GERS: Reflections on the debate
The publication of the annual GERS report has sparked the usual ill-tempered debate, but what can we reasonably take from GERS? David Eiser of the Fraser of Allander Institute reflects on the report and its implications on Scotland’s constitutional debates.
The publication of the annual GERS report has sparked the usual ill-tempered debate about its implications.
Although to call it a debate is perhaps disingenuous. There is an increasing tendency for the supporters of the two ‘sides’ (for unfortunately, polarisation into ‘sides’ is what GERS tends to create) to cheer the disingenuous proclamations of their own ringleaders, whilst dismissing any vaguely dissenting view.
‘Scotland’s deficit reflects economic mismanagement’ say some. This is disingenuous at best – Scotland’s deficit largely reflects higher spending coming through the Barnett formula and is nothing to do with economic growth – which in any case has matched the UK for most of the past 20 years.
‘The GERS figures are absurd as they imply Scotland accounts for 60% of the UK deficit’ say others, apparently ignorant of the simple mathematical basis for this – that some UK regions generate a fiscal surplus.
So what can we reasonably take from GERS?
The headline is of course about Scotland’s ‘notional’ fiscal deficit, estimated to be 7% of GDP in 2018/19. The deficit is notional because…