THE fact Scotland’s public sector has during the past year again spent more than it gets back in taxes seems this time to be arousing a slightly muted chorus of unionist cackles. The cackles have been heard ever since the revenues from North Sea oil took a sharp dip in 2011, to reach their present almost negligible level of an annual £60 million.

No unionist mentions the fact that, in the dozen years up to 2011, the cumulative annual oil revenues came to more than £80 billion (not million). Of course, none of this money had found its way directly to Scotland. It all went into the Treasury’s coffers in London, and only about £8 billion ever made it back across the border.

Nor do I recall unionists praising the Scots’ previous generosity in these huge contributions to the UK, which for much of the period was in such dire economic straits that it could hardly have got by otherwise. One day the oil price will go up again, given how the world’s demand for energy is bound to increase rather than decrease. But then, no doubt, the unionist chorus will fade away once more.

The figures I have quoted were among the many revealed yesterday in the document dubbed GERS (Government Expenditure and Revenue Scotland). It has been a matter of controversy ever since it was first published in 1991 at the behest of the Tory Secretary of State for Scotland, Ian Lang, after he had given this consensual advice to his Prime Minister, John Major: “I judge that it 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.”

Politicians will be politicians, but I suspect the basic political nature of the GERS exercise is the reason why the British state, with its ample resources, has never spared the pittance needed to make the figures more accurate than they are (true, they are now published by the Scottish Government, but for all non-Scottish information it will still be reliant on UK inputs).

For instance, I have often wondered why, if Scotland’s share of UK employment is nine per cent or so, its share of income tax paid is seven per cent or so, when we know the difference in wage levels is nothing like so wide. Could it be these tax payments are under-recorded? They are in my own case: though I have lived at the same address for 40 years, I have always needed to send my tax return to an office in England, presumably because it deals with all freelance writers and journalists – but I doubt if it separates out the Scots from the English ones. That is only a small example, yet there must be a lot of companies headquartered in England with employees at a branch in Scotland not separately assessed, so depressing the revenue recorded as coming from Scots.

On the expenditure side there is scope for even greater discrepancy. There are UK public departments and authorities apparently incapable of producing separate figures for their outlays in Scotland, so GERS just makes a guess which may be right or wrong. The UK Government decides what sort of spending counts as union-wide or specific to one of the four nations. Now we are celebrating the successes of Team GB in Rio de Janeiro, we might recall how the London Olympics was reckoned as an item of UK spending, so that nine per cent of it in theory took place in Scotland. It is same with HS2, so clearly a project of benefit to the whole UK! Therefore, nine per cent of the money for a line from London to Manchester or Leeds counts as Scottish expenditure. It is the same with Trident, though Scotland wants none of it: nine per cent of expenditure on it is reckoned to be for us.

Given all this, it came as something of a surprise to me that the GERS figures for 2015-6 revealed a Scottish deficit of more or less the same size as in the previous fiscal year (surely, in this period of crashing oil revenues, an even more horrendous Scottish deficit could have been conjured up from somewhere).

But I suspect that, from the time of Chancellor Philip Hammond’s autumn statement, deficits are about to become fashionable again. After six years of trying without success to eliminate the UK deficit, Tories have decided to lie back and enjoy it. There are after all other countries with far bigger deficits and not obviously bankrupt. Just look at GERS: independent Scotland would be one of them!

Alas, this new perception may do little to alter London’s idea of Scotland as the home of the dependency culture, needing always to be propped up by subsidies from more prosperous regions, especially the south-east of England. Yet this is itself a provincial view.

No other major country has at the macro level made financial services the main motor of the economy, as the UK has done with the City of London, in place of all that fuddy-duddy manufacturing elsewhere. Nor at the micro level has any other country tried to make householders feel prosperous by engineering inflation in the price of the homes they own. Ever since the great financial crisis of 2007-8, the dream has been that householders will then go out and spend the money they feel they have locked up in their homes, so keeping the UK economy ticking over (except this has not worked – hence the hasty rethink under Theresa May).

In Scotland the role of financial services is far from dominant, and owner-occupation has not been such a fetish. As a result, asset bubbles have never appeared, at least on nothing like the same scale as in England. If these are the reasons Scotland appears from London a poor relation, we should retort that we are in international terms actually much more normal.

The differences may bring us southern subsidies, yet these have in all their years of operation since the Second World War never brought us up to the southern standard of living: if they have not done it by now, it is hard to believe they are going to do so in future.

Is there an alternative to being the eternal poor relation? Well, there is always the possibility of going for economic growth on our own terms, as other small European nations have done after being released from somebody else’s empire.

It would need more encouragement from our own government, which remains remarkably indifferent to the nation’s present darkening outlook. Nicola Sturgeon did rightly say this week that Brexit has worsened conditions for Scotland, and that it is the Tories’ fault. But it is hardly enough to wring our hands and apportion blame. A remedy will come not in the abstract from our wonderful communal values but in the real world from easing burdens of taxation and regulation.

There are two possible futures for Scotland. One lies in the world of GERS, a world of provincial dependency, most likely still in the UK.

The other lies in an independent nation generating growth out of its own people and resources.

http://www.thenational.scot/news/Nicola Sturgeon: Scotland is strong enough to go it alone.21579


http://www.thenational.scot/news/Sturgeon’s prosperity claim backed by top economist.21583

http://www.thenational.scot/news/Plea for action to boost the economy via business growth.21588