It’s Gersmas Day, Scotland’s annual present of fantasy Westminster economics

This week, Scotland had its annual Gersmas Day, when British nationalist Santa puts supporters of Scottish independence on the naughty list and the anti-independence Scottish media, which is to say almost all of it, crows triumphantly about how much of an economic basket case Scotland supposedly is. This is all thanks to the annual release of the Government Expenditure and Revenue Scotland (GERS) figures, which purport to show Scots the extent to which they depend on the largesse of the UK Treasury. Apparently it’s a testament to the success of Westminster rule that a literal power house like Scotland is incapable of supporting itself financially. It’s an odd definition of success, but with the Gers figures we long ago passed through the mirror into the topsy turvy world of Westminster Wonderland.

Gersmas Day has been going on so long that it has developed its own rituals. The Scottish Secretary makes an announcement about the cash amount which each individual Scottish person allegedly benefits from Westminster’s munificence, this year it’s £2,669. Oh goodie! Can I get mine in National Lottery scratch cards please. You’ve got a much better chance of financially benefiting from a lottery ticket than you do from the Westminster government and the chances of winning the jackpot on the lottery are not dissimilar to the chances of being struck by lightning.

Meanwhile anti-independence campaigners who view GERS as Holy Writ denounce heretical “GERS deniers” who have their own Gersmas ritual, which is the temerity to point out that the GERS figures tell us absolutely nothing about the finances of an independent Scotland and that in any case the methodology behind the figures is as dodgy as a used Reliant Robin sold to you by Del Boy.

As financial services consultancy Deloitte noted in 2017: “Commentators suggested that, under these conditions [the global slump in oil prices that year], Scotland would struggle to operate as an independent country. However, GERS data is produced for Scotland as part of the UK – it does not model scenarios for an independent Scotland in which the Scottish government would be enabled to make its own fiscal choices.”

Independence supporters also point out every Gersmas that this annual charade was instituted in 1992 by then Conservative Scottish Secretary Ian Lang as a tool to use against his political opponents who were arguing in favour of greater Scottish self-government. 33 years later the figures are still performing the same job. In a leaked memo written at the time Lang wrote: “I judge that [GERS] is just what is needed at present in our campaign to maintain the initiative and undermine the other parties. This initiative could score against all of them.”

The campaign to which Lang was referring was the campaign for the creation of a Scottish Parliament which the Conservatives vigorously opposed, mounting a scaremongering campaign which alleged that the creation of a Scottish Parliament would lead to massive tax rises and the decimation of Scottish public services. Decades later, the Westminster parties are still deploying scare stories from the same playbook to argue against greater Scottish self-government.

The reality is that the GERS figures have long since ceased to make a credible or meaningful contribution to Scotland’s constitutional debate, opponents of independence still view them with veneration as though they were chiseled on tablets of stone by God himself and handed down to his faithful on Mount Sinai, while supporters of independence see them as discredited political tools which only distort and mislead the debate, but we continue to go through this annual farce every August as it is politically useful to the Westminster government . It also supplies the anti-independence Scottish press with something to write about during the silly season when there’s otherwise a dearth of political news.

The immense utility of the GERS figures to those opposed to independence is why they defend them so ferociously, refusing to concede that these figures are a political and not an economic tool and attempting to characterise those who call GERS into question as being conspiracy theorists akin to Flat Earthers or vaccine deniers. That’s the very definition of an ad hominem attack.

However, as Professor Richard Murphy, points out, the supposed deficit in GERS attributed to Scotland is in its entirety a creation of Westminster. Professor Murphy, who as a professor of accounting practice knows infinitely more about accountancy than the “We’re not nationalists we’re British” types who annually salivate over the imaginary “Union benefit” is scathing in his assessment of the methodology of GERS, as an Englishman he has no personal axe to grind in the Scottish independence debate, but as a professor of accounting practice he cares deeply about misleading accountancy practices.

The truth is that the Scottish Government has a legal obligation to balance its books, as do Scottish local authorities. The deficit which GERS attributes to Scotland 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.

Every year the GERS figures tell us that Scotland is running a large public finance deficit; one that is far larger than that in the rest of the UK.

Murphy dismisses the GERS figures as CRAp a Completely Rubbish Approximation to the truth, and calls it “accounting abuse on a giant scale.” That’s damning indictment of a set of figures which form the bedrock of the economic case against independence.

A man who has spent a career in accountancy and who for years has been a respected professor of accountancy practice can be trusted to understand the reality of the GERS figures far better than anti-independence pressure groups with a vested interest in maintaining the myth that Scotland is too poor to maintain current levels of public services as an independent nation.

You can watch Professor Murphy’s expert take down of the fantasy economics of the GERS figures here:

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