Squaring the circles, watching the angles

Saturday 20 October 2012

THE Edinburgh Agreement – the handshake, the inky signatures, the mile-upon-mile of unnecessary police crash barriers outside St Andrew's House –seems a long time a ago.

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That was the "how" phase of the referendum and it's so last Monday. Here at the SNP conference in Perth cabinet ministers and grassroots activists alike are firmly into the "why" of independence. Cue a blizzard of economic statistics, extravagant claims and angry counter-claims.

Party strategists let it be known before the start of the conference that a key aim would be to convince Scots they would be financially better off in an independent Scotland. To that end two sets of figures are being deployed. According to the first, Scotland paid 9.6% of UK tax in 2010/11 but benefited from only 9.3% of public spending.It sounds like a rip-off but, these being statistics, it's not as simple as that. Government spending is not based solely on the tax take so, while Scotland contributed £53billion in tax, the country benefited from nearly £64billion in public spending, about 20% more. Better Together, the cross-party pro-UK campaign, was not slow to point this out.But that's not the end of it. The rest of the UK also received higher level of public spending than was chipped in by taxpayers –by about 24%. One-nil to the Nationalists, then? That's still not clear. Scotland might have come off second best in 2010/11 but in almost every other years in the past three decades, the pattern was reversed, says Better Together, with Scotland doing rather better in terms of public spending. The second set of figures cited by the Nationalists is even more contentious. Ever since Monday's referendum deal, cabinet ministers have been queueing up to declare that Scotland is in a stronger financial position than the rest of the UK. It is based on figures showing that Scotland's deficit, as a proportion of GDP, is smaller than the rest of the UK's, 7.4% compared with 9.2%, to be precise. From that the Nationalists have extrapolated a cash figure of £2.7billion which equates to £500 per person or £1000 for every family in the land.So we'll be better off in an independent Scotland? Don't spend the money just yet. Even Mr Salmond is not proposing a post-independence hand-out in used tenners. In his opening address yesterday on Thursday, the First Minister said the cash could be spend on "vital services". On previous occasions he has suggested it might be used to drive down borrowing.But, while Scotland was in a healthier financial position than the rest of the UK in 2010/11, this is not real money. It just means Scotland is slightly less skint than the rest of the UK. It would only become real if an independent Scotland decided to borrow it, taking its deficit relative to GDP to the same level as the rest of the UK. And, as Scots Tory leader Ruth Davidson pointed out, it's hard to see how borrowing money would cut borrowing.So there is more to Mr Salmond's economic claims than meets the eye. If there is a conclusion to be drawn it's this: most figures should be accompanied by a big red warning sticker saying "handle with care".The SNP's fondness for these numbers is not hard to explain – a YouGov poll at the weekend suggested that 45% of Scots would be likely to vote Yes if they felt independence would make them better off, a much more encouraging return than Ipsos MORI's findings (30% for, 58% against) on Thursday. However it's a far cry from the high-minded, philosophical appeal of the Yes Campaign, which says simply that Scotland should be independent because those living in Scotland care most and are best placed to govern the country.The heart alone won't win it, the SNP seems now to accept. Expect a sustained economic bombardment between now and the end of 2014.

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Squaring the circles, watching the angles

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