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The Flag in the Wind for 2nd July 2010

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  • The Flag in the Wind for 2nd July 2010

    This weeks issue is compiled by Jamie Hepburn and is now available at

    Here is the lead article for you to read here but there are also some good articles in the Synopsis as well.

    Time for Independence

    The emergency budget presented last week by Chancellor George Osborne, if it has done nothing else, has clearly demonstrated the need for Scotland’s independence.

    Just as he was announcing 5billion worth of cuts to Scotland’s budget by 2014/15, the latest Government Expenditure and Revenue Scotland (GERS) report was published. GERS demonstrates that Scotland’s financial position, including our geographical share of North Sea revenues in 2008/09 was a current budget surplus of 1.3 billion, or 0.9% of GDP. This sharply contrasts with the UK in a current budget deficit of 48.9 billion, or 3.4% of GDP – and that includes the entirety of North Sea oil monies.

    Of course our lack of independence foists this budget surplus on us too, meaning that we must suffer the consequent slashing of Scotland’s budget. Such is the pocket money approach to financing the Scottish Government, that whilst we would have enjoyed a budgetary surplus of 3.5billion between 2005/06 and 2008/09 with independence, we are tied into a UK that has built a 72.3billion budget deficit in the same period.

    GERS is not the only demonstration of why being part of the UK is failing us.

    It has been oft said by a myriad of unionists, desperate to down their country, that the financial crisis demonstrates why we can’t be independent. Indeed, not satisfied with doing down Scotland, they have regularly traduced many of our neighbours, such as Ireland, or Iceland, who they like to scoff as being bankrupt or insolvent (this terminology in itself says a lot for them, as if these countries are corporate entities that could be bankrupt or insolvent).

    It certainly is true that both these countries have suffered through recession. There is no denying that. Indeed, recent OECD figures have demonstrated that Iceland operates a national debt that is 43.9% of its GDP, whilst the comparative figure for the Republic of Ireland is 38%. No doubt about it – that poses a challenge for these two nations.

    However, the old maxim that those who live in glass houses shouldn’t throw stones is one that people would do well to reflect on. The United Kingdom’s national debt is 59% of GDP – significantly greater than either of the two countries cited. Meanwhile, amongst our other neighbours, Denmark operates a national debt of 1.6% of GDP, and Sweden, Finland and Norway are all in surplus. It may be said by some that Norway is in surplus to an almost embarrassing degree – although this would presumably be revealed to the public, rather than covered up, as it was when it was said about a prospective independent Scotland by the Scottish Office in the mid 70s. Norway’s national debt as a proportion of GDP is negative 143.6%, largely fuelled by their oil fund, which is worth around 290billion. Scotland’s lack of independence of course denies us the opportunity to utilise our oil and gas for similar ends.

    So, whilst it is could never be claimed that independence would insulate us entirely from any economic downturn; it would certainly allow us to respond differently. The experience of our similar sized and independent neighbours demonstrates that quite clearly. They too may have experienced economic difficulties, but unlike Scotland, they have the requisite economic levers to respond and offer greater protection to their people.

    The lessons from elsewhere are that we shouldn’t have to thrall the removal of 5billion from Scotland’s budget, and the consequent damage to Scotland’s public services. The conclusion has to be, that this is the time for independence.