The recent UK budget was, as all budgets are, a blizzard of numbers. The odd thing on this occasion was that the numbers said one thing and the Chancellor did another.
We have all got fed up with what the numbers tell us but the picture they paint is absolutely clear. The aggregate stock of debt which the nation has is far too high, debt levels have not yet stopped rising and the ratio of debt to GDP has only just started to fall slowly from a worryingly high level.
This year, both borrowing and growth have gone a bit better than expected. What should have been done is that this good news was not given away but ploughed back into deficit reduction and to fully fund the proposed increase in NHS expenditure.
Our public services are not in good shape and our infrastructure is increasingly awful. More money needs to be spent. Even more critical is that one day, perhaps soon, we will have another economic recession. When that happens the Government needs the ammunition to keep spending - and the UK Government doesn’t have much at its disposal.
The UK budget was all about two things. First, to make us all feel a bit better about life so we keep spending and investing - this isn’t as daft as it seems as confidence is critical to economic performance.
The second thing was a heavy hint from the Chancellor that the Government Auntie will be giving out lots more sweets if we manage to achieve a smooth and sensible Brexit - and all the sweets will be taken away if we do not.
The media have been quick to latch on to the large gap that has now emerged between Scotland and the rest of the UK over when you become a higher rate income tax payer. In the rest of the UK from next year it will be when you earn over £50,000, in Scotland it is currently £43,430 - and then you pay 41% rather than the 40% down south. The small gap has now become a large one.
Derek Mackay has a few weeks before he will publish his own budget on December 12. I am sure he will avoid insisting that special Scottish banknotes must be issued to mark Brexit but the pressure is on him to “do something” to lessen the tax gap with the rest of the UK and to splash the cash to fill potholes and generally please the voters.
I hope he does nothing and, in particular, doesn’t try to bribe us by giving us some of our own money back in tax cuts.
If the financial position of the UK is not great the financial position of Scotland on a standalone basis is absolutely dire. We cannot afford giveaways and our public services and infrastructure need the same additional funding as they do - but are not going to get - in England.
More than that, for both consumers and businesses, a key factor in making decisions is not just confidence about the future but clarity and consistency from Government. The Scottish Government made changes to income tax last year and, although a bit complex, I would say that on balance they were pretty fair.
Stick to your guns Derek, don’t react to deal with a problem which doesn’t exist and let Scotland be a bit more different - that’s what devolution is supposed to be about.
Pinstripe is a senior member of Scotland's financial services community.
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