but nothing whatsoever to do with a Glasgow football team.
GERS (Government Expenditure and Revenue Scotland) bothers me as I’m not sure I’ve yet found an authoritive analysis of what they actually tell us about the state of the Scotland’s economy. (A thought just occurs, is there an equivalent GERE for England’s economy? That would make an interesting set of comparisons if such figures exist)
Anyway, this post is about GERS and it’s likely to leave you as confused as I am…….. Comments welcomed!!
So to GERS. GERS is compiled by statisticians and economists in the Office of the Chief Economic Adviser of the Scottish Government. The Scottish Government’s Chief Statistician takes responsibility for this publication. But, and it’s a might big but, the key word here is “compiled”. The source or raw data is supplied to The Scottish Government by departments of the UK Government. Such departments being HMRC, ONS and others.
So there’s a first reason why independence supporting people might be suspicious of the GERS accuracy.
Here’s something else interesting from the Scottish Government website
“Historical estimates of Scotland’s public sector finances consistent with GERS published in March 2015 are not available. This is because detailed UK revenue and expenditure on an ESA10 basis have not been produced by the ONS. Previous versions of historical estimates are available for user reference below. Caution should be used when drawing conclusions from these estimates.”
So is this another reason for questioning the reality of the GERS figures?
A common cry on social media is “What about the Whisky Taxes?” Well sorry to break what might be bad news to some, but the tax on whisky is consumption based. That is, you and I pay it when we buy the stuff. Sure the whisky industry is an exporter from Scotland, but the value of that would only show up in Scotland’s balance of payments figures. Currently they make a much needed contribution to the UK balance of payments figures. Oh, and most of the whisky is owned by multinationals, eg Diageo. They could do clever accounting tricks if they desired to.
Below, is a table taken directly from the Scottish Government website. I’m not looking at any of the individual lines or entries. I’m more interested in the number of times the word “estimates” shows up. Is this yet another reason to be cautious before accepting the GERS figures as gospel truth?
Q: What is the GERS estimate of Scottish revenue for HMRC tax categories?
A: The table below provides the GERS revenue estimates for the years 2009-10 to 2013-14, under the categories used by HMRC. A description of how the HMRC categories match the GERS categories is provided if they are different.
There are a number of differences between the GERS and HMRC estimates, including:
- HMRC receipts are on a cash basis; GERS receipts are on an accruals basis;
- HMRC includes estimates for Customs Duties. These are collected by HMRC on behalf of the EU. They are not included in GERS revenue estimates.
- HMRC estimate Scotland’s geographical share of offshore corporation tax and petroleum revenue tax (PRT) separately. The GERS figures are based on Scotland’s share of total North Sea revenue, with this single estimate share applied to both offshore corporation tax and PRT. The individual GERS estimates of corporation tax and PRT are therefore less meaningful.
GERS revenues by HMRC category (£m)
|
2010-11 |
2011-12 |
2012-13 |
2013-14 |
2014-15 |
Notes on presentation on GERS |
Total HMRC receipts excluding customs duties (Geographic) |
41,638 |
44,995 |
41,584 |
42,061 |
41,689 |
|
Total HMRC receipts excluding customs duties (Population) |
35,638 |
37,254 |
37,387 |
38,911 |
40,323 |
|
Income Tax |
11,012 |
11,127 |
11,022 |
11,277 |
11,735 |
|
Capital Gains Tax |
201 |
277 |
321 |
240 |
293 |
|
NICs |
7,968 |
8,270 |
8,501 |
8,730 |
8,969 |
|
VAT |
7,306 |
8,215 |
8,456 |
9,141 |
9,512 |
Net VAT receipts only, part of VAT |
Corporation Tax (Onshore) |
2,598 |
2,424 |
2,551 |
2,566 |
2,920 |
|
Corporation Tax (Offshore – Geographic) |
5,524 |
7,031 |
3,377 |
2,681 |
1,489 |
Part of North Sea revenue (geographical share) |
Corporation Tax (Offshore – Population) |
575 |
739 |
366 |
295 |
172 |
Part of North Sea revenue (population share) |
Bank Levy |
0 |
120 |
110 |
180 |
221 |
Part of other taxes, royalties, and adjustments |
Bank payroll tax |
124 |
0 |
0 |
0 |
0 |
Part of other taxes on income and wealth |
Petroleum Revenue Tax (Geographic) |
1,173 |
1,620 |
1,331 |
857 |
55 |
Part of North Sea revenue (geographical share) |
Petroleum Revenue Tax (Population) |
122 |
170 |
145 |
93 |
6 |
Part of North Sea revenue (population share) |
Fuel duties |
2,304 |
2,259 |
2,240 |
2,271 |
2,294 |
|
IHT |
175 |
170 |
175 |
210 |
229 |
|
Shares |
243 |
236 |
181 |
268 |
252 |
Part of stamp duties |
Stamp Duty Land Tax |
334 |
275 |
283 |
389 |
478 |
Part of stamp duties |
Annual Tax on Enveloped Dwellings |
0 |
0 |
0 |
4 |
5 |
Part of stamp duties |
Tobacco duties |
1,058 |
1,208 |
1,278 |
1,242 |
1,211 |
|
Spirits duties |
341 |
369 |
369 |
373 |
373 |
Part of alcohol duties |
Beer duties |
281 |
255 |
226 |
222 |
224 |
Part of alcohol duties |
Wines duties |
267 |
314 |
322 |
350 |
346 |
Part of alcohol duties |
Cider duties |
24 |
30 |
28 |
26 |
19 |
Part of alcohol duties |
Betting & Gaming |
98 |
122 |
122 |
173 |
185 |
|
Air Passenger Duty |
185 |
228 |
243 |
273 |
309 |
|
Insurance Premium Tax |
174 |
204 |
202 |
211 |
206 |
|
Landfill Tax |
129 |
131 |
139 |
150 |
147 |
|
Climate Change Levy |
61 |
63 |
61 |
117 |
163 |
|
Aggregates Levy |
55 |
48 |
43 |
43 |
54 |
|
Swiss Capital Tax |
0 |
0 |
0 |
63 |
0 |
Part of other taxes on income and wealth |
Misc |
0 |
0 |
0 |
0 |
0 |
|
Customs Duties |
n/a |
n/a |
n/a |
n/a |
n/a |
|
Tax Credits Net Payments |
2,211 |
2,238 |
2,219 |
2,160 |
2,096 |
|
Child Benefit Net Payments |
924 |
930 |
921 |
862 |
863 |
What’s in the GERS
Allocations of ‘Scotland’s Share’ of UK wide expenditure. Contentiousness starts here. Who decides what is ‘Scotland’s Share’ and on what basis? What’s ‘in’ and what’s ‘out’? Ah, that’ll be the UK Government departments who provide the data to the Scottish Government.
What’s not in the GERS
As these are figures which reflect the existing status of Scotland within the UK, and continuing to be so, then they by definition cannot be foreasting or including anything an independent Scotland might do. GERS does not show anything like:
- an allocation to Scotland of VAT arising from economic activity in Scotland
- an allocation to Scotland of Corporation Tax from business’s headquarted in Scotland
- Military expenditure, old-age pensions and benefits for a future iScotland (These are set by Westminster, with no input from the devolved administrations and a share of costs is allocated)
- any accounting for anything which could reasonably be interetpreted as an asset
Summary
So, congratulations if you’ve made it this far. We know that GERS are confusing statistical figures with perhaps limited accuracy built usp from a whole heap of assumptions. And yet the MainStream Media loves them and treats them as though they were carbonite solid bey-your-grannies-house-on-them types of figures.
They are all we’ve got and if they’re showing something negative we need to work away at that. We also need to seriously hassle the Scottish Government to measure and produce better statistics.
Other people’s views on GERS
Wings Over Scotland : http://wingsoverscotland.com/the-limitations-of-gers/
John McLaren at Scottish Trends : http://scottishtrends.co.uk/wp-content/uploads/2016/08/Analysis-of-GERS-2016.pdf
Margaret Cuthbert : https://www.commonspace.scot/articles/9162/margaret-cuthbert-what-gers-and-brexit-reports-tell-us-about-scotlands-economy