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Unformatted text preview: Constitutional Convention. Since 1997, Labour ministers, first at the Scottish Office and more recently at the
Scottish Executive, use this document to pronounce unrealistic the SNP’s plans for independence. In turn, the SNP
attack the integrity of GERS, and always make reference to a celebrated written Parliamentary answer from 1997 given
by the then Chief Secretary (William Waldegrave).20 The media constantly recycle figures for Scottish fiscal deficits or
surpluses relative to England, many of which reports are incompetent and/or malevolent. A classic error is to interpret
the Scottish fiscal deficit as a measure of the subsidy from England, even when the United Kingdom as a whole incurs a
fiscal deficit. Some of the inflammatory language is so outrageous as to be humorous.21
Although Scottish Executive economists must feel battered by this exposure, they deserve credit for persisting with
GERS; no counterpart exists for Wales or Northern Ireland. In this political context, it will be quite difficult to achieve
transparency and agreement upon regional flows of income and expenditure.22 18 19
20 21 22 270 Although it is not fashionable to have public doubts about the desirability of transparency, it is clear that attitudes in practice are ambivalent. There
seems to be a presumption in some Finance Ministries, most notably in the New Zealand Treasury, that greater transparency will lead to lower
spending. Moreover, it is difficult to take the UK Treasury’s new-found enthusiasm for transparency at face value when there is so much pressure to
use the PFI as a vehicle for off-balance sheet finance. Furthermore, the effect, so far, of the Comprehensive Spending Review has been to bring
even more obscurity to public expenditure numbers. Some of the calls for greater transparency, whether with regard to interpersonal or interregional
transfers, may implicitly or explicitly be calls for less redistribution or fiscal equalization. However, these observations should not be taken as a
defence of fiscal opaqueness.
The most recent issue of GERS relates to 1998-99 (Scottish Executive, 2000) and is available on the Scottish Executive’s website at
Historically, North Sea oil revenues (which are attributed to the UK Continental Shelf which is part of the United Kingdom but not part of any region)
have been large. The Scottish National Party’s argument that Scotland subsidized the United Kingdom by £28 billion during the years 1978-79 to
1994-95 is discussed in Heald et al. (1998). Whatever view is taken about the past, oil revenues have less significance for the future.
One example is Heffer (1999): ‘For the English…, the road to Scottish independence is paved with gold (p. 67).’; ‘… every English taxpayer and every
English business will be better off if England no longer has to subsidise Scotland (p. 71); ‘If the English can make a four pence in the pound tax cut
out of Scotland’s deciding to become independent, that is a cause for rejoicing rather than shame (p. 73)’. His calculations (p. 71) take the GERS
measure of Scotland’s fisca...
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