Last month, the Scottish Government published their annual Government Expenditure and Revenue Scotland (GERS) report. The figures were good news for those Scots who believe in the value of pooling and sharing resources across the UK, bad news for those who believe Scotland should be independent (or for some reason needs to be fiscally autonomous).
The UK’s deficit is running at 2.4 per cent of GDP and, because Scotland voted No in 2014, that fiscal context determines Scotland’s ability to sustain spending on vital public services. By contrast, Scotland’s notional stand-alone deficit according to GERS is 8.4 per cent. The EU’s ‘excessive deficit’ threshold is 3.0 per cent. Even before considering the challenges of creating a currency and weathering the shock of separation from the UK single market – a market objectively four times more important to Scotland than the EU – it’s clear that an independent Scotland wouldn’t be able to sustain the tax and spend levels described in GERS.