Gordon Brown on fiscal implications

Gordon Brown made his first significant intervention in the constitutional debate over the weekend. Not surprisingly, he puts some focus on the fiscal implications, covering similar ground to my contribution in the last Red Paper booklet.

He starts with the solidarity argument. He says that today there is a 4 per cent difference between Scottish income per head and English income per head. That is much smaller than other EU countries or the USA, concluding that as a union it has delivered the same economic and social rights, “We have guaranteed that when one part of the UK is in difficulty the rest of the UK will come to their aid.”

However, he somewhat over eggs the case with the claim, “In the last hundred years the union thanks to Scottish ideas of fairness and opportunity has become a union for social justice”. Sadly, we still have enormous differences in wealth and health across the UK, largely because we have not tackled the issues of social justice. It is legitimate to ask, as I did, what the SNP would put in its place, but the union hasn’t delivered either.

He is on much stronger grounds when attacking the SNP economic plans. “Why under their plans the rest of the Uk and not Scotland will decide the interest rates we pay, the costs of the mortgages we hold, the rates at which business lends money, why under their proposals Scotland has no power over setting the inflation target, controlling the money supply, deciding crisis measures like quantitative easing.” Indeed, I argued that such a system would give us less say over economic policy and put even more power in the hands of the City. Gordon Brown makes the same point rather more sharply, “Under their plans all the decisions in an economic crisis would be made for Scotland by a separate government and bank from the rest of the UK , a form of self-imposed colonialism more reminiscent of the old Empire.”

Again, he slightly over eggs the argument with his claims that Scottish income will be unable to pay pensions and public service pay. Most objective studies accept that while the oil revenues are at today’s levels, Scotland’s income slightly exceeds expenditure. It is valid to question the wisdom of of relying on volatile oil revenues and the long term financial implications when oil revenues fall.

He ends his speech with 20 questions that the SNP needs to answer. Some frankly better than others, but he is right that the SNP cannot rely on high level platitudes without commissioning the detailed studies we need to make a reasoned judgement. Or as Gordon Brown puts it, “It is like being on the programme ‘Blankety Blank’ with the blanks still left to be filled in.”

I can’t really picture Gordon on Blankety Blank, but we get the point!

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