A guest post today from Labour MSP Ken Macintosh, who shadows John Swinney at Holyrood. Ken’s blogged for us before, and been blogged about too. Thanks Ken!

Ken MacintoshHow do you turn a deficit into a surplus? According to the Cabinet Secretary for Finance, simply start calling it a “relative surplus”. John Swinney revealed his distorted logic in Parliament recently during a debate on Scotland’s public finances. It was a debate supposedly designed to demonstrate the financial strength of Scotland compared to the rest of the UK, but in the event the SNP inadvertently illuminated some of the contradictions at the heart of the Yes campaign and left John Swinney in contortions.

The SNP assert that Scotland is £4.4bn “better off” than the rest of the UK. This figure is then translated by Alex Salmond, Nicola Sturgeon et al as £824 for every Scot, money that apparently could be spent, saved or invested, in fact remarkably it is claimed, all three at once.

The trouble with this set of assertions is that they conveniently ignore the fact that the £4.4bn does not refer to a surplus or an extra amount of money, but to a deficit. Scotland is spending more than it earns and the deficit for the UK is even greater. The “relative surplus” as John Swinney euphemistically describes it, is the difference between the two deficits, i.e. a larger deficit. At best the SNP’s claim should be something like ‘our overdraft is not quite as bad as your overdraft’.

The first observation to make is that not having such a big deficit as the UK does not give £824 to every Scot, nor does it give us money to spend, nor to save nor to invest. You would expect the country’s Financial Secretary to know this, but it would appear not. During the debate Mr Swinney talked about a cumulative relative surplus over several years and then about potentially using this to pay down borrowings. Does he not understand that to “access” this non-existent surplus, Scotland would have to increase its deficit, in other words, we’d have to increase our borrowings.

But perhaps the more important point is that the “relative” state of our finances is about to change. Within three years it is the rest of the UK which will have the smaller deficit. How do I know this? Because John Swinney himself shared this information with a select few senior SNP colleagues in his leaked cabinet paper.

Quoting verbatim from Mr Swinney’s report: “Including a geographical share of North Sea revenues, both Scotland and the UK are expected to run a net fiscal deficit in each of the years to 2016-17. Before 2016-17, Scotland is projected to have a smaller deficit, as a share of GDP, than the UK. However, in 2016-17, OBR forecasts suggest that Scotland would have a marginally larger net fiscal deficit than the UK.”

It is at this point my exasperation turns from frustration to mistrust. It is one thing to have a he says/she says political disagreement, it is quite another for the Scottish Cabinet Secretary to be telling us all one thing in public while secretly briefing his political colleagues on the truth in private.

Last month Mr Swinney told assembled SNP delegates; “Scotland has strong foundations, perhaps some of the strongest from which any country has sought its independence,” whilst telling the SNP cabinet “downward revisions have resulted in a deterioration in the outlook for Scotland’s public finances”. He stated from the conference platform without a blush “in all the debate about Scotland’s financial future, one point is very clear, the real risk to Scotland comes from staying part of the United Kingdom,” whilst briefing the select few “At present HM Treasury and DWP absorb the risk … in future we will assume responsibility for managing such pressure. This will imply more volatility in overall spending than at present.”

Now I remain optimistic that when it comes to the referendum, most people will see through such deliberate attempts at misinformation, but what happens to Scotland in the mean time? How can anyone have confidence in a Cabinet Secretary who is so clearly not being straight with us about the public finances? If every issue from oil revenues to what we do about the bedroom tax is used as an opportunity to make the case for independence, how on earth can we have an honest discussion of what can be done now, to help Scottish households now, using the powers we have now?

What I find so disappointing is that some in the SNP at least recognise the truth about the economic difficulties we are facing but rather than deviate from the accepted independence script they tie themselves in linguistic knots. No one can change an absolute deficit into a relative surplus by words alone, and if the SNP think they can give us the relative truth rather than the honest information, they will absolutely lose our respect and our trust.