Dragged into the economic mire by a party fixated on splitting UK at the expense of all else
IT has taken Nicola Sturgeon only eight years as First Minister to wake up to the importance of bolstering economic growth.
Yesterday there was evidence of a Damascene conversion when she spoke of boosting the economy as a priority for our ‘collective wellbeing’.
Better late than never, but actions speak louder than words — and if she was serious, her party wouldn’t be in league with the Marxist Greens.
According to Miss Sturgeon, many of the ‘big challenges’ we’re facing, including sky-high living costs, are at least partly down to the fact that we’re part of the UK — though why they’d be any less if Scotland seceded is anyone’s guess.
Today, the first full day of this bold new focus on increasing our national prosperity, will see publication of the first instalment of (another) prospectus for independence.
It will look at the UK’s supposedly poor productivity compared to Europe — so, appropriately, the scene-setting document will be full of old grudges.
But it’s unlikely to mention the latest candid assessment of the finances of an independent Scotland, from Professor John Kay, a former economic adviser to Miss Sturgeon.
He says in a new book that Scotland would start off £180billion in debt and would have to borrow up to £20billion a year — because we’d have to shoulder our share of UK liabilities.
Hardly peanuts, then, though for Paul McLennan, SNP MSP for East Lothian, it’s a matter of little concern — Scotland ‘doesn’t have debt — it needs to balance its books legally every year’.
The notion that Scotland ‘doesn’t have debt’ would be an ambitious (and short-lived) proposition at the start of talks with the government for the rest of the UK in the event that independence was secured.
As for the SNP’s insistence that the UK economy is on the skids, the latest data isn’t positive, but if you exclude the enormous cost of the Covid testing regime, there is still growth, albeit not much, and possibly not for much longer.
But that makes it all the more extraordinary that the SNP’s proposed solution is to dismantle one of the world’s most successful political and economic partnerships.
The timing is bizarre, and seemingly underpinned by the assumption that people will be so disillusioned with soaring energy bills, and other constraints on household spending, that independence will begin to look like an escape route.
An insight into this strategy was provided by former top spin doctor Kevin Pringle, a voice from the SNP’s relatively recent past, who said the £20million set aside by the SNP Government for a referendum next year was a ‘piddling’ sum.
He said: ‘By embarking on this venture in the teeth of a severe cost-of-living crisis, Sturgeon and her team know that people’s minds will be made up according to which future for Scotland they judge offers the best prospect for relief and salvation from the financial pressures they are under.’
Any political movement which genuinely thinks £20million is ‘piddling’ at a time when disposable income is nothing more than a fond memory for most of us is living on another planet.
Alex Salmond, another blast from the past, has re-emerged to put pressure on his old protégée, suggesting that she should seize the moment by demanding the right to hold a second referendum from a weakened Boris Johnson.
Not the most of novel of ideas, though it does show that even Mr Salmond has little faith in the current plan, to plough ahead with a Referendum Bill and wait for the inevitable court challenge.
Mr Salmond was an economist, and built some bridges with sceptical businesses ahead of the 2014 referendum, which are now in ruins.
The Sturgeon regime has been deaf to the concerns of firms struggling for survival during the lockdown years, and now they face another hammer blow.
The small print of Finance Secretary Kate Forbes’s recent spending review showed that bosses are being primed for a sharp rise in business rates next year, as well as other cost hikes.
If you want a more detailed idea of what lies ahead, Miss Forbes’s report on our economic position, and the accompanying fiscal predictions, are more instructive than Miss Sturgeon’s speech yesterday.
The outlook is bleak, with public services to be hollowed out and budgets stripped down to the bare minimum, or beyond.
The axe will fall on councils, police, the fire service and universities under brutal cost-saving plans as inflation soars and funding is squeezed.
Years of costly giveaways and botched decision-making have combined with a culture of rampant waste and inefficiency to produce a £3.5billion black hole (a term Miss Forbes hates — though the Institute for Fiscal Studies calls it a ‘funding gap’.)
Semantics aside, the First Minister and Miss Forbes have both claimed that the Scottish budget this year has been cut by more than five per cent in real terms.
In reality, if the 2020/21 emergency pandemic funding is discounted, the Scottish Government’s core block grant, at almost £35billion, is higher than it has ever been.
The SNP wanted Scotland to stand on its own two feet, hence the new fiscal powers handed to Holyrood in the wake of the 2014 referendum.
Yet, as former Scottish Labour leader Kezia Dugdale points out, the ‘opportunity to grow and so benefit from… economic growth was offset by a substantial risk: if Scottish tax receipts fell short of those of the UK, then public spending would fall too’.
So the SNP battled for more power, and got it, and now wants more, despite having misused or abused those it already has, leaving us in dire straits — with worse to come.
The gloomy analysis published by Miss Forbes the other week is bad enough, but it would be infinitely worse if Scotland were to break away from the Union, which benefits every Scot to the tune of £3,100 — the ‘Union dividend’ revealed in the Scottish Government’s own GERS data last year.
In her speech yesterday, Miss Sturgeon said economic activity should be purposeful — for example by adding to our happiness — and not just an ‘end in itself’.
A laudable aim, though it would be good to have some growth in the first place before agonising over the point of it (and bear in mind that her anti-capitalist Green partners are opposed to the very concept of growth).
What is an ‘end in itself’ for Miss Sturgeon is independence, so brace yourself for the SNP spin machine to go into overdrive in the coming weeks and months.
And remember whether you can pay your gas bill, or afford to fill up your car, is of secondary importance to them, at best.
It’s a desperate last throw of the dice by a party determined to drag us into an economic quagmire in a bid to fulfil the only aim it has ever cared about.
- This column appeared in the Scottish Daily Mail on June 14, 2022.
- *Follow me on Twitter:@GrahamGGrant