UK debt

A Guide to the Government Expenditure and Revenue Scotland (GERS) Report

Stephen Richard — Wed, 29 Sep 2021 10:39:20 +0000

A Guide to the Government Expenditure and Revenue Scotland (GERS) Report

Primary Author or Creator

Fraser of Allander Institute

Stephen Richard Wed, 09/29/2021 - 11:39

Additional Author(s) / Creators

University of Strathclyde

Alternative Published Date

2021

Category

Economy

Type of Resource

Academic Paper

Fast Facts

The possible financial costs and risks, or savings and opportunities, of implementing a new constitutional framework are, naturally, not considered in GERS. Similarly, it does not report on the effects of faster or slower economic growth in an independent Scotland.

Resource Address (URL)

https://fraserofallander.org/gers-guide/

Keywords

Language English

Response to latest Government Expenditure and Revenue Scotland (GERS) estimates

Stephen Richard — Mon, 13 Sep 2021 08:29:12 +0000

Response to latest Government Expenditure and Revenue Scotland (GERS) estimates

Primary Author or Creator

David Phillips

Stephen Richard Mon, 09/13/2021 - 09:29

Additional Author(s) / Creators

Institute for Fiscal Studies

Date Published

Wed, 08/18/2021 - 12:00

Category

Economy

Type of Resource

Assessment report

Fast Facts

The large debts shown by the 2020/1 GERS are temporary and not structural. They do not indicate that Scotland cannot afford to be inedpendent.

More details

Hasn’t the massive borrowing carried out by the UK government and other high-income country governments during the COVID-19 pandemic, and at very low borrowing costs to boot, shown that an independent Scotland need not be concerned about running a large budget deficit? It’s not clear that it does.

First, there is a difference between a temporary surge in borrowing like the UK’s – especially at a time when the household sector is massively boosting its saving – and the large structural deficit that an independent Scotland would start life with. And the UK government has announced a package of tax rises and cuts to previous spending plans which amount to 1.8% of GDP a year by 2025-26 in an attempt to bring the deficit down over time – although the spending totals will almost certainly be revised up in this autumn’s Spending Review.

Second, nearly all of the extra borrowing by the UK government since the pandemic began has effectively been financed by the Bank of England creating additional reserves on which interest is paid at Bank Rate – i.e. currently just 0.1%, as it expanded its programme of ‘quantitative easing’ to boost liquidity and support the economy during the pandemic. The US Federal Reserve and European Central Bank have also carried out similar operations to support their economies. If an independent Scotland were to use the pound informally, as is current SNP policy for the short-term, such monetary financing would unlikely be available to it on the same terms. On the other hand, a separate Scottish currency, the SNP’s preferred option for the longer-term, could come under pressure if Scotland’s public finances were seen as unsustainable by the financial markets, pushing up the cost of any sterling-denominated debt obligations of the Scottish Government, households and businesses. Indeed, one of the six tests the SNP say will guide the decision of when to move to a separate Scottish currency is that the Scottish Government has a “sufficiently strong and credible fiscal position in relation to [its] budget deficit and overall debt level”. Action to reduce Scotland’s deficit is therefore a key part of plans for a new currency that further down the road would give Scotland greater fiscal flexibility.

None of this means that Scotland cannot afford to be independent, nor that there aren’t a range of opportunities for better policy to improve performance and better address Scottish needs and preferences. If such policies can be developed and implemented, this might in the longer-term allow more to be spent on public services and more to be kept in Scottish people’s pockets.

Resource Address (URL)

https://ifs.org.uk/publications/15581

Keywords

Language English

Revealed: The ACCOUNTING TRICK that Hides Scotland’s Wealth (2020)

Stephen Richard — Sun, 12 Sep 2021 06:39:18 +0000

Revealed: The ACCOUNTING TRICK that Hides Scotland’s Wealth (2020)

Primary Author or Creator

Gordon MacIntyre-Kemp

Stephen Richard Sun, 09/12/2021 - 07:39

Additional Author(s) / Creators

Business for Scotland

Alternative Published Date

2020

Category

Economy

Type of Resource

Assessment report

Fast Facts

The UK Government has diverted Scotland’s wealth to the UK Treasury to pay off its debts. Thus it creates 100% of Scotland’s supposed debts and 100% of its phoney deficit. This is the impact of Westminster’s debt loading alone, and upon that accounting trick, rests the entire economic case for the Union. Would an independent Scotland have to pay the rUK a population share of the UK’s historical debt? No – there is in fact a very strong case for Scotland to be compensated for having already paid more than it’s “fair share” of the UK’s debt

Resource Address (URL)

https://www.businessforscotland.com/revealed-the-accounting-trick-that-hides-sc…

Keywords

Barnett formula

UK debt

GERS

Language English

Investment in Scotland: A Common Weal Approach

Stephen Richard — Tue, 31 Aug 2021 14:24:48 +0000

Investment in Scotland: A Common Weal Approach

Primary Author or Creator

Iain Cairns

Stephen Richard Tue, 08/31/2021 - 15:24

Additional Author(s) / Creators

Christine Cooper, Gordon Morgan, Common Weal

Alternative Published Date

Septtember 2014

Category

Banking

Type of Resource

Policy Paper

Fast Facts

― Taking a look at UK debt over the long-term shows that it is historically at a very low level. It is also incorrect to claim that we cannot afford the interest on debt.

― The reality is that there has rarely been a more favourable time for the UK Government to borrow in order to invest in renewing its infrastructure and fostering new industries.

― It is testament to the outright failure of the Thatcherite project – the deregulation and privatisation of much of the UK economy and the increasing emphasis placed on the financial sector – that the UK’s growth has declined every decade since the former Prime Minister began the process in the 1980s.

― The case of Private Finance Initiatives (PFI), which has dominated infrastructure investment since the 1990s, exemplifies how private finance provides poor value for money.

― The financial system in the UK, which by its nature, distributes wealth from the productive economy to the financial sector from the indebted poor to the wealthy shareholders of banks and from regions to financial centres, is not capable of delivering the kinds of economic and social outcomes people have a right to demand.

― Investment is what the UK lacks, not money.

More details

The financial system in the UK, as this report has shown, which by its nature distributes wealth from the productive economy to the financial sector, from the indebted poor to the wealthy shareholders of banks and from regions to financial centres, is not capable of delivering the kinds of economic and social outcomes people have a right to demand. Moreover, it threatens to create a kind of‘perpetual state of crisis’which acts as a justification for the utterly destructive rounds of austerity to which all mainstream parties at Westminster have committed.

This report shows another way forward.

Governments and central banks must once again regard monetary policy as being about more than merely the quantity of money in an economy, which is supposedly controlled by the price of money (i.e. interest rates). Governments and central banks must also be concerned with the ‘quality’ of money in the economy, i.e. for what purposes the money is allocated, how it is allocated and what kind of institutions allocate it.

Central bank credit controls or guidance is a tried and tested method of improving productive investment while reducing speculation.

Also at the national level, a National Investment Bank should be the central component of a new and accountable financial architecture. But the financial sector must also be remodelled around democratically accountable, locally responsive banks and credit co-operatives, run by communities for communities.

Investment is what the UK lacks, not money.

Not only will this create stability in the financial sector. It will be a huge boost to the productive economy, including for co-ops and social enterprises which seek to put people before profit. It is self-evident that if we are to have an economy which is run in the interests of communities rather than shareholders, communities must be in control of directing the flow of financial resources towards their chosen outcomes.

Our current economy - characterised by low-skilled work, disempowered employees and enterprises concerned almost exclusively with profit - is to a large extent a reflection of the priorities of a financial sector which itself is dominated by the desire for profit above all else.

A Common Weal society needs a Common Weal financial sector. And considering the current debate about Scotland’s constitutional status, it is worthwhile emphasising that viewing monetary policy in these broader terms would allow Scotland, even without its own currency, to pursue its own independent monetary policy through the strategies outlined in this paper, which promote diversity in the financial sector.

Finally the austerity narrative must be challenged. The current rounds of austerity in the UK are justified neither by the level of debt nor the rate of interest paid on that debt, both of which are currently low by historical standards.

Investment is what the UK lacks, not money.

Resource Address (URL)

https://commonweal.scot/wp-content/uploads/2020/09/Investment-in-Scotland-A-Com…

Keywords

UK debt

UK Government Borrowing

Privatisation

Private Finance Initiative

Wealth

public investment

Profit

Language English