I was part of a discussion at Holyrood on Scottish Economic Data this morning, which I have previously flagged, as I did the evidence submitted.
As I predicted in the link, above, there was remarkable unity amongst those giving evidence. It was agreed that GERS now misses the point and further investment in it makes little sense. The consensus was that developing a system that assumes, in effect, that an independent Scotland which does not exist would continue to function as if it were still a part of the UK is a complete waste of time. Apart from some rather pointed questions on GERS from Jackie Baillie MSP (who seems to be a GERS enthusiast) to me, which did not take us very far because, as I pointed out, I could not give her precise answers to questions that GERS data would not permit to be answered in the way she demanded, the entire focus of discussion was on what to do to move on to delivering better data.
And I'll be honest, most of what was useful in that debate was already in the submissions made. For the record my own elaborations were to say, first of all, that all data is subjective: the subjectivity coming in the decision as to what to measure, which is key to the success of any measurement system. Unless the goals of the organisation are supported by the reporting the latter becomes meaningless, which is why I was not convinced by the suggestion of a supposedly wholly independent of government statistical authority.
Second, I reiterated the need for better data on Scottish companies and better Scottish company regulation, which would otherwise undermine all attempts at accountability in Scotland.
Third, I emphasised the need for a Scottish balance sheet so that the undertsanding that investment is key to economic development is embedded in the system.
And last I made clear the importance of HMRC being instructed to secure Scottish VAT data, in particular.
But overall the session was most useful for saying the GERS debate needs to move on and those who think it is the focus of attention need to realise that it really is peripheral to what is needed because of the many flaws within it.
I fear some will not take any notice though. I got the impression some MSPs felt the same.
One final aside; some welcome discussions took place at a personal level and I'm grateful to those who said surprisingly kind things of my intervention in this debate. They know who they are.
And a PS: I found myself in the surprising position of saying that it was mildly embarrassing that Jersey can produce better data than Scotland on many issues, meaning Scotland has no excuse for not doing better because of size. But then, I think it's also fair to say that much of that is the legacy of John Christensen's time there.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Thank you for your time and effort, Richard, you have debunked the myth that GERS were the be all and end all and showed Scotland’s finances now and seemingly forever to be doomed to failure, our yearly reminder of just how grateful we should be for the broad shoulders of the UK has become irrelevant and the demand for far better information now lies firmly at the doorstep of the Scottish Government.
PS: Jackie’s calculator is solar, so in Scotland, it only works for about an hour twice a year 🙂
Yes and I have my grandfather’s watch which is entirely mechanical and is right twice a day. I’m glad you added the smiley the sun is splitting the trees in Angus today.
Good work to move the discussion on. At one point I mistakenly believed outside bodies like the BBC would do more objective examination of so much of what was happening in Scotland but then discovered just how far away from objective the BBC was/is.
Must add, Jackie Baillie is also a great Trident enthusiast, and thinks the jobs it supports are worth the millions who would die, and for some reason doesn’t think it makes Scotland a target.
However Phil Hammond did point out in 2016 that, “North Koreas seems to think nuclear weapons makes it safe. In fact the opposite. Having nuclear weapons makes it a target”.
So it’s possible that shortly, GERS, Jackie Baillie and most of Scotland won’t matter at all!
Phillip Hammond presumably doesn’t draw the same logical conclusion to the UK nuclear arsenal as to the Korean capability. I’m not aware of his being vociferously in favour of scrapping Trident.
Years ago someone discussing the counterintuitive results which statistics can (but don’t always) reveal pointed out that private gun ownership increases a person’s likelihood of dying from gunshot wounds. There are numerous very good reasons for this and it’s likely that having a nuclear arsenal could in the long term produce similar results.
So far there’s not a lot of hard data to be had and of course if ‘we’ do start slinging nukes about there may never be anyone around to compile the data or indeed read them.
I watched the whole committee session with interest. Your contribution was very clear and informative. It is no surprise that Jackie Baillie disingenuously tried to dismiss it. John McLaren – an ex SPAD for Labour and committed SNP basher – can also be relied on to talk down Scotland’s economy (strangely citing OIL as the main problem).
As you say, the experts were in agreement that GERS is no use as a decision making tool. Let’s hope a new approach emerges very soon.
Many thanks for putting such an excellent case.
Thank you
I was unaware of John McLaren’s leanings in advance, but guessed from his dismissal of some SNP member’s comments which seemed inappropriate at best
The excellent Wings Over Scotland posted an article on him earlier this month. We have learned to always check the background affiliation of any comment piece on Scotland’s politics and economics.
As you pointed out today, nobody is completely free from politics:
https://wingsoverscotland.com/making-your-own-news
Thanks for another great article your honest and easy to follow which I know helps many of us who are not up on the ins and outs of tax laws.
Was Kev not invited? I’m sure there’s a ranty blog coming…. it’s in the air… 😉
No hint
And no evidence from him either
Which surprised me
I was expecting the committee to be in need of a chart or two
And I am sure the many of the committee have pets too…an opportunity wasted I’d say …
Thank you very much for your informed input Richard.
You always talk sense and you’re a pleasure to listen too as you know what you’re talking about.
Will be interesting in how things go forward from now on.
Scotland thanks you kindly Sir.
Thanks
Yes, it’s great you’ve taken your time and trouble. But perhaps “just” the blog articles and even The National articles wouldn’t have got you an invite. Personally I think it’s the provocative use of the Acronym for “completely rubbish approximations”
Sometimes you have to shock to get noticed.
I’m not sure Margaret Cuthbert will forgive me
But others, I think, agreed with you
And even Margaret and I had a good conversation about it
If Government wants more accurate and broken-down data from businesses, particulalry micro-entities, then it should not expect this to be done for free. We have to spend too much of our very limited time already doing the job we expect (reasonably or unreasonably) Gubmint to do.
However, just as the HMRC gave cash incentives for business to submit accounts online in a progressive downward payments (£500, £250, £200, £150, £75 or something like that) back in the early naughties, it could do similar for surveys. Give cash would be expensive, with online submissions there was an eventual cash saving to get for the HMRC to make it ultimately costless, which would not be true for surveys, though of course if better data increases the economy, ultimately Government gains revenues.
But perhaps a better way is a chargeable equivalent through corporation tax / profit tax (remembering that even if no profit in a year, losses can be carried forward). This might not even have to cost anything if for instance the Government was planning to reduce corp tax from 20% to 19%, but instead gave the cash return, and ultimately a 386 page downloadable report which all but the most enthusiastic would never even look at.
FoAI send out surveys for instance, personally I never have the time or inclination to fill them in – which is a pity. Give me a hundred quid every time and I’m their pal for life.
I really welcome your input in to this subject Richard.
What the UK Government in Scotland has been selling the Scottish people is misinformation and has been doing so for a number of years. John Jappy highlighted the true nature and extent of this in 2014 and not enough was made of his input at the time.
Thank you Richard once again for your work, it is very much appreciated.
Just read your submission paper, Richard.
It’s a pretty damning indictment of the current ‘system’ of accounting and its inadequacy in meeting any requirement other than to be obscure.
Assuming the Holyrood government agrees with your assessment what chance is there that any of your recommendations can be implemented given that much of the change needs to come from authorities over which Holyrood has little influence and no control?
The UK government is not likely to pay much attention while it is embroiled in the fiasco surrounding Brexit.
Scotland could decide to do this
The VAT changes could be done as part of Brexit adjustments
I stress, could be
PS.
The submission from Montagna and Kopasker reads like bullshit. I can’t make head nor tail of it. Presumably that is deliberate?
Their concern appears to be micro data when a macro issue was being discussed
Thanks. Yes, that would make sense.
Good work Richard, you socked it to ’em.
It’s here for everyone to see:
https://www.scottishparliament.tv/meeting/economy-jobs-and-fair-work-committee-september-19-2017?clip_start=11:06:46&clip_end=11:16:13
I think that your comment that your work ‘was based on blogging, not on the basis of doing a lot of deep searching’ was very revealing to the committee, and gave them an indication of your basic understanding of the issues at hand.
Vey informative.
Completely honest
But if you think I wrote that submission without some thinking then you would be seriously mistaken
You depth of knowledge of the GERS problems was very obvious, and will be useful for them when considering how you could assist in the future.
Well done.
Thanks
Well done Richard.
When questioned about other countries operating in the way you say Scotland should you stuck to your guns and pointed out that no other country in the world did so.
I think the committee now realise just who they are dealing with!
They said did
Not should
But it was Jackie Baillie and her whole line of questioning was pretty hard to follow
I have viewed the video of the whole committee meeting. Thank you for your efforts Professor Murphy. If I was going to carp about the meeting I thought it wandered in a slightly unfocused way, without sufficent rigour, between national accounts, GERS, micro issues, macro issues and so on; which would make it quite difficult for the public (at least) to follow. I thought this threatened to dissipate what you were trying to achieve; I hope the MSPs were able to sieve the real value available.
Generally the point was made fairly uniformly by the professionals, I thought, that Scotland is not sufficiently well served by the relevance an use-value of the information that is available to it on its economy; this is a comprehensively damning indictment of our political system. It suggests a kind of intellectual lethargy or insufficient capacity to challenge received opinion; reflecting also perhaps an eagerness in economics to theorise; but lacking the commitment, resources or expertise to do the experiment; to measure and test the nature of reality (the difference between physics and economics in a nutshell).
Returning to the meeting, I attempted to take careful note of John McLaren’s rather odd defence of GERS, which I hope I have recorded reasonably accurately, if awkwardly in an attempt at verbatim transcription (I stand to be corrected):
“… we should pass GERS – because it is too political ….. It [GERS] is saying something about what would happen if Scotland based on current spending and tax patterns, if Scotland became fiscally independent. That is all it is doing, which is not particularly interesting”.
Try and parse that, if you will: I will not do so; however, I agree with John McLaren this far only; GERS is not particularly interesting. It never was interesting; so why are we doing it? Why was it ever produced, at least in this form? What is its point (a rhetorical question)? Why has nobody among the “informed” ever seemed to challenge it (I think that Jim and Margaret Cuthbert argued assiduoulsy and doggedly for improvements over the years); but where were the powerful outside academic, or inside political voices, craving much better, usable information to make their important (for others – i.e., the public) social, economic or political decisions of substance? The silence has been deafening, for years. The defence of producing uninteresting data – for decades – has been stalwart (and worse, righteous); and piously supported across a media spectrum of uniform, wide-eyed, vacant acolytes of GERS.
What is the point of producing information for years that an economist now suggests “is not particularly interesting”? I spent my career in business and could never afford to waste my time on ‘information’ that was not even interesting. QED.
Thanks John: I agree with a great deal of what you say
Where I agreed with John MacLaren, and I have to say here I will defend the FoA, is that it is shameful that so few Scottish academics seem to have an interest in this as indicated by the lack of evidence submitted
Richard, it’s not just about GERS the accademic community is deficient on. Back in 2012 I confidently expected the academics to take a lead on producing not impartial, people would take sides, but in-depth analysis and balanced view, perhaps summations by YESsers, and ones by NOers.
Universities would see this as the biggest issue of modern times for Scotland with far-reaching effects – even including their own research funding. They would eagerly work to research, analyse and provide balanced information on a range of issues, constitution, legal, economy, EU, EFTA, international relations, start-up costs for ministries – currency and central bank or union, etc.
With a few notable exceptions, there was for instance an interesting forum on constitutional matters with balanced papers, what did we get? The same old handful of academics, with some universities proudly presenting “debates” with the same handful of academics and “experts” every time. Oh, and Academics Together and Academics for YES.
They let down Scotland.
Better work was done by LSE and Man U, plus Iceland.
I think the SNP-led government will be very lucky to get someone like you to do work for them of material value.
I think that very unlikely to happen