Do sums add up in wealth of nations?


Money, money, money’s always funny in a rich man’s world.

So sang Agnetha and Anna-Frid back in 1976 when ABBA ruled the charts and inflation stood at an eye-watering 16.5 per cent

Then along came Gordon Gekko in the ‘80s who delivered the world’s most eloquent homage to Thatcher’s vision of unadulterated capitalism when he said: “The point is, ladies and gentlemen, that greed - for lack of a better word - is good.

“Greed is right.

“Greed works.

“Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.

“Greed, in all of its forms - greed for life, for money, for love, knowledge - has marked the upward surge of mankind.”

Then, oops, along came Black Monday which overnight wiped the value of stock markets around the globe by 50 per cent.

In time everybody licked their wounds and we entered the more caring sharing ‘90s when New Labour took the helm and, accompanied by that irritatingly catchy D:Ream song, promised halcyon days ahead for capitalists and welfarists alike.

Indeed, Gordon Brown confidently declared that, through prudent management, Britain would never return to the days of ‘boom and bust’. Hurrah!

Then, oops, the subprime mortgage racket collapsed and markets fell down like dominoes.

My point is this - if there’s one thing that is true, and it’s been proven time and time again throughout economic history, it’s this - there are no experts; even among the top people running the country.

Nobody is able to predict with absolute certainty how well a country will be faring financially in three months’ time, let alone a year because the variables are too unpredictable.

Take, for example, the white paper in the run-up to the independence referendum in which we were told Scotland could enjoy oil revenues of £7.5 billion a year.

But, following an abrupt crash in the oil industry, what did we actually bring in? £130 million - a mere 94 per cent wide of the predicted mark.

Instead of forecasts look at facts - if Scotland stood alone we would be in the red by about £15 billion (and rising), or about 10 per cent of GDP.

That’s twice as large as the UK as a whole and represents the largest deficit of any country in Europe.

Nicola Sturgeon claims Scotland’s economy is “fundamentally strong” but it took Andrew Neil to push home the cold hard reality that oil revenues - and only oil revenues - pulled Scotland into the black at times and we can’t rely on that cash cow anymore.

So here we are. The SNP didn’t win independence but it did win control over Scotland’s purse strings.

Can we continue to spend around £1500 more per head in Scotland than our counterparts in England and continue to expect Westminster to prop us up? Of course not - we’ll have to raise taxes or make significant cuts.

After all, there’s no such thing as a free lunch.

Of that, you can safely bet your bottom dollar.