SNP’s independence plan would deliver ‘super-austerity’, as Scottish Government’s own figures show

There is an excruciating piece of video doing the rounds on social media showing the First Minister John Swinney being interviewed by Nicky Campbell on BBC 5 Live, and being asked the simple question: “How many genders are there?” In scenes reminiscent from the recent performance of President Joe Biden in the debate with Donald Trump, Swinney hesitates and stumbles over the answer, diverting to talk about transgender issues before eventually coming to the answer “male and female”.

SNP strategists could only watch this clip from behind their fingers, not least because it demonstrates how woefully unprepared their leader was for a simple question which could easily have been predicted. It does suggest that much is wrong with a campaign on behalf of Scotland’s governing party, on track to lose the majority of seats they currently hold at Westminster. It is hard to imagine such a scene occurring in the days when former SNP chief executive Peter Murrell and communications chief Kevin Pringle were in charge.

It is not just on questions of gender that the SNP have struggled in this campaign. Independence is still line one of the party’s manifesto, no doubt in a desperate attempt to appeal to its core supporters and encourage them to turn out. But beyond this, the SNP have struggled to find a coherent message to persuade people to vote in an election which will determine who will be the occupant of 10 Downing Street, and where opinion polls suggest the public has already decided the answer to that question.

Separating Scotland from the rest of the UK would result in major tax rises, spending cuts or excessive state borrowing (Picture: Jeff J Mitchell/Getty Images)

Westminster’s largesse

The new SNP strategy has focussed on the damage they say is being done by Brexit to the UK and Scottish economies, and the “Westminster austerity” they say will continue whatever the result of the election. Neither of these arguments is convincing.

Whatever one’s view on Brexit, none of the major UK parties is standing on a platform in this election proposing to take us back into the EU. The only route to do that through the SNP is for Scotland first to become independent, and then go through the torturous process of applying as a new entrant. That would mean cutting ourselves off from our nearest neighbours and by far our largest trading partners in the rest of the UK, erecting trade barriers and potentially pursuing a different currency. Any benefits that might accrue in the long run of entering the EU Single Market would be outweighed in dramatic fashion by the economic devastation that would ensue from breaking away from the rest of the UK.

On the question of so-called “austerity”, the nationalists never mention that the Westminster Block Grant to Holyrood has increased by 69 per cent in real terms since Holyrood was founded in 1999, according to analysis by the independent Fraser of Allander Institute. Even since 2010, and the election of the Conservative-Liberal Democrat coalition government, the block grant is up 6 per cent in real terms. The current SNP Finance Secretary has resources at her disposal which her predecessors could only dream of.

Massive fiscal deficit

In criticising Westminster austerity, the SNP never set out their alternatives. Would they propose additional borrowing or tax rises to fund higher spending? That answer is never clear, but we know that the nationalists are keen to argue for tax cuts when it suits them, although they take an entirely different approach when dealing with taxes under their control.

In another interview, this time with BBC Scotland’s Martin Geissler, Swinney argued for the devolution of VAT to Holyrood, a move which many financial experts believe is extremely challenging because of the tax’s complexity. But, when pressed on whether VAT would be raised or lowered should it be devolved, Swinney was unable to give an answer to the question. They just seem to be making it up as they go along.

What the SNP will never tell us is what their plans for independence would mean for public spending and taxation in Scotland. According to the GERS analysis by Scottish Government economists, the net fiscal balance for Scotland in 2022-23, taking account of oil revenues, represented minus 9 per cent of GDP. This compares to the equivalent UK figure of minus 5.2 per cent of GDP.

What this means in cash terms is a fiscal deficit, excluding North Sea oil revenues, of £28.5 billion in that financial year. If oil revenues are included, bearing in mind that the SNP don’t see a long-term future for the oil and gas sector, that takes the total down to just over £19 billion. That equates to just short of £3,500 of a fiscal gap for every man, woman and child in the country.

Tax rises or massive cuts

When the SNP talk about austerity, they never explain how this gap would be filled. Often the language is around “different choices”, but these are never spelled out, apart from marginal examples such as spending on the nuclear deterrent.

The fact is that a fiscal deficit of this size, the largest in Europe, could only be filled by massive borrowing (likely to be unrealistic at the same time as launching a new currency), significant tax rises, and/or massive reductions in public spending.

Independence, as offered by the SNP, would deliver super-austerity on a scale the UK has never seen in its history. There would be real-life consequences for families across Scotland, particularly those in the most vulnerable of circumstances. And the rise in taxation is likely to drive away all those with an interest in seeing the economy grow.

It is simply not the case, as some nationalists claim, that the finances of the UK mean “we put more in than we get out”. The simple facts, as set out by the Scottish Government’s own figures, show the opposite. And they also show that when the SNP talk about austerity, they have the shiniest of brass necks.

Murdo Fraser is a Scottish Conservative MSP for Mid-Scotland and Fife