In December 2006, the SNP released a document entitled “Scotland in Surplus”. Including a geographic allocation of North Sea revenues, it claimed a Scottish current account surplus for 2005/06 of £1,370m.When, in June of this year, the SNP Executive finally got around to issuing the edition of GERS which had been due last December, it estimated a surplus for 2005/06 of £1,420m.
Note how very similar those two figures are. Within the context of revenues and expenditures around the £50bn mark, even a couple or three hundred millions either way is of little significance.
The SNP’s document had also predicted a current surplus for 2006/07 of £610m. GERS 2006/07 then estimated a current surplus of £837m. Again, the two figures are startlingly similar.
So, following “improvements” by Scottish Government statisticians, GERS is clearly now very close to being “SNP-compliant”. To criticise it would be to call into serious question their own claims.
Of course, current account balances exclude capital expenditure. Once that’s factored in we see fiscal deficits of £1,490m for 2005/06 and £2,652m for 2006/07, which fact the SNP’s public statements sought to obscure. Plus ça change...!
But what’s really interesting is if we step back in time another year, to 2004/05. Issued under the Lab/Lib Executive, GERS 2004/05 estimated a non-oil fiscal deficit of £11.2bn and was branded a “dodgy dossier” by the SNP, who claimed perennial “chronic surplus” for Scotland.
Separately, Oxford Economic Forecasting produced a very similar estimate of a non-oil fiscal deficit of £10.8bn for the same year. It too was derided by the nationalists.
But even if GERS 2004/05 and the OEF had used the SNP’s methodology of adding in a geographic allocation of oil and gas revenues, they would have found a fiscal deficit of around £5.5bn.
So when the SNP-compliant GERS backdated its “new, improved” methodology to 2004-05, one might expect to see a surplus. After all, that’s what the SNP had claimed at the time. But no: it estimated a fiscal deficit of some £4,722m, in the same general ballpark as the original version!
Actually, double standards doesn’t quite cover it. Rank hypocrisy would seem nearer the mark.
Hilarious AM2. Like the "I have to moderate" post.
Nobody believes you. "Free speech." "Real Time." HAHAHA.
"I cannae post on the SNP site - isnae fair !" Classic.
I know you haven't the cahonies to allow this post through, but if it makes you happy... anyway, I'm on a mission to expose you as the fraud you are, and it's easy enough - all one needs to do is post your own words up.
Should have a blogspot up soon with the highlights. Must pop onto the scotsman, herald et all and do some searching. Plenty from this site too of your classic hypocracy.
Of course, if you manage to get on to these two papers sites sites in the next few hours and delete AM2 logins I won't be able to do this; ditto if your nonsense blog about not being allowed to post on the SNP site goes away from this site too I won't be able to cut and paste it into the blog as a particularly good example
... kind of up to you, maybe it is time for you to disappear off AM2 as you have others including myself.
Or. You can reinstate my McMadman login at the hootsman and we can have the open debate there, if you are really not afraid of open debate.
Laters fraud.
I'll leave this post in situ as an example of why I've had to activate moderation. Here is this site's commenting policy.
Allow me to introduce myself. My name is Richard Thomson and I was one of the SNP researchers who worked on the SNP’s ‘Scotland in Surplus’ document you refer to here. Something which, I suppose, also makes me one of the people you are accusing here of rank hypocrisy.
Rather than just respond in kind, which would be much easier and perhaps more satisfying for me to do, I thought I’d share some background with you to help aid your understanding of GERS, SiS and the significant differences which remain between the two. I may of course be completely wasting my time, here, but I’ll give it a go nonetheless.
SiS was, in effect, the result of myself and many others (though mainly others) taking a long, hard look at previous editions of GERS. It may pain you to recall this but originally, GERS was conceived by then Secretary of State Ian Lang to be something which [the Conservative government] could use to ‘to score over all our opponents’ in the devolution debate [as Lang wrote in a letter to John Major, who opposed the plan initially].
Lang’s idea was that a document which estimated Scottish non-oil tax receipts and total government expenditure, would show Scotland to be so dependent on fiscal transfers from elsewhere in the UK that voters would quickly lose their appetite for constitutional change. As something which was to be presented as a cold-eyed and impartial look at Scottish public finances, it therefore didn’t enjoy the happiest of starts. In the event, the civil servants produced much a more nuanced set of reports than those envisaged by Lang, but that still didn’t stop hysterical shrieks about structural deficits from politically interested parties whenever the reports were published.
The main problem with the reports was that to a quite remarkable extent, they overstated expenditure and underestimated revenues. They also took no heed of the UK fiscal balance, which meant that even if the rest of the UK was in deficit (as it is currently), any ‘deficit’ in Scotland was automatically assumed (incorrectly) in the unionist political arena to be covered in whole by resources flooding from south of the border.
This plugged in nicely to the meme that constitutional change = higher taxes, service cuts and business flight, which the Tories tried to propagate pre devolution, and which unionist parties have tried, with varying degrees of success, to deploy against the SNP ever since. Unfortunately, it also helped reignite the myth of the subsidised Scot south of the border, which now manifests itself so unpleasantly in the comments sections of the Mail and the Telegraph and throughout the blogosphere. Surely the law of unintended consequences at work!
The civil servants involved were always careful to point out that these figures in no way represented how Scotland’s fiscal position might be under independence, and that the borrowing requirement figure should be ‘treated with caution’, but of course in the ensuing political bunfight, unionist caution was scarce to be found anywhere. By the time Labour was in power and a Scottish Parliament on the way, GERS became a vital tool in lending a veneer of credibility to the idea of there being a ‘union dividend’.
There were 2 big differences between GERS and SiS. First, on the revenue side, SiS dealt with revenues raised in the geographical entity we know as Scotland, whereas GERS calculated a headline ‘borrowing requirement’ based on the Government statistical region known as Scotland, which excluded North Sea Revenues as ‘extra regio’. Second, on the expenditure side, SiS tried as far as was possible to determine what government expenditure actually took place in Scotland. GERS, on the other hand, allocated blanket pro-rata shares of ‘non-identifiable’ expenditure. I can see why this approach was adopted in GERS, but in terms of trying to establish whether Scotland benefits from the union in crude financial terms, which was what the report was conceived by the Conservatives to do, this approach is open to the criticism of painting a misleading picture.
So, what the SNP did with SiS was to correct what we saw as being some of the more egregious shortcomings in the GERS methodology. Firstly, we added a geographical share of oil and gas revenues, in line with work previously undertaken by Prof Alex Kemp. This was an entirely reasonable thing to do. Secondly, we took account of the UK fiscal position, so that the analysis could be about Scotland’s relative position as well as its absolute position. Thirdly, we examined both revenue and expenditure sides of the balance sheet, and tried as far as was possible with the available data to reflect what was accurately collected and spent in Scotland, particularly in the sphere of ‘non-identifiable’ expenditure.
There were other figures we never got round to probing. For one, why was Scotland always allocated such a high percentage of non-capital consumption (depreciation to you and I)? What about the treatment of public corporations? What about EU transactions? We also knew that VAT estimates were a joke, relying as they did on such robust data sources as ‘simplified children’s diaries’, kept as part of a 6,000 household UK-wide expenditure survey.
And then there were the corporation tax receipts, which GERS had always warned should be ‘treated with extra caution’. In the 04/05 edition, an alteration to the Annual Survey of Hours and Earnings methodology by the ONS fed through to GERS corporation tax estimates, with the result that over £300m was wiped off previous estimates. An improvement? Since it still advised that we ‘treat with extra caution’ (not even just ‘with caution’), I’ll leave you to draw your own conclusions.
This lack of Scotland-specific data was a real problem, since it left the civil servants scrabbling around to fill the gaps as best they could (as an aside, whoever wrote the GERS 04/05 report was gracious enough to admit on page 6 that in terms of estimating revenues: “it is emphasised that there is no uniquely correct way to undertake the exercise”. I will admit to being quietly pleased with that one :-)
Another difficulty was the understandable but uncritical reliance on Treasury data. The (entirely separate) work of people like Jim and Margaret Cuthbert was crucial in pointing the shortcomings of this. It was the Cuthberts who published a paper which found a series of errors in the Treasury PESA database, the result of which had been to overestimate Scottish expenditure by what was then thought to be some £500m each year.
Fast forward to the SNP taking power. By now, GERS had been given the ‘National Statistics’ imprint, with the greater rigour this implied. However, partly as a result of the critique mounted by the Cuthberts, amongst others, a review was undertaken of the data sources – particularly those PESA database errors which had led, incredibly, to Scotland being allocated shares of English only spending on courts and tourism. The outcome of this review has been the current report, which sets out the methodological changes in some detail.
Your charge of hypocrisy seems to rest on 2 pillars: The fact that new improved GERS (or ‘SNP Compliant GERS’ as you seem to prefer it) still shows a deficit in 04/05, and that there is presently a negative balance once capital expenditure is included. Let me deal with each in turn.
Far from being ‘SNP Compliant’, in actual fact, GERS continues to rely on many of the old methodologies and data sources which the SNP found fault with in opposition.
From a personal point of view, I still reckon that GERS should be showing how much is actually spent in Scotland, rather than assuming that non-identifiable expenditure can be allocated pro rata. I also wish that there were more accurate figures available for tax receipts, instead of having to rely on heroic extrapolations from household expenditure surveys and the like. Despite this, I have no hesitation in saying that the present GERS document is light years ahead of its predecessors in terms of its rigour.
For that reason, if the figures produced in both GERS and SiS seem similar in some years, it isn’t because the methodology of SiS has been duplicated by the Government. Nor does it signify hypocrisy just because one year is out of step with the linear expectation you’ve formed from the relationships between the numbers in other years.
Finally, you draw attention to the fact that the latest GERS shows a negative balance once capital expenditure is included. You may wish to reflect on the fact that this is a new innovation for GERS this year. It was never included in previous publications of GERS, which is why SiS, in a bid to compare like with like as far as was possible, excluded it also.
Incidentally, the OEF report you link to shows nothing of the kind a £10.8bn deficit unless you manipulate it to do so – it instead showed a Scotland broadly in balance and was welcomed by the SNP as pretty much backing up what we’d been saying all along.
http://www.snp.org/node/8278
http://www.theherald.co.uk/news/other/display.var.1804147.0.0.php
If it had shown a non-oil deficit, though, it would rightly have been derided. I know some people like to strip oil out of Scottish accounts before effecting unflattering comparisons with a UK where oil is included, but you can’t just go carving out parts of Scotland’s economic prosperity which you may find geographically or politically inconvenient. As Bill Clinton almost said: ‘It’s the whole economy, stupid. :-)
I hope that you’ll accept this public clarification in the spirit which it is intended. I also hope not to find it selectively dismembered by your alter-ego over on the discussion boards of the Scotsman, or anywhere else for that matter!
Regards,
Richard Thomson
P.S. The "Chronic surplus" quote you use originates from the 1970's McCrone report, and not from anyone the SNP. Just so you have the correct context, you understand...
Thanks for your comment, Richard.
I accidentally linked to the wrong OEF report, which does indeed suggest only a small deficit - although for 2005-06.
But this was the one I meant: showing a non-oil deficit of around £10.8 billion for 2004-05 (see page 20). I'll update the original post.
Pushed for time today. I'll reply in more detail later.
Richard
I just reread your post, and bluntly there’s nothing much in it that I haven’t heard said before.
I’m well aware of certain aspects of the estimating methodology behind GERS being subject to debate. Refinements have been being made on an ongoing basis for over a decade. But I’m also aware of opinions such as these:
“GERS is a very useful summary of the pattern of fiscal flows between Scotland and the United Kingdom.” – Prof Arthur Midwinter
“GERS tells us what the fiscal inheritance would be of an independent Scotland - the position on day one. It does not tell us what the settled fiscal position would be under independence.” – Prof Brian Ashcroft
“The methodology used in GERS… most people accept that it is pretty much at the cutting edge of this sort of work in unified fiscal systems.” – Dr Victor Hewitt
“The final numbers from GERS are probably now within the couple of hundreds of millions of pounds needed for broad economic policy considerations.” – Prof Hervey Gibson
“The figures in GERS are as good as one can get for Scotland” – Prof Gavin McCrone
So anyway, rather than go point-by-point through your post, I’ll try to spell out why the SNP’s attempt to face both ways in respect of GERS (and indeed, any such analysis) is untenable.
When GERS 2004/05 was released, Stewart Hosie called it a “dodgy financial dossier” and claimed that “Scotland's economy is currently in surplus”.
But when, under the SNP Executive, GERS 2005/06 and 2006/07 were issued, John Swinney’s remarks indicated that he was taking them broadly at face value. For example, he spoke of a “current budget surplus in 2006-07 of over £800 million”. (GERS 2006/07 estimated £837m.)
The SNP said that Stewart Hosie “also welcomed” the new GERS figures. Their press release tried to sell the line that these were the “most accurate picture yet of Scotland’s fiscal position”.
So the SNP “welcomed” GERS 2005/06 and 2006/07. Why? Simply because they could be used to indicate a (current account) surplus in those years.
But the SNP made no mention of the recalculation of the previous three years’ estimates using the same methodology which was behind the two “welcomed” reports. Specifically:
2002-03: Current deficit: £1,918. Fiscal deficit: £3,813m.
2003-04: Current deficit: £3,547m. Fiscal deficit: £5,364m.
2004-05: Current deficit: £2,261m. Fiscal deficit: £4,722m.
Get the basic idea? If it shows any kind of surplus, it’s “welcomed”. But if it shows a deficit, it’s either “dodgy” or brushed under the carpet.
You’ve done a similar thing in your comment. You said that the OEF analysis for 2005/06 “showed a Scotland broadly in balance and was welcomed by the SNP as pretty much backing up what we’d been saying all along”.
It did indeed. But did you welcome their 2004/05 analysis which, using basically the same methodology, found a £10.8bn deficit?
No, of course not – because it found a deficit!
The unfortunate fact is that the SNP has taken to using estimates based on the recent, almost unprecedented high oil prices to misinform the public about independence.
For example, this press release claimed that “an Independent Scotland would have a budget surplus of at least £4.4 billion”. Not so. That statement is dependent on oil prices remaining sky high. It’s crystal ball gazing masquerading as fact.
John Swinney even claimed that “an independent Scotland would be the 3rd richest nation in the EU in terms of wealth per head”, seemingly oblivious to the fact that commodity prices fall as well as rise!
I don’t use an ugly word like “hypocrisy” lightly, Richard. But that’s where it arises.
Stewart Hosie, speaking about GERS in 2007: “It says nothing about independence.”
Stewart Hosie, speaking in 2008: “GERS shows that Scotland would be a prosperous nation with a budget surplus.”
Hypocrisy? You judge.
Get the basic idea? If it shows any kind of surplus, it’s “welcomed”. But if it shows a deficit, it’s either “dodgy” or brushed under the carpet.
You’ve done a similar thing in your comment. You said that the OEF analysis for 2005/06 “showed a Scotland broadly in balance and was welcomed by the SNP as pretty much backing up what we’d been saying all along”.
It did indeed. But did you welcome their 2004/05 analysis which, using basically the same methodology, found a £10.8bn deficit?
Er, no. As you say yourself, that OEF report was on a 'non-oil' basis - which is as daft as calculating the output of the City of London on a 'non financial-services basis'.
The SNP criticised GERS when it excluded oil and included items of expenditure which clearly didn't take place in Scotland, when others were happy to accept GERS as being the best figures possible because they were the only ones we had. Now when some, but by no means all of these criticisms have been taken on board, at the behest of the civil service I might add, somehow the outcome is now 'dodgy'?
Once more:
Get the basic idea? If it shows any kind of surplus, it’s “welcomed”. But if it shows a deficit, it’s either “dodgy” or brushed under the carpet.
No, as a matter of fact I don't.
Your jibe can be inverted easily and with much more credibility - when it shows a deficit, GERS is a robust exercise and a shining example of monitoring fiscal lows through a unified state. When it doesn't, it's a fix by the SNP to cynically hoodwink people out of a joyful and contented preference for unionism. Argument credibility? Precisely zero.
It's inevitable that in politics, people will pick the figures which best suite their arguments pace the continued unionist party references to a state without oil. However, you're going to have to do better than trying to fabricate behaviour patterns which you can then proclaim to be somehow 'typical' of your opponents. As we found long ago, vitriol is simply no substitute for rigour.
Now, as I see it, unionism has 2 strategic choices on how to handle Scotland's finances. 1: Political leaders can either stamp their little feet and complain that the new GERS is all a fix by a hypocritical, nasty, mendacious SNP, determined to hoodwink the Scots out of their birthright of belonging to the most successful multi-national union state ever to exist on the face of the planet; or they can set about showing why the new basis adopted by GERS is deficient (remembering, of course, that the methodologies between the figures compiled in SiS and GERS are still very different).
2: Secondly, the whole 'subsidised Scot' thing, resurrected to dowse ideas of radical constitutional change, has taken root in the popular consciousness south of the border, and now itself poses a big risk to the union. Having told Scots for years that independence was not a viable option on financial grounds, are unionist politicians ready or even capable of saying "yes, on balance, despite higher than average levels of public spending, Scotland in most years does contribute more than she receives. Here's why she should continue to do so..."
On present evidence, very few people seem willing, able or perhaps even capable of so doing. Yourself included.
Richard
Thanks again for taking the time to comment. I’ll follow your stylistic lead, and will reply bit-by-bit with your words in italic.
"…that OEF report was on a 'non-oil' basis - which is as daft as calculating the output of the City of London on a 'non financial-services basis'."
It’s not in the least daft. The question of how much oil and gas would fall either side of an international maritime border between a breakaway Scotland and the remainder of the United Kingdom is, as you must surely know, a deeply contentious issue.
Moreover, the proportion of total UK North Sea revenues which would accrue to an independent Scottish state depends on the relative prices of oil and gas.
Until recently, the SNP claimed a blanket 95% for Scotland, despite more measured voices suggesting that it could be significantly less. In the absence of any academic study there was little to stop them making any claim they wanted.
But now there is. As John Swinney said of the SNP-released editions: “This year's GERS publication has been informed by an updated and detailed analysis of North Sea revenues by Aberdeen University, enabling a geographical share to be allocated to Scotland's accounts.”
Leaving aside his unsubtle attempt to piggyback credibility from Aberdeen University, the analysis is of course Kemp & Stephen, which suggested that for the years under discussion here (2002/03 through 2006/07) the allocation would probably have been around 83%.
So, as Mr Swinney correctly hinted, it simply wasn’t possible to allocate a proportion of the “extra regio” revenues for any edition up to and including 2004/05 without an unacceptable stab in the dark.
But adding them in, based on a percentage assumption, was never the major issue the SNP made it out to be. It’s not as if the oil was “hidden” – which was always the impression the SNP sought to give to the uninitiated. Cynical stuff, in my opinion.
Take the original GERS 2004-05, for example:
Total expenditure: £47,662m
Total receipts: £36,439m (excl North Sea)
Non-oil deficit: £11,223m
North Sea allocation: 83.5% of £5,183m = £4,328m (had Kemp & Stephen been available)
Deficit: £6,895m
Not exactly brain surgery, is it?! So basically, your party’s attempt to send the signal that the previous editions of GERS – those issued prior to the SNP Executive – tried to “ignore” oil, are as naive as if I complained to my bank because my current account statements underestimated my true personal wealth by “failing” to include details of my savings and investments! They’re two entirely different things, and accounting for them separately certainly doesn’t indicate anything underhand!
"Your jibe can be inverted easily and with much more credibility - when it shows a deficit, GERS is a robust exercise and a shining example of monitoring fiscal lows through a unified state. When it doesn't, it's a fix by the SNP to cynically hoodwink people out of a joyful and contented preference for unionism."
It wasn’t a jibe. It was an observation given credence by SNP politicians’ own words.
However, your attempt at “tu quoque” falls flat on its face simply because it’s demonstrably untrue. The SNP claims perpetual surplus for Scotland whereas unionist politicians do not claim the reverse. It wouldn’t be true.
For example, here is Wendy Alexander, writing in 2006 that “thoughout the 80s Scotland ran a significant surplus … however since 1990 the position has reversed”.
Not one unionist politician has accused the SNP Executive of trying to “fix” GERS, and nor am I. But the vacuous spin which they have always put on it strikes me as absolutely shameless.
"…the continued unionist party references to a state without oil."
What references? Citations, please. Or is this another reliance on GERS not having credited an indeterminate “Scottish share” of extra regio resources?
"…vitriol is simply no substitute for rigour"
I agree. Where we seem to disagree is on what constitutes vitriol. Have you visited the Scotsman or Herald political forums lately? Or are you preoccupied with the equally distasteful offence, to which you alluded earlier, being dished back at Scottish nationalists over at the Mail and Telegraph? I don’t see measured criticism of such vitriol as itself vitriolic.
Now, your numbered points:
1. That’s a straw man argument. Who said anything about a “fix”? Surely you would agree have to agree that GERS is now more compliant with preferred SNP methods than it was before. Indeed, you’ve already done so, by acknowledging that some some of the nationalists’ criticisms “have been taken on board”.
However, you overstate the differences between the two. Here’s a direct comparison of GERS and the SNP’s “SiS” estimates for 2006-07:
GERS. Revenue: £49,915m. Expenditure: £49,079m. Current surplus: £837m
SNP. Revenue: £52,940m. Expenditure: £52,330m. Current surplus: £610m.
So much for Stewart Hosie’s claim that GERS “significantly overestimates Scottish spending”. If anything, the reverse is arguable! Hypocrisy? Would you say not? Would you perhaps see it as part of the “inevitable” fact that “people will pick the figures which best suite their arguments”?! But I digress.
2. I find all this talk of “subsidies” fairly distasteful. Simple analogy: if your wife was out of cash and wanted £50 for something or other would you think of reaching into your pocket for her as a “subsidy”? Or if you were out of work for a while and she was the only earner, how would you feel if she thought of that as a “subsidy” to you?
The overwhelming weight of evidence is that from 1989-90 until perhaps 2006-07 Scotland received more funding than the revenues which we would have generated had we been independent. During the 1980s the reverse was true, and that seems now to be the case again with oil prices at near-record highs.
But so what? That’s the nature of the Union. The whole United Kingdom benefits from the “sharing of risk, revenues and resources”, to quote again from the above-linked article. The keeping of tabs is just for informational purposes, and only those of a nationalistic disposition seem to begrudge it one way or the other. I certainly don’t!
Re the exclusion of oil: It’s not in the least daft. The question of how much oil and gas would fall either side of an international maritime border between a breakaway Scotland and the remainder of the United Kingdom is, as you must surely know, a deeply contentious issue.
Nonsense - it's completely daft. The issue of a maritime border notwithstanding, the percentage of revenues which would accrue to an independent Scotland, whether you follow the 1968 boundary or equidistance, is still considerably greater than zero.
So, as Mr Swinney correctly hinted, it simply wasn’t possible to allocate a proportion of the “extra regio” revenues for any edition up to and including 2004/05 without an unacceptable stab in the dark.
You seem to forget that 95% was in line with previous work undertaken by Kemp. Even then, just about any stab in the dark was going be more accurate than a zero allocation.
As for being hidden, it might as well have been from the use that was made of a 'borrowing requirement' without oil, and the political purposes to which that figure was then used, to the consternation, we must assume, of the civil servants every bit as much as the SNP.
One side here wants to reflect as accurate as possible a picture of the Scottish economy, while another seems to want to subtract almost a fifth of the economy from consideration and use that as a reason for the maintenance of the status quo. It takes a peculiarly blinkered view of the world to see the 'whole economy' approach as being cynical, I must say! .
Take the original GERS 2004-05, for example:
Total expenditure: £47,662m
Total receipts: £36,439m (excl North Sea)
Non-oil deficit: £11,223m
North Sea allocation: 83.5% of £5,183m = £4,328m (had Kemp & Stephen been available)
Deficit: £6,895m
Not exactly brain surgery, is it?! So basically, your party’s attempt to send the signal that the previous editions of GERS – those issued prior to the SNP Executive – tried to “ignore” oil, are as naive as if I complained to my bank because my current account statements underestimated my true personal wealth by “failing” to include details of my savings and investments! They’re two entirely different things, and accounting for them separately certainly doesn’t indicate anything underhand!
If only 80% of the income which I paid into a bank account was shown up by the time my statement arrived, I'd certainly have something to say about it, as I suspect would you. Oil has nothing to do with investment or savings in this analogy, more's the pity...
It wasn’t a jibe. It was an observation given credence by SNP politicians’ own words.
However, your attempt at “tu quoque” falls flat on its face simply because it’s demonstrably untrue. The SNP claims perpetual surplus for Scotland whereas unionist politicians do not claim the reverse. It wouldn’t be true.
The SNP does no such thing, as well you know, though I'm glad to see that you do not agree that Scotland is in every year a net recipient. Would that others, in more elevated positions who made ill-advised comparisons in years gone by with Bangladesh, could have had the wisdom and magnanimity to do the same.
Not one unionist politician has accused the SNP Executive of trying to “fix” GERS, and nor am I.
Glad to hear it – though you could have fooled me from the 'SNP compliant' tag you applied earlier...
"…the continued unionist party references to a state without oil."
What references? Citations, please. Or is this another reliance on GERS not having credited an indeterminate “Scottish share” of extra regio resources?
Got it in one, thought it's a reference to continued references from unionist politicians to the 'borrowing requirement', rather than any kind of 'reliance' on my part. I trust no further citations will be necessary.
Where we seem to disagree is on what constitutes vitriol. Have you visited the Scotsman or Herald political forums lately? Or are you preoccupied with the equally distasteful offence, to which you alluded earlier, being dished back at Scottish nationalists over at the Mail and Telegraph? I don’t see measured criticism of such vitriol as itself vitriolic.
I tend not to read too far below the articles these days - life is really too short. As for being 'dished back', simply being Scottish and having the nerve to express an opinion seems to be enough to destabilise some. You may have some sympathy with that state of affairs, no?
Now, your numbered points:
1. That’s a straw man argument.
If you're not claiming that GERS is a fix, then I agree. You must forgive me – it was unclear from your original post.
However, you overstate the differences between the two. Here’s a direct comparison of GERS and the SNP’s “SiS” estimates for 2006-07:
GERS. Revenue: £49,915m. Expenditure: £49,079m. Current surplus: £837m
SNP. Revenue: £52,940m. Expenditure: £52,330m. Current surplus: £610m.
So much for Stewart Hosie’s claim that GERS “significantly overestimates Scottish spending”. If anything, the reverse is arguable! Hypocrisy? Would you say not?
No. You could say it was because they still use different methodology. You could even say it didn't matter, because since we were comparing the difference between 2 very large numbers and they drew roughly similar conclusions, it wasn't worth dwelling on. Since you're also, unless I'm very much mistaken, taking Mr Hosie's specific criticisms of previous editions and applying them to the most recent report, you could say that the criticism no longer applied. You could even surmise that given SiS and GERS came out at different times, and were therefore using different sets of government stats (which would have been revised in the interim), the two were still pretty much in accord.
One thing you couldn't claim, unless you were in complete ignorance of the meaning of the word, is that it represented 'hypocrisy'.
2. I find all this talk of “subsidies” fairly distasteful. Simple analogy: if your wife was out of cash and wanted £50 for something or other would you think of reaching into your pocket for her as a “subsidy”? Or if you were out of work for a while and she was the only earner, how would you feel if she thought of that as a “subsidy” to you?
I'll admit, I wouldn't be very happy at being though of as subsidising or being subsidised. But then, if I was in work and finding my contribution belittled, I'd certainly be annoyed at that. Isn't that the more apposite analogy to the situation in which Scotland finds herself presently?
The overwhelming weight of evidence is that from 1989-90 until perhaps 2006-07 Scotland received more funding than the revenues which we would have generated had we been independent. During the 1980s the reverse was true, and that seems now to be the case again with oil prices at near-record highs.
But so what? That’s the nature of the Union. The whole United Kingdom benefits from the “sharing of risk, revenues and resources”, to quote again from the above-linked article. The keeping of tabs is just for informational purposes, and only those of a nationalistic disposition seem to begrudge it one way or the other. I certainly don’t!
Glad to hear it. I don't begrudge Scotland making her contribution one little bit – that's the deal for so long as we're in the union, after all. It would just be nice if it could be recognised outwith Scotland occasionally, and not used to try and close off or divert rational debate on the best future for the peoples on these islands.
Richard
A) You said: “Nonsense - it's completely daft. The issue of a maritime border notwithstanding, the percentage of revenues which would accrue to an independent Scotland, whether you follow the 1968 boundary or equidistance, is still considerably greater than zero.”
I had been under the impression that previous work by Kemp & Stephen had shown that when the oil price and US$ are both low, Scotland’s share could be as low as 70%. And as David Smith pointed out, “the most generous interpretation of International conventions on these things, in England's favour, would give Scotland at least 55%”. Kemp & Stephen (2008) acknowledge that the boundary issue is “open to dispute” and have no option but to base their estimates on just one possible boundary: the median.
So given all this uncertainty, to reckon oil and gas separately seems to me eminently sensible. Even the SNP-issued GERS does likewise, before tagging the 83% (ish) allocation on top.
B) You said: “You seem to forget that 95% was in line with previous work undertaken by Kemp. Even then, just about any stab in the dark was going be more accurate than a zero allocation.”
I presume you mean the 1999 Kemp & Stephen paper “Expenditures in and Revenues from the UKCS: Estimating the Hypothetical Scottish Shares 1970-2003”.
Very much out of date by the time you produced “Scotland in Surplus” in 2006, wasn’t it?
Re: “zero allocation”, see previous answer.
C) You said: “As for being hidden, it might as well have been from the use that was made of a 'borrowing requirement' without oil, and the political purposes to which that figure was then used, to the consternation, we must assume, of the civil servants every bit as much as the SNP.”
At least you concede that it wasn’t, in fact, hidden. And I agree that the £11.2bn figure was misunderstood, misquoted and misapplied.
But I don’t accept that there was any attempt to misrepresent it. See this PDF file, for example. It’s the Labour Party’s “Break up Britain, End up Broke” document from early 2007.
Their “£5242 per household per year” figure was obtained by adding the £11,223m non-oil figure from GERS 2004/05, an estimate of the annual cost of the SNP’s 2007 manifesto pledges and an estimate by the Constitution Unit of the lost economies of scale resulting from independence, then subtracting additional revenue receipts for the same year (including a “benefit of the doubt” 95% UKCS allocation but excluding the annual investment to the SNP’s proposed oil fund) and finally dividing by the number of households in Scotland.
A somewhat crude methodology, in that it only estimated the starting balance sheet for a newly independent Scotland, had that occurred at the end of the fiscal year 2004/05 – but that’s peripheral to this discussion. The key point is that, contrary to the impression given by various SNP pronouncements (eg. Stewart Hosie’s claim that GERS “pretends” that oil revenues “don't exist”) no effort was made to obscure oil or to downplay its significance to the debate.
Neither do I know of any instance when the Conservatives or Lib Dems made any such pretence.
D) You said: “One side here wants to reflect as accurate as possible a picture of the Scottish economy, while another seems to want to subtract almost a fifth of the economy from consideration and use that as a reason for the maintenance of the status quo. It takes a peculiarly blinkered view of the world to see the 'whole economy' approach as being cynical, I must say!”
I don’t believe that the SNP’s use of 95% as a geographic allocation, when in fact the reality is much more nuanced and unpredictable, represents an attempt to “reflect as accurate as possible a picture”. I see it as opportunistic, if not quite propagandist. But it’s certainly not the whole truth!
I’ve answered your “whole economy” charge already, in the form of my current account bank statements analogy. Those statements don’t “subtract” anything simply because I happen to have other accounts!
E) To my claim that “the SNP claims perpetual surplus for Scotland”, you replied: “the SNP does no such thing, as well you know”.
Actually, I didn’t know. For which specific fiscal years is the SNP prepared to admit that total public sector expenditure in Scotland exceeded total revenues?
F) Re: “ill-advised comparisons in years gone by with Bangladesh”
Absolutely agree. Such comparisons are grossly inappropriate.
G) In reference to the Mail and Telegraph, you said that “simply being Scottish and having the nerve to express an opinion seems to be enough to destabilise some. You may have some sympathy with that state of affairs, no?”
Yes. The racist fringe within English nationalism is just as objectionable as its Scottish counterpart.
H) Re. the GERS figures in your numbered point 1
Apologies; senior moment! I gave 2006/07 figures instead of 2004/05. You’re right that Stewart Hosie was referring to the 2004/05 edition. I’ll try again…
One of Stewart Hosie’s criticisms of GERS 2004/05 was that “it is out of date”, saying that it “uses estimates from 2003 to 2005”. But your SiS relied on Kemp’s 1999 paper, didn’t it?
And you didn’t comment on the other two contradictory statements – that Stewart Hosie, writing about GERS – again in January 2007 – said “it says nothing about independence”, but in June 2008 said “GERS shows that Scotland would be a prosperous nation with a budget surplus”.
I imagine that it must be hard for you to give even a little in a conversation of this type when you’re using your real name, known to be employed by the SNP and when much of my criticism seems to revolve around one of your MPs. But can you concede that these statements at least appear to be contradictory?
You said: “Glad to hear it. I don't begrudge Scotland making her contribution one little bit – that's the deal for so long as we're in the union, after all.”
Making and receiving, yes. At least I can round off this particular reply on a semi-consensual note!
Apologies for the delay in replying – the impertinent intrusions of real life and all that…
I had been under the impression that previous work by Kemp & Stephen had shown that when the oil price and US$ are both low, Scotland’s share could be as low as 70%. And as David Smith pointed out, “the most generous interpretation of International conventions on these things, in England's favour, would give Scotland at least 55%”. Kemp & Stephen (2008) acknowledge that the boundary issue is “open to dispute” and have no option but to base their estimates on just one possible boundary: the median.
All fair enough, but even 55% puts a very different slant on things to a 0% allocation and as you acknowledge, on the median line it’s still above 80%.
I’m not going to regurgitate the argument here, but even if you were to consider it sensible to reckon oil and gas separately, there are very sound non-constitutional reasons as to why this should be resisted, not least when it comes to measuring public spending as a percentage of GDP. Ever wondered where the nonsense about the Scottish public sector being uniquely bloated and inefficient comes from?
http://scotsandindependent.blogspot.com/2008/06/s-elsewhere-invisible-giant.html
I presume you mean the 1999 Kemp & Stephen paper “Expenditures in and Revenues from the UKCS: Estimating the Hypothetical Scottish Shares 1970-2003”.
Very much out of date by the time you produced “Scotland in Surplus” in 2006, wasn’t it?
It was still the best estimate that was available at the time. In any case, the figures to which it was applied were as up to date as it was possible to get.
But I don’t accept that there was any attempt to misrepresent it. See this PDF file, for example. It’s the Labour Party’s “Break up Britain, End up Broke” document from early 2007.
I always wondered where that figure came from. However, you can’t deny that unionist politicians of all stripes have down the years chosen to downplay or exclude this section of the Scottish economy.
A non-oil revenue figure may be of academic interest, but in the real world it’s of little relevance. Why then bother discussing Scottish revenues/expenditure in the context of constitutional change without taking a portion of these revenues into account, unless the intention is, wittingly or otherwise to divert or mislead? This is what happens every time someone says ‘Of course, Scotland presently has a deficit of £11bn (or whatever) which under independence, would need to be filled by tax rises or spending cuts…’
I don’t believe that the SNP’s use of 95% as a geographic allocation, when in fact the reality is much more nuanced and unpredictable, represents an attempt to “reflect as accurate as possible a picture”. I see it as opportunistic, if not quite propagandist. But it’s certainly not the whole truth!
Well, the 95% figure had a precedent, and is a lot closer to the 83% which Kemp now cites than the 0% which arises from separate reckoning!
I’ve answered your “whole economy” charge already, in the form of my current account bank statements analogy. Those statements don’t “subtract” anything simply because I happen to have other accounts!
Your analogy is completely fallacious, but for what its worth, I’ll play along. I agree that you are no less wealthy just because your wealth is in more than one account. However, if you were asked to make a declaration to the taxman and only did so on the basis of what went into your current account, then under these circumstances, you would be guilty of fraud.
Actually, I didn’t know. For which specific fiscal years is the SNP prepared to admit that total public sector expenditure in Scotland exceeded total revenues?
The only figures the SNP has calculated are those which are already in the public domain. However, I suspect the working title of ‘Scotland in Surplus’ would have to change were we to repeat the exercise under different circumstances :-)
One of Stewart Hosie’s criticisms of GERS 2004/05 was that “it is out of date”, saying that it “uses estimates from 2003 to 2005”. But your SiS relied on Kemp’s 1999 paper, didn’t it?
GERS was routinely published about a year - 18 months after the period to which it purported to refer, which is what was meant by out of date (GERS 04/05 didn’t come out until December 06). Your comparison with Kemp is, to say the least of it, as mischievous as it is misplaced!
And you didn’t comment on the other two contradictory statements – that Stewart Hosie, writing about GERS – again in January 2007 – said “it says nothing about independence”, but in June 2008 said “GERS shows that Scotland would be a prosperous nation with a budget surplus”.
I imagine that it must be hard for you to give even a little in a conversation of this type when you’re using your real name, known to be employed by the SNP and when much of my criticism seems to revolve around one of your MPs. But can you concede that these statements at least appear to be contradictory?
Appear? Well, at face value, then perhaps. In reality, it’s a little more complex.
You could argue that GERS still tells us little about independence, since it is a static rather than a dynamic analysis. You could further say that it tells us little because spending lines accounted for in GERS, such as those on Trident etc, are unlikely to be replicated in an independent Scotland.
On the other hand, you could say that thanks to the inclusion of a conservative estimate of North Sea revenues and the improved allocation of identifiable expenditure, that the picture it paints is now a great deal more accurate than before. As such, you could use it to predict that an independent Scotland would indeed in the year concerned be likely to “be a prosperous nation with a budget surplus”.
Either way, if it’s hypocrisy you’re setting out to prove, I’m afraid it still doesn’t ‘rank’ :-)