Considering how much we all agree about the GERS figures it is a surprise that we find so much to argue about.
It is GERS (Government Expenditure and Revenue Scotland) time once again. Over the coming week, we will see every pundit voice their views and opinions about the GERS figures, which is a bit weird considering what we all agree on. Left and right, indy and unionist here are what we will all sign up to:
- The figures are best estimates.
- The figures are signed off by the Scottish Government.
- The figures do not represent the finances of an independent Scotland.
- No other set of similar figures exists for any other subnational government in the World. GERS figures have a unique methodology.
- The figures contain a vast amount of expenditure that is spent on Scotland’s behalf rather than in or by the Scottish Government.
- “Scotland” spent considerably more money than it raised.
We all agree on the above. So what is it that we get so het up about?
The answer is the amount of the fiscal transfer from within the UK. This is the amount that is spent on/for Scotland as part of the UK. It is in effect what it costs Scotland to run “as is” given the available funding and according to the methodology. It proves one thing, the way Scotland is run by its two governments is not sustainable over the medium to long term. Things need to change. For one side it is independence, for the other, it is, well, more of the same, with some slight differences, and perhaps, for some, less devolution.
Last year Scotland had a deficit of 36,340 million pounds which was 22.4% of Scotland’s GDP. For the UK which includes the peculiarly of London, the figure was 14.2%. The figure for Scotland is not sustainable and almost everyone would agree. And there the agreements end. Mainly because the people who agree on the six points above forget that they agreed with the six points above.
We could add a seventh point. Governments run fiscal deficits most of the time and they are a crucial way to manage the ebbs and flow of an economy. They go up and they go down.
But every year the same old same is trotted out.
Every time you hear someone talk about GERS, no matter what side of the debate they are on, ask them if they agree with the six or seven points above. If they do then there’s not much to argue about. Maybe then we can concentrate on the more important conversation about how to fix the situation.