It’s time for the independence movement to tell us the truth about what will happen if we lose the dividends from being part of the UK, says Ian Murray
Most people in Scotland reading a headline “GERS crisis” may think Rangers Football Club was in trouble. Not yesterday. The “GERS crisis” was in Scotland’s public finances. GERS is the Scottish Government’s own accounts and its “authoritative publication on Scotland’s public finances” as ministers themselves described them.
It is so influential that they were used as the basis for the SNP’s Growth Commission report last year, which examined the financial options for an independent Scotland.
This week’s GERS figures demonstrate yet again one of the most positive arguments for Scotland remaining in the UK as they show that Scotland enjoys a large public service spending dividend from being part of the UK. The figures, which include oil revenues, very much align with the principal of pooling together the resources of the UK and then sharing those resources to meet needs. That’s a principle I’m sure we can all agree with.
This pooling and sharing means Scotland contributes 8 per cent to the entire UK pot but receives a share close to 9.3 per cent. We spend £75.3bn but only raise £62.7bn. That’s a lot of extra money into our schools, hospitals and cherished public services to the tune of an extra £1,661 for every person in Scotland.
To put this into context, that’s a fiscal deficit between money raised and spent of over 7 per cent. The UK deficit is current 1.1 per cent. The next nearest EU country is Cyprus on 4.8 per cent. The deficit condition of any nation joining the EU is capped at 3 per cent.
The SNP will have to tell us how it plans to raise the extra £12.6bn required to balance the nation’s books. This is a huge amount of money. The only options to plug that gap are massive cuts to public expenditure, eye watering borrowing, and/or significantly higher taxes.
The SNP suggested that, if Scotland was independent, it would tackle the deficit through “a combination of higher taxes and a squeeze on spending growth”, concluding this would see the “country cut its deficit to 3 per cent in nine years”. The assertion that Scotland would slip seamlessly and quickly into the EU would take at least this long.
The Nationalists’ proposition would deliver unprecedented levels of austerity. Do Scots honestly want a decade or more of devastation to public services alongside much higher taxes?
Sit this alongside the much more extreme independence the SNP is offering compared to 2014. Ditching the pound for an unknown and unused currency that will require the borrowing of hundreds of billions of pounds for reserves to support it. Also, the SNP rightly argues that there is no solution to a post-Brexit hard border between Northern Ireland and Eire. That surely means there would have to be a border at Berwick for the same reasons.
The GERS figures and these arguments show that the wrong-headed arguments to justify Brexit are the same wrong-headed arguments being deployed to justify independence.
It’s time Nicola Sturgeon and the independence movement stopped waving flags and marching up and down our streets, and instead told us the truth about the impact of losing the dividends from being part of the UK. If they refuse, their response is no better than the lies, obfuscation and vacuous arguments delivered to us by Boris Johnson and his cronies during the EU referendum. Rather than answers to legitimate questions that concern voters they will say “you are talking Scotland down”, “this is about taking back control”, “we stand up for Scotland”. Those may be powerful slogans but I’m afraid they don’t create jobs, pay mortgages, or provide a future for our children.
It’s time we rejected the divisive nationalism of Boris Johnson and Nicola Sturgeon and started to concentrate on what really matters to the people of Edinburgh.
A good start would be a bit of honesty in these debates.
Ian Murray is the Labour MP for Edinburgh South