But the Senior Lecturer insists that these numbers are wrong!

Nicola Sturgeon has said an independent Scotland would face tough economic challenges after data showed the country spent £13.5bn more than it raised in taxes last year.

The first minister confirmed that if voters backed independence in the near future, Scotland would need a dramatic improvement in its finances to bring its current spending deficit of 8.3% down to 3%, the level most economists see as sustainable.

The Government Expenditure and Revenue Scotland (GERS) report for 2016-17 says the gap between spending and tax income in Scotland last year was three times the UK’s deficit of 2.4%.

Therefore what is Nicola doing paying attention to them?

54 thoughts on “But the Senior Lecturer insists that these numbers are wrong!”

  1. Why this sudden burst of honesty and anti-socialism from the Sturge?

    I’ll give her some credit for admitting this.

    To be frank, even 3% wouldn’t be sustainable for Scotland (or the UK for that matter), although they could run it for a brief period if there was a credible plan to bring it even lower (much like the UK is supposedly doing) Or they could default and devalue their own currency, as an option B!

  2. 5.3 million people. 13,500 million overspend.

    Two and a half thousand quid per head overspend. So 10k overspend per family of 4.

    Bloody oath.

    Those are scary, scary figures.

  3. A sure fire test of Spuds “Green QE” would be an independent Scotland with its own presses and currency , let it rip. The tax take would be phenomenal. .. ho ho ho .

  4. “Why this sudden burst of honesty and anti-socialism from the Sturge?”

    Because they’re realised that the actual support for independence is roughly the 60/40 against that the vote went in the election – 40% to the ‘Lets have another referendum’ SNP, 60% to the the ‘Lets not’ everyone else. Which anyone with half a brain could have predicted, given the 2014 result and the catastrophic drop in oil prices since. 35-40% of the Scottish public may be stupid enough to vote for national self immolation, the rest can see which way the wind in blowing regardless of whether they’d like independence in a perfect world.

    So now its to the SNP’s advantage to accept the GERS figures, having studiously ignored them for the last 3 years, they need an out to drop independence for a bit. ‘Oh look we can’t afford it right now, we’ll just have to wait. So you can vote for us if you like waving your saltire and telling Westminster to f*ck off but don’t want to be impoverished by actually being independent’.

  5. Alex: Surprised she doesn’t mention the billions an independent Scotland would save post-Brexit by not rejoining the EU.

    Surely the gnats think that Scotland would be a major net recipient of EU money, rather like Ireland in the heyday of milk and honey from Brussels?

  6. Bloke in North Dorset

    “I accept that Scotland’s economy has challenges and [I] always have done,” Sturgeon said. “Yes, Scotland has a deficit and it’s a deficit we want to see reduced to sustainable levels.

    “This reflects Scotland’s position under current constitutional arrangements. Of course, if Scotland is independent, getting that deficit down to sustainable levels would be the responsibility of an independent Scottish government with the challenges which are inherent in that.”

    Yes, that’s all well and good but how will it be achieved? The article is deafeningly silent on that point, I suspect because they know it means a lot more of the dreaded “A” word.

  7. So just as a matter of interest, I wonder where that £13.5 billion is coming from at the moment.

    Who is giving each jock a two and a half grand pressie every year?

  8. @Oblong

    If (large-ish if) Scotland could grow its GDP at 4% per year, say 2% real growth plus 2% inflation, then a budget deficit of 3% of GDP each year would be consistent with a stable debt-to-GDP ratio of 75%. Most economists would regard that as sustainable.

  9. @BIND:

    The article is deafeningly silent on that point, I suspect because they know it means a lot more of the dreaded “A” word.

    Except that in this instance the “austerity” would have to be both real (rather than just a decrease in the rate of increase as the UK applied it under George Osborne).

    Scottish austerity would have to be both severe and structural to ensure that an independent Scotland could break even. If they wanted to be able to put money aside for reserves and boondoggles they’d probably need to cut another few percent on top of that.

    Porcine aviation is more likely.

  10. I wish Theresa May would call Sturgeon’s bluff and offer to transfer more powers (including tax raising powers) to the Scottish parliament in exchange for the withdrawal of all subsidies! Sturgeon would find it very difficult to turn down!

  11. So when does England get its independence referendum? We could have a bus driving around with the message “we send mooching Jocks £260 million each week” on the side.

  12. The Fish-Faced Trasher, rather than giving them more power, should put the boot in and order them to desist their anti-chanting and ” a commissar for every child” programs and be seen to be publicly ordering them to do so on pain of heavy financial loss to the Scottish budget and their own personal money.

    She is too stupid and gutless of course.

  13. I’d like help figuring out which is a bigger problem:
    – a 3% deficit when the public sector is say 25% of the economy
    -or a 3% deficit when the public sector is say 65% of the economy
    The deficit to spending ratio is massive in the first example, but in the second example the deficit to the private sector ratio is troublingly large

  14. Who is giving each jock a two and a half grand pressie every year?

    I realise this is a rhetorical question, but a fair amount will come from taxpayers in the north of England, whose local businesses are being squeezed by all the freebies handed out to their competitors on the other side of the border.

  15. Knowing Me, Knowing Steve

    after data showed the country spent £13.5bn more than it raised in taxes last year

    Crivvens and jings!

    I remember how, in the 90’s, the SNP used to boast that getting their hands on North Sea oil revenue would make Scotland rich. That was in the region of £2Bn a year.

    It’s worth revisiting the absolute shambles that was their economic policy going into the referendum. So, after them demanding independence for 80 years, we found out they still didn’t have a bloody clue about what currency they should use.

    Turned out “Independence” meant being having their foreign policy (and much of their domestic policy) made in Brussels and monetary policy made in London.

    You’d need the assistance of Diane Abbott to reconstruct a pig in a poke of that magnitude. Children camping in the back garden have more independence.

    You’d think they might be embarrassed, but the SNP appears to be incapable of shame. It’s basically McScientology, but with crappier celebrities.

    Scottish Independence isn’t, in principle, an unworthy argument to make. Shame nobody’s making it.

  16. And what would happen when the Shetlands and other islands demanded independence from Edinburgh as the politicians there care nothing for the problems the islands have?
    The same arguments the SNP use about London can be applied to Edinburgh.

  17. Ireland was told going independent would result in a financial hit, but they thought it worth the price paying. Scotland is now clearly stating that, yes, going independent would result in a financial hit, but they beleive it would be worth the price paying. And I’ve been arguing for months that even if leaving the EU results in a financial hit, then, yes, it too is also worth the price paying.

  18. @TMB: I was referring to the old politician’s trick of referring to maintaining the status quo as a saving compared to doing something more expensive, so if it is a saving it must reduce the deficit, no?

    Much used by Garron of the LD’s who went so far as to say that various spending pledges would be funded by staying in the customs union/single market, which would actually have cost HMG more.

  19. Off Topic but funny, as Owen Jones finds a new socialist miracle country to eulogise over….

    “For years we’ve been told that only deep cuts can save our economy. Portugal’s socialist-led government has proved the opposite”

  20. Its also an admission they fucked up strategically after the referendum – they swept the board in 2015 with what was effectively a policy of ‘OK we lost the independence referendum but we’ll fight those Tory Scum in Westminster for more powers and every penny we can get from within the Union’ but then got ahead of themselves thinking their success meant they could push for another referendum. 2017 showed them they couldn’t, and the former strategy was the way to go. So this is a return to trying to lure the scottish nationalists with a small n back into voting for them, safe in the knowledge the status quo won’t be overturned any time soon. The Tartan Brigade will vote SNP whatever as long as they get thrown a few bones now and again about Westminster and bashing the Tories. Its about luring the ‘I like independence but not at the moment’ voters back to the SNP.

  21. I see that Snippa has put a video of himself up on his site, looking fat and pasty-faced and frankly very unhealthy explaining why GERs is crap. It was wrong then and is still wrong today. He is the Bozo the Clown of economics. Why did anyone invite him to Holyrood to get things so wrong?

  22. I see that Kevin Hague shows just how much Scotland benefits from the Barnett formula. I wonder what Snippa thinks of that

  23. “I see that Snippa has put a video of himself up on his site, looking fat and pasty-faced and frankly very unhealthy”

    He’s starting to look like one of the Sontarans off of Dr Who.

  24. Harsh, AndrewC, the Sontarans are a noble, proud race, though a tad belligerent. To liken them to the Murphoblob could mean interplanetary war.

  25. “I see that Snippa has put a video of himself up on his site, looking fat and pasty-faced and frankly very unhealthy”

    Seeing how covered in sweat his face is there, you’ve got to wonder at the state of his scrotum.

  26. Seeing how covered in sweat his face is there, you’ve got to wonder at the state of his scrotum.

    Nurse! The mindbleach!!

  27. More like a re-tread Michelin man in an outsize suit. High & Mighty is his gent’s outfitter as well as his character.

  28. ““I see that Snippa has put a video of himself up on his site, looking fat and pasty-faced and frankly very unhealthy”

    Maybe he took advantage of that job offer Rocco made a couple weeks back. Been moonlighting.

  29. “Maybe this is a coincidence, but 3% is the maximum debt level required to join the Eurozone”

    That’s the maximum deficit you are allowed. It’s bollocks anyway as the Greeks fiddled their way in. Like all EU ‘rules’, application of said rule depends on it being in the interests of the Germans or EU nomenklatura.

    For Scotland, their current welfare state is simply incompatible with independence. Simple as that.

  30. KM,KS

    Turned out “Independence” meant being having their foreign policy (and much of their domestic policy) made in Brussels and monetary policy made in London.

    Quite so. The only people who would benefit from Sco’land’s independence would be the SNP’s hierarchy: more status, more grandstanding, more governmental – not to mention, ambassadorial – appointments…the gravy train would be endless…

    Theo’s Law states that if your answer is more politicians, then you have asked the wrong question.

  31. He nailed his trousers to the mast of tinfoil hat GERS denial to curry favour with the Nats. Now that ship is sinking and he’s the only one on board. Oh dear.

  32. Three tweets today from Kevin Hague mildly critical of the Dick Tater and his comments on GERS:

    Richard Murphy really isn’t very good with numbers, is he?

    I mean this is just ignorant nonsense

    I genuinely can’t bring myself to look

  33. Theoretical question: Scotland “wins” an independence referendum in 2020, declares the ScotPound as currency at 1:1 with GBP initially, assumes a proportionate-ish share of the UK national debt in ScP, and then sets about frenetically devaluing. Debt holders get very upset.

    This seems weird. Are new UK debt buyers pricing in a risk something like this? How would it actually work?

  34. What’s awful about Snippa’s presentation is that it is minutes that could have been used by someone else to say something useful on Scotland’s finances: like toll bridges and congestion charges are mostly good, and free museums are mostly bad. Anything at all except the drivel of the Priest look-a-like as marvellously identified by Invicta

  35. @Hopper – I doubt It is priced in as Gilts are actual things whereas a proportionate share is just a notional split. Someone somewhere would actually have to give up their rUK gilt for a Scottish “Gilt”. One is clearly a better risk than the other so the yield (inverse of price) would have to go up on the worse one. This instantly shows how bad an idea it is.

    Of course the UK government could enforce a change in the terms of the bonds on the bond holders as they make the law but that would look bad and rather deter people from lending to the UK which would be very bad.

  36. I don’t think the UK government could have a sort of lottery and pick current gilt holders at random for involuntary ‘conversion’ to Scottish Gilts. There would be law suits as far as the eye could see, and I can’t see the government getting away with it.

    The person at biggest risk in such a scenario is poor old John Q Taxpayer, because we’d probably accept a load of newly issued Scottish Gilts at nominal par with the GBP as a payment to balance their share of the National Debt. Then if the Sc£ fell through the floor, we’d be collectively out of pocket.

  37. Poor Richard. Nothing is going as he wants it.
    Obviously everyone else is wrong and he’ll soon have his just reward.

  38. And if you live in Scotland, you cannot see where the money goes.

    The roads are shit, the rubbish collection is shit. The NHS is shit.

    It all goes on benefits for the workshy.

  39. Thanks Andrew A and Jim. Very reassuring that it shouldn’t be a problem unless Uk.gov screws up the negotiations.

    We’re sunk, aren’t we?

  40. Theoretical question: Scotland “wins” an independence referendum in 2020, declares the ScotPound as currency at 1:1 with GBP initially, assumes a proportionate-ish share of the UK national debt in ScP, and then sets about frenetically devaluing. Debt holders get very upset.

    The debt is in Sterling though. Whatever happens to the Scottish Pound after independence surely doesn’t matter. If it halves in value they would need twice as many to redeem the debt.

  41. Bloke in North Dorset

    Rob, not if they converted it at 1:1 to the Scottish pound and then devalued.

    Not that any bond holders would be stupid enough to allow that to happen.

  42. So Snippa on his blog today comments that someone commented on his weight problem in the video and states that he has lost 10 kg since. I checked his blog comments and his twitter feed. The only mention is in this blog. Proof that Snippa reads Worstall!

  43. “assumes a proportionate-ish share of the UK national debt’

    Can’t do that without the consent of the gilt holders. More likely scenario is Scotland tried to issue enough bonds in its own currency to buy 10% of the outstanding gilts. Pass the popcorn.

  44. Kevin Hague shows just how unprofessional the professor is. Murphy is the kind of bloke who thinks a codom is a rubber glove

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