Update, 26/09/2020: The joke at the foot of this post, the pseudo-graph from pseudo Kevin Hague, has been picked up and republished by Munguin’s Republic, a lovely site with stunning nature pics, a strong but unencumbering commitment to Scottish independence, and jokes. Thanks, Tris, and best wishes in the ongoing struggle.
IT’S TIME for a brief look at GERS, the “Government Expenditure and Revenue in Scotland” report. The usual narrative is:
• Scotland has a deficit, because it spends more on public services than it raises in taxes.
• The UK funds that deficit by giving money to the Scottish Government (the “fiscal transfer”). This means that Scotland sponges on the UK.
• An independent Scotland couldn’t fund that difference.
All nice and clear, then – and all nice and falsely spun. Let’s look at those falsehoods.
Firstly, deficits are normal: all countries in the world have deficits, bar a handful of tax havens. What matters is whether a country’s deficit is “sustainable”. Having a deficit means that a country has to borrow money to spend on public services, and that means paying loan-interest. So it needs to generate enough revenue to cover the loan-interest. If it can do that, its deficit is “sustainable”. If it can’t, it isn’t.
The UK deficit goes up and down on a ten-year cycle, becoming a surplus in one or two years in each ten. Its economy generates enough revenue to meet its interest payments, so its deficit is sustainable. Virtually every country in the developed world has a sustainable deficit, unless its government is very silly. Scotland’s deficit too will be sustainable.
Secondly, it says above, the UK funds Scotland’s deficit by giving money to the Scottish Government, in a fiscal transfer. No, it doesn’t. There is no “fiscal transfer”, and no money changes hands. Scotland gets a block grant. But that “block grant” isn’t a grant at all: it’s simply the amount of Scottish Government spending that the UK will underwrite. The Scottish Government doesn’t have to spend it all, and in past years it hasn’t always; but if it spends more than the laid-down amount, Scottish ministers go to jail. The UK calls it a grant, but in fact it’s a cap.
Thirdly, Scotland covers its deficit by notionally borrowing money from the UK, and pays interest on that loan. Here is the line from GERS that tells us it’s a loan:
“Public sector debt interest” is the interest on the UK’s national debt, which is all the money that it’s borrowed since ever, less whatever it’s paid back up till now; this line shows Scotland’s share of that interest. Wrapped inside it is the interest Scotland is paying to fund its deficit (i.e. its shortfall for the current year). So the UK borrows money to fund Scottish public spending, and charges Scotland interest on the loan that the UK has taken out. This is normal and fair, and it means that the UK doesn’t pay for Scotland’s deficit. If the UK did pay for Scotland’s deficit, Scotland would be getting a free lunch, and free lunches don’t exist.
Scotland has no money of its own: all its tax revenues go directly to the UK, and the UK underwrites all its expenditure. Further, it has no borrowing powers: it “borrows” only from the UK. The Scottish economy, in short, is wholly controlled by the UK. Which leads us to:
Fourthly, why, after 300 years of economic integration, is Scotland so poor? Maybe it’s because its people are ineducable blockheads, whose only contribution to cultural life has been the work of Adam Smith, Francis Hutcheson, David Hume, James Watt, John Logie Baird and Alexander Broadie and the creation of four world-class universities. Or maybe it’s because the ineducable blockheads have recklessly wasted their natural resources, leaving Scotland, per head of population, with only one-and-a-half times as many farm animals as the rest of the UK, two-and-a-half times as much timber, twice as much cereal, six times the renewable energy (wind, wave and solar), and nine times as much hydroelectic energy. (Who could make a living out of that?) Or there again, it may just be 300 years of exploitation, under-investment and false accounting.
Let’s wrap this up with a graphic, so that it can be understood by even a prolix and repetitive blogger who nobody takes seriously any more:
A – Amount of Scottish deficit.
B – Amount that Scotland “borrows” from the UK, standing on a scaffold with both hands tied behind its back and its head in a noose.
C – Amount that an independent Scotland could borrow on the open market, so that it could elect the government of its choice, run its economy how it thought fit, and prosper like a normal country.
As immediate fall-out from the Alex Salmond trial stitch-up, the commentator Craig Murray is being prosecuted for saying that the Alex Salmond trial was a stitch-up. The grounds for the prosecution are that, by saying that the Alex Salmond trial was a stitch-up, he committed contempt of court. Contempt-of-court cases are heard not by a jury, but only by judges, and carry a possible sentence of two years in prison.
The first step is a procedural hearing, scheduled for Wednesday 10th June at 10:00 a.m. This hearing will be on line, and therefore open to anybody with an internet connection. But you need to apply for access. Please do so – it’s important that as many people as possible know what was actually said in court, because the mainstream media and the judiciary will try to stamp on anything they see as threatening, and what Craig Murray has to say undoubtedly fits that bill.
You can apply for access by emailing email@example.com. And please circulate this to friends, and post it on any internet forum you have access to, so that there’s more public observation of these proceedings.
POSTTHOUGHT: The amount of effort that the authorities are putting in to suppress allegations that the Salmond trial was a fit-up does suggest that it was.
My last post has been met with incredulous hostility by some commentators, hostile incredulity by others (all in personal communications), so I need to flesh it out a bit. To provide continuity with the previous post, I thought of heading this one “Where it’s really at, asshole”, but since the skeptics were my friends I’ve forborne to do this.
The first point in my previous post – that Nicola Sturgeon would either commit or not commit to an indyref this year – was not controversial (how could it be? – it covered all possibilities). In the event, NS’s response contained many fine words and high aspirations, but you should always listen to the small print. What she actually said was, “it is still my hope [that we can get an indyref in 2020]”. That doesn’t sound like commitment to me.
My second point – that SNP policy is based on the belief that indyref without a Section 30 order would create too much hatred and division to be sustainable – attracted no adverse comment. Looking at it again now, I’m not sure that it’s true, but that question needs a separate post.
My third point – that the SNP doesn’t want independence, it just wants to stay in power for ever – is the one where my skeptical friends thought I’d lost my grip on reality. However, there are plenty of pointers in the SNP’s conduct over the last six years:
– The only actions the SNP have taken to further independence is Ian Blackford saying repeatedly and untruthfully that Scotland won’t be taken out of the EU against its will (it has been), and Nicola Sturgeon saying repeatedly that Scotland’s right to a referendum will be recognised (it won’t);
– They’ve mounted no legal challenge to the need for a Section 30 order, their refutation of mainstream media lies is non-existent, and they have not moved the opinion polls by any noticeable amount;
– The Scottish political scene is glacial, with the SNP running a straightforward social-democratic programme, and the opposition ineffective beyond belief. But with independence, that will change. After the honeymoon period, the growth of better-formulated dissenting views on how run a country will mean that they’ll have to work for their living;
– Their record in government has seen some ill-prepared legislation put forward – the Offensive Behaviour (Football) Act, the Named Persons Scheme, the Gender Recognition Act. They’re good at managing money, but poor at managing public opinion. So the return of normal politics is a threat to them;
– Their finances won’t cover a second indyref. They have £400,000 cash-in-hand, membership has halved since 2014, and indy will mean losing their £1.5m per annum share of the ‘Short money’ gifted by the UK Government to opposition parties.
More on the SNP’s true policy below.
On my fourth point – that the Salmond trial is a stitch-up and Sturgeon helped bring it about – the skeptics really had a field-day; “About as realistic as eating fish and chips on Mars,” was one comment. But my analysis is not unrealistic: my information comes from Craig Murray, the British Ambassador to Uzbekistan who was hounded out of office for showing that Britain relied on intelligence obtained from torture. You can read what he has to say here, and it’s very disturbing. By “at the heart of Holyrood” Craig means, of course, in the heads of Nicola Sturgeon and her husband Peter Murrell, Chief Executive of the SNP. And as a coda to this, let’s note that the name of Alex Salmond is not now to be found anywhere on the SNP’s website. Here is everything the SNP has to say on the 2014 referendum:
The 2014 independence referendum was Scotland’s greatest ever democratic event. In the months building up to the vote, the Yes campaign – spearheaded by the SNP and its then depute leader Nicola Sturgeon – engaged with every community in Scotland. Support for independence reached record highs[,] and levels of political participation blossomed across the country.
While the result delivered in the wee small hours of September 19th fell short…
I know that memory plays us tricks, but I think I remember Alex Salmond being around at that time. Wikipedia supports me on this: in its article on the 2014 referendum, it mentions Alex Salmond by name 89 times. The SNP names him, um, zero times.
Putting my third and fourth points together – the SNP’s inactivity and the Salmond stitch-up – we can derive a coherent account of the SNP’s policy over the last six years:
a. The UK will never let Scotland go if it can avoid it, because Scotland is too valuable. (For a summary of this, read Craig Murray’s opening paragraph here.) This makes independence is virtually unachievable, except by UDI and the risk of bloodshed (which the UK is perfectly capable of fostering). Sturgeon understood this early on, and decided not go go for it;
b. Her career plan is therefore to leave the SNP after five to ten years, and move on to an international career;
c. The modus operandi will be to talk up independence, but do nothing, just as the Brexiteers have talked up a “free” Britain, but will balk (we hope) at actually making much of a difference with Brexit;
d. Salmond is a threat to this, because he’s a cunning political animal and is committed to independence. He must therefore be neutralised;
d. The Gender Recognition Act – which gets you lots of brownie points internationally – is the jumping-off point for her international career. This is why she’s packed the party with transgender activists. The GRA is her passport out, and needs to be more or less in place if possible before the Salmond trial, which could see her forced to resign, and in any case before the 2021 Holyrood election, which could be the high point at which she departs.
That may all sound out-to-lunch, but in my view it adds up. So that’s all I’ll say for the moment, except for one final point. One of my skeptical friends describes BoJo as “a fatuous prick”, meaning (I assume) that he needn’t be taken seriously. I disagree. BoJo’s fatuous prickery is a stance, an act, designed to endear him to the voting public; underneath it, he’s a shrewd performer with a steely grasp of all the things he needs to do to further his career. He’s ruthless and skilled and uncontrollable, and that adds up to dangerous.
The Salmond trial opens on Monday. We live in interesting times.
That title reminds me of a linguistic joke, so let’s get that over with:
New student at Harvard, seeing a clearly established student whom he can ask for information: “Say, is this where the library’s at?
Established student (snootily): “This is Harvard. We don’t end sentences with a preposition.”
New student: “Oh, I’ll rephrase my question. Is this where the library’s at, asshole?”
To the point, now. It’s been a long time since the Scottish independence movement has been anything other than murky, unpredictable, unbelievably baffling or just plain hopeless. However, things are beginning to turn the corner, with some upcoming dramatic events:-
- This coming Wednesday, it is said, Nicola Sturgeon will set out her response to BJ’s refusal of the request for a Section 30 order. This either will or will not contain a commitment to an indy referendum this year. It’s difficult to see how it will plausibly do that. But if it doesn’t, the SNP’s credibility will slide down by another notch.
- The background to this, and the basis of all SNP policy on independence since 2015, is their belief that independence can only be securely won with the consent of the British government; anything else will create too much division in Scotland, and too much risk of non-recognition abroad.
- An alternative explanation of the SNP’s conduct since 2015 is that they don’t in fact want independence – they want to stay in power and keep their jobs and perks for ever. Political life after independence will become much more difficult for the SNP, with their primary aim accomplished and the rise (let us hope) of a proper Scottish opposition.
- The Alex Salmond trial opens soon, and there’s open discussion among commentators that this will destroy the SNP. It will destroy the SNP because the accusations against Salmond are (commentators say) a stitch-up, and Sturgeon (they say) played a large part in setting that stitch-up up. She did this (they claim) to demolish a rival who wanted to take the party in a direction she didn’t favour. (The thought of the honest, open, red-headed wee wifie whose mouth butter wouldn’t melt in being revealed as a corrupt and self-seeking political turd is an unsettling one, until you remember Blair’s metamorphosis in just a few years from left-wing poster-boy to financial scammer and international war criminal.)
- A line of argument that might mitigate the SNP’s dishonesty is that their proposed direction – indy with consent – is truly the only viable one, but that this will take ten to twenty years. Their only dishonesty is that they haven’t admitted to that timescale.
- If the SNP is eviscerated by the Salmond trial, a new party will head the independence movement (let’s just assume it’ll call itself the Scottish Independence Party, for heaven’s sake!). It’ll be much more aggressive in calling out the lies of the mass media on Scotland’s economic and cultural strengths, and in challenging Westminster’s machinations to erode devolution. If the movement is eventually forced to go for UDI, it will be a UDI which Scottish voters are in favour of because they’ll have listened to all the arguments, and one for which international recognition has been prepared through diplomatic initiatives.
- This might not be far off. After January 31st, an EU that wanted Scotland to join it (because of its economic potential and cultural compatibility) would be able to twist the arm of the UK, because the UK will no longer be an EU member and the UK will want a trade deal.
The Scotsman doesn’t believe this last point: it reports that the EU has stated categorically that it will not readmit a Scotland that has separated from the UK without consent. What The Scotsman doesn’t say, however, is that the EU will twist the British government’s arm to give consent, and that will be the price of the trade deal. So there’ll be consent, and therefore indy. And the Northern Ireland settlement shows that BoJo does actually back down when he has no cards.