Advertisement

Sorry Nicola Sturgeon, the revenue numbers do matter

The latest government expenditure and revenue statistics (GERS) paint a grim picture for Scotland, says Merryn Somerset Webb – and Nicola Sturgeon knows it.

16-8-24-Sturgeon-1200
Nicola Sturgeon is desperate to distract your attention from the figures

No one in Scotland's SNP has much been looking forward to today. That's because the new official government expenditure and revenue statistics (GERS) have been published and they are absolutely awful. The last lot showed Scotland spending an average of £1,400 per head more than the rest of the UK and having a horrible budget deficit of just under £15bn (nearly 10%) of GDP. This lot are no better you can have a look at them here.

Advertisement - Article continues below

The stats show the deficit at much the same level (£14.8bn and 9.5% of GDP against 4% for the UK as a whole). It is hard to make a case for Scottish independence with this as a backdrop. So, despite the fact that the Scottish government produces the numbers, Nicola Sturgeon and her supporters are keen to suggest that the GERS numbers have no worth whatsoever that they aren't exact and they are a reflection of "Scotland's economy under the status quo, not a reflection of how Scotland would perform under independence".

Advertisement
Advertisement - Article continues below

There's truth in this of course. I knocked off a quick blog a few years ago in which I pointed out that there is an awful lot of guesstimating in the revenue figures in the numbers (which come in about £400 lower per head than in the UK as whole): it is all but impossible to know what corporation tax receipts, for example, and other tax-takes such as those from income tax would depend heavily on what arbitrage there might be between the rest of the UK and Scotland post-independence (low income tax rates would bring high-earners in and visa versa).

Advertisement - Article continues below

However, some revenue numbers are not as much in doubt as others (oil revenues down from £9.6bn when the White Paper and my original blog were being written to less than £0.1bn now being the obvious one here, although you could argue that no one knows how much of them Scotland would really get!) and the spending numbers are what they are: Scotland is unlikely to spend hugely less or hugely more in the immediate future.

I said rather flippantly in that last blog post that, given the rough guess nature of some of the revenue numbers, you didn't have to worry about the GERS numbers too much as a forecast of Scotland's long-term future. But that wasn't quite true: the numbers don't tell us what things would look like ten years after independence, but do give us the best snapshot we have of where an independent Scotland would start from (albeit probably a fairly optimistic one).

Advertisement - Article continues below

So they do matter. And this, of course, is why, Nicola Sturgeon is so desperate to distract everyone's attention from them. That's why yesterday was the day she revived the EU referendum's "project fear" with some suitably bonkers scaremongering about Scotland's future as part of the UK outside the EU. And why yesterday was also the day that she announced that she would soon be able to reveal her plans to pretend that she will soon have a second referendum on full independence for Scotland if she sees it as "in the interests of Scotland".

Both things were designed to make the long-suffering population of Scotland to think less about GERS, less about the crappy state of our education system, less about our failing NHS and police system and more about referendums.

If you want the full run down on GERS and what the numbers really mean visit the excellent blog by Kevin Hague on the matter.

Advertisement
Advertisement

Recommended

Visit/519858/how-long-can-the-good-times-roll
Economy

How long can the good times roll?

Despite all the doom and gloom that has dominated our headlines for most of 2019, Britain and most of the rest of the developing world is currently en…
19 Dec 2019
Visit/516758/beyond-the-brexit-talk-the-british-economy-isnt-doing-too-badly
Economy

Beyond the Brexit talk, the British economy isn’t doing too badly

The political Brexit pantomime aside, Britain is in pretty good shape. With near-record employment, strong wage growth and modest inflation, there is …
17 Oct 2019
Visit/economy/uk-economy/601605/spend-spend-spend-think-of-it-as-your-patriotic-duty
UK Economy

Spend, spend, spend – think of it as your patriotic duty

After months of lockdown, many of us will have some money to spare. If you do, says Merryn Somerset Webb, spend it.
2 Jul 2020
Visit/investments/property/601606/house-prices-crash-uk-property-prices-falling-where-next
Property

House price crash: UK property prices are falling – so where next?

With UK property prices falling for the first time in eight years, are we about to see a house price crash? John Stepek looks at what’s behind the sli…
2 Jul 2020

Most Popular

Visit/investments/property/601606/house-prices-crash-uk-property-prices-falling-where-next
Property

House price crash: UK property prices are falling – so where next?

With UK property prices falling for the first time in eight years, are we about to see a house price crash? John Stepek looks at what’s behind the sli…
2 Jul 2020
Visit/economy/inflation/601584/the-end-of-the-bond-bull-market-and-the-return-of-inflation
Inflation

The end of the bond bull market and the return of inflation

Central bank stimulus, surging post-lockdown demand and the end of the 40-year bond bull market. It all points to inflation, says John Stepek. Here’s …
30 Jun 2020
Visit/investments/stockmarkets/601611/nasdaq-all-time-high-markets-and-the-real-economy
Stockmarkets

How can markets hit new record highs when the economy is in such a mess?

Despite the world being in the midst of a global pandemic, America's Nasdaq stock index just hit an all-time high. And it's not the only index on a bu…
3 Jul 2020