LIKE many, I wish Scotland could put Westminster’s politics behind it. But, right now it can’t. Given that when Westminster decides that austerity is to be the order of the day then Scotland is going to suffer, whatever the Scottish Government desires. And right now austerity looks to be coming our way again, very soon.
We know that because of the UK Government’s decision on "education catch up". This, of course, does not affect Scotland directly, because education is devolved. The SNP can seek to do better than provide just 10% of the required funding in that case. But, it’s the reason why Rushi Sunak refused Boris Johnson the spend that he wants that matters to Scotland now.
Hints from the Treasury in London make it clear that Sunak thinks that the days of easy Covid money are over. He turned the taps on to tackle the issue a year or so ago. In the process he proved that there really was a magic money tree that could be used to deliver the economic activity that the UK as a whole needed when Covid closed down so many markets. And now he has decided to turn the taps off. The magic money tree is to be cut down. The money is going to stop.
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Why is he doing this? Because he wants to. That is the only explanation that there is. He hates government and what it can do for people. That’s his ideology. And he is making up excuses to support his claim that we can’t afford education for children, in the first instance.
He will not stop there though. In the autumn he is having a spending review. That will set the spending limits for all government departments, and devolved governments, including Scotland. The argument he will present is already clear. He will say there is no money left, meaning cuts have to be the order of the day. And he will say there can be no more debt. He will also claim we cannot afford the debt we already have. Repayment may be the plan.
There is just one problem with all his arguments. They are not true. As I have shown, the UK Government did, after quantitative easing was taken into account, borrow less than £20 billion last year, which is vastly less than usual, and in historic terms a tiny sum.
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Quantitative easing did, admittedly, increase the sums the Banks of England owed the UK’s clearing banks that you and I use for day-to-day banking by over £300bn. But as I have also shown, this sum need not be considered to be debt, and interest need not be paid in it, unless you’d rather pay bankers than provide education, of course.
So there is no UK debt crisis. And there is no threat to government funding from increased interest rates, which are in any event under the UK Government’s control via the Bank of England, which it owns.
So, in other words, there is no reason for austerity this autumn. But I very strongly suspect that is what we will get. Because that’s what Sunak and the Treasury want, alongside increasing interest rates, which will make the lives of everyone with a mortgage very much harder.
What to do about it? First, understand the economics of this. I explain them in my free ebook, ‘Money for nothing and my Tweets for free’. Second, tell everyone that Sunak is lying when we need austerity.
Third, campaign for independence so that Scotland can be free of the wretched thinking of the UK Treasury that demands austerity whenever it can get it.
Fourth, reject any suggestion that Scotland will ever use sterling as its currency, because that would keep the UK Treasury in charge of Scottish economic policy, and guarantee austerity even in an independent Scotland.
Fifth, demand that Scotland have the right to make its own economic decisions. If you care about the future that has to happen. Sunak prefers bankers to children’s education. That’s an ideology Scotland has to be free from.
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