It’s that time of the year again when – as Jim Gallagher puts it – the Scottish Government’s statisticians are let off their leashes and ‘tell it like it is’. According to the annual Government Expenditure and Revenue Scotland (GERS) Holyrood spent £15.1 billion more than it raised in taxes in 2019-20, an increase of £2 billion on last year – and that’s without the majority of the impact of Covid-19 factored in.
Unsurprisingly, this had led the SNP to drop its annual ‘economic case for independence’ – a Scottish taxpayer-funded propaganda piece based on such a wide range of hypothetical situations it should be stocked in the Fantasy section at Waterstones.
The response from politicians has been predictable – Nationalists argue that this “illustrate[s] [the] case for Scottish independence” by highlighting Westminster’s failings, whilst Unionist claim this means the UK is “more valuable than ever” to Scotland, with the ‘union dividend’ received north of the border hitting almost £2000 per person (a rise of 30% since the 2014 independence referendum) – making England seem like a sugar daddy, keeping his partner sweet on the promise of more and more money.
But what about the voters?
Well, this is undoubtedly bad news for proponents of Scottish independence.
A poll by Survation for Progress Scotland in October 2019 found that in a second Independence referendum, undecided voters were more likely to think Independence would be good for the Scottish economy in the long run (35% to 19%), but figures like those released by GERS might help to change their mind. When asked what the three most important issues were for deciding how to vote in a next referendum, 34% of voters replied with the state of the economy. Broken down by potential referendum vote, of those who supported independence just 26% selected the economy, compared to 35% who were undecided and 41% who were against independence. The GERS figures will be used heavily by unionists to firm up their support and to convince waivers.
Only by Brexit (chosen by 40% of voters) and the NHS (selected by 51%, broadly similar when split by position on independence) were seen as more important than the economy. It is no surprise that the £15 billion deficit is already being framed as “the entire annual cost of Scotland’s NHS” by Ian Murray, Labour MP for Edinburgh South – anything that can link perilous Scottish finances to the beloved state religion of the NHS will help to shore up Unionist support.
But does England want to be a sugar daddy to an indifferent Scotland? Is it happy to see the public sector in Scotland spend £81bn but have total revenues of £66bn, whilst English taxpayers lose out?
In 2014, the Centre for Constitutional Change found that 56% of English voters (and 48% of Welsh voters) thought “levels of public spending in Scotland should be reduced to the levels in the rest of the UK”, with only 9% disagreeing (12% in Wales).
Promising more and more spending to Scotland as a way of keeping the Union together might end up doing more damage than it avoids. For in the long run, letting the Scottish public sector pig out on English taxpayer money runs the risk of pushing English voters to turn their back on the Union – or at least risks them becoming much more apathetic about whether Scots stay or go.
Indeed, there are already signs that English voters feel this way. Polling by Lord Ashcroft found that a plurality of English voters (37%) think Scotland benefits more from being in the UK than the rest of the UK benefits from Scottish membership (9%). Indeed, excluding those who don’t know, 43% of English voters agree that “England subsidies Scotland financially, and I’m not happy with that” – compared to just 30% who felt the same about Northern Ireland.
It will become increasingly hard to justify to English voters why they should subsidise Scotland when they already think Scotland gets more out of it than they do.
Furthermore, 53% of English voters and 44% of Welsh voters thought an independent Scotland should not be able to continue to use the pound. Whilst technically nothing can stop an independent Scotland allowing pound sterling as legal tender, Andrew Neil points out that sterlingisation – using the currency without any legal control over it – would mean Scotland “would not be able to join the EU. Or set [its] own interest rates. Or have an independent monetary policy or central bank”. It would certainly not help with Scotland’s economic woes and would make independence much less attractive.
But the clock is ticking amongst apathetic English voters – Ashcroft polling found that only 41% of English voters thought Scotland should remain part of the UK, whilst 8% thought they should not. 41% had no view and thought it was up to the Scots to decide – and half of those voters wouldn’t mind if Scotland left. The romantic idea of the Union seems much less relevant in 2020 than in years gone by.
So, what does the GERS mean for the Union? Not much, in the short term. Polling shows us that unionists think independence will make Scotland worse off and nationalists think the reverse. There will still be calls for a referendum – Sturgeon is counting on Boris saying no, so she can play the grievance card once again.
However, what will slip under the radar is, as usual, England. The GERS serves as a reminder to English voters that Scotland is eating out to help themselves out and England is picking up the tab. After a decade of austerity, English voters will quite rightly be asking if that is a bill worth paying for keeping the Union.
Click here to subscribe to our daily briefing – the best pieces from CapX and across the web.
CapX depends on the generosity of its readers. If you value what we do, please consider making a donation.