IF ever there was a year in which the annual Government Expenditure and Revenue Scotland (GERS) figures prove problematic it is the latest data set, covering 2020-2021.
For “problematic” read totally meaningless as a picture of Scotland’s fiscal situation, never mind giving any plausible indication of the financial situation post-independence. Reason: the pandemic.
The latest GERS figures claim that Scotland’s notional public spending deficit has doubled to £36.3 billion as a result of Covid-19 measures and taxes lost under the lockdown. That gap equates to 22.4% of GDP. But don’t panic.
READ MORE: Kate Forbes 'committed' to producing pro-independence GERS data after pandemic
First point: clearly we have survived even such a staggering deficit, so previous hysterical claims that a 15% deficit would bankrupt indy Scotland are hokum. Second: the enlarged deficit is a good thing as it got Scotland through the worst of the pandemic – public deficits are investments for the good of society. Third: this enlarged “deficit” is an accounting mirage as the extra spending was effectively printed by the Bank of England.
The latest GERS have some dubious assumptions buried in the small print. Remember GERS is a guess at overall Scottish finances incorporating Westminster Tory government spending – the devolved Scottish Government runs a mandatory balanced budget. For instance, we find that £3.6bn of military expenditures is “allocated” to Scotland. That’s a whopping 3.7% of the GERS combined Scottish budget compared to Nato’s 2% requirement. There’s saving.
GERS small print also shows lots of public cash has gone missing. For instance, Scottish universities received £442 million in EU funding, in the five years before Brexit. But GERS says: “This spending is outside the public sector, and therefore has no impact on the figures reported in GERS.” That’s alright then.
Again, GERS shows the UK Treasury actually paid oil companies £2.6bn in tax refunds, over the last five years. And you thought it was supposed to be the other way around.
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