If Scotland has a deficit, only London could have caused it

Devolution of course complicates matters because it means that two governments are involved – Edinburgh and London. However, the difference between the two is that only the latter can run a deficit. The Scottish Government must balance its budget, just as local authorities must do. Thus, if there is a deficit, there is only one place can have caused it – London – for only there can there be a deficit.

Moreover, devolution does not entirely change the situation, for 70% of decisions on tax and 40% on expenditure are still taken in London. Indeed, the value of the 60% of expenditure decisions which are taken in Edinburgh largely remains one for London via the size it determines for the Block Grant, constraining the limits of Scottish Government expenditure. Given the economic hegemony of the south-east, Scotland, like almost all the other regions of the UK, gets its "pocket money" from the London Government. Our sole advantage is to have some say on how we spend it.

Lastly, while much improved, GERS, particularly on the revenue side is a series of estimates. For instance, how much of a company’s corporation tax should be attributed to Scotland if it has economic activities in Scotland as well as the rest of the UK. An independent Scotland would tax these at source, before the proceeds are sent to London. Just now they can only be estimated.

This takes us back to the original argument, that GERS is an argument against independence which contends that Scotland is just not a viable country. Yet the "evidence" for this is a deficit "revealed" by an analysis which has to be the responsibility of London, as Scotland must balance the budget that has been determined for it.

Alasdair Galloway, Dumbarton.

Why are we lagging behind?

ALTHOUGH published by the Scottish civil servants, the vast bulk of the notional GERS figures are based on UK Government estimates of Scotland’s poor position in a London-dominated Union. Several reports mistakenly refer to record oil revenues, as GERS strangely only goes back to 1999 in relation to Scotland’s share, which is just after the last Labour government transferred 6,000 square miles of Scotland’s territorial waters to England prior to devolution through the back door using a House of Lords Order and not debated in the House of Commons.

The highest oil revenues were in the years 1984 to 1986, worth some £41 billion each year in today’s money, and it is instructive to compare how Norway with similar oil extraction has prospered since then compared to London’s control of our economy. Under GERS, Scotland is charged £9.2bn as our pro rata share of interest on UK’s national debt of over £2500bn caused by Westminster’s mismanagement of the economy, a failed energy policy and inflation. The Scottish Government has to balance its books and can only borrow £300 million so can’t undertake the infrastructure projects required to grow our economy.

The GERS estimate is our annual reminder of how badly Scotland fares within the UK compared to other similar-sized western European nations. The government in Ireland, without £9.4bn in oil revenues, spends roughly the same amount per head of population but expects to raise £102bn in taxes this year, thus creating a government surplus. Given Scotland’s highly educated population and vast energy resources, why is our GDP per head £33k, while Norway's is £80k, Denmark's £55k and Finland’s £42k? Under London rule our standard of living is falling, while theirs is rising.

Mary Thomas, Edinburgh.

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About-turn from the nationalists

THE publication of the Scottish Government’s Government Revenue and Expenditure Scotland (GERS) has caused the customary flurry of denial from the usual suspects, mainly on social media. Scottish nationalists have been brought up to disparage and rubbish the GERS figures because they show that Scotland’s deficit remains stubbornly high (nine per cent, compared with the UK’s 5.2 per cent), and would be even higher had not world energy prices brought in unusually high revenues in the last year. They also show that leaving the UK would be disastrous for Scots.

Nationalists forget that their leaders fought the 2014 campaign on the basis of the GERS being authoritative. Alex Salmond said so repeatedly, not least in a debate with Alistair Darling. The blogger, Wings Over Scotland, said so, too. That was when oil prices were high and GERS showed Scotland in a relatively favourable financial position. But the slump in oil prices, especially in 2015-17, changed all that.

If only nationalists would read the series of reports on the GERS from the Fraser of Allander Institute. It defends the use of "estimates", which are sophisticated compilations and not mere random guesses, and it points out, fairly sternly, that the GERS figures should be defended: "We can’t think of any other government statistical publication - and a National Statistics publication at that - that is subject to such criticism and attack ... Much more could be done by government to defend these statistics and proactively clear up misunderstandings."

But it isn’t in the interests for the SNP Government to defend GERS, its very own statistical report. Doing so would offend its most ardent supporters, and, especially with a diminishing membership, it can’t afford that.

Jill Stephenson, Edinburgh.

Higher taxes will not work

ANOTHER set of GERS figures and the argument against independence remains as strong as ever. North Sea oil and gas is the key economic factor so removing this from the equation, as would be the position of the current Scottish Government, leaves an independent Scotland reliant on upping our already-high taxation even higher.

Where in the world has this tactic worked? There is a ceiling level of taxation which Scotland is at already. The only other way is to grow the economy – something the SNP seems incapable of and the Greens don't even want.

Dr Gerald Edwards, Glasgow.

Doctors' deal is welcome news

YOU were tight to place Helen McArdle's article ("Junior doctors vote to accept pay offer", The Herald, August 17) on your front page. The efforts of the Scottish Government to achieve a pay settlement with junior doctors here, while strikes are taking place in other parts of the UK, is to be welcomed in the interests of us all. This settlement will in no small way make a huge difference with demands of winter just around the corner.

Catriona C Clark, Falkirk.

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Wrong to blame LEZs

YOUR headline about rat infestation blamed on the LEZ introduction ("Rise in rat numbers blamed on LEZ ban for bin lorries", The Herald August 16) was poorly worded and incomplete factually.

First, Glasgow binmen were complaining about rat infestation long before and have already stated that the reason was cuts in personnel and equipment.

Whilst the council admits that all its vehicles are not compatible with low emission requirements, the problem is with tow or lift trucks to remove illegally parked vehicles. I am sure that plenty private companies will be happy to be contracted to do this duty.

Thirdly, the opposition to LEZs ignores the presence of foul air in the centre of Glasgow and, if anything, your article seems to sustain this negative attitude.

JB Drummond, Kilmarnock.

Returning to the future

I WONDER if Lorna Slater will manage to remain a minister in a SNP/Green coalition until 2030. If she does and if she learns the lessons of the Deposit Return Scheme she'll be the ideal person to implement HPRS, the Heat Pump Return Scheme.

Allan Sutherland, Stonehaven.

Scottish Water does us proud

I NOTE with interest Martin Williams' report ("Scottish Water accused over £50k salary rise for new chief", The Herald, August 17). It would have been good to see in your article some contextualisation such as a comparison with the salaries of the 11 CEOs of private water companies in England. As you may know their average pay is in excess of £1 million each.

It looks like Scotland gets a very good deal in comparison as well as a much better service in terms of the quality of the water we get.

Michael Docherty, Glasgow.