Ignore Kate Forbes spin, GERS reveals the economic strength of the union

It's GERS time again and the figures reveal the strength of continuing to share risks and rewards in union and expose the emptiness of nationalist rhetoric

The new GERS statistics are out and the former Finance Secretary Kate Forbes today attempted to argue the “GERS figures reveal chronic inequalities within this Union”, and only independence is the answer. Only problem is, if we read her piece in The National, it’s quickly apparent not only is her contribution entirely political, it’s at odds with economic reality.

The very nature of Ms Forbes contribution today is nakedly political. In three aspects we can conclude it is written to pre-empt negative political implications for the pro-independence movement. An attempt to politically ‘get ahead’ of the economic realities the GERS statistics reveal. As I will explain, she is not responding to the economic realities shown by GERS, which make a sound case for continuing to share the risks and rewards of union.

Despite saying the following quote, by her own admission Kate Forbes wrote her piece prior to even reading GERS figures.

“Every year, certain supporters of the Union claim that GERS confirms once and for all that Scotland can never be independent – but their arguments are illogical and short-sighted.

In fact, the figures tell a completely different story. These figures are proof of the need for change and evidence of why the Union serves Scotland so poorly.”

Putting aside the typical nationalist conjuring trick (the debate isn’t ‘can / can’t we be independent, it’s actually ‘should/shouldn’t we?’), she admits “I’m writing this in advance of seeing the figures today”. Ms Forbes is in substance opening with ‘the GERS statistics are proof independence is the solution to what the GERS statistics show, but I’ve not read the GERS statistics yet’…you can go square that circle if you can, this writer can’t.

The reason why she’s seeking to distort by politically reframing how the GERS statistics will be received becomes very clear while reading her article. Put simply, this isn’t about facing economic realities, it’s about continuing to keep the independence balloon inflated and her hopes of being well placed in a future SNP leadership race alive.

The first example of this is her argument in essence saying ‘ignore GERS, independence makes things better’. As an argument it’s exceedingly desperate, not least since the relevance of GERS statistics in the immediate aftermath of a vote for independence would be quickly felt. Foreign investors, credit rating agencies and investment banks which syndicate sovereign debt would base initial assumptions on those statistics.

Now some may - fairly - say to me, ‘hold on a minute Dean, GERS matters but not as a predictor of future GDP or deficits’. Sure, fair point, but my response is to say GERS also doesn’t show the serious damage we’d be inflicting should we opt for independence. Going it alone means we’d be withdrawing from our in-built fiscal and monetary base, capital flight can be expected and GERS statistics would be hotly read over.

Put it simply, no matter how you try slicing this, you can’t simply say ‘ignore GERS, indy will make things better’ - they’re closely entwined economically. Or at least you can say that if you don’t give a monkey about that sort of reality, as seems to be the case here with Ms Forbes. But many of us care about objective truth as opposed to alternative truth variety politics.

The Second example of how nakedly political (and economically illiterate) Kate Forbes is being with her article arrives with the strange vagaries regarding her pensions comments. Kate Forbes - reputationally a fiscal hawk - seems to be suggesting in her piece that if only Scotland controlled reserved areas, we could be more generous.

“Firstly, the figures illustrate that most of the decisions are still made by the UK Government – not a fully empowered Government of an independent Scotland. The bottom line is that approximately 70% of the revenue figures (i.e. taxation) and 40% of the spending figures are reserved.

That means that the UK Government controls, in full, the powers and decision-making to arrive at those reserved figures. That includes areas that are fully controlled by the UK Government such as pensions, or areas where the UK Government spends an overall amount and an estimate is accounted to the Scottish people, based on geography or population share, like defence, foreign affairs, aid, debt payments and North Sea oil”

The implication she’s making here is obvious, pensions constitute an example of how Scotland could do things differently. But notice she conveniently fails to say if she’d put them up or down if only we had ‘full levers’. This is a charming example of how a politician can make a promise without actually promising anything. Hint that Scotland could be more generous with spending on for example pensions, but never say what you’d do if you actually controlled pensions. Empty platitude meet dog-whistle, the political art of messaging to garner support from a particular group without risking a backlash from another group.

Perhaps she is doing this is because of what else the GERS shows…

Third up, Ms Forbes entirely ignores the core substance of the GERS statistics. The figures show that the Scottish deficit (difference between what’s raised and what is spent) is (2022-23) a net fiscal balance was a deficit of 9.0% of GDP. By way of comparison, the UK as a whole has a deficit of 5.2 % of GDP. Thus we can clearly see in unambiguous terms that the Union works for Scotland based on the GERS statistics. By sharing economic risks with the rest of the UK our deficit is smaller - something Ms Forbes is desperate to downplay in politically motivated article. This is why she wrote this piece without even waiting to read the figures, she knew this would be coming down the pipeline and wished to pre-empt and obfuscate.

To quote Blair McDougall (Better Together maestro and Notes on Nationalism writer)

“As Scots we received £2,217 more per person in spending than the UK average - a difference mainly thanks to our share of UK funding - a share that the SNP are campaigning to give up.”

That’s the tough truth that Ms Forbes desperate article in The National today is desperate for you not to notice. The union works for Scotland economically, and independence represents a seriously disruptive leap in the dark which could hurt not help our economy. Always look past the political spin and focus on the substance and form a judgement, that’s how responsible politicians ought to behave. But then, Kate Forbes and her band of backbench Holyrood rebels are likely on manoeuvres should Humza Yousaf fall. Her eyes are on the SNP leadership prize, and if that means writing somewhat ridiculous articles in The National distorting economic realities for political purposes, she’s apparently fine with it.

It is GERS time again and the figures reveal the strength of continuing to share risks and rewards in union and expose the emptiness of nationalist rhetoric.

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