Deconstructing The Deficit
When unionists run out of legitimate arguments (or patience) while disputing the merits of independence, they commonly rely on the fallback position that Scotland ‘could not become independent anyway’ because of the ‘deficit’ which the UK has accrued and of which Scotland is arguably liable to pay a share . Indeed, even if not utilised as a last resort ‘you couldn’t be independent anyway’ argument, the deficit is consistently referenced as a demerit of independence. However, while the UK’s fiscal deficit is relevant to the terms under which an independent Scotland would exit the UK and rejoin the European Union, its use as a general argument against Scottish independence is politically illiterate.
The Scottish government are very limited in their ability to borrow money and raise debt to fund spending; their few restricted borrowing powers were only introduced in 2016 and even then, they are bound to publish a ‘balanced budget’ each year. Notwithstanding the fact that reversing these limitations through independence would facilitate an escape from austerity, the ‘block on borrowing’ imposed on the Scottish government until 2016 and the subsequent restrictions placed on their fiscal freedom have prevented any significant ‘devolved debt’ from being accrued and as such, any significant contributory ‘devolved deficit’ from being created.
Instead, the enormous amount of national debt accrued by the UK government (£2.67 trillion) is a product of the collective fiscal mismanagement led by successive Westminster governments. This deficit was amassed in Scotland’s name despite Scotland’s fiscal contributions through oil and tax revenues exceeding the value of the UK Governments spending in Scotland during many of the periods in which the deficit was run up. In other words: despite being a net contributor to the UK during those periods, Scotland has been burdened with a share of a huge deficit caused by incompetent spending decisions made by UK governments.
Norway (which has extracted similar amounts of oil to those extracted from Scottish waters) used the proceeds to create a sovereign wealth fund which is now worth over a trillion pounds and directly benefits the Norwegian people. Due to Westminster’s policies of privatisation and low taxation, Scotland has received no equivalent benefits as a result of its oil wealth, with the relevant revenues being irretrievably squandered. Since then, in the name of ‘balancing the books’, successive Conservative governments have implemented austerity programmes which have starved essential public services in Scotland of vital funding. During these times, national debt has continued to soar; in 2010 when David Cameron took power and began his austerity agenda the UKs debt was £770 billion, but now, after fourteen years of austerity, it is £2.67 trillion.
Illogically, unionists who employ the deficit deterrent effectively argue that the misspending of Westminster governments should somehow justify keeping those Westminster governments in control of Scotland’s finances. This proposition is quite extraordinary; consistently poor fiscal governance (as reflected through the deficit) may instead justify changing the system of fiscal governance rather than maintaining it. By taking this approach, the cause of the deficit (Westminster mismanagement) is diagnosed, and a strategy to cure that cause (independence) is devised and implemented.
The national debt burdening the UK is a direct result of Westminster led economic mismanagement. Excessive natural wealth has been squandered and public services have been starved all while an enormous national debt has been incurred. It is therefore absurd to propose that the existence of such deficit should be interpreted as a reason to maintain Westminster’s control over Scotland’s finances.
