GERS is an argument FOR independence

In their now annual scramble to discredit GERS the ultra nationalists employ a wide variety of memes.

However the most bizarre of these is the concept that GERS actually argues for independence. The logic goes:

• How terribly the Scottish economy is doing
• This terrible performance has occurred within the Union
• Therefore the Union has caused this terrible performance. 

Logical enough, if it was true. 

Stop talking Scotland down

The trouble is the premise collapses at the first line - the Scottish economy is doing terribly. As usual despite the ultra’s contentions that Unionists just talk Scotland down the argument that Scotland is in terrible state is an ultranat one. 

Before examining how terribly Scotland is doing let’s just pause for a moment to talk about UK tax take. 

The “London" dominance

The UK like many single markets with a common currency is dominated by a large centre which attracts people, capital and power - London incase you hadn’t guessed! But London in this context can be considered wider than its political boundaries but extending out through to the South East of England to the huge commuter belt of London. 

This is all part of the golden triangle of wealth between Paris, London and Berlin that has long been part of Europe (long before the EU) and is a likely consequence of a capitalist system. 

The partial solution to this, from the state, is of course to use fiscal transfers to take this lopsided wealth away from the centre and pass it back to the very areas that feed it. 

The trouble with the EU of course is that these fiscal transfers barely exist. Thankfully they are a key part of the UK single market. 

However consider then the position of the UK. The tax take from the UK is dominated by the huge wealth contained within London (and I really mean dominated). So much so that it dwarfs the others and makes everyone else below (mean) average. 

Let me explain with a simple example. 

In a class of 10 pupils everyone is just 1m tall, but there is one poor pupil who is an incredible 3m in height (I know bear with me it makes the numbers easier). 

The total higher of the pupils in the class is therefore (9x1+ 3) 12m, so the mean average of the class pupils are 1.2M (12 divided by 10). So whilst nearly every pupil is 1M tall they are all, bar one, below average for the entire class. 

Given the dominance of London and the South East in the UK economy it would be no surprise then that most, if not all, parts of the UK, regions and nations are below the UK average when it comes to tax revenue. 

Scotland stands tall

How does Scotland fair when it comes to onshore tax - yes I’m excluding oil for this discussion so I can fully demonstrate the point and we’ll come back to it later.

Quite simply GERS shows Scotland at, or there abouts, when it comes to the UK average, recently we have been slightly ahead but dipped just below in the last set of GERS. The latest figures this month will likely fit with that pattern. 

So in terms of onshore tax revenue alone, on a comparable per head basis, Scotland is as good as that skewed UK average. This makes it one of the real powerhouses of the UK - before counting oil revenue (although there is very little of that now). If you were a nationalists then you really want to be making something of this. However the ultranats just seem to want to ignore this and talk Scotland down? Why?

The ultra nationalist problem

The problem is of course that tax revenue is only one side of the equation, when it comes to spending Scotland is far higher than average. This isn’t because Scotland is a basket case or some subsidy junkie, it’s a direct consequence of our sparse population, as I show here, and as Nicola Sturgeon admits in this car cash interview with Andrew Neil. 

It’s this higher spending that causes our fiscal transfer from the UK. 

Even when you take oil into account - as GERS does - the data shows that Scotland benefits from a fiscal transfer from the rest of the UK (due to that higher spending). This is likely to be in the order of £9bn for last year when the figures are released later in the month. 

Therefore rather than accept the case that Scotland is doing really well in the UK in terms of economic performance and tax take the ultras just ignore it and talk Scotland down. 

The real issue for Scotland in respect of the fiscal transfer from the UK is our relative sparsity of population. 

There are deep demographic, social, cultural and historic reasons for the sparsity of our population and clearly not all of them are negative - who doesn't think, at least in part, of Scotland in terms of our wide open rugged landscapes and our small tightly connected local communities. 

But they have a cost and those costs won't disappear under independence, nor will they change without a fundamental and enormous transformation of the population of Scotland. The only other real alternative is a cruel and politically impossible set of decisions to effectively cut off or severely curtail access to public services to our rural communities. 

No wonder then the ultras don't want to discuss that but would rather just say GERS shows we're rubbish and hope no one will look any further.