rushed out – rather in the style of this week’s hastily-convened press conference – the “first Oil and Gas Analytical Bulletin” which conjured up an additional £26 billion above and beyond the figures that Swinney had been using.

This dealt with the short-term political problem through the brazen fabrication of figures which had minimal credibility then and have even less now. In a single year, 2017-18, Salmond’s “bulletin” predicted, Scotland was to have £11.8 billion of oil revenues – a complete fantasy figure. In contrast, the Office of Budget Responsibility puts the revenues at £15.8 billion for the whole period to 2018-19.

Even after the Scottish Government latest dilution of Salmond’s ridiculous assertions, their projection is still double that of the OBR. This swapping of vast numbers, wrapped up in claims and assertions, means very little to most of us. But translate them into jobs, pensions and our children’s futures and they mean a great deal.

Coincidentally, the frankness of Swinney’s leaked paper came back to haunt the Nationalists in another context this week. In it, he also told his colleagues that he would shortly share with them a “comprehensive overview of the institutions, costs and staff numbers” which setting up an independent Scotland would entail. The civil servants, he said, were already working on it.

That work has never been published and the existence of its conclusions is now denied. On radio this week, Swinney was repeatedly asked what estimate he had made of exactly these costs. In response, he equally repeatedly refused to offer even the roughest figure.

In fairness, his evasions were at least half-honest as he did not actually tell any untruths. If it had been Salmond doing the interview, he would simply have plucked a figure from thin air and challenged all and sundry to contradict it. In some quarters, that is what passes for political brilliance.

A couple of hours later, he did exactly that. It is now the official position of the Scottish Government that the start-up costs for an independent Scotland would be £200 million – a third of the figure which Swinney himself had attributed to the cost of establishing a tax and revenue system alone. And so it goes on. I return to the Aberdeen quote: “Your numbers are not taken seriously. Your numbers are simply wrong”.

Meanwhile, matters of real substance are being overlooked. One of them involves the hundreds of thousands of jobs which depend on Scotland selling its goods and services to the rest of the UK (two-thirds of our exports) and the rest of the world (one-third).

Over the past year or so, I have been carrying out a review of Scottish exporting which was initiated by the former Secretary of State for Scotland, Michael Moore. Many of its conclusions are relevant irrespective of the constitutional issue but the extent to which independence has massive implications for all of our key exporting sectors is in danger of being browbeaten into silence.

Take the aerospace, defence and security sector which stressed its almost total reliance on being part of UK-wide supply chain. Or our financial services companies who could not be clearer that “the City of London jurisdiction has been absolutely crucial to the development of the Scottish Financial Services sector and the jobs that depend on it”.

Or how about Scotch whisky industry for which the main concern is to “maintain the crucial links which exist on trade policy issues and the influence which the UK carries both in Brussels and in markets around the world”? Or Scottish engineering which is plugged into UK-wide supply chains and to the UK government’s support for winning multi-billion opportunities for British industry?

The inescapable fact is that every sector of Scottish business and industry providing large-scale employment and exporting goods and services, is deeply integrated into the wider UK economy. How could it be otherwise after being part of the same state and the same market for so long?

These are the voices that need to be heard more of, from both employers and trade unions. Nothing would suit the Nationalists better than another 100-odd days of a shouting match in which dubious numbers are hurled backwards and forwards, with the eventual effect of numbing the public mind and cancelling each other out.

Voices which carry credibility from the front line of industry, business and employment need to insist on being heard rather than shouted down. The people who know the real, practical issues for every sector of the Scottish economy are better qualified than any politician to spell out exactly the implications and risks of division within a small island.

 

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