Morning Call: pick of the papers

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

1. Immigration line weakens Cameron story (Financial Times)

The UK government’s policy is economic and political folly, says Janan Ganesh.

2. In or out? It’s a question for Europhiles too (Daily Telegraph)

A referendum would give pro-Europeans the chance to win the case for democratic reform, writes Will Straw.

3. Labour's 2015 fears are puny compared to the Tories' terror (Guardian)

On the economy, Europe, tax and the NHS, the trajectory is all in favour of Ed Miliband, says Polly Toynbee. Now his party can start to dare.

4. Netanyahu: tactical genius, strategic idiot (Financial Times)

The Israeli prime minister may be returned to office in triumph next week, writes Gideon Rachman. But he risks leading Israel to disaster.

5. No one wants to be mistaken for the pub bore (Times) (£)

A tough line on Europe and shirkers may be popular, but the Prime Minister has to play the measured statesman, writes Rachel Sylvester.

6. Nothing to fear from a new deal with EU (Financial Times)

The UK should change the relationship and realign its trade relations, says Douglas Carswell.

7. Mali's Islamists are too dangerous to be ignored (Independent)

For all the difficulties of intervention in Mali, the alternatives are worse, argues an Independent editorial.

8. To understand the deepening mess we are in now, it's worth looking to the words of a Polish economist in 1944 (Guardian)

This assault on an entire social contract is what Michał Kalecki warned about, writes Aditya Chakrabortty.

9. Let’s see the top civil servants on television (Independent)

Jeremy Heywood is now with his third successive PM, writes Steve Richards. He and other officials should be held to account.

10. Benjamin Disraeli can help Cameron to a clear win in 2015 (Daily Telegraph)

It is the 'aspirers’ who deliver Tory majorities – so the PM must put himself on their side, says

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.