GERS

Well this is interesting. For a long time now, I’ve been skeptical about the voracity of the Government Expenditure and Revenue Scotland figures, despite the Scottish government’s own adherence to them. Scotland’s supposed deficit was a major issue during the 2014 independence referendum, and continues to be a major driver in “Scotland is too poor” narrative today.

Back in 2017, the fullfact.org fact-checking site produced a short, concise, statement that Scotland’s deficit was “three times that of the UK as a whole”. It noted that:

The deficit in Scotland was 8% including the North Sea, and excluding it was 9%. This compares to a deficit of 2.3% for the UK as a whole….In monetary terms Scotland had a deficit of around £13 billion in 2016/17. That’s whether or not revenue and spending from the North Sea is included. The UK deficit was larger, at £46 billion.

In other words (and this was not considered by fullfact.org at the time), Scotland (population 5 million) “owned” 28% of the total UK (population 67 million) deficit. These figures apply to 2016/17, and clearly suggested that a small country like Scotland producing such a huge share of the UK deficit was an economic basket case. So much so, that you would think that perhaps there would be more anecdotal evidence around.

But hey, some people (including the Scottish government) accepted that the figures were a reasonable description of Scotland’s economic well-being or otherwise. Jump forward a few years to the latest figures for 2018/19, and it seems Scotland’s economy has all but collapsed:

 

Scotland’s Deficit excluding North Sea oil: £14billion

UK Deficit:  £23.5billion

In other words, wee Scotland managed to produce 60% of the UK’s deficit in 2018/19. Even when oil is included, the figure is 54%. The claim was ripped apart when the figures were released, by Richard Murphy. He pointed to three failures in the GERS’s methodology:

  1. The way financial services extracts value from the UK and allocates it to London.
  2. The massive wealth inequalities between UK regions, generating unequal incomes.
  3. The methodology’s failings regarding corporate profit allocation.

Now a new study of the GERS methodology has been published, focusing on the way in which the funding of the interest on the UK’s debt has been allocated, and accumulated, by the GERS methodology. Scotland the Brief is produced by Business in Scotland, the pro-indy business organisation. In it, it demonstrates how what would have been a massive surplus in an independent Scotland has been used to fund the UK’s burgeoning deficit. Here’s a talk that explains much of the content:

 

A Resilient Society?

Months into the worst health crisis the world has known for a century, much of the focus is rightly on finding medical solutions for the pandemic, whether a vaccine, improved medical treatments for people with life-threatening symptoms, or reliable forms of testing for infection or resistant anti-bodies. But parallel to these issues, there is widespread concern that the effect of governments’ efforts to contain the spread of the virus will be the worst economic crisis this century.

The world’s stock markets have collapsed by some 25%, unemployment claims in the USA alone have risen to over 6 million, and economic growth forecasts for 2020 range from 1% in Asia to -6.5% in the UK and -7.5% in the Euro Area. Whilst lockdown measures in many countries are being slowly eased, no one is able to predict when the worst-hit sectors of the world’s economies – hospitality, tourism, events and travel – will be able to return to anything resembling normality. Instead there is talk of a “new normal” that will follow the health crisis.

Yet before COVID-19 struck, Greens around the world were already searching for solutions to many of these economic problems. Greens in Scotland advocate leaving oil in the ground and supporting “a fair transition of skills and investment (from the oil industry) to renewable energies and sustainable industries“. A range of political parties and politicians around the world advocate a Universal Basic Income, for example the Green Party of England and Wales. And a number of ecologically-minded economists have argued since 1972 for a no-growth economic model that operates within the limits of the earth’s finite resources.

The COVID-19 pandemic has placed the following conundrums of full-square in front of us all.

  • How can we manage a decline in overall consumption?
  • How can we survive without industries and activities that pollute and generate high greenhouse gas emissions?
  • How can we ensure that we can all survive as the economy throttles down?

These three effects of the pandemic are regarded in our current economic world as problems that need to be reversed. Yet in every case, from the point of view of the earth’s resources, they are actually desirable. The major difference is that greens and others advocate a managed transition, whilst the pandemic has hit us with these economic consequences without any forward planning or anticipation.

A recent article on the steady-state economy website argues that there is a silver lining to the COVID-19 pandemic. What has been termed “wealth” by growth advocates can actually be better characterised as “illth”, activities doing harm to ourselves and the environment – noise and congestion, landscape destruction, environmental catastrophe and light pollution. Indeed the pandemic itself is now being partly blamed on our “excessive intrusion into nature..The solution is to have a much more respectful approach to nature, which includes dealing with climate change and all the rest”.

Intriguingly, a key tool in a planned move to a low-consumption, no-growth, and no-fossil fuel economy is localism. Analysts of greenhouse gas emissions, and governments around the world currently engaged in an all too slow transition to no-carbon economies, see transport as the top problem sector, the one area that is currently not achieving reductions in emissions. For example, Samual Alexander, research fellow at the Sustainable Society Institute at the University of Melbourne, argues that a de-growth economy will involve reduced working hours, a lot of growing of our own food (so-called edible suburbs), and much much less global trade.

Will COVID-19 force us into a more sustainable lifestyle? Probably not. As things stand today, owners of bars, cafés, restaurants, hotels, logistics companies, airlines, sports organisations, public transport and many more are looking for a way back to their previous existence. And governments are focussed on aid that simply bridges a gap rather than offers a transition. But many of these sectors will not see a way out of the crisis until a reliable vaccine is found. Perhaps in months to come, with a vaccine still a year away, the thinking will change. The irony is that the no-growth society, in the face of a COVID-19 pandemic that in such circumstances would probably not have happened anyway, would have been a much more resilient society.

James Grassick – Blind Socialist (1871-1926)

James Duncan Grassick was known in Edinburgh as a champion of the working class, and in particular the blind. Born in Leith, he lived most of his life in the poor inner-city area of St. Leonards. This part of Edinburgh was renowned for its poor sanitation and health record. For example, in 1915, 25% of the monies allocated by Edinburgh Council for “civil distress” were spent in this one ward.

St. Leonards was an area that workers aspiring for better things wanted to leave. But James Duncan was blind – as was his first wife Isabella (Bowie) Grassick – and he had little chance at a time when such disabilities were simply accepted as meaning fewer chances in life. Instea

d, he campaigned on behalf of both the blind and the workers generally. He was chairman of the local ward Labour Party, and in fact stood for election to the council in 1920, losing to the Liberal candidate in a by-election notable for its poor turn-out of 12.5%.

James Duncan was also the Blind Workers Union delegate to Edinburgh Trades Council. Interestingly, his grand-son Harry, and his great-grandson Richard, would both go on to become delegates to their local Trades Council, Harry in Edinburgh and Richard in Darlington.

James’ wife died in a tragic accident in 1907. Blind, she fell down an unattended open manhole belonging to the local Gas Board, who subsequently had to pay around £600 compensation to James, blind and widowed with two small children aged 12 (James Duncan junior) and 10 (Jane McGregor).