Truth is, numbers add up for independence

Published on 13/12/2006 11:44

WE'VE been experiencing the first skirmishes in an oh-so-Scottish civil war of words. By the elections next May, verbal trench warfare will be the order of the day, bringing with it all its futility and inevitable destruction of relationships, careers and goodwill towards all mankind.

Even though our bloodless battles are to be much preferred to the sort of civil wars that disfigure individual lives and national economies in Africa, they're still a waste of time and energy if there's no improvement or greater understanding of the state we're in, after learned professors and clever economists have argued the case for, and against, Scottish independence.

Having been round this course at least twice before, I'm heartened to see the number of respected economists admitting what most of their colleagues of two and three decades ago wouldn't - that Scotland can be independent, and that John Reid's hysterical rants about the plague of boils we can expect if his warnings against leaving the control of Westminster are ignored, can be ignored.

But not for nothing is economics known as "the dismal science" and the statistics from which it draws its life-blood equated with "lies, damn lies".

Economists compare the outputs of countries such as Ireland or Norway or the Baltic states. To judge the performances of any of these countries against Scotland's levels of poverty and prosperity, these experts make calculations and assumptions. And there's nothing wrong with that.

The problem occurs when other economists make their calculations on a different basis, and make very different assumptions. That's when the rest of us start on about damned lies and statistics.

You may have noticed a good example of this in the past few days, with Labour claiming that even with the tax proceeds from Scottish oil being counted as part of Scotland's income (did you know it never has been?) we'd still be 7 billion in the red and, by implication, would need to go cap in hand to Westminster, the UN or whoever would give a poor, oil-producing country a handout.

Not so, cried the SNP economists. According to nationalists, even using the unionists' figures, the fact is that Scotland would have a 2bn surplus. A modest amount in the scheme of things, but a virtue to treasure above gold, the dollar and the Japanese yen, according to the Micawber school of economic thought.

So is that Scotland's fault-line fixed, then? Now that we've pursued the big question in Scottish politics (can we afford it?) to a satisfactory conclusion, should we expect independence to be along in a tick, just like devolution?

Not really. Economists who are against independence are getting their back-up Nat-basher weapon out of the locker: a structural, as opposed to cyclical, fiscal deficit.

I know, I know, it makes your eyes water even to think of it. But here's what it means for observers of the phoney war between pro-independence economists and unionist economists.

Since the SNP's economic cheerleaders achieve their fiscal surplus of 2bn by counting in the oil taxes, according to the unionist economists, that's an admission that, without oil, Scotland would be skint.

That's false and misleading accounting, according to the SNP. Why should oil not be included? It's there, off the Scottish coast, just like the City of London's financial centre is a part of the national economy. Who would take seriously an end-of-year financial report from the Westminster Treasury that left out the taxes paid by the financial sector?

And in any case, argue pro-independence economists, loads of countries run fiscal deficits - even the UK.

By the financial year 2010/11, the Treasury estimates that the UK will have a deficit of 700bn. A clutch of very eminent economists pointed this out at the weekend, and reminded everyone of the likelihood of a greatly improved economic output on the attainment of Scottish independence.

The academics and economists expressing this point of view don't see their auld Scots grannie's wee heilan' hame amang the heather through rose-tinted specs. These well-travelled lecturers and consultants are basing their predictions on what every other small EU country has done in the first ten years of their independence.

Even though Professor Hervey Gibson, chairman of the international development consultancy that advises the Scottish Executive, and Rod Cross, a politics professor at Edinburgh University, agree that the Scottish economy would be better with independence, that's not the bottom line.

We still haven't figured out the real reason for the Scots being different from other nations.

Why are we the only people in the world to put a price tag on our national pride? Did any of the other newly independent, oil-free, EU member states debate with themselves about whether they could afford to be independent?

No. They just started making policies that suited their needs and resources, worked hard, and their economies started growing much faster than Scotland's.

Could we possibly have an emotional, or cultural attachment to being ruled from Westminster - even if it costs us money?

Prostitute murders show why Bill is vital

THE murders of five prostitutes in Ipswich have put the issue of the best way to manage street soliciting back into the limelight. Right now, the Bill that was supposed to do this in Scotland is making very heavy weather in the Local Government Committee of Holyrood.

Some members are determined to prevent police and other local agencies providing intervention and support where soliciting is known to occur, because they think it would send a message of approval. I hope they'll think again about the evidence given to the committee that shows managed areas, such as Edinburgh pioneered, do provide some level of protection for vulnerable women.

Skatepark solution caught my eye

I RARELY miss reading the letters from News readers on the Your Views page. On Monday I read a very sensible letter suggesting building the long-promised skateboard facility on the north side of Holyrood Park, tucked in behind Dynamic Earth, or perhaps the east side of the palace.

Such a development wouldn't intrude into the magical area of Arthur's Seat and the Crags, as I'm very wary of breaking the tradition of not building on the south side of the road through the park.

But Mr Thomson's letter has caught my interest - I must find out if Her Majesty has any right to veto any plans for the Royal Park.