Keith Brown, cabinet secretary responsible for GERS
Many years ago I had a job providing a research and information function for a London borough council. My responsibilities included making population projections for the area and undertaking social surveys. I had two great battles that involved what might be called professional standards. I won one and lost one. Both are worth retailing for what they might tell us about some of the current controversies over the Scottish Government’s expenditure and revenue figures (GERS, or Government Expenditure and Revenue Scotland, see the Scottish Government website).
The first was a struggle over population projections that the Greater London Council produced and which I tailored for the inner city area we worked in. The problem was that no matter how you cast the figures, they showed the forecast population falling. My boss was incandescent. As an architect he’d been responsible for a massive housing programme that amongst other things threw up over fifty tower blocks in a decade or less, partly on the promise that they would reverse previous falls in population. ‘How can we build so many new housing units,’ he fulminated, ‘and you still think the population’s going down?’
It took a while to persuade him that the critical factors in determining the population were not the number of new flats built but how many people lived in them, how long they lived, how many children they had, whether they chose to move out of the area at some stage (many did) and who moved in to replace them, as well as what was happening in the many older houses in the area. It was a bruising encounter. Although I won the battle (because the facts were irrefutable) and gained some credibility elsewhere in the organisation, I trod on eggshells with him for the rest of my stay at that unhappy place.
My second battle was with a colleague responsible for the improvement of many of those older houses in specially designated areas. The council had decided to undertake a housing condition survey. X was adamant that the houses in these areas should be excluded, ‘After all, they’ve been improved, haven’t they?’ Never mind that the ‘improvements’ looked like a dog’s dinner, with cheap white plastic doors and green roof tiles replacing wooden doors and grey slates. X had close, and it turned out inappropriate, contacts with a number of councillors and builders. The survey did not proceed in those areas and a while after I left his wrongdoing was the subject of investigative journalist Roger Cook’s Checkpoint programme.
You might think this is a long way from the current controversy over GERS, which can be summarised briefly. GERS analyses data which show, on the best evidence available, that Scotland is responsible for spending a lot more public money than it generates in revenue (taxes). To do so it receives a net transfer (subsidy, if you will) from the UK Treasury. This evidence is, to say the least, inconvenient for anyone trying to build an economic case for separation, especially at a time when taxes from North Sea oil and gas have collapsed. So a lot of effort has been devoted by nationalists to other ways of looking at the data, to the extent that in many cases they are no different from the ‘alternative facts’ so beloved of President Trump.
The purpose of this post is not to enter into the details of the controversy. Others better qualified than me have done that: see, for example, various posts by the excellent Kevin Hague on his blog. I buy his conclusion that GERS is, as we say, ‘nae bad’ and probably as good as we’re going to get on the subject. But if you want other points of view dive in via Mr Hague. He has demolished a number of them but always links his comments to the original material he is critiquing. So, for example, when Professor Richard Murphy of City University described GERS as ‘economic data provided by London,’ Hague’s riposte included a link to Murphy’s blog on the subject.
Before Prof. Murphy dipped his toe into the waters of GERS, much of the criticism of it was at the ‘Yaa boo sucks’ level of schoolboy debate perpetrated by what I think of as Wings-and-the-friends-of-Wings. Thus for example, and I paraphrase from memory, ‘GERS was invented by the Tories/Michael Forsyth to hide oil revenues/do Scotland down and it excludes taxes on whisky exported via English ports’ (a tax that doesn’t exist).
This sort of nonsense cuts no mustard with anyone who’s willing to examine the facts and think the issues through seriously, although many nationalist politicians are happy to turn a blind eye to it, presumably on the basis that some naïve voters will believe it and have their faith in the cause strengthened.
There was another twist of the knife this last week when a mainstream SNP politician, long-standing MSP Joan McAlpine, once said to be close to trained economist Alex Salmond, sought to cast further doubt on GERS. She used her column in the Daily Record to re-hash Professor Murphy’s arguments but added:
Unionist commentators point out that the Scottish Government have used GERS and that is true … Professor Murphy thinks he knows the answer. The figures are wrong. He deserves to be heard.
No Joan, the Scottish Government don’t use them: they, or their economists, generate and own them. They are the government’s figures. And Murphy doesn’t deserve to be heard if he’s wrong (Kevin Hague, mentioned above, has also blogged a riposte to McAlpine).
By now, you may be wondering about the connection between GERS and my own long-ago experience in a different place.
All large organisations need facts about the present and a best guess at future facts that might affect them. They need to employ experts and specialists to do the best they can in gathering, analysing, interpreting and explaining the information involved. Those experts should not be beyond criticism and their conclusions should not go unchallenged. But they do need to be allowed to operate to the highest standards and to be protected from unjust disparagement.
If you look at the Scottish Government website, you’ll see that GERS is prepared by a team within the office of their Chief Economic Adviser. You’ll also see links to a wealth of related material – an annual publication, spreadsheets, methodology, frequently asked questions, and so on. Most importantly you’ll see that the work carries the seal of approval of the UK Statistics Authority which certifies amongst other things that they have been prepared ‘without being influenced by non-statistical matters.’
All this is good. But what is going on to discredit the work of the Scottish Government GERS team is no different than the pressure brought on me to do a less-than-good technical job many years ago. It’s about people wanting to influence the production of statistics on the basis of ‘non-statistical matters.’ Ironically, there’s an open invitation on the GERS web page for users to give comments on any aspect of the subject, an opportunity available to the owner of the Wings website, Professor Murphy and Ms McAlpine. If they have genuine doubts about the exercise they should contact the GERS team or refrain from comment.
As for the Scottish Government, I hope and assume the GERS team has the full support not only of the civil service senior management but also of Keith Brown, the cabinet secretary for the economy, jobs and fair work, to whom they ultimately report. They are civil servants and cannot respond in public to loaded criticisms of their work. Mr Brown needs to make a public statement supporting that work or announce an open review of the GERS exercise. Without that there will be continuing suspicion that both he and the government want to undermine the work of their own experts.
These things count when it comes to building reputations, not least with the international organisations, rating agencies and banking community that a separate Scotland would be reliant on. Start with a fudge on the basic financial situation of the country and you’re doomed. I’m not sure the SNP have grasped this simple fact.