As politics across the UK remains in perpetual turmoil, one factor continues to be a constant: the First Minister will turn every opportunity into an argument for Scottish independence.
What is also a constant however is the underlying economic weakness of her case. Year after year the Scottish Government’s own set of figures on public sector revenue and expenditure, widely known as GERS, remind us of what we need to know about the problems that would face the Scottish economy in the event of separation.
Put it like this: When a publicly listed company publishes its annual results to shareholders, investors have the opportunity to judge the board and executives based on hard numbers. If all is going well and profits are fine then the markets react accordingly and back the company’s strategy. If those figures paint a less than healthy picture on the other hand, investors run elsewhere.
Using the same analogy, the latest GERS release, published just last month, carried the equivalent of a profits warning on an independent Scottish economy. They showed that Scotland’s public spending deficit over the last year was £12.6bn. The tax take per person of £307 was less than the UK figure and the amount spent on each person in Scotland by government was a whopping £1,660 higher per head.
So while the total deficit was a bit less than last year, the big picture is one of a United Kingdom doing what it should to pool resources and allow people and businesses in Scotland to live their lives without worrying about the political equivalent of financial liquidation of company assets.
Indeed, we’re one of nine UK regions that are net receivers of UK taxes that prop up our public services, albeit we’re the only one whose leadership complains vociferously about receiving support they can’t do without. SBUK’s own research on the resulting ‘Union dividend’ showed last year that Scottish independence would be at least eight times as costly as worst case Brexit.
The reaction to GERS from the SNP and Scottish ministers has been, as ever, to seek to undermine the perception of the figures rather than doing much to address the trends that lead to them.
The highly respected Fraser of Allander Institute said as much when it reflected, “we can’t think of any other government statistical publication – and a National Statistics publication at that – that is subject to such criticism and attack”. It concluded wearily that “much more could be done by government to defend these statistics and proactively clear-up misunderstandings”.
Again, imagine a company publishing its annual results and then actively talking down the skills of the people in its accounts department for producing that audited information. Yet ministers do exactly that every year in the hope that we as voters will look away from the numbers and focus on the distraction or bluster about how things would all be better if only we had independence.
The truth is quite simple to grasp. If the First Minister really plans to hold another referendum in the near future, she must explain how she hopes to tackle a vast net fiscal deficit after independence without resorting either to huge tax rises or commensurate public spending cuts in year one. Having read the proposals of her much-vaunted Growth Commission last year, I suspect she simply can’t and won’t bother to try.
Before we hear any more talk of timetables for a second independence referendum with Brexit as a flimsy pretext, Scottish businesses are owed a full and convincing explanation of how adding future chaos to the present confusion can be anything more than a political gamble that our economy can’t afford the First Minister to take. While the GERS figures show a true and challenging picture, they don’t obscure the fact that the Scottish economy has lots of strengths; that it has the potential to grow and thrive if its workers and its business community in particular are given the confidence to drive growth.
We need a new debate on the true opportunities for our economy that finds the answers required to unlock the rich potential of companies sick to death of hearing nothing but plans for constitutional upheaval upon upheaval from ministers.
What we shouldn’t face, again and again, year after year, is a concerted attempt to obscure the fundamental truth about the root strength we have that comes from our current place in the UK.
Struan Stevenson, Chief Executive, Scottish Business UK