I HAVE read all the scaremongering resulting from the Institute for Fiscal Studies (IFS) report in advance of the Scottish Spending Review as well as their reaction to it. As I have had to say so many times over so many years, what a load of twaddle their commentary is.

Let me stand back from the detail in the actual review. I can agree with some of it and disagree with other parts. Overall, what it suggests is that, within the decidedly limited powers available, the Scottish government is trying to do more to help vulnerable people than the UK Government is. Let’s be grateful for that, whilst worrying about the very limited additional budget for the NHS and social care.

Instead, let me look at the bigger issue. It’s an issue which the IFS, for all its supposedly lofty status, does not seem to understand.

READ MORE: Tory MSP leaves 'false' tweet up – despite being corrected by expert he quoted

The IFS is a supposedly independent think tank, largely funded by government and academic grants. It has close connections to Oxford University when it comes to taxation matters and its economic thinking is deeply orthodox. In other words, it buys entirely the false mantras that governments must balance budgets, taxes pay for expenditure, and prudence is the watchdog of all finance ministers (unless handouts to big business are on offer, which it will usually applaud because they believe that these subsidies boost the economy).

Literally none of these things are true.

Instead, they are simply articles of faith for right-wing economists and those politicians who follow them. And since the SNP is viewed by those politicians as left of centre, unsurprisingly the IFS seems to always take a dim view of whatever the SNP might do, forecasting doom and gloom whenever it can, as it did before this review.

There is something important to know about the IFS though. That is that they are much better at being accountants than they are at being economists. I suspect they will be rather offended by me saying so, but their imagination rarely extends beyond asking whether the books add up. This is what is called a microeconomic (or accounting) view of the world. What they do not do is take a macroeconomic view of what is going on when providing their comments.

READ MORE: IFS: Scotland could have 'range of economic opportunities' after independence

Macroeconomics is about the big picture, and is about what is going on in the economy as a whole. Famously, the IFS have actually said in the past that they do not do this. It shows.

The great unwritten assumption in all their commentary is that between 2023 and 2027 nothing will change in the world. Their criticisms and comments do not, in that case, take into account some fairly significant events that either will, or might well, happen.

So, an independence referendum is ignored. If we take Nicola Sturgeon at her word, and have faith in the people of Scotland, by 2027 there may be the government of an independent country in Holyrood. All that that might entail is dismissed by the IFS with disdainful commentary about the cost of holding such a vote.

An IFS report came out in advance of the Scottish Spending Review laid out by Finance Secretary Kate Forbes

The fact that the UK will also have a General Election by 2024 in which Scotland will take part, which is likely to throw the Tories out of office and leave some form of coalition in office is also ignored. So too is the negotiating leverage that the need to form a coalition at Westminster will supply to the SNP.

The possibility that “events” (as Harold Macmillan supposedly called them) might overwhelm governments in both Edinburgh and London long before 2027 is also ignored. Just look back four years to see what might happen. Just about no one really expected a pandemic as severe as Covid, or that Russia might again wage war in Europe.

What is more, a year ago I did not anticipate inflation in the way we have it, because I had not assumed energy, fuel and food companies would hold the world to ransom in the way that they are by imposing price increases. And, at this moment, the IFS seems to expect that inflation to continue, when I have only to look at the history of inflation in England and then in the UK over the last 800 years as published by the Bank of England to know that this is incredibly unlikely.

The actual likelihood is that inflation will fall heavily over the next year or so if historic trends are followed, and whatever the Bank of England might do. That’s because markets usually get over the disruptions that create inflation quite quickly.

So, what’s the lesson in all this? There are three.

First, applaud the SNP for at least thinking about the longer term. Few governments do.

Second, look at the bias of anyone offering comment (including me) and in this case note that the IFS are assuming that nothing but the decisions that the SNP might make alter anything over the next few years, which is a classic economic falsehood and also quite ridiculous.

Third, imagine what is possible, and stop looking on the downside. An independent Scotland with (quite crucially) its own currency could in four years’ time borrow to manage whatever “events” might arise, or use quantitative easing as the Westminster government did to manage economic downturns in 2008 and 2020. The IFS ignores all that. As a result, all those who believe in an independent Scotland have to point out that the IFS’s neoliberal, London-centric worldview will always run Scotland down. Unionist papers might like that. I beg to offer a different opinion.