Forget milk and honey, now is not the time for fantasy economics

YOU may have tomorrow marked in your diary as ‘GERS day’ – possibly to remind you not to look at social media. That’s the day data is released on how much Scotland benefits from being in the Union, customarily triggering a Twitter row.

There are veteran separatist grievance-mongers who insinuate that the stats are a charade – cooked-up, misleading, and frankly a giant conspiracy.

Last year’s figures showed that public spending per head was £1,661 higher in Scotland than across the UK in 2018/19, with the gap growing substantially.

Scots also contributed £307 less per person towards government income – meaning the overall ‘Union dividend’ is worth nearly £2,000 a year to every man, woman and child. This is, for certain Nationalists (quite a lot of them, in fact), proof of grinding colonial oppression.

As Nicola Sturgeon claimed last year, Scotland remains ‘imprisoned’ in the UK and Boris Johnson is effectively locking Scotland ‘in a cupboard’ by refusing another Scexit referendum.

It’s a strange kind of captivity, and not a bad deal for those of us stuck in that metaphorical cupboard, but you wouldn’t know it to witness the annual GERS backlash.

Fearlessly, Professor Jim Gallagher has intervened even before the figures are issued to claim that the coronavirus crisis will make the economic case for an independent Scotland even weaker.

While this year’s data will only cover the initial impact of the pandemic, it’s likely it will show our deficit has grown while oil revenues have fallen again, to about a tenth of the Scottish Government’s 2014 predictions for the ‘first year of independence’.

Awkward

And Professor Gallagher warns that ‘income tax has grown less than in the rest of the UK, reflecting the continuing relative decline in the Scottish economy for more than ten years now’.

Covid-19 has dominated political discussion, and the SNP hasn’t had to contend with awkward questions about its economic blueprint for an independent Scotland.

As Miss Sturgeon has remarked, not talking about independence hasn’t done the cause much harm.

It looks as if support for independence has risen, while the SNP is on course for a majority at the Scottish elections next May. But when the talking does resume, the opposite could hold true: uncomfortable truths can’t be hidden for ever.

Andrew Neil, now with more time on his hands after being dropped, inexplicably, by the BBC, asked some of those tricky questions on Twitter at the weekend.

He raised the contentious topic of currency, one of the areas where detail remains threadbare in the SNP’s prospectus for independence.

Andrew Wilson, the Nationalists’ economic guru, who masterminded the SNP’s Soviet-sounding ‘sustainable growth commission’, spelt out the big idea: ‘retain sterling as at present until conditions [are] met to create [our] own currency when in balance of our economic interests’.

Mr Neil suggested that the retention of sterling (ruled out by the Tories, rather unsportingly, back in 2014) really meant sterlingisation, or using the pound without Treasury permission.

Last year former Tory Chancellor Lord Lamont warned that ‘using the currency of another country would be the Latin Americanisation of Scotland’.

Mr Wilson replied there would be ‘no change’ – no sterlingisation – which presumably implies the Treasury would U-turn and let us keep the pound: a big, even reckless, assumption.

He added: ‘We would also set up a central bank immediately. It’s all in the policy detail… I also believe there is nothing to stop us joining the EU in this policy.’

As Mr Wilson confirmed, the EU states that adopting the euro is a precondition of membership, but he believes this could only be enforced in the long term – to begin with we would just need to say we backed the euro in principle.

Well, that’s alright then – no risk there; we just have to advocate a position that it seems not even senior Nationalist strategists really believe in (if they were happy with the euro, why prevaricate?)

The answer is clear – it’s about as big a vote-loser as you could imagine.

The pandemic has shown we were right to get out of the EU when we did because we would have been left with a bill for helping to rebuild other shattered economies, as well as our own. It’s far from clear that a policy of getting back into the EU, and therefore accepting the inevitability of the euro, would be as popular as the SNP hopes.

Ireland will stump up almost £17billion to the EU coronavirus bailout, while only getting £1.8billion back in grants.

And earlier this year, one of the First Minister’s top advisers warned Scotland would face a taxpayer-funded bill of up to £1billion if it won independence and joined the Eurozone.

Plunged

Charles Grant, a member of the Scottish Government’s Standing Council on Europe, said Scotland would be ‘liable’ to help pay into a bailout fund for countries in dire need. Scottish Government adviser Richard Marsh has said the nation would be plunged into a Greece-style economic crisis under the SNP’s currency plans. He warned they would involve accepting monetary policy as set by the Bank of England, including interest rates.

That’s why Mr Wilson is keen to stress nothing would change: a soothing mantra that is wholly disingenuous.

The growth commission produced a report so lengthy and esoteric that one of its own members told me they hadn’t managed to get to the end of it. But under the layers, its plan is a jumble of half-truths and outright fabrication.

The only chance the SNP has of trying to get any of this past voters is hoping they won’t ask about it.

Not so long ago, leading SNP figures were trying to take a more realistic approach. There was talk about how difficult independence would be, but the underlying message was no gain without pain.

Our collective appetite for such pain as we hurtle towards pandemic-induced economic turmoil has probably diminished since then.

And how does this broad acknowledgement of the likely austerity we’d face square with promises of ‘no change’ and seamless transition?

There are diehard Nationalists who would settle for medieval-style bartering if it meant an end to the UK. But the rest of us have higher hopes – and we know now isn’t the time for fantasy economics.

Imaginary currencies are the stuff of Tolkien novels (and maybe even he would have written off Covid-19 as a storyline his readers wouldn’t have bought).

The snake-oil salesmanship of the SNP doesn’t bear up to serious analysis – it never has.

And one truth they will never own is that we’ll get out of this crisis only as part of the historic alliance that has safeguarded our joint interests for the past three centuries.