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  1. kenmath says:

    Richard Murphy explains that virtually none of GERS figures are actual numbers. I’m a retired CA and if I had presented a set of accounts consisting almost exclusively of estimates, allocations and wild guesses, with almost none of it supportable by any probative audit trail, I would have expected to get some very frank talking and a very swift P45.

    The problems start with UK national record-keeping, be it government, HMRC etc, which has always been sloppy, outmoded and inconsistent. Some figures are produced on an accruals accounting basis (which books items when a liability is incurred and therefore gives a basis for forward cash flow management), but some are still prepared on a cash accounting basis (i.e. only booked when items are paid or received and so fail to take account of future events and therefore useless for forward cash planning). Using a mix of bases in a set of accounts produces figures which are the sum of “apples and pears.”

    HMRC and its predecessor bodies have never been able to identify where taxes are raised: they have counted taxes received according to where the tax entered their systems. With closures of offices across the land, more and more taxes coming out of pockets and businesses in Scotland are collected via tax offices in England and so have been counted as “English” revenue.

    Just think of all the UK-wide retailers etc who typically have a single VAT number for their entire UK operation: all that VAT enters the tax system in an aggregate payment made by the company’s main UK accounting function, typically located outside of Scotland, so there is no record available on VAT collected from the Scottish economy in UK Government records and statistics. This lack of precision is replicated across a wide range of UK statistics

    You couldn’t run a successful sweetie shop if you didn’t know where your income came from and where your money goes, but UK has never seen the need to improve its record-keeping. Any set of numbers can be massaged to portray whatever the author wants: it’s a simple matter of what you leave out (like oil revenues for instance) and what you include (like an inflated recharge for “defence” or share of National Debt servicing costs).

    But GERS is also influenced by classification of costs as national (rather than England only) when little or none of the benefit will be felt by Scots (e.g. London’s Crossrail, High Speed Rail projects in the south of England etc). By omitting these from the public spend in England, we lose out on the Barnett consequentials, but by counting them as “national” GERS will include an allocation as a cost to Scotland, so we don’t get the income but we get charged with a chunk of the expenditure.

    All of this sleight of hand and massaging of figures is what produces a £15b GERS “deficit” in 2015-6. It won’t be the pricipal motivating factor if/when Scotland chooses to go independent, but we’ll get the opportunity to implement a better, simpler, fairer tax system, and national statistics that more truly represent the state of our finances.

    1. David Howdle says:

      Kenneth, thank you for that extremely well argued explanation. Is there any chance you could post it direct onto Facebook so that it can get wider circulation? That would be very helpful.

  2. Mike McGeachy says:

    Kenmath states he is a retired CA, so therefore one would suspect he is an intelligent man, so why is he recycling stuff that has proven not to be true?
    “exclusively of estimates, allocations and wild guesses,” This is a huge insult to the civil servants that compile the figures to ONS standards. Wild guessses? I think not.
    “businesses in Scotland are collected via tax offices in England and so have been counted as “English” revenue.” A lie, pure and simple.
    “Any set of numbers can be massaged to portray whatever the author wants: it’s a simple matter of what you leave out ……………. Not sure exactly what the author is saying here….is he implying that it is in the SG’s interest to show Scotland’s finances in a bad light? Why would they want to do that? Stuff of fantasy.
    “(like an inflated recharge for “defence” We have an armed forces that are charged with protecting the UK in its entirety, a per capita charge to Scotland would appear to be the fairest way, woulfd it not? You need to be aware that not every cost that benefits Scotland is spent in Scotland, eg the Officer Training Centres based in Sandhurst, Dartmouth & Cranwell, the Army Training Centre in Brecon, MI5,MI6, Counter-Terrorism units etc etc etc. Oh, and lets not forget the EWS Radar based in RAF Boulmer which covers Scotland’s entire coastal and airspace.
    “or share of National Debt servicing costs)” Ah yes the debt that we contributed 22% to last year that we only pay 8.4% to service. That one?
    Then the old chestnuts: London’s “Crossrail,” We pay nothing, and we WILL receive Barnett consequentials. “High Speed Rail projects” Scotland will pay 2% towards the cost and as a result we will receive almost 10% back due to Barnett. All this is simple, basic stuff, and is available to view on the SG website.
    “All of this sleight of hand and massaging of figures is what produces a £15b GERS “deficit” in 2015-6. ” Really? Are you saying that our SG is so feeble that they let WM ride roughshod over them. Utter nonsense.

  3. MBC says:

    It’s no more possible to get figures for how much revenue is raised in Scotland than it is in Yorkshire because fiscally they are part of the UK and such figures for individual parts simply do not exist because they are all integrated.

    As a Scottish historian, economic historians of Scotland regularly comment on how difficult it has been to get a true picture of Scotland economically because much of the data does not exist.

  4. Crubag says:

    On some issues GERS will be deficient, such as exports, because we won’t truly know the picture until independence. When the picture will change anyway.

    On most of the important issues we will know the facts – the number and level of taxpayers, the HQs of firms, government expenditure etc.

    But issues of corporates booking taxes in the most advantageous jurisdiction are a problem for all countries. Possibly outside of the EU we will have a few more levers.

  5. Wul says:

    Scotland has:
    fisheries, timber, agriculture, wind & tide power, nuclear power, whisky, tourism, world-class scenic beauty, world-class universities, a well educated population, technology & engineering industries, oil, gas & steel production facilities, thousands of miles of atlantic coastline, fresh air, unlimited clean drinking water, bio technology, a long history of successful innovation & leadership, cultural & artistic excellence, strong trade links with Europe & beyond, plenty of land, good global relations, a great resource to population ratio, free public health & education…etc…etc…etc…

    There are other similarly sized & resourced countries which have a better standard of living than us, higher levels of happiness and much more trust in their politicians and leaders. (There are also other, poorer, countries which are happier than us too)

    That’s all we need to know.

    This GERS & “deficit-black-hole” stuff is just a load of old pish dreamt up by bitter folk who want to do us down, denigrate us and prevent us blossoming into a real, normal, humane & sane independent nation.

    1. James Coleman says:

      Hear! Hear!

    2. Alan McNaughton says:

      Unfortunately the Alleged Deficit of £15 Billion for 2015/16 Will be the Main Mantra of both Ruth Davidson and Kezia Dugdale!
      I asked Kezia Dugdale ‘How is the Scottish Deficit calculated?’ and She told me it was by Experts working for the Scottish Government
      I told her that I used to be 1 of these so called Experts and that All the Main figures are Guesstimates. She looked at me as if She had just swallowed a wasp and Not a lot of inaccurate figures!
      I also asked John Swinney why he and Oor Nicola never seemed to argue Against the GERS lies, He said wait until the figures for 2016/17 & onwards come out!!!

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