THIS MAY SEEM a bit obvious but sometimes one needs to go back to basics such is the nature of the discourse of the ruling political parties in Holyrood. They act like they are in penury when in reality they have taken almost all the gold.
A free society is one which is lightly governed and taxed – where individuals, families and communities are free, within the rule of law, to act as they see fit and are thus agents of their own destiny. This should be exhilarating, rewarding and self-re-enforcing for the benefit of the vast majority.
Tragically, despite the anguished cries of austerity, modern Scotland is the very opposite of that definition. Scotland is a highly controlled, taxed and in a declining state under the direct jurisdiction of a deeply centralised government that says you will receive this service, this way, like it or not.
Thus the nation is becoming slowly comatose, unable to grow, its people increasing dependent on a failing state dolling out mediocre services. Modern Scotland is the very the definition of a dependant land and one our political and bureaucratic elites seem incapable of either recognising, or understanding.
The Scottish Government’s own annual Government Expenditure and Revenues Scotland report confirmed this. It never makes good reading and this year was no exception. EG: Excluding revenues from North Sea oil, which both Westminster and Holyrood have done their best to cancel, the State now accounts for a staggering 55.9 per cent of the economy, up a further 0.3 per cent on the year and contrasting with c44 per cent 10 or 15 years ago. We are witnessing the collapse of private enterprise into a new tokenised state that redistributes the decreasing slice rather than attempting to grow the cake. This is a tragic dependency culture for a once proud global-leading nation.
Last year public expenditure rose a further 4.8 per cent to £123.6bn or a staggering £48,100 for each of Scotland’s 2.57 million households. Numbers jump off the page but really what services and what quality of service is on offer for such an extraordinary figure? Most people believe they are rather poor ones.
Worse, the deficit – the gap between what is raised in taxation and what is spent in Scotland – stood at £28.4bn ex-North Sea revenues (or £25.3bn including North Sea). This is a deficit of some 12.9 per cent of GDP.
To put this deficit in context, outside Ukraine (which has a published deficit of 18 per cent GDP in the middle of a terrible war), the next worst in all of Europe is Romania at 7.9 per cent. Even at the height of the Global Financial crisis, bankrupt Greece (which, by the way, now runs a surplus) only managed a deficit of c10 per cent pa. Contrast Scotland at 12.9 per cent. Utterly unsustainable as an independent entity.
It gives me no pleasure at all to write this but the economic and political debates in this once great country, are utterly delusional. An Independent Scotland, as currently constructed, would be very quickly bankrupt without massive tax increases, causing capital flight, or spending cuts on an unprecedented scale. Those who argue for Scottish Independence seem oblivious to this rather obvious fact.
In fairness the situation in North East England is almost as dire and Wales and Northern Ireland are somewhat worse, but that is no compensation as this can only continue with the goodwill of the rest of the UK, but even with that it is not healthy. Dependency is never healthy.
Of course few people seem to either recognise, or understand the consequences of this. It is easier to draw the public sector salary and pretend it will continue. It might well continue for a while but ultimately without private enterprise and some self-sufficiency there shall be a day of reckoning – for sooner or later the paymasters will get fed up, or be forced themselves to change course. Deficits of that scale are not internally fundable.
The tragedy of this situation is there are very obvious examples of small countries that are prospering. The Republic of Ireland almost went bust in 2008-09. It had no central bank to bail it out and the ECB effectively said ‘Non.’ This became Ireland’s renaissance. It was forced as a matter of record to take drastic action including cutting public sector pay and social benefits by routinely 20 per cent to balance its books. This, together with a targeted tax cutting programme, encouraged external investment and the virtuous circle was borne.
No one wishes to go through the painful process that the Irish did but frankly those who profess to be Scottish nationalists need to understand the very parlous position Scotland is in. If they wish their independence the only way can be through growth, private investment and enterprise. One might have thought the leadership of the Nationalists might have understood that. Apparently not.
The current course is deeply unhealthy at best. No one wishes dependence but that is what Scotland has. It could be rather different.
With great respect to Ireland, Scotland has far stronger assets and it has in the past been an industrial and intellectual powerhouse. The legacy of some of those assets persists in elements of engineering, finance, elite education, medical science and the like. Coupled with cultural and tourists assets Scotland could rejuvenate and with the right enterprise enabling policies probably rather quickly.
Ireland has. Why not Scotland, or the North East of England for that matter? It needs the confidence to say ‘No. We the people can do this, we don’t want your dependency.’ It takes courage of course. It is essential that courageous spirit that Scotland has is re-found way from this rather patronising, shallow and self-defeating paternalism.
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