I have to say that the Institute for Fiscal Studies has always been respected and the only time I remember doubts about its work was when it reported on Scotland’s economy and happily quoted oil statistics from the Office of Budget Responsibility which had already been questioned as unduly pessimistic. The money for this latest effort comes from the Economic and Social Research Council which is in fact a non departmental government body with funding from the Department for Business, Innovation and Skills, so make up your own mind about motivation. Any thoughts on its publication the day before the Scottish government’s financial report…obviously coincidental. No?
I can’t argue with any of their figures but as ever it is the conclusions they draw which cause concern. The reason is that they don’t appear able to take account of any variation in their modelling, as the call it. It means, like all of these reports it bases everything on what we know now and presume there will no change in anything much after independence. In fact, as Swinney pointed out, further into the report, they concede that it is the case by saying that…there are “alternative assumptions about inward migration, future productivity growth, the change in revenues from North Sea activity, the initial allocation of accumulated debt between an independent Scotland and the rest of the UK, and the interest rate payable on public debt. These factors are inherently uncertain and could also evolve differently if Scotland were independent rather than part of the UK; in addition, they could be substantially affected by the policies chosen by the government of an independent Scotland.”
So you can’t dispute, I think, the report on Scotland’s budget shortfall as far it goes but, like all these think tank efforts, it doesn’t – can’t – say what will actually happen.
Why shouldn’t Scotland negotiate a better deal on its share of national debt for example? It’s even suggested that could lead to a deal on Trident for a period of years. Will Scotland’s economy never grow any bigger…will there be no entrepreneurs…no boom in business…no savings in budgets, some of which we know are already unfairly attributed to Scotland? To read the report and to listen to an increasingly shrill Alastair Darling, you’d think the future is set in stone. Is that how Alastair saw the crash coming and averted financial disaster?
The IFS should have subtitled its report: If Everything Remains the Same After Independence and All Future Projections Prove –Against All the Odds – To Be Accurate. Anyway, if they imagine a tax hike or a service cut would prevent me from voting Yes they really are lost in space. Whatever the initial costs, there can be no doubt in the mind of any Scot that we will make a better long-term fist of our country than the Unionists have. The main reason why the figures are so god-awful is our share of the ballooning national debt of the UK, heading for £1.5 TRILLION. Whose fault was that, Alastair? Who was in charge over all those years when the money was rolling in, when the oil was in its heyday, how much was invested? Don’t you find it rich for Darling, the man who was asleep at the wheel in 2007-08 and contributed massively to this obscene economic mess, to be lecturing us on prudence. In a tirade without punctuation on Radio Four he sounded like an out-of-control local councillor desperate to get the last word, a long way from the mighty statesman we were promised. He even said we were trying to base an economy entirely on oil! Eh? Does he never to stop to think what a dreary picture he paints of his own country. I accept he has a point to make about finances and is justified in using the IFS report but for him and Alexander to suggest as they do that their own countrymen couldn’t punch their way out of paper bag is one way to not to get folk onside. There is a hint, a growing one, in all this of desperation creeping in. I wonder why.