JOHN SWINNEY'S ROPEY RELATIONSHIP WITH REALITY
Latest GERS figures do not reveal what the Deputy First Minister claims they do, and the denialism of economic realities needs to end
The Government Expenditure and Revenue Scotland (GERS)1 report is supposed to provide illumination and greater understanding of fiscal issues in contemporary Scotland. GERS is produced by statisticians in the Scottish Government and subject to accreditation as a National Records Scotland publication.
Nevertheless, this has not prevented the usual chorus of fact-free denialism gripping typical corners of Scottish politics. In almost Trumpian fashion, the usual suspects are both hailing GERS as revealing a Scotland “recovering from the coronavirus (COVID-19) pandemic faster than the UK as a whole”, while maintaining a history of rubbishing the very same report.
Last Wednesday Deputy First Minister John Swinney boasted that
“Today’s figures show Scotland’s fiscal position is recovering faster than the UK’s, with a huge fall in the annual deficit thanks to the largest increase in revenues on record”2
Putting aside the heroic levels of spin Mr Swinney is engaging in (we’ll return to that soon), what is more interesting is the distinctly dicey relationship between this Scottish Government and reality.
An obvious point is that while it is true Scotland’s net fiscal balance (deficit) is improving faster than the UK; it is still more than double the rest of the UK. So, is the glass half full or half empty? Is Scotland’s deficit improving faster than the UK? Or is Scotland's notional deficit still twice UK level, despite the unprecedented jump in tax revenues? It’s actually more nuanced than John Swinney’s boasting.
But the SNP have a history of dismissing GERS reports when the facts do not fit their narrative, and embracing them when they do. It was not all that long ago that Keith Brown (then Economy Secretary) was describing GERS as
“statistically pretty ropey”3
I don’t know about you, but the only ropey thing here is Mr Brown’s ability to retain any personal credibility. According to high profile SNP figures, GERS reports - produced by the Scottish Government - are “ropey” except when they show something the SNP wish to hear.
You see how this all goes? When the SNP’s own official government figures provided by government civil servants fit with whatever story they are peddling, Ministers want you to know they are “authoritative”. When they don’t fit their political needs? Suddenly they become “ropey”. The political equivalent of the Hokey Cokey, except the only thing getting shaken all about here is public trust.
Naturally it’s also important to note that the latest GERS report does not show anything remotely akin to what Deputy First Minister John Swinney is currently claiming. If we examine the facts, Mr Swinney’s claims are…how should I put it… “pretty ropey”
One example of highly questionable claims relating to the GERS statistics is John Swinney’s boast that
"even without North Sea receipts, revenue raised in Scotland covers all devolved expenditure as well as all social security spending,"
This is fictitious bunkum.
If we look at the numbers you can see the game the SNP are playing here. While the numbers would seem superficially true, they in fact do not show what Mr Swinney is claiming they do.
Scotland has onshore revenues of £70.3bn, and yes these are more than devolved current spending of £53.5bn. Additionally social protection spending by the UK Government is £16.7bn. So adding all of this up we get £70.2bn (£53.5bn+£16.7bn=£70.2bn).
£70.2bn is less than £70.3bn, so Swinney was telling the truth? Right? No, wrong.
You see, this superficial calculation does not account for any capital investment. And that includes leaving out £8bn of devolved capital expenditure.
The Fraser of Allander Institute has noted the conjuring trick the SNP spin machine is engaging in, noting that as well as leaving out capital investment, they also ignore plenty more besides
“More significantly, there are a number of reserved functions that are also funded outwith these 2 categories – including reserved economic development spending of £2.2bn (so on programmes like Innovate UK), public sector debt interest payments (£4.5bn), reserved transport spending (£988m), public and common services (£1.4bn – including running administrative services such as HMRC), defence (£3.9bn), International services (£659m – including foreign aid) etc.”4
So ‘honest’ John’s claim that “even without North Sea receipts, revenue raised in Scotland covers all devolved expenditure as well as all social security spending” (and thus Scotland wouldn’t face hard economic realities if going independent) is only true if you ignore:
capital investment
devolved capital expenditure
reserved economic development spending
public sector debt interest payments
reserved transport spending
running administrative organisations like HMRC
defence spending
international foreign aid spending
If anything can be “statistically pretty ropey”, it is surely SNP claims that GERS proves an independent Scotland wouldn’t need to make any hard fiscal choices. After all, it is simply untrue to claim Scotland “covers all devolved expenditure” and “social security spending” even without oil. This is not true no matter how many times John Swinney claims it is.
But this is a game the nationalists simply must play, otherwise the balloon will pop on the pretence independence is somehow a credible progressive choice.
GERS statistics reveal a stark and challenging reality. Scotland labours under a grim net fiscal balance, with a likely deficit far in excess of the UK as a whole. And the usual rhetoric accusing people of “talking Scotland down” for daring to point out economic realities needs to end. Nor is it sufficient to just shrug the shoulders, roll the dice with the nations future muttering ‘it’ll be alright on the night’.
Scotland won’t ‘become Denmark’ or suddenly morph into ‘Norway’; or whatever ‘look at [x] country’ nonsense comparison nationalists wish to reach for. It took Denmark 600 years to become Denmark and voting for a Scottish exit from the UK - scexit - isn’t some manna from heaven to short-cut our way to ‘being like them’.
Concrete proposals, serious policy suggestions and an end to SNP fake-news politics is the only way we can fix the mess that is Scotland’s economy. We need the grown-ups back in the room.
(2022), Government Expenditure and Revenue Scotland (GERS), Full Report, https://www.gov.scot/binaries/content/documents/govscot/publications/statistics/2022/08/government-expenditure-revenue-scotland-gers-2021-22/documents/government-expenditure-revenue-scotland-2021-22/government-expenditure-revenue-scotland-2021-22/govscot%3Adocument/government-expenditure-revenue-scotland-2021-22.pdf
Swinney, John (2022), ‘Record revenues drive recovery in Scotland’s finances’, ScotGov press statement, https://www.gov.scot/news/record-revenues-drive-recovery-in-scotlands-finances/
Nicoll, Andrew (2017), The SNP website contains a lengthy attack on GERS numbers, dismissing them as “a snapshot but not the whole picture”, Scottish Sun, https://www.thescottishsun.co.uk/news/1479567/snp-website-gers-numbers-figures/
Fraser of Allander (2022), ‘GERS 2022 – the main headlines… and what does it really tell us?’, https://fraserofallander.org/gers-2022-the-main-headlines-and-what-does-it-really-tell-us/