Jim O’Neill says the SNP spin over this week’s GERS figures can’t mask the blunt reality they show.
No, I’m not talking about a football team from Sunny Govan, although it could work referring to the “Old co”. No, the recent figures for government expenditure and revenue show Scotland with a deficit of £13.4bn over the last year, which at 7.9% of GDP is four times greater than the UK as a whole.
In past years the SNP’s reaction has been to challenge these figures, since they are produced partially using UK Government figures, and their knee jerk reaction has always been to attack anything produced by the UK Government as, in the modern parlance, fake news. This time, however, the figures have been accepted by Ms Sturgeon without any argument.
The spin this year is that the deficit has been cut by 1% of GDP and so it proves that the Scottish economy is getting better. The problem is that, in comparison to the improving figures for the UK as a whole, this is a poor outcome. Given that the deficit in the UK as a whole is barely over 1% of GDP, how much better would the UK figures have been if Scotland had matched the UK average? Indeed the Scottish Government spends £1600 more per person that the rest of the UK.
There is another flaw in the spin. This year’s figures reflect an upturn in oil industry revenues. Without that upturn, the rest of the Scottish economy would have shown a further decline as against the rest of the UK which has shown an improvement across the board. Further, projections show that the improvement in oil revenues may not be sustained, since there is no indication of further increases in oil
This reflects the negativity expressed in the (No) Growth Commission which predicted 20 years of austerity following independence. I am not convinced that this is a great prospectus for independence – our economy is going backwards and if you vote for independence you will have to suffer another 20 years of austerity. That is why I believe that Nicola Sturgeon is going to disappoint her ultras by hedging once again on a date for an independence referendum. Remember what happened to her predecessor after he failed to deliver a yes vote?
Meanwhile Jeremy Corbyn has been visiting Scotland, meeting among others the bus builders of Alexanders and the asylum seekers of Glasgow. He has made it plain that a Corbyn-led government would be much more proactive in looking after the best interests of asylum seekers and refugees and, possibly more important, would seek to re-balance Britain’s economy back towards manufacturing.
But if you seek to increase support for the manufacturing industry, you have to ensure that they have markets in which to sell their products. Clearly Brexit would be a major disaster for any growing manufacturing sector, whether it be no-deal or with a deal which increases the costs of British manufacturers especially in Europe, our biggest market.
Very interestingly, Sir Keir Starmer has now said that a second referendum must now be back on the table. It is important for any hopes that Corbyn may have of taking up residence of 10 Downing Street that he now comes out publicly and supports Starmer’s statement and commits the Parliamentary Labour Party to voting for a second referendum in the House of Commons. That by itself would do more to reunify the PLP than any statements about support for Judaism or fast-tracked disciplinary proceedings.
Labour must now take the lead in opposing Brexit and promise to give the UK voters another chance to vote, now that the implications are clear and the lies and shady actions of Vote Leave have been publicised. Labour leadership in this will bring us much closer to government, a government with policies that will lead us out of this mire and be much more people friendly. A government that will really be for the many.