Expert debunks everything you've been told about Scottish 'deficit'

The National

4 days ago

Here, you can watch the full video. The transcription is also written below.
It's GERS day: The day in Scotland when the Government Expenditure and Revenue Statement for Scotland is published by the Scottish Government.
Every year it's presented as the truth about Scotland's public finances, and in reality, it's a Completely Rubbish Approximation to the truth or it's CRAp, as I've always described it.
The real position is this.
The Scottish Government balances its books.
Every single council in Scotland balances its books.
Every public agency that is reflected in jurors balances its books.
In other words, the truth is Scotland's public finances balance, by definition and by law.
So where does the deficit that GERS reports come from?
Well, it comes from the actions of the UK Government. It has to, because nobody else can create this deficit on behalf of Scotland because nobody else has the legal power to do so. And, therefore, if Scotland is running a deficit, we know who to blame. It's Westminster, and nobody at Holyrood is responsible.
READ MORE: What is the GERS report and how is it calculated?
Now let's just look at some of the detail behind that, because as usual, GERS is saying that Scotland is running a large public finance deficit; one that is larger than that in the rest of the UK.
And that is because people in Scotland are said to be paying a little bit less tax than people elsewhere in the UK. And I deliberately emphasised the point, "a little bit less tax". In fact, if we take oil into account, they pay no less tax than other people in the UK. But if we take oil out of account, it's about £500 or so less than other people in the UK. So, the difference is insignificant, and that's amazing given that average incomes per head in Scotland are lower than in the rest of the UK.
But let's look at the second part of this equation, and that is that the supposed spend on people in Scotland is £2670 per person more than it is on people in the rest of the UK. It's over £21,000 and it's around £18,000 per person in the rest of the UK; a figure, which you're probably going find pretty staggering because you're going try and work out how you get that much benefit. And the answer is, it is very hard to work out.
But the point is that the deficit per person in the UK is £2200 per person, and it is claimed as a consequence of adjusting for these tax figures and for the extra spending for people in Scotland that the deficit per person in Scotland is over £4700 per person per year.
And I'm going to put it to you that that is nothing to do with what is actually happening inside Scotland's public finances, for the reasons I've already explained.
They balance.
So what are the reasons for the deficit?
First of all, as the GERS statement itself, rather pointedly says, expenditure on social provision and welfare in Scotland is higher than it is in the rest of the UK. And there's a little dig at the Scottish Government for that in this document.
But in truth, that's not the reason. The truth is Scotland is poorer than the rest of the UK and has more social need than the rest of the UK, and also needs more support because of the environment of Scotland being different from the rest of the UK. It's colder for a start. And so, there are issues in Scotland that have to be addressed which Westminster is never going to care about, which are reflected in this report and which don't get adjusted for as a consequence. They are never going to be solved until Scotland is independent.
But the rest of this deficit is created by Westminster because it is the only organisation that can create it because nobody in Scotland has the power to do so.
And I'm saying that that is deliberate. Scotland is deliberately having costs dumped on it by Westminster in a way that is entirely unreasonable. It is claimed that Scotland has excess costs, in other words, in my opinion, and some of those are easy to identify.
For example, Scotland is not buying new nuclear power stations in the south of England, and it would never need them because it has a power surplus. In fact, Scotland is underreporting its national income because companies in Scotland are being paid to not produce renewable energy. You couldn't make up a situation more bizarre than that, which is so biased in favour of England.
And Scotland would never, if it was independent, waste the money that the UK does on defence so that Keir Starmer can continue to go around the world politically posturing as if the country is a world power when everybody knows it isn't.
And nor would Scotland spend money on HS2, which is never going to come near the country.
And nor would it pour subsidies into investment in the south-east of England, which is the absolutely standard norm in the UK Government accounts for which apparently Scotland has to pay.
Independence could change all this.
Scotland would have its own capital, which would boost its GDP.
All profits earned in Scotland would be taxed in Scotland, and I very strongly suspect that is not the case at present.
All interests paid in Scotland would be taxed in Scotland because it would have to be paid to Scottish banks, and I very strongly suspect that that is not being accounted for properly at present.
And in addition. VAT paid in Scotland would definitely be collected in the country and once more, I'm not at all convinced that is happening right now.
And Scotland could, if it was an independent country, crack down on the small company abuse that is now denying the revenue across the whole of the UK, tens of billions of pounds, and therefore costing Scotland a significant amount as well.
And all of this could be done to change the way in which Scotland's accounting works. But Westminster isn't interested in doing that. So long as it can dump its costs on Scotland and Wales, and Northern England and Northern Ireland, then it doesn't care that it is making losses in those areas as a consequence of its accounting because it can blame them for being the burden on the rest of the UK. They keep wasteful projects alive on the basis of this while starving Scotland of funds to meet real needs.
This is accounting abuse on a giant scale.
READ MORE: We have to create an alternative to GERS to make the case for indy
The figures that are used in GERS are flawed because the UK Government supplies what is, in my opinion, and I'm allowed to have this opinion, flawed apportionments of UK national data. And Scotland has no control over this. What it's charged for is a matter for the UK Government to decide and not for Scotland to decide. America sought independence for less reason than that.
And these estimates would all change if independence was to be a reality. In fact, in fairness, GERS says that. There is no indication of what Scotland's finances would be like if it was independent from the extrapolation of the GERS statement. But if you listen to a Unionist, you would never believe that. They love GERS, they always have, and remember that it was created in 1992 precisely to prove that Scotland couldn't be an independent country, and more than 30 years on the Scottish Government, headed by the SNP for well over a decade now, is still producing this nonsense data and looks incredibly weak as a result for doing so.
Year after year I have begged the SNP to change the methodology, to put forward a proposal as to how this can be properly accounted for, and to show, at least, the degree of expense which is reallocated which they would challenge, and that which is not. But it doesn't happen, and that's ridiculous.
So, we end up with a situation where GERS is, as I've always described it, CRAp – a completely rubbish approximation to the truth.
It's misleading. It's untruthful, and it's politically loaded against Scotland. It's time to scrap it, to replace it, and to show Scotland's real potential.
Scotland can and must do better than this.