Morning Call: pick of the papers

The ten must-read pieces from this morning’s papers.

1. Only a merger with the Tories will save most Liberal Democrat MPs (Daily Telegraph)

A merger between the Tories and the Lib Dems is increasingly likely, writes Fraser Nelson. Yet, to most Tory MPs, the idea is anathema.

2. For Labour, moral outrage is not enough (Guardian)

Just shouting more loudly about every cut risks confining Labour to comfortable irrelevance, says Douglas Alexander.

3. Go on, Mr Cameron. Dare to be an optimist (Times) (£)

Smarter children, longer lives, less crime: the "politics of optimism" could transform Britain, argues Anthony Seldon.

4. Ken Clarke says prison doesn't work. Little wonder when they're holiday camps like this one (Daily Mail)

The inmates at Ford Open Prison have been indulged by the authorities, says Stephen Glover.

5. Liberalism still has a place in penal policy (Independent)

But elsewhere, an Independent leader argues that the riot should not be used as an excuse by the coalition to revert to counterproductive policies.

6. Pungent, angry and decisive: Margaret Thatcher still dominates the Tory party (Guardian)

Conservative rebels, who still regard Cameron as a fake, see Thatcher as their spiritual leader, writes Jackie Ashley.

7. Remembering an unsung heroine of our modern history (Independent)

The workers' rights activist Jayaben Desa must be honoured by those of us who knew her, says Yasmin Alibhai-Brown.

8. Parking fees that put the boot into business (Daily Telegraph)

Shoppers will be driven out of town if asked to pay more to park their cars, argues Philip Johnston.

9. Why sequels will not come first this year (Guardian)

Films such as The King's Speech and 127 Hours suggest that cinema has a bright future, writes Mark Lawson.

10. Heads have to consider the majority of pupils (Daily Telegraph)

British schools must have the wherewithal to deal with unruly pupils properly, argues a Daily Telegraph leader.

Photo: Getty
Show Hide image

Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.