Brian Monteith: Time for SNP to be honest with Scots

The huge public spending deficit exposes the lack of a government solution to growing our economy, writes Brian Monteith.

Brian Monteith says it is time for the SNP to be honest with the Scottish public.

It is not uncommon to hear politicians avoid a difficult question by using the phrase, “Well, I wouldn’t start from here”.

It is a standard method of avoiding responsibility for a situation not of a politician’s own making and it was indeed the approach taken by the SNP government last week when the Government Expenditure and Revenues Scotland (GERS) figures were published showing a Scottish public spending deficit of £13.8 billion in 2015-16.

The intent was to argue that on independence the SNP government would be able to do things differently, that the worst deficit in the EU (as a percentage of GDP) would not present an economic crisis. Like the SNP government’s White Paper advocating independence, this is nothing other than a deceit being played upon the Scottish public.

If the SNP would do things differently if Scotland were independent, then two obvious questions arise. First, why is the SNP government not doing things differently now – when it already has many economic levers at its disposal? Second, were it to have the full gamut of economic policies available, how would the SNP propose to reduce the deficit significantly or even turn it into a surplus?

The GERS figures are exactly what they say they are: they represent the totality of government spending by the Scottish and UK governments in or for Scotland, and the totality of revenues that are raised or can be identified as belonging to Scotland. In other words, if Scotland were to be independent, the annual GERS deficit or surplus is indicative of the balance sheet from which our country would start – and it has become a truly high cliff from which to leap.

Indeed the state of the Scottish public finances is even worse than had been thought, with over-optimistic oil and gas revenues being revised downwards for past GERS reports. The result is that, despite the “good” years of oil revenues, Scotland has been a net contributor to the UK exchequer in only three of the last 16 years.

As usual there were a few SNP politicians who sought to dismiss the GERS figures as irrelevant by challenging either their veracity or cherry-picking any individual number that might be claimed as good news.

This behaviour only emphasises the fact the GERS figures have become an annual embarrassment for the SNP as they reveal just how poorly Scotland’s public sector-dominated economy is faring under its management and exposes the complete absence of any SNP solution to growing our economy.

Much has been said about how the SNP misled people in its pre-referendum White Paper, leading to justifiable calls for an apology from Alex Salmond, Nicola Sturgeon and John Swinney – who all signed-off the publication. Beyond accepting the blame for what in banking would be branded as mis-selling, what is required now is for the SNP government to explain how it proposes to reduce the Scottish deficit.

It is not good enough to trot out trite answers such as Scotland would not have to fund the Trident nuclear missile replacement.

Salmond himself has put the cost to Scotland at £200 million a year, a number that is generally held to be on the high side.

If we accept that number it would still only reduce the current deficit from £13.8bn to £13.6bn – hardly a dent – so what other deductions would the SNP make to bring it down?

Worryingly for all of us there is nothing but utter silence from the SNP on both questions.

There will always be room to reduce public expenditure but our current crop of politicians – across all parties – are too afraid of suggesting how this can be done other than through blunt instruments such as pay caps and passing on cuts to local government expenditure.

To reduce public expenditure significantly requires our government to get out of whole sectors of operation, such as its water utility, but the drive for modernisation has never seriously taken off in Scotland.

I’ve witnessed more public service improvement in former Marxist developing nations such as Vietnam or Tanzania than happens in Scotland.

The truth of the matter is that a great deal of the responsibility for the Scottish deficit is the responsibility of successive Scottish governments since devolution started in 1999.

The stock Holyrood answer to any clamour for righting a perceived injustice has been to give away free items that were previously charged. We have seen free personal care, free tuition fees for Scots and EU students, free prescriptions, free eye and ear tests, and free travel passes for the whole of Scotland.

This week the first cars will cross the Queensferry Crossing, built at some £2bn, but none of this will be recovered because the SNP abolished bridge tolls.

Scotland is living well beyond its means and the SNP has played a significant role in this behaviour, stating that increased spending during Labour’s years was never enough, then spending to the max itself once it was elected to office.

Since 1999, government has tightened its grip on the economy by extending the scope of what it does, centralising control and expanding the tentacles of its regulatory role – this has all cost more money, rather than saved it.

In the absence of being willing to reduce spending, the SNP has to find ways to increase revenues, of which there are essentially two options: look to make Scotland a full-on capitalist success story where the private sector blossoms and the taxes on profits increase – or raise taxes and create new ones in the hope that it will not kill investment or lead to the flight of capital and wealth creators.

It is already known that the attempts by successive SNP finance secretaries John Swinney and Derek Mackay to increase tax revenues by introducing new higher taxes on property have depressed the market and reduced revenues as a consequence.

Now Mackay has denied 50,000 Scottish taxpayers the rise in tax-band thresholds that the rest of the UK is enjoying.

How long before he – or his replacement – decides to put the tax rate up?

If the choice is between free trading Singapore or the socialist intervention of Venezuela – or somewhere in between – the SNP needs to tell us what it will do.

Saying “We would not start from here” is simply not good enough.