Latest news with #GERS
The Herald Scotland
a day ago
- Business
- The Herald Scotland
Within the UK, we get what we need and deserve - no more, no less
The GERS figures, which are published by the Scottish Government, were pretty dire. They measure the amount of public money spent in Scotland against the taxation that is raised here. The difference, this year, is £26.2 billion which is a remarkable 11.7 per cent of GDP. As part of the exercise, the GERS deficit is rapidly translated, without the help of AI, into the per capita variation between public expenditure in Scotland and England, which now runs at £2669, up by £358 in a year. That number is, understandably, trumpeted by those who favour the constitutional status quo. If there was ever another referendum, it would frighten all but the most dedicated horses. Read More: It is a pity however that the GERS figures have been reduced to political cudgels without greater understanding of what they represent. First, it needs to be understood that, within a United Kingdom, it makes perfectly good sense that Scotland enjoys these advantages, which were embedded long before devolution or independence became significant terms in the political vocabulary. Higher public expenditure in Scotland was based on two main factors – our heavily disproportionate geography vis-à-vis population and our levels of urban poverty, exacerbated by the decline of heavy industry in post-war years. In other words, the distribution was broadly founded on fairness and need rather than any political or constitutional fix. The Barnett formula brought order to that principle but certainly did not invent it. This point is reinforced by the pattern of public spending in England. The figure of £2669 is misleading since it is a comparison with a figure generic to the whole of England, within which there are actually large divergences. The poorer areas 'up north' are not far off Scottish levels of per capita spending while those in the effete south-east are significantly lower. In other words, the Scottish funding 'bonus' is based on needs rather than munificence and it is on these grounds it should be defended and argued for. If Scotland does well out of Barnett, which it does, it is because of our history and geography rather than a political decision either to buy us off or, as Nationalists would have it, sell us short. Within the UK, we get what we need and deserve. No more, no less. At that point, Nationalists resort to a hypothetical argument rather than the actual one. On the basis of no evidence, they assert that the need for this relative largesse – or simple fairness, as I would have it - would disappear if all the economic levers were in their hands. I do not believe that to be true and have no wish for my children or grand-children to be on the receiving end of finding out. But let's park that argument, as the SNP seems to have done, for another decade. Recall instead the grounds for the Barnett formula in the first place – scattered geography and the consequences of industrial history, leading to a higher level of poverty and need. Logically, within that context, these are the areas of Scottish life which should have been prioritised, in the interests of 'levelling up' before the term was fashionable. The 'differential' money should really be ringfenced for post-industrial communities that have never recovered from the loss of their raisons d'etre, and also for the Scottish periphery where per capita costs of delivery are inevitably greater. If that principle had been maintained, we would see very different outcomes today and the myth of the poor and the peripheral being subsidy supplicants rather than entitled priorities would evaporate. But where has Scotland's 'extra' money, via the Barnett formula, actually gone? Is it to the periphery, which continues to shed population at an alarming rate? Is it to the depressed industrial communities and opportunities for their new generations? Or, in fact, has the bonus enshrined in the Barnett formula simply become one big funding trough which serves disproportionately the interests of the better-off? At this point, I revert to the National Records of Scotland which reported on our shifting demographics. The headline figure is that the Scottish population has reached new heights of over 5.5 million, due to net immigration more than making up for the excess of deaths over births. In some parts of Scotland, however, the figures give very little sign of encouragement that anything is being levelled up. Where I live in the Western Isles, for example, the under-16 population is down by13 per cent in a decade and the working age population is down by 10 per cent. The implications of this are not difficult to discern. There are not enough people to do the jobs on which an ageing population depends. So more people leave and the trend continues. There is very little sign of population growth in old industrial areas either. North Ayrshire's young population, for example, is down by ten per cent and working age numbers by 5.7 per cent. And be warned- what the most peripheral and poorest parts of Scotland face today in terms of not having enough people to support the services on which an ageing population depends is coming for others which still regard themselves as secure from demographic trends. Money is not the answer to everything but it rarely does any harm. So let's not apologise or be excessively grateful for the 'extra' £2669 each of us gets a year through the Barnett formula. But let us not forget either why we get it – which is off the backs of places which represented the original case for that extra money but are still left behind when it comes to addressing poverty, disadvantage and population loss. Brian Wilson is a former Labour Party politician. He was MP for Cunninghame North from 1987 until 2005 and served as a Minister of State from 1997 to 2003
The National
2 days ago
- Business
- The National
Scotland is wealthy but GERS makes it look poor. Time for a rethink
It's all predictable. Performative. Boring. And utterly, utterly bogus. Self-evidently, Scotland is a wealthy country with a sophisticated economy and well-educated workforce. If Scotland can't be independent on the grounds of economics, then someone has clearly forgotten to tell all the other independent countries without a fraction of our advantages or per capita wealth that they can't be independent either – and that they surely must come to their senses immediately. READ MORE: SNP must not act as bystanders in run-up to next year's election But then, any meaningful debate about the economics of independence has never been about whether we could, but rather about whether we should. Which is why it suits Unionists to ignore the political and economic imbalances of the UK to try to keep the independence debate mired in the narrowness of a GERS publication which, in its present form, is of no real use to anyone interested in a meaningful, good-faith discussion about the Scottish economy. For despite the no doubt best efforts of the civil servants involved in producing it, all GERS really offers is a distorted view in the rear-view mirror, based on the difference between two very large numbers, each of which rely to a very large extent on estimates and assumptions rather than cold, hard outturn figures. If you were foolish enough to try to use GERS as a proxy for independence, then there are some big problems with that. Since it allocates large amounts of reserved UK expenditure to Scotland, it immediately carries with it the assumption that an independent Scottish Government would wish to continue with certain spending lines – like expenditure on nuclear weapons, for instance. Clearly, not even the most rabidly pro-Trident Scottish Unionist could seriously anticipate that this would ever be the case. A more serious flaw arises when it comes to spending under the control of the UK Government. GERS allocates a spend 'for' Scotland, as opposed to providing a record of what's actually spent 'in' Scotland. This means that large tracts of the defence budget, or the wages and taxes of tens of thousands of civil servants in London and the South-East of England, all get allocated on a population share to Scotland, on the grounds that this spend takes place for our benefit too. READ MORE: Scottish city among 'best places in the world' for young people to live The result is that Scotland is allocated costs of activity supposedly for its benefit, while missing out on higher tax revenues that would exist if such government work were actually located and employed in Scotland. And all of this is – remember – a snapshot of one year in the past, rather than any kind of dynamic look forwards. Nevertheless, the vested interest in portraying GERS as showing that a Scotland free of Whitehall's apron strings would immediately have higher taxes, poorer services, a plague of boils and locusts, or perhaps all at the same time (with even worse to come), still persists. Last year, I mused about why Alex Salmond might have kept GERS in place after he became First Minister. I concluded that since the figures at the time were so advantageous for Scotland relative to the rest of the UK, it must have suited him in that pre-referendum stage to turn those figures right back on those who had always previously tried to deploy them against independence. Even if so, it's surely now past time to give GERS a decent burial – or at least to turn it into something vaguely useful for the people of Scotland in whose name and at whose expense it is produced each year. READ MORE: 'Cover up': Labour refuse to release files on secret meeting with Israeli minister If we are to keep GERS, then we should get rid of the estimates when it comes to tax by devolving complete control of all taxes, and place Revenue Scotland in charge of their collection within Scotland. This would both locate more jobs in Scotland and give us solid real-time outturn figures for revenues. We should ensure GERS reflects actual expenditure happening in Scotland rather than allocations of UK spending elsewhere. This would help solidify the true extent of the much-trumpeted 'Union dividend.' We should also provide a breakdown of how UK spending decisions filter through to the Scottish Government's eventual budget. At year end, comparing UK Government boasts of increased funds with the reality of what actually reaches Holyrood would be both illuminating and enlightening for the public.
Scotsman
3 days ago
- Business
- Scotsman
Frankly, the worst revelations are in Scotland's official statistics
PA This year's GERS read more like a horror story Sign up to our daily newsletter – Regular news stories and round-ups from around Scotland direct to your inbox Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... Last week the most shocking revelations about Scottish politics came to light. It should leave us worried. It should make us angry. Based on hard facts rather than unsubstantiated tittle-tattle and tasteless rumours, the evidence cannot be treated lightly or dismissed as wild imaginings. I write, of course, about the Government Expenditure and Revenue (GERS) report for 2024/25 that deserved to be taken more seriously than competing publications claiming to be fact but having all the look of wild fiction. Advertisement Hide Ad Advertisement Hide Ad This year's GERS read more like a horror story worthy of Robert Louis Stevenson (Jekyll and Hyde) or Edgar Alan Poe (The House of Usher) than a dry statistical perambulation around Scotland's public spending and tax revenues. Back in 2019/20 only five years ago – public spending in Scotland was £82.8bn, yet it is £117.6bn today. That is an explosive increase of 42 per cent in just five years. If the rate of spending growth had risen in line with inflation it would have been £103bn this year. The additional £14.6bn has gone on what exactly? The increase in public spending last year alone was by 5.5 per cent – double the rate of inflation – reaching a total per household of £44,882. These sordid economic facts should be the stuff of festival fringe dramas where tragedy and comedy of the absurd is employed to explore the scheming, evasion, and delusion of SNP politicians taking decisions that cost us millions that amount to billions. Plays such as 'Who pays the Ferry, man?' or 'Recycling for Dummies' would look at great schemes that even now are still costing huge sums with no end in sight. Advertisement Hide Ad Advertisement Hide Ad Just yesterday the Scotsman reported exclusively the willingness of Scottish Government politicians to test our public finances to destruction. Having established (late as usual) their shiny new political toy, called the Scottish Benefits Agency, the wilful deviation from how things are done in the rest of Britain means the Scottish taxpayer could be on the hook for an additional £36 million. Why? By not seeking to collect overpayments or errors in benefit pay-outs. Of course, were the Scottish dis-Benefits Agency to not deviate from the norm then the obvious question would be why did we create our own new bureaucracy in the first place? So we can expect more of these policies, higher or different 'benefits' than what were paid out before, at greater cost. And all from a pool of money that the Scottish Government does not have. Remember, the Scottish public finances are spent up to the limit, with any budget underspends quickly reallocated to other departments rather than returned to the taxpayer as a rebate against the next year's taxes. The public borrowing that is available is also maxed-out – which is exactly why the no new borrowing powers should be allowed, it would simply be used to extend the line of credit to an even higher amount rather than more properly provide the headroom for emergencies such as pandemics or disaster relief. Why has it come to all this? The cast of characters is substantial, not just the current finance minister Shona Robison, but stretching back to Kate Forbes, Douglas Mackay and John Swinney – all have had a hand. Presenting their past claims and contrasting them with the reality would hardly make great Fringe comedy, for no one would be laughing – although the potential of exploring the well-being economy devised by Kate Forbes could provide many ironic jaw dropping moments. Advertisement Hide Ad Advertisement Hide Ad Record drug-related deaths anyone? Scottish education standards in English, maths and science falling against those of other countries where we previously built schools and taught the masses? The Book Festival could interview past ministers on how it became possible for Scots pupils to gain English qualifications without having read a novel. We should all be deeply concerned about the waste of money, the rush to book international receptions, the offices we don't need, the staff complement that only knows how to grow and where redundancies are not allowed. The free bus travel with daily excursions to shoplifting centres for under twenty-fives. Improv stand-up could take a new form of spontaneous dialogue delivered by foregoing actors and picking participants from the audience to have a serious discourse around a staged kitchen table. Hard questions could be asked with the actors role-playing the politicians but only allowed to ad-lib their answers – as making it all up seems to be how it's normally done anyway. Likewise, documentaries on devolved disasters could be made for Film Festival premiers. What GERS tells us is that while the UK public finances are bad (and yes, I have written about that too) they are but a pale imitation of the depressing Scottish public finances. When devolution commenced the size of the Scottish state accounted for 43 per cent of the economy. Now the tartan behemoth is a swaggering 55.4 per cent of GDP before oil, falling marginally to 52 per cent when including oil revenues. It is unsustainable without a sponsor, and that sponsor just happens to be Westminster. Advertisement Hide Ad Advertisement Hide Ad The message from GERS is simple but indisputable; until nationalists can show they can deliver a dynamic, vibrant, prosperous, revenue-raising, job-creating economy the path to secession cannot be found because it does not exist. Ironically, if Holyrood were to come to its senses by the electorate giving it an administration that seeks to live within its means by eliminating waste and allowing compulsory redundancies then the economy could transform. Taxes could be reduced, the economic activity could rise and Scotland's wellbeing would be happy again – just not the way the current politicians would like it. It could even make separation possible, but then why would we want to? Frankly, Holyrood is a farce presented as a pantomime – and no one can rewrite any differently.
The Herald Scotland
4 days ago
- Business
- The Herald Scotland
Unspun: Scotland's Defence bill & the independence debate
Defence is one of the main issues at the heart of Scotland's constitutional debate and a row over the price tag attached to it has become a political battleground. For decades, warships built in Glasgow, nuclear weapons on the Clyde and RAF jets patrolling the skies have symbolised Scotland's significant role in UK defence. And as the 'UK's defence hub', Scotland has naturally seen the political discourse surrounding the topic play out vividly. The most recent Government Expenditure and Revenue Scotland (GERS) report, published last week, has reignited the debate. The Scottish Government says Scotland contributes £2.1 billion a year towards defence, based on its share of the UK population. Shona Robison argues that GERS allocates Scotland a 'population share' of reserved UK spending rather than accounting for real expenditure. Yet, the Secretary of State for Scotland, Labour's Ian Murray, describes the Scottish Government £2.1 billion figure as 'wholly misleading' and has said it 'fundamentally misrepresents how the defence of our nation works'. Westminster points to official GERS figures that allocate a much higher £5.1 billion when nuclear submarines, overseas operations, and procurement are included. Economists from the Fraser of Allander Institute suggest the Scottish Government £2.1 billion figure comes from a Ministry of Defence report which only covers transactions with UK-based companies, excluding overseas purchases or research and development that may benefit the sector. For the SNP, the lower figure helps bolster the case that Scotland could fund its own defence force while still investing more in areas such as health, education, and welfare. For Unionists, the £5.1bn estimate underlines the scale of protection provided by being part of the UK, and the challenge of replicating it in an independent state. As with so much in Scotland's constitutional debate, the fight is not really about statistics. It is about competing visions of sovereignty, security, and national priorities. The defence debate is also about livelihoods. Thousands of jobs are tied to the UK's nuclear deterrent at Faslane and Coulport and the MOD contracts sustain Scotland's naval construction industry. At RAF Lossiemouth, secure and well-paid employment supports many in a rural area. Then there's the planned £250 million redevelopment of Faslane which could create even more jobs. An independent Scotland could not guarantee the same scale of investment, at least in the short term. Supporters of independence argue jobs could be redirected into conventional defence forces and shipbuilding for Scotland's own navy. However, critics warn of potential economic shock if UK contracts were lost. READ MORE FROM UNSPUN: Opposition parties accuse the SNP of 'cooking the books,' using a narrow calculation to make independence look more affordable. The SNP counters that Westminster deliberately inflates costs to portray Scotland as dependent. Either way, the row highlights a recurring problem: independence cannot be debated without first agreeing on what the numbers actually mean. As long as two different sets of figures circulate, both sides can claim victory for their own arguments. Defence is about more than money. It is about identity, alliances, and Scotland's place in the world. Would Scots accept higher taxes to maintain a credible military? Could an independent Scotland sit in NATO while rejecting nuclear weapons? These are not abstract questions. They will shape the arguments going into the 2026 Holyrood election. And just as the independence referendum in 2014 was shaped by doubts over currency and oil, the next debate may well turn on the price tag of defence.
Scotsman
7 days ago
- Business
- Scotsman
Readers' letters: Scottish Government's reaction to Gers figures stretches credulity
A reader criticises the SNP for blaming the UK Government for Scotland's soaring public spending deficit Sign up to our daily newsletter – Regular news stories and round-ups from around Scotland direct to your inbox Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... Shona Robison states: 'Gers reflects the fact that the current UK Government has continued with the economic mismanagement of its predecessors.' She also blames the reduction in revenues from the North Sea. Advertisement Hide Ad Advertisement Hide Ad After 18 years of utter fiscal incompetence from the SNP, perhaps some of the dosh which has disappeared down the plug-hole needs stating. Stop all exploration in the North sea, destroying revenues, massive redundancies and huge losses in tax revenue. Free prescriptions, free university for the limited number of Scottish students allowed to enroll, free baby boxes, £400 million overspend on two ferries, free bus passes for under-22-year-olds, free school meals – the list is never ending. It would appear that the magic money tree (£2,699 of additional public spending compared to the UK average) is losing its leaves. The time has come to get rid of this SNP government. We have another nine months of financial incompetence to endure before the 2026 elections – what state will the nation's finances be in by then? I dread to think. When our pre-eminent national newspaper states with regard to Ms Robisons comments, 'In other words, the magic wand of independence will make our problems disappear', it is nothing short of a huge indictment of this government's ineptitude and utterly deluded means of governing. Advertisement Hide Ad Advertisement Hide Ad No wonder Nicola Sturgeon is thinking of jumping Hadrian's Wall – she won't be the only one should these indie zealots get their way. David Millar, Lauder, Scottish Borders Business as usual The publication of the latest GERS (Government Expenditure and Revenue for Scotland) figures has triggered a now traditional feeding frenzy. A black hole in Scotland's finances is heralded by unionist politicians as validating the continuation of the Union. The killer phrase for me from the GERS report is: 'The report is designed to allow users to understand and analyse Scotland's fiscal position under different scenarios within the current constitutional framework.' GERS is therefore a measure of the public finances under the current Union, hardly the greatest endorsement for how the economy has been managed on the UK's watch. Indeed, major economic levers required to stimulate economic growth are still currently reserved to Westminster. Advertisement Hide Ad Advertisement Hide Ad Contrast this with our near neighbour, the Republic of Ireland, which has run budget surpluses totalling over £34 billion since 2022, with another forecast this year. Despite having considerably less in the way of natural resources than Scotland, the government there has announced a 'transformational' plan to spend over £183bn over the next decade on infrastructure. The point of independence is not to do everything in the same way as it has been done within the current constitutional framework, but to move away from this one-size-fits-all fiscal straitjacket to a tailored approach that prioritises stimulating economic growth. Alex Orr, Edinburgh Service sector The closing of churches (Letters, 14 August) is the business equivalent of sacking the sales force because business is bad. In both cases the answer is an updating of the product to make it more attractive to the customer. Malcolm Parkin, Kinnesswood, Perth & Kinross Covid claims I have to disagree with Martin O'Gorman's suggestion (Letters, 13 August) that Nicola Sturgeon 'weaponised Covid'. He gives no justification and for many she did the opposite. Advertisement Hide Ad Advertisement Hide Ad Evidence suggests that she went out of her way to keep Scotland informed in her clear communicative style with press conferences daily to hold her and her government to account. This is a far cry from Boris Johnson, who flagrantly breached his own rules on several occasions and blustered through occasional press conferences with lies and, it transpired, put the economy before human life on occasion. In her candid interview with Julie Etchingham she covered at least as many misjudgments as successes. While there were the eight election victories, Sturgeon chose to talk about the dark and difficult realities in her troubled political life. The usual political answers were replaced by a frank admission that she had got things wrong in four key areas. Misjudging the mood of the nation in 2017 when 'caught off guard' by the scrutiny of a second referendum, feeling partly responsible for Covid deaths, losing her friendship with Alex Salmond and gender reform. Her reluctance to mark her performance out of ten may be because it is not for her to judge. Often we are quick to praise ourselves before others. I agree with Mr O'Gorman about a lack of political progress, Sturgeon cited only the child payment along with election successes as achievements. Ultimately she failed to deliver independence and that is how many will judge her. Neil Anderson, Edinburgh Stalinist tendencies Advertisement Hide Ad Advertisement Hide Ad Joanna Cherry accuses Nicola Sturgeon of having a Stalinist leadership style (Scotsman, 14 August).There seems little doubt that the SNP was run in an authoritarian style under Nicola, but to be fair, she inherited this from the previous leader Alex Salmond, in his drive for independence. William Ballantine, Bo'ness, West Lothian Orwell's critique In his defence of Nicola Sturgeon, Robert Menzies uses the term Orwellian (Letters, 14 August). I suggest that he reads Orwell's 'Notes on Nationalism', written in 1945. Orwell's wide-ranging critique starts by saying that nationalism assumes that human beings can be classified like insects, that whole blocks of millions or tens of millions of people can be confidently labelled 'good' or 'bad', and that the nationalist habit of identifying oneself with a single nation and placing it beyond good or evil recognises no other duty than advancing its interests. He goes on to say that the abiding interest of every nationalist is to secure more power, not for himself, but for the nation in which he has chosen to sink his own individuality. Of course Orwell's binary phraseology was written long before the gender wars had broken out, but I am sure that he would have fulminated against censorship and no-platforming with great vigour as matters of principle. Hugh Pennington, Aberdeen Never too late Advertisement Hide Ad Advertisement Hide Ad Murdo Fraser's throwaway sentence towards the end of his article about the 2025 Highers examinations (Scotsman, 13 August) stated that 'Young people get only one chance at education'. As one who spent 32 years in various further education colleges this does seem rather disrespectful to the sector. My favourite class over the years was a group of, mainly, 35-45-year-old housewives responding to an urgent invitation to train as teachers. I do not think that the school system had failed them; rather they were probably too immature at that time to gain full benefit. Often I was told by them that they had never understood Hamlet until they were given this second chance. Not my teaching, but their greater maturity and experience of life was what made the difference. Their lack of ego about their own ability was touching but led to my being asked frequently: 'Do you think I'll scrape a C pass?' There was never any doubt. And that's what those of us working in the sector always saw as its main priority – giving people a second chance. I even saw this in my own family when one my daughters, who had been pursuing City and Guilds qualifications in catering, took a government-sponsored basic computing course in my own college and progressed from there to a degree in computing at university and a very successful career. Bill Greenock, Netherlee, East Renfrewshire Forgotten Fleet National events are being held to mark the 80th anniversary of VJ Day today. Advertisement Hide Ad Advertisement Hide Ad For VJ Day 80, the government's website mentions the Fourteenth Army – the Forgotten Army – but not the British Pacific Fleet (BPF), the Forgotten Fleet. By VJ Day in 1945, the BPF consisted of 190,000 men and women, some 273 ships, more than 750 naval aircraft and bases ashore. The largest ever British fleet, it was supported by peoples of the Commonwealth in Australia, New Zealand, India and Ceylon. Sailors from many more nations served in Merchant Navy ships in the 'Fleet Train', and some foreign nationals were at sea with the Royal Navy and Royal Marines, all supporting America's huge Pacific naval forces. After Japan's surrender, the BPF was the only force immediately available to safeguard British and Commonwealth interests in the Pacific, carrying out humanitarian work, particularly with prisoners of war. My father's destroyer, HMS Wager, returned home after 18 months away in January 1946. In All Hell Let Loose, Sir Max Hastings suggests that 'the Royal Navy and the United States Navy were their countries' outstanding fighting services' of the war. Indeed, the Royal Navy was the only service in the world engaged from the first to the last day of the Second World War. Not just the Forgotten Fleet, today's sea-blind Britain has forgotten the importance of the sea and ships to our nation's livelihood. Advertisement Hide Ad Advertisement Hide Ad Lester May (Lieutenant Commander, Royal Navy – retired), London Write to The Scotsman
