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11 December 2013

S4M-08551 Finance

The Presiding Officer (Tricia Marwick): The next item of business is a Conservative debate on motion S4M-08551, in the name of Gavin Brown, on finance.

15:12
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16:54

Stewart Stevenson (Banffshire and Buchan Coast) (SNP):

I agree with Gavin Brown’s opening remark that there is a long way to go. One of the difficulties in setting out on a journey is the need for a road on which to travel. If capital spending is cut, that road is not built. That is what the Conservatives have inflicted on us.

I congratulate the Conservatives on exploiting a Scottish invention to a degree that was previously unthought of. Scotland invented the overdraft, and boy are the Tories exploiting it. We have moved from the overdraft to the credit card as the UK’s credit rating has been cut from AAA to AA+. Of course, when credit ratings are cut, interest rates increase, so the outlook is not necessarily good.

The point of a debate such as this is not about the numbers. We can trade them all day long and choose our own numbers, but do people outside here understand what they mean? What does £197 billion of new borrowing physically look like? It works out at something over £5,000 per household in the UK. That sounds like quite a lot of money.

What does £5,000 look like? If we made a pile of 5,000 pound coins, it would reach the ceiling; alternatively, it would go all the way horizontally from me to my colleague Alex Fergusson. That is a big lot of money. People would know what it meant if they saw it sitting somewhere, waiting to be spent. That is only the increase in debt and not the amount of debt.

What does the £5,000 compare with? The increase in debt for every household is more than we pay a pensioner in state pension every year.

One of the jobs that we as politicians must do is turn such abstract arguments into something that Joe Public can relate to—something physical—because £197 billion is just an awfully big number. It happens to have 12 digits or, in binary, 38 digits.

People who deal with big numbers get desensitised to them. Thirty years ago, I was in the Bank of Scotland’s London dealing room, where we settled up with the Bank of England in about 30 minutes at the end of the day by trading excess money to other banks that were short or vice versa. That was done with paper and pencil, and I was there to see whether we could automate the process.

At the end of the day, when the numbers were added up for the various corrections that had been made and the trades that had been done with other banks, it was found that the numbers were £56 million adrift. The interesting thing is that the people there said, “It disnae matter,” and they went to the pub. People who deal with big numbers get desensitised to them. The figure of £197 billion, which is not the debt but the increase in debt, is so vast that none of us here has any conception of what it means.

Sam Goldwyn said that predictions are a risky business, especially when they are about the future. The OBR has given new meaning to that comment with its flaky predictions of growth, which have been halved, and of borrowing, which has more than doubled. When we rely on figures from a source such as the OBR, we rely on a chimera and on something that is provably of little worth.

With the terms of the debate, the Conservatives have given us insight into precisely how we cannot rely on the numbers that we get from such independent people. The OBR does not have a track record that we can rely on. We must be careful to illustrate to people what the numbers look like in bread and butter terms. I hope that my example has given my dear colleagues something on which to engage with their constituents.

16:59

Stewart Stevenson
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