Prof Andrew Hughes-Hallet, on Thursday 1st March, reflected on Scotland’s fiscal position since his departure. His recognition that “the best we can do is estimate the deficit on the basis of estimates of revenues expenditures made in the General Expenditures and Revenues (GERS) framework” is welcome, and in line with the findings of a recent Finance Committee evidence session.

However, readers will have reached their own judgement on the wisdom of his Zimbabwean analogy.   His article then addresses three areas: the fiscal position, student destinations and growth performance

On the fiscal position Prof Hallet suggests Scotland’s “deficit” estimates has risen from 2-3% to 12% of GDP in the last 6 years.  In fact the GERS estimate of Scottish fiscal “deficit” in 1998/99 was 7%, now estimated at 12% of GDP in 2004/05. The figure of 2% - 3%, he cites has only been found in alternative SNP analysis – based on assumptions which attracted no support at the recent Finance Committee GERS evidence session.
   
GERS is a National Statistics document, produced without any political interference. The authors compile the analysis using national statistics produced by other government departments and using well-documented and established assumptions.
   
Professor Hughes-Hallett also states that ‘recent evidence shows that the majority of Scotland’s graduates go to jobs outside Scotland…’. This is not true. The most recent data (2004-05) show that 80% of all higher education graduates from Scottish higher education institutions (HEIs) and Scotland’s colleges stayed and gained permanent employment in Scotland. Further to this, 91% of   Scottish-domiciled graduates from these Scottish institutions gained permanent employment in Scotland – up from 79% in 1999.
    
Finally Professor Hughes-Hallett says that the small countries in Europe have grown twice as fast as Scotland in the past 10 years. He fails to specify which countries he is referring to. It is true that several big and small countries, including Spain, Ireland, Portugal, and the Eastern European countries have shown exceptional growth rates over recent times. However, these countries are all in catch up mode, starting from a much lower base than Scotland, and as such, have more scope to increase their productive capacity at considerably faster rates.
   
Looking at economic welfare (GDP per Capita) can provide a more nuanced picture. The most recent Smart Successful Scotland Measuring Progress report shows that Scotland’s ($29,623) GDP per head is above Spain  ($25,875), Portugal ($18,098), Poland ($12,410), Czech Republic  ($18,643), as well as being above the G7 countries of Germany  ($28,605), Japan ($29,567), Italy ($27,312) and France ($29,554).