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The SNP owes us an apology for their blatant deception

The Huffington Post The Huffington Post 10/03/2016 Azeem Ibrahim

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When the SNP made their case for Scottish independence in the run-up to the referendum in 2014, they told us that Scotland was fundamentally a wealthy country which was held from achieving its full potential by Westminster. And just in case we didn't get it the first time around, they told this to us again. And again. Ad nauseaum.
There was only one snag. Scotland is indeed a wealthy nation, certainly by international standards. It has ample natural resources relative to the size of its population, including oil, and a well-educated and productive population. But the case the SNP was making was that an independent Scotland would boom economically, it would lower taxes, increase public spending, tackle social and economic inequality and build a social democratic utopia. Apart from economic growth, which has many complex drivers, this stuff has little to do with the wealth of the nation, but rather, it is about the government's fiscal position. Could we afford to lower taxes and/or increase expenditure? The answer is no. Scotland's fiscal position is poor. Extremely poor.
Had Scotland voted for independence, they would have celebrated "independence day" this month. And upon independence, the SNP would have had to go to work building their social democratic utopia - though, personally, I do not quite understand what is keeping them from doing just that now, if Scotland has such huge, untapped potential as they claim. In any case, they would have discovered what should have been an obvious truth all along: building a social democratic utopia is expensive. And it would certainly not have gotten any cheaper outside of the Union.
This week, we have seen the release of the Government Expenditure and Revenue Scotland (GERS) report for 2014-2015. The headline figure is that the Scottish government spent £15bn more than it earned in revenues - that is roughly 10% of output, and almost double the level for the UK as a whole. Just over £2bn of that can be attributed to a fall in oil revenues compared with the year before. The SNP does like to claim that oil is only small part of Scotland's wealth, but it still makes up a much larger proportion of Scottish revenues: depending on global prices, it can make up as much as 10-20% of total revenues. Even so, in order to make up a 15bn deficit, the global price of oil would need to be over three times what it is now.
Otherwise, productivity in Scotland is comparable to what it is in the UK. There are no obvious things you could do to the Scottish economy to make it boom compared to the UK economy. Both are mature economies that will only ever grow at pedestrian rates from now on. Which leaves us with one, inevitable conclusion: short of the price of oil spiking beyond the levels of 2008, and staying there indefinitely, an independent Scotland would be virtually bankrupt at current rates of spending. Talk of lowering taxes and increasing expenditure was an absurd fantasy.
This has been evident, at least to some of us, a long time ago. Prior to the referendum, the Scotland Institute (which I chair), has produced a number of publications showing the economic parts of the SNP's independence White Paper were nonsense. Our efforts were labelled "scare mongering". Today, they stand as vindicated facts.
But here I am not asking the SNP to apologise for trying to discredit our research. I am asking the SNP to apologise for deceiving the Scottish people. Writing late last year, Alex Bell, Alex Salmond's adviser and speech writer for much of the period leading up to the referendum, put it best: "The idea that you could have a Scotland with high public spending, low taxes, a stable economy and reasonable government debt was wishful [at the time of the referendum] - now it is deluded." The figures from this week show just how deluded.
Nicola Sturgeon has decided to respond to these figures by bleating some empty nonsense about the Scottish economy being fundamentally strong. Sure, Nicola, the economy is limping along fine. But you are 10% in deficit. Outside of the UK, that would have made the Scottish government effectively bankrupt. This is a fact. The only question is: is this something you do not understand, or something you understand but refuse to acknowledge?
Dr Azeem Ibrahim is the Executive Chairman of the Scotland Institute

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