FFS The Ferret’s claim that Mike Russell’s claim is False is FALSE FFS!

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Disclaimer: I’m not an economist, thank God, but I think I know what’s wrong with this stoatally wrong ‘Fact Check’ and can weaselly rebut it. Famous last words. Maybe I should ask Contrary before I post this. Ah, WTF, I’m going for it.

The Ferret piece is here: https://theferret.scot/claim-scotland-pays-out-more-than-gets-back-false/

I’ve read it and it seems to rely on GERS figures, just like the Tories do. These data are almost entirely based on estimates. I know the SG now colludes in the process, but no one really knows how much revenue Scotland would have. See this from Professor Murphy who knows a lot about this:

Note that there are 26 variables. As far as I can tell two (local authority income and, maybe, the estimate of Scottish oil revenues) are definitely calculated in Scotland, and the latter is an estimate, not a fact, which is pretty significant in this case. Another three or four minor ones (car tax, aggregates levy, airport taxes) are likely to be locally accurate. The remainder which is the vast majority) are figures supplied, as I suggested, by Westminster linked organisations, or ‘London’ as I called it. I think I can happily rest my case with regard to that claim. If anyone suggests this data was made in Scotland, they are deluding themselves. Whatever else might appropriately be described as such, this data is not.

Second, is it reliable? Let’s just think the big taxes such as income tax, NIC, VAT and corporation tax. As yet Revenue Scotland are not sure who is tax resident in the country, although they are working on it. This data is not based on any such split. It could be wildly inaccurate, just as Revenue Scotland’s attempts at working out who is tax resident were.

Am I right or meringue?

If that wasn’t enough, here’s the Prof’s full demolition of the GERS figures as the basis for calculation revenue in Scotland:

So, before we see anything let me remind those who will get excited by this (and I am sure some graphs will be coming our way) of just why I think this.

First, this was and to some extent remains a Unionist exercise. The short name says it all, and is not, I am sure coincidence. No one puts expenditure ahead of revenue in the name of an accounting document. It was done here for a reason, and it was to make a point that is still repeated. I will treat it with more respect when it is renamed.

Second, this is very largely UK based data. It is simply an extrapolation of that data to Scotland in most cases. And UK data is prepared for UK purposes. The result is that the inherent reporting bias in it, recently referred to by the Tax Justice Network, for example, is not removed. Large amounts of economic value created in Scotland is not reported there as a result.

Third, GERS is not intended to show how an independent Scotland would perform, and does not. For the sake of the independence debate it is almost irrelevant.

Fourth, GERS reflects a lot of spending Scotland would not incur. It would not have a nuclear deterrent, for example.

Fifth, as I have argued many times, the accounting is biased and theoretically utterly flawed. When accounting it is vital that all estimates are prepared consistently and on the same basis. GERS has not been. Income is estimated on the basis of that arising IN Scotland but spending is estimated on the basis of that arising FOR Scotland. So, only taxes paid in Scotland are included. But expenditure in England (mainly), Wales and Northern Ireland is also charged to Scotland when Scotland is deemed to benefit from it. But the tax paid to generate that expenditure is not taken into account. The system is, then, inherently designed to show a deficit. This is why the Scottish government claim about it is wrong.

Sixth, no one really has a clue about the level of Scottish imports and exports, including services, because as yet the data to check these does not exist. And since this data might significantly impact GERS, and any other debate on the Scottish economy, that leaves a gaping hole in the estimates that nothing can fill.

Seventh, even now Scotland has a tax authority we know it is having difficulty identifying Scottish resident people and their tax liabilities. And that is for easy taxes. On VAT, corporation tax and many other taxes the figures are stabs in the dark, especially as much Scottish added value is recorded elsewhere.

In other words, don’t get too excited by GERS. I will not be. It’s CRAp, however it is polished.

AND, the Ferret has previously displayed a smell of anti-SNP sentiment. See:

Labour and BBC-friendly Ferret feeds new salmon crisis

I’m getting rid of the Ferret but keeping the Canary. It’s been biting the SNP for the Herald

Published by johnrobertson834

Retired Professor of Media Politics Not-for-profit independent political analysis

17 thoughts on “FFS The Ferret’s claim that Mike Russell’s claim is False is FALSE FFS!

  1. I too have wondered about the Ferret recently and was quite alarmed by Stu Campbell’s tweet that Kevin Hague was writing for it. I asked Stu and that last bit was in fact a joke, but having read the above, I’ve decided that perhaps I don’t want to be spending (albeit a small amount) on something that is not as impartial as it purports to be. I’m inclined to go with your judgment on the matter.

    Liked by 2 people

  2. I, too, was taken aback when I read the piece on The Ferret. It takes GERS for granted and bases its conclusion solely on these figures.

    I have been concerned about a number of things in The Ferret recently. While the SG should be subject to rigorous public examination like any other organisation, the tone of a number of Ferret articles recently was very similar to things I would read in the Herald, Scotsman, Daily Mail, Daily Telegraph, the Times. I know that some of the Ferret journalist have pieces published in such papers and, I wonder if they have to tailor tham to suit the editorial line.

    Liked by 3 people

  3. A few weeks ago Audit Scotland published a report on the Privately Financed Infrastructure Investment: on-Profit Distributing and Hub models which was the subject of a Ferret Fact check.

    On page 7 of the Audit Scotland report it said:
    “”In 2005, the Scottish Government replaced PFI with the Non-Profit Distributing Model (NPD). “”

    The Ferret repeated this statement without comment.

    Now I may be wrong but as I remember it in 2005 the Scottish Executive (Lab & LibDem coalition) were still in power at Holyrood and were still using PFI to fund infrastructure projects. It was not until after the SNP took over in 2007 as a minority government that the name was changed to Scottish Government and they stopped using PFI.

    If you are a fact-checking organisation then should you not check your facts? And other people’s facts.

    Liked by 2 people

      1. I am surprised no one else spotted it but I guess they were more interested to use the report against the SG. However, for me at any rate, when you see something like this in a report you then look at everything else in the report and wonder what else is wrong. The rotten apple in the barrel syndrome.

        Liked by 2 people

    1. You are correct Legerwood, I looked into some of the timelines and institutions from the PFI/PPP scandal in North Ayrshire, I’m still trying to organise what paltry information I could find (surprisingly paltry I’d say, maybe there are more reasons behind the media not reporting on a juicy scandal than it first appears?) – but yes they moved away from the PFI / PPP in 2007. In 2005 there was full-blown dodgyness going on.

      Liked by 1 person

  4. I’ve had a few wee niggling doubts recently about the Ferret, the National too. I’m no economist either, but as soon as I saw ‘Gers’, I knew it was irrelevant. Your article just confirmed it for me. I’ve just cancelled my direct debit to the Ferret. I’ll probably not be renewing my subscription to the National either. Thankfully, there are far more reliable sources for comment and opinion, talkingupscotland is one of the best.

    Liked by 2 people

  5. Disappointing to hear that about The Ferret – it sounded like a very good idea when it was floated a few years back. Disappointing to learn that possible ‘reversion to mean’ (where mean = Ukanian style msm) might be occurring?

    I see Alister ‘Union’ Jack has held on (for dear life) in Cabinet. Can’t help but wonder if Sajid Javid’s power-play might have saved Ben Wallace’s skin? – This morning the story was being punted that Wallace (Capt. Ben Wallace as he was known back in his MSP days) was due to be out on his ear. Seems he’s still in place – Perhaps Johnson’s plans knocked somewhat awry and he decided to limit further change?

    Here’s hoping the unexplained £15,000 holiday ‘donation’ doesn’t get completely lost in all the tosh about the Cabinet reshuffle (but that’s doubtless part of the plan – never let a good Cabinet resignation story go to waste, as it were).

    Liked by 2 people

    1. Mr Jack was retained because he is exactly the kind of automaton who will do what Downing Street tells him.He was never likely to do what Mr Javid did (not that I find his economic policies attractive – far from it!)

      Like

  6. Oh I am so glad I didn’t need to fact check this 😉

    Haven’t ever trusted the Ferret (and as said above, there have been enough dodgy reports to put doubt on their motivations), or any fact checking service – facts change with time and with viewpoints, they are not concrete things – if they gave a nuanced analysis, well and good, but ,,, they don’t.

    Liked by 1 person

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