Tag Archives: GERS

Richard Murphy’s Journey to Yes

Richard Murphy is a political economist. You  might have come across his blog TaxResearchUK which is much, much more interesting reading than you might guess from it’s title! For example “It’s time the BBC learned that all money is made out of thin air.” and “Has Carney taken leave of his sense?” Carney being the Chairman of the Bank of England.

Recently he wrote about the inadequacies of the GERS (Governement Expenditure & Revenue Scotland) figures. If you read my blog you’ll have spotted me trying to makes me sense of them and what they say about the Scottish economy. According to Richard, I shouldn’t waste my time as they are not fit for purpose. Or to be more precise not fit if your purpose is to make sense of the Scottish economy. On the other hand if your purpose is to obfuscate the likely state of an independent Scottish economy, they do an admirable job. He has written several posts about GERS, for example “Why economic data provided by London will not help the Scottish independence debate” and  “More on Why GERS might properly be called crap data” .

In this video he talks about he see sees leaving the UK as the only way for Scotland to reach its full economic and human potential.  The prize is a better Scotland. He takes about the economic forces powering the Yes movement, he dismantles the case for GERS and looks at the key issues of currency, investment and taxation that must be addressed to win the independence argument. Worth a listen….

Is Scotland Bankrupt Pt 4: Haud oan, whit aboot oor GDP?

Same waiver as before: If you’re looking for a reliable economic overview you need to read an economist’s blog. I just know how to read a balance sheet, do arithmetic and create nice graphs from governmental data spreadsheets. Oh and this is part4 so might be an idea to read parts 1,2 & 3 first. They’re not long.

So yeah, what about Scotland’s gross national product, GDP, then? The previous posts in this series have mostly been about public revenue and spending for Scotland and for UK. Gross national product is the complete national pay packet before profit-taking, tax,  and other deductions. The World Bank is very helpful. Their website gives access to their worldwide database where you can select which countries, specific data and timelines you’re interested in and download it all to your computer in a spreadsheet. The spreadsheet can be at your fingertips in a few seconds and you can create graphs and visuals to your heart’s content. Same with Scottish Government GERS which is what started me off on this to begin with.

So here’s a few extracts. This is GNI in US$ which is now the World Bank’s preferred measure. It’s GDP plus a bit extra, for example  including income contributed by  country’s nationals working abroad. And this is GNI per capita, i.e. per head of population.

World Bank Data

The Nordic countries are obviously doing OK. Norway, obviously. Iceland is pretty good though it’s population is only 300,000. Germany and UK are a bit, but not far, behind. Here are some detailed per capita numbers, again in US$. Clearly it pays to be a) very small and have either b) a lot of private banks, Luxembourg, or c) be the registered nation for a very big multinational company, Luxembourg and Amazon, or d) have a lot of oil, Qatar. And  look at Ireland!! 

World Bank GDP per capita data, 2015

What is Scotland’s GDP? And how does it compare with our Nordic neighbours and a few others? 

WorldBankData; ScotGov GERS

In other words, as far as overall income for each one of us here in Scotland, we’re producing as much as Canada, Finland and Germany, yes GERMANY!!! and a bit more than France and Japan. Not to mention lots more than Turkey and Russia. 

When was the last time you heard anyone say that Canada, Finland, Germany, France, Japan, Turkey and Russia couldn’t afford to be independent? 

When was the last time you heard that Scotland was too poor to be independent? Yeah, probably today on the BBC or in the Herald, Scotsman, Telegraph, etc, etc.

So what’s going on here? It beats me. 

Is Scotland Bankrupt? Pt 3 – HMRC Trade Surplus statistics

Same waiver as in Pt1 as to my lack of economic training. Oh and it’s probably better to read this series in chronological order. 

Despite the figures seeming to point to a Mr McCawber outcome of misery due to our public spending being about £3,000 more per person than our public income and a Ma Broon “Michty me” warning ringing in our ears, surely there’s other ways to look at it.

What does the HM Revenue & Customs say?

Very handily, HMRC provide UK trade info broken down into geographical regions. Here is one of their current graphs, showing trade info for the Year to end of September 2016. Continue reading Is Scotland Bankrupt? Pt 3 – HMRC Trade Surplus statistics

Is Scotland Bankrupt? Pt2: Yes, I already told you that.

“The aim of GERS is to enhance public understanding of fiscal issues in Scotland.”

Right then,  let’s take a closer look at GERS: As with any financial transactions, it pays to attend to the small print. Same waiver as in Pt1.

Here goes:

2015-16 Income: 

  • Including an illustrative geographic share of North Sea, Scottish public sector revenue was estimated as £53.7 billion (7.9 per cent of UK revenue).
  • Of this, £60 million was North Sea revenue.
  • The year before North Sea revenue was  £1.8 billion which just goes to show the effect of long-term falls in oil production and recent falls in oil price.
  • Scotland’s public sector revenue is equivalent to £10,000 per person, £400 less than the UK average, regardless of the inclusion of North Sea revenue.  

Continue reading Is Scotland Bankrupt? Pt2: Yes, I already told you that.