The unionist fiscal fantasists who fetishise the GERS figures

It’s time to kill off the GERS figures. They are nothing more than a political tool designed to be used by opponents of independence to rubbish Scotland’s economic prospects and to scare the public off the idea of Scottish independence by painting a false picture of a supposedly financial basket case of a country which is hopelessly dependent on a transfer of funds from a benevolent Westminster. The heat and noise deliberately generated by GERS hampers any realistic discussion of the finances and economic potential of an independent Scotland. That’s not just my opinion. It is also the opinion of Professor David Simpson, formerly a professor of economics at Strathclyde University and a founding director of the Fraser of Allander Institute, that same economics think tank which is always cited by the BBC in order to give credence to the claims of some Tory that in an independent Scotland we’d all be left living in mud huts with nothing to heat us but a hatred of the English.

Professor Simpson explains why the GERS figures need to be scrapped in an article for The National on Sunday. Link here : https://www.thenational.scot/politics/19868114.gers-continuing-myth-fiscal-deficit-scotland/

The GERS figures have served opponents of independence well, providing them with annual headlines which scream the supposed poverty and inadequacy of Scotland and opportunities for friends of Neil Oliver to draw multi-coloured graphs which purport to prove that Scotland has by far the greatest fiscal deficit in Europe. The apologists for British nationalism are aware of just how useful the GERS figures are to them, and are fiercely protective of them. This is why the likes of those who tout prettily coloured graphs of Scotland’s supposed fiscal deficit attempt to discredit any attempt to question the GERS figures or to examine their methodology critically as nothing more than “GERS denial” as though the politically motivated GERS figures were some sort of objective scientific consensus like climate change or the efficacy of vaccines in order to portray those who disagree with their contention that Scotland is a financial basket case as cranks and conspiracy theorists who can be dismissed out of hand.

The value of Professor Simpson’s intervention is that it’s much harder for them to do that when the attack on GERS comes from a respected economist who was a founder of an economics think tank that they themselves are fond of citing.

The essential problem with the GERS figures which Professor Simpson identifies is that it allows opponents of independence to dominate discussions of the Scottish economy with their claims of Scotland’s supposed “fiscal deficit”. The problem, as Professor Simpson points out, is that the “fiscal deficit” as measured by GERS does not correspond to how “fiscal deficits” are measured in any other country, yet opponents of independence frequently cite Scotland’s GERS defined “fiscal deficit” and compare it unfavourably with the fiscal deficits of other countries as though they were measurements of the exact same thing, when in fact they are not.

As the professor points out, in every other country in the world a fiscal deficit is defined as the shortfall in the expenditure of a government when its expenditure exceeds its revenues. Professor Simpson writes : “If Scotland’s ­fiscal balance was compiled according to recognised standards of ­national ­accounting, then the ­expenditure side of the balance would show ­expenditure by the ­Scottish ­Government. Since the ­Scottish ­Government is obliged by the ­devolution settlement always to balance its budget, Scotland’s fiscal deficit in the proper sense of that term is zero every year.”

However the GERS figures do not just allocate spending by the Scottish Government to the expenditure side of Scotland’s balance sheet, they also include spending by the British Government which is deemed by that same British Government as being spending on Scotland’s behalf. Professor Simpson notes : “So far as I’m aware, no ­other ­country in the world publishes ­statistics that attempt to ­measure expenditures ­according to their ­supposed ­”benefit”, for the ­simple reason that such ­measures are ­necessarily arbitrary and ­subjective.”

This spending includes Scotland’s allocated share of spending outwith Scotland, for example Scotland’s notional share of UK defence expenditure which is disproportionately spent in the South of England where it generates jobs and economic activity which is then apportioned as revenues from the south of England, so Scotland is lumbered with the expenditure but doesn’t get the credit for or benefit from the economic activity and consequent tax revenues which that expenditure generates.

Scotland is also allocated a share of UK expenditure which an independent Scotland would neither want nor need, such as bearing a part of the cost for the UK’s eye-wateringly expensive nuclear weapons system. Yet if you were to believe the likes of Labour’s Jackie Baillie, the entire purpose of Trident is to generate sufficient economic activity on the Clyde in order to keep open a medium sized Tesco Express in the Greater Helensburgh area. Yet even if that was indeed its purpose, and not to act as viagra for the imperial fantasies of an impotent and much diminished former global power that is incapable of reconciling itself to its true standing in the modern world, it would be a shockingly inefficient and wasteful means of doing so.

Even the fiscal fantasists who fetishise the GERS figures are forced to admit that they tell us little that’s useful about the economy and finances of an independent Scotland. After all the entire point of independence is to give Scotland the ability to make different tax and spending decisions and different decisions about international trade deals and relationships from the decisions made by successive governments in Westminster, decisions which have consistently, and over many generations favoured London and the South East of England over Scotland, Wales, and the English regions. Yet apologists for Anglo-British nationalism continue to cite the GERS figures as supposed “proof” that independence is unaffordable.

They do this because generating fear and doubt about the fiscal position of Scotland are grounds on which they think they can gain traction in the independence debate, because they have no real answer to arguments for independence based upon democracy, governmental accountability and giving the people of Scotland the ability to determine the path this country takes, and no interest in more realistic assessments of Scotland’s economic potential.

The fiscal fantasists who fetishise the GERS figure continue to sow their scare stories and threats, without concerning themselves with the immense damage they are causing to Scottish national self-confidence. They are hell bent on perpetuating the psychic wounds of the infamous Cringe, because it’s all they have got left.

It’s long past time that the GERS figures are seen for what they really are, fairy stories told to Scotland in an attempt to scare us and make us doubt ourselves.

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