THE DREAM IS DEAD
A staggering £15bn defecit. A ballooning and unreformed public sector. An economy faltering on tax-grabs and uncertainty. Will SNP now accept that the economic case for independence has been destroyed?
HISTORY will be the ultimate arbiter on whether Wednesday truly was the day the SNP’s independence dream died, but it certainly felt like the moment the fatal blow fell. President Bill Clinton’s maxim – ‘It’s the economy, stupid’ – still cuts through all the froth, propaganda, tribalism and doctrinaire pontificating of politicians.
If you cannot get the economy right, you won’t get to run the country. And the scale of how wrong the SNP is about the fiscal cornerstone was made abundantly clear by the Government Expenditure and Revenue Scotland (GERS) figures.
While a deficit of £14.8billion is a very big number to grasp, what lies behind it is familiar to those of us who daily run a household budget. In reality, Scotland is spending £41million a day more than we generate. You don’t need a degree in macroeconomics to know that is ruinous. We are living beyond our means and are insulated from the worst of the impact by remaining part of the broader United Kingdom family.
The go-it-alone Scotland we were hours from becoming on September 18, 2014, would by now be bankrupt. Our flatlining economy would be in the intensive care unit while the International Monetary Fund was in the anteroom warning concerned relatives to prepare for the worst.
Independence is simply unaffordable. Alex Salmond vaingloriously declared ‘the dream shall never die’ but GERS seems to have banged the last nail in its coffin.
That immutable fact is grasped by the public and SNP leader Nicola Sturgeon has no chance of reviving the corpse.
In her party is a hard core – representative of perhaps as many as one in four of the population – who are such dyed-in-the-wool separatists that they would go to their graves clutching the now-discredited ‘Scotland’s Future’ White Paper to their breast.
FOR them independence, even if it condemned generations yet unborn to the serfdom of faceless bankers in far-off Brussels, is worth any price. Such zealots need not detain the rest of us long. Miss Sturgeon welcomed them with open arms in the aftermath of the referendum defeat, little realising they carried the seeds of doom for her party.
Their burning passion for separation can never be reconciled with the majority view that Scotland’s best hopes are as part of the Union.
Their fundamentalist fury will fester and sour and turn to anger focused on an upper echelon of the party unable to deliver the ‘freedom’ they crave. Good luck with that, Nicola.
This much we know and it is just so much blood under the bridge, for what matters now is the course we chart from here.
For the SNP – albeit with its raison d’être in tatters – remains the party in power at Holyrood. It is imperative that it uses the parliament’s growing powers to improve Scotland’s perilous position and it can start by giving up the grandstanding on Brexit and the EU.
From Nationalist MEP Alyn Smith’s embarrassing begging in Brussels, to Miss Sturgeon’s futile photo-ops in European capitals, the party needs to realise that just as independence is dead in the water, so too is its madcap scheme to fly in the face of Brexit. Negotiating a special place in the EU is a non-starter.
Spain would veto our accession and Wednesday’s GERS figures make us economic pariahs. Germany would not admit another Greece. Instead, the SNP must take Scottish Secretary David Mundell at his word. He has said he will make sure Scotland’s voice is heard as the competent body – the UK Government – extracts Britain from the EU.
Yes, Brexit has its risks but Miss Sturgeon’s attempt to overshadow the GERS figures by warning earlier in the week that leaving the UK could cost Scotland £11billion annually was an utter flop.
That possible loss has to be compared to the absolute certainty of a £15billion deficit if we exited the UK. Again, no accountants required.
Scots might now welcome less talk from Miss Sturgeon and more action. Certainly fewer self-indulgent selfies with fellow senior Nats would not go amiss. Such vanity does nothing to dispel the unsettling notion that the First Minister is a demagogue demanding unquestioning cult-like obedience.
Instead of pointless keening for times past, won’t the SNP look at how best to move Scotland forward? If London truly is the ‘dark star’ of the British economy, pulling everything its way, shouldn’t the SNP be seeking something by way of counterbalance?
Freed from EU meddlers, there must be scope for the UK to set up, say, special assistance zones. Is Holyrood pushing for the remoter parts of the country to receive extra help with, for instance, broadband or transport infrastructure?
Aberdeen has borne the brunt of an oil downturn so precipitous that the black gold has gone from bonus to near irrelevance in terms of government income.
But decommissioning is big business. Instead of Western Isles MP Angus MacNeil bemoaning the lack of an ‘Admiralty tug’ to help defunct rigs on their way to breakers’ yards in Turkey, would he not be better campaigning for Scotland to become a centre of excellence in such demanding and lucrative work?
Fracking, for ideological rather than sound scientific reasons, is anathema to the SNP. That means engineers and other hi-tech workers no longer able to look to oil for work have no domestic fracking jobs either. The SNP moratorium suddenly looks less a principled stance than a self-inflicted wound.
Ireland was once held up as the sort of country an independent Scotland could become. The shine came off that after the 2008 banking crash when Dublin got massive EU bailouts and paid a high price as savage public spending cuts were enforced by the same EU the SNP would have us believe is a benign sweetheart.
BUT Ireland has lessons for Scotland, not least over corporation tax. Much of the genuine success of the Celtic Tiger – whose pelt is now presumably a rug somewhere in Frankfurt – was built on an extremely low rate of corporation tax.
Other countries fairly howled that the ultra-low rates lured businesses away from high-tax jurisdictions. The Irish knew a good thing when they saw it and stuck to their guns.
In rolled jobs. In 2014, Ireland was said to have benefited from £182billion of American direct investment in the previous 20 years – gaining more from US firms than Brazil, Russia, India and China combined.
The list of major firms
operating in the Republic, many choosing to base their European headquarters there, includes Google, Facebook, Intel, Dell, Pfizer, HewlettPackard, Boston Scientific and Johnson & Johnson.
And Ireland is doubling down on the idea. While UK corporation tax stands at 20 per cent with a hint of a modest dip of 5 per cent in the offing, Ireland’s is only 12.5 per cent.
And there’s more – companies which demonstrate they are genuine innovators and employ highly skilled people can avail of a new 6.25 per cent rate. Says Dáil Finance Minister Michael Noonan: ‘Fostering innovation in Ireland will be critical to our new economic model.’
While corporation tax decisions rest with Westminster, why is the SNP not agitating for positive change while talking in Mr Noonan’s business-friendly language?
It’s partly because the Nationalists lack big brains with big ideas. Who in the Scottish Cabinet has the political vision to even consider a sea-change that would see Scotland doing more than griping about perfidious Westminster?
‘Standing up for Scotland’ appears to consist of piling up legislation on a never-mind-the-quality-feel-the-width basis. From the Offensive Behaviour at Football Act to the Named Persons legislation; from the bungled creation of Police Scotland to the ham-fisted U-turn on corroboration in court, the Nats look like chippy amateurs locked in opposition, not a dexterous party of government.
Is Derek Mackay, lately moved from being in charge of potholes to finance, bringing forward an adroit fiscal revolution? No, he’s moaning about the billions Chancellor Philip Hammond is earmarking to replace lost EU funding not being enough.
And while the appointment of a Holyrood Brexit minister is welcome, the casting is woeful.
Mike Russell was one of the first people Miss Sturgeon axed after her coronation as First Minister, so egregious was his reign at education.
The heart sinks at his first tweet about his new post: ‘Michael Russell to lead on UK Government engagement on Scotland’s place in Europe.’
That’s not the brief at all. It should be to lead on Scotland’s place in a post-EU Britain. But immediately Mr Russell is playing to type and trying to refight a battle long since lost.
The wider problem is that the Nationalists simply do not grasp what business is about.
Mr Mackay’s talk midweek of the ‘on-shore economy’ was telling. He suggested the way forward was to do more, make more and sell more.
Has it really taken nine years in power for the SNP to make the blinding discovery that this country has a robust and innovative private sector? And that, hey, maybe it might be an idea to support and nurture this hitherto unknown miracle?
Businessmen will nod knowing that, yes, this is all new to a party which views business as something to raid relentlessly for tax and cannot grasp that lower taxation generates more wealth, not less.
INSTEAD of listening to trendy focus groups and its own strident bloggers, the SNP needs to listen to businesses. The party should, in particular, heed the small and medium-sized enterprises that are the backbone of this country’s tax base, creating prosperity and jobs despite – rather than because of – Holyrood.
Listen, for instance, to Andrew Lapping, managing director of Hamilton Portfolio Ltd, trying to create wealth ‘despite the best efforts of the First Minister to generate as much uncertainty as possible by refusing to let go of the bone that is independence.
‘What we want in commerce is certainty, not drift... Your pontificating stance is damaging confidence in all sectors.’
Business needs assistance, not the constant draining uncertainty caused by the threat of another independence referendum. The SNP seems to think Scotland is the world’s darling, but sentiment counts for nothing.
Investors and firms have a choice. Why put money into a country when you don’t know what its tax or trade regime will be in a year or two?
And that enormous Scottish deficit is down in no small measure to profligate spending. Our benefits bill is estimated at around £65million a day. Can the SNP really say every penny of that is justified?
Even if we truly want to spend that sort of money, it has to come from somewhere.
The same is true of our burgeoning public sector. Yes, Scotland will always have to pay extra to bring services to remote areas. But with Scottish public sector spending said by experts to be around 20 per cent higher than England, are our services much better?
AS with benefits, we need real and meaningful reform of the public sector. For instance, why have 32 council heads of education and associated departments when standards are supposed to be unified across the country?
On NHS bureaucracy, the Scottish Government’s own website says: ‘The NHS has 14 regional boards plus seven special boards and one public health body who support the regional NHS boards by providing a range of important specialist and national services...’
A model of efficiency or a recipe for piecemeal decisionmaking, duplication and waste?
Reform will take real political backbone. The NHS is a sacred cow which much be worshipped with ever-more cash.
And what will happen in May when the council elections take place – if the SNP does well, will the party centrally take on its colleagues at local level to demand savings and value for money?
As well as listening to business on commerce, the Nationalists ought to listen to the private sector on the NHS and public sector. There is little internal appetite for reform when public cash is involved because managers are not under the budgetary pressure the private sector faces.
Wednesday’s GERS figures tell us every penny is precious. What are Miss Sturgeon’s plans to ram that message home to indolent pen-pushers convinced there is always more, more, more to be squeezed from public coffers?
Miss Sturgeon called the GERS figures ‘challenging’. She cannot see the wood for the trees. It is not the figures that are challenging. It is the solutions we require to improve the figures that will truly test the mettle of her and her party.
There is little empirical evidence thus far that they are capable of battling through the foothills of the tasks at hand, let alone conquering the lofty pinnacles.
But instead of constantly cursing the darkness – blaming all and sundry around it for our ills – won’t the SNP instead light a candle or two?