Scotland Looks Into a Black Hole

Its’ been obvious to anybody with a basic understanding of economics that Scotland‘s dependence on English taxes would eventually collapse its house of cards.

At the height of the credit crunch and collapse in house prices we watched a smug politician claim Scotland would be protected from the worst of the recession, because a larger proportion of the Scottish economy was the public sector, which would be protected.

Now Glasgow‘s Sunday Herald tells us:

For tens of thousands of Scottish council workers are facing pay freezes until 2014, as government spending plummets in the wake of the recession, the Sunday Herald can reveal.

Local authority bosses fear the “unprecedented” financial climate may lead to job losses and redundancies across local government, where wages account for 50% of the annual £10 billion budget.

The grim outlook raises the prospect of councils axing frontline services and strikes by angry staff. The pay freezes would mean millions of pounds less flowing into the Scottish economy. Scotland’s 32 councils employ around 283,000 people – 11% of the workforce.

For the last ten years smaller countries in Europe have been building dynamic private sectors to exploit their membership of the European Union and giving birth to technology based businesses capable of competing on the world stage – the Nordic region being the best but not only example.

Meanwhile Scotland has kept its pact with the devil – England‘s New Labour. Scottish constituency Labour MPs have kept Labour in power at Westminster, ensuring English taxes would subsidise Scottish public spending while the Scottish public sector pursued it’s own political ambitions.

The short term result was those Nordic countries achieved the highest standards of living in the world while there are parts of Glasgow with lower life expectancy than some countries in Africa. Of course the politicians and public sector mandarins have made hay while the sun shone, but they didn’t fix the roof.

The Scottish public hasn’t cared about the paucity of growth in GDP, but it’s going to have to now.

The last chance saloon has started to ration the beer.