Morning Call: pick of the papers

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

1. Even Labour supporters don’t think that Ed Miliband’s up to it (Daily Telegraph)

The Labour leader is seen as out of his depth, and the Tories can sense a route towards general election victory in 2015, writes Fraser Nelson.

2. A Labour win is still on – if alienated Tories and Lib Dems play ball (Guardian)

Miliband has the prospect of becoming an unpopular leader, by fluke of greater conservative forces split three ways, says Polly Toynbee.

3. Merkel’s stealthy plan for the euro (Financial Times)

The German chancellor grasps that there is more to leadership than rhetoric, writes Philip Stephens.

4. Liberalism triumphs while Lib Dems sink (Times)

Nye Bevan, Roy Jenkins, Keith Joseph and Margaret Thatcher advanced liberalism more than Clegg’s party, says Philip Collins.

5. We’ve let a good financial crisis go to waste (Daily Telegraph)

The financial system remains unchanged – banks are still too big to be allowed to fail, writes Jeremy Warner.

6. Royal Mail sale is vandalism and must be stopped (Guardian)

Privatising Royal Mail will destroy a cherished institution, says Billy Hayes. Labour must commit to renationalise it.

7. So, should you have a flutter on the Royal Mail? (Daily Mail)

The government could be very disappointed if it expects a rush of retail investor interest, writes Alex Brummer. 

8. Nick Clegg can tell his party to hold their nerve (Guardian)

The Lib Dem leader never said it would be easy, but the economic crisis is being resolved, writes Menzies Campbell.

9. Meet Abdulrahim Elmi, a Somaliland Dickens hero who personifies his new nation (Independent)

Educated, successful young Somalis from the diaspora are flocking back to Somaliland to contribute, writes Peter Popham. Now the only thing the country lacks is international recognition.

10. I’m ending this scandal over children’s care (Daily Telegraph)

No longer will the quality, policies and location of care homes be kept a secret, says Michael Gove.

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.