Andrew Wilson: Self-belief is key for Scotland

FIND me the one country on earth where a political incumbent would argue that their own indolent mismanagement was the reason they should stay in charge?

“I have run up a huge national debt at the same time as literally blowing a colossal natural resources windfall while our near neighbours have saved theirs. I am passing on to the next generation the greatest financial burden of all time. Things must stay as they are. Vote me”. Scotland 2013.

Actually the nuance of it was worse last week as one senior Labour MP even tweeted: “Scotland faces pensions ­triple whammy – more pensioners, fewer younger workers & more pensioners in ill health than UK as whole”. And that damning symptom of underperformance was meant as a reason not to reform but to keep the world as it is.

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It is amazing how hot a political event the annual Government Expenditure and Revenue in Scotland (GERS) report is. It has the pull of the full moon on our political classes and it always has.

The whole exercise was invented by the Conservative government of the early 90s to demonstrate that Scotland was indeed a “Subsidy Junkie” and therefore incapable of standing on its own two feet. Thankfully the debate has moved on since then and people now realise that the UK’s fiscal record is hardly stellar and the shameful squandering of £300 billion plus of North Sea revenues is a particular low point. But the exercise has only ever told us about the road already travelled and the impact of things managed as they are now. The real battle of ideas is about the future.

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The single most important impact on the structure of the Scottish economic debate in the last two decades was made by Jim Mather in 1999, when he brought a non-combatant’s naivety to a meeting with Salmond, Swinney and Wilson and told us our obsession about rebutting GERS was completely missing the point. The debate had to be about analysing what was wrong with our economy now and how it could be made better to strengthen growth, living standards and the foundation of revenues to pay for ­services. Obvious on reflection. Thank God for Jim Mather.

If the SNP were guilty of anything last week it was of forgetting the Mather advice and getting dragged into an arid “You’re poor/We’re rich” tussle that serves no-one, least of all a bemused public.

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For the avoidance of doubt there is ­neither a black hole nor a pot of gold, black or otherwise, at the end of the ­independence rainbow. But there is a tool box and the means to lead ourselves into the sort of economy and society we can be happy to live in and proud to pass on.

The leaking of a Scottish Government cabinet paper created most of the drama, of course. Leaks always do and to be fair to the No campaign they made the best they could of their windfall politically. They are very concerned by the polling that shows trust in Scotland’s cabinet massively outstrips the London equivalent, so their core strategy is to attack that trust at every turn.

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The content of the actual paper, however, was a reasonably impeccable ­perspective from John Swinney about the outlook for finances based on the (often inaccurate) forecasts of the Office for Budget Responsibility. No new news,
really. The Institute of Fiscal Studies used the same data to draw the same conclusions weeks ago.

Having spent my adult life thinking about it all, I understand the picture as follows: the UK economic model is ­heavily dependent on increasingly centralised growth in London and the south-east with the welfare for the rest dependent on financial transfers from the centre. Scotland performs the best of the rest of the UK regions/nations (even ignoring North Sea oil), with many other significant assets. But we are challenged by the centrifugal pull of London on our capital, talent and resource.

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North Sea revenues still represent a game-changing opportunity to create an inter-generational sovereign savings fund. Their depletion with nothing to show for it damns the status quo, not the case for reform. Creating the new institutions and infrastructure of government will require expenditure at the start but will also see the economic benefits of that expenditure boosting the Scottish economy. We currently pay to have our government administered from the most expensive office space in the world and one of the most expensive labour markets. We can do better.

Our political instincts are to aim for a European/Nordic social democratic model and all the evidence suggests that we have what it takes to strengthen our economic sinews to get there.

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But as long as our politics is about spending money to dry the tears caused by an economic model that is failing in real time in front of our eyes we won’t move on. So the choice we really face is, do we sit like a frog in a pot as the water simmers enjoying its comforting warmth? Or do we have the self-belief it takes to imagine we can do better?

Twitter: @AndrewWilsonAJW