As we observed last night, the BBC’s Andrew Neil has reacted with rather poor grace to his chiding at the hands of respected statisticians Jim and Margaret Cuthbert. Neil embarked on a Twitter blocking spree and tried to rewrite history, claiming that he’d “simply offered” the blunt claim that there had been no cuts to the Scottish budget in the last five years “as one measure” of the money available to Holyrood.
The problem for Neil is that we recorded video of his Sunday interview with the SNP’s Angus Robertson, and anyone can see for themselves that Neil made an unequivocal assertion with no suggestion whatsoever that there were any alternative measures.
“In real terms there’s been – no – cut”, said Neil, spitting out the last three words with dramatic pauses between them for emphasis, in a statement whose stark absence of ambiguity unfortunately left him no wiggle room when the Cuthberts politely but firmly pointed out that it was “ridiculous” to argue that there hadn’t been any cuts, and that the budget “clearly has gone down”.
But Neil’s embarrassment is illustrative of a much wider delusion.
Followers of this site’s social media accounts will very likely have encountered a particular group of angry Unionists inexplicably still fighting the referendum campaign despite having won it more than a year ago. Their particular grievance is with our Wee Blue Book (read by over a million people last year), and a few lines in it on the subject of Scotland’s economy which the angry Unionists furiously claim to be “lies”.
(Many of the alleged “fabrications” of the WBB are in fact just quotes it’s printed from other sources, such as the Financial Times, all sourced and clearly labelled as such.)
We’ve always ignored them, partly because the claims – which are chiefly levelled by an obsessive, abusive businessman with self-confessed attention-seeking issues (see the quote below from a 2011 Telegraph interview) – have no merit at all and partly because there hasn’t seemed much point in getting drawn into an argument about the referendum when it’s over and there’s no second one on the immediate horizon.
But it’s perhaps worth taking a moment to lay out some facts as an illustration of how humans will seize on any case, no matter how obviously full of giant, gaping holes it is, in order to believe something if they really, really want it to be true.
The Unionists primarily object to a line in the WBB’s “Economy” section which says “Scotland subsidises the UK by billions of pounds every year, and has done for many decades”. Yet this claim is easily verified, using only figures provided by those either neutral or actively hostile to the cause of independence.
In 1997 the UK government explicitly admitted in Parliament that Scotland’s net subsidy to the rest of the UK over the preceding 18 years had been in the order of £30bn, despite the oil price for most of that period being around $20 a barrel.
(Since that time, of course, the price of oil has been far higher, and is still more than twice that level even after the crash that happened around the start of 2015. But as we’ve recently pointed out, the health of the Scottish economy is far more complex and nuanced than simply a matter of looking at what the oil price is anyway.)
When independent analysts FullFact investigated Scotland’s finances in 2014, they concluded that Scottish taxpayers had over the last 30 years contributed £222 billion more to the UK exchequer than their fair share – about £7.4bn per year on average.
If we also repeat this calculation for the UK, we can see that Mr Salmond is on the money when he says [that] in every single one of the last 30 years, the amount of tax revenues generated per person in Scotland was greater than for the UK as a whole.
If, continuing to apply the geographical share principle, we look at how Scotland’s total tax receipts since 1980 compare with the UK’s, we can see that Scotland has contributed – as Mr Salmond notes – a surplus £222 billion in today’s prices.”
The Unionists protest, legitimately, that the UK also spent disproportionately more on Scotland to partly balance that contribution out. The “Better Together” campaign used a figure of £1200 a year, which for the sake of argument we’ll take at face value.
For most of the oil era the population of Scotland was just above 5 million. If we take a generous average of 5.1m and multiply that up by the claimed £1200 we get £6.12bn a year in extra spending, balanced against our £7.4bn in extra contribution, meaning Scotland paid around £1.3bn a year more into the UK on average than it got back, according to the official No campaign’s own figures.
(And it’s perhaps worth noting in passing that any “UK average” figure is in itself being distorted upwards because it includes Scotland’s higher contribution.)
But that’s a crude back-of-an-envelope calculation which disguises the full magnitude of the subsidy. To get a better picture of the reality we have to turn to Professor Brian Ashcroft of the Fraser Of Allander Institute.
The husband of former Scottish Labour leader Wendy Alexander, he’s nobody’s idea of a Scottish nationalist. And in 2013 he set out to prove that Scotland hadn’t had a rough deal out of the Union since the oil boom:
Prof. Ashcroft’s figures asserted that in real terms over 32 years Scotland had spent (or more accurately, had spent on it) £15 billion more than the amount of money it had earned in taxes – a net average overspend of £469m a year.
That’s an absolutely tiny deficit by international standards, somewhere in the region of 0.3% of Scotland’s GDP of £158bn.
But Ashcroft goes on to note, albeit somewhat reluctantly, that even those figures do Scotland a disservice. They’re severely skewed by the fact that Scotland contributed billions of pounds a year to servicing UK debt, even though – as he notes – Scotland had incurred almost none of that debt itself, because it had almost no deficit.
“I estimate using 19 years of Government Expenditure and Revenues Scotland (GERS) that Scotland’s share of UK debt interest amounted to £83 billion at 2001-12 prices. Subtracting this from total estimated Scottish spend of £1,440 billion we get a debt interest adjusted estimate of spend of £1,357 billion. Total estimated tax revenues are £1,425 billion.
Prof. Ashcroft isn’t clear about whether he’s calculating that debt-interest stat over 19 years of GERS or the full 32-year period. But if we take the most Unionist-favourable interpretation and say it’s 32, that’s a net average subsidy from Scotland to the rest of the UK of £2.2bn a year. (Over 19 years it’s £3.6bn a year.)
That figure still understates the reality significantly, because of course Scotland would have enjoyed considerable additional benefits from that £68bn surplus, the larger part of which accrued early in the period. It could either have invested it in a Norway-style oil fund, generating uncountable billions of pounds in extra income, or spent it in the economy, generating growth and tax receipts. (Or most likely a combination of both.)
Nevertheless, what we find by examining only figures provided by the Unionist side is that beyond any possible question, Scotland HAS subsidised the UK by billions of pounds a year for decades, exactly as stated by the Wee Blue Book.
(Depending on how you interpret the figures the exact size of that subsidy is anywhere from £1.3bn a year to several times as much.)
The angry Unionists simply ignore Prof. Ashcroft’s rather inconvenient findings on the subject, and the obsessive attention-starved businessman then cherry-picks some misleading statistics, isolated from context, to paint a gloomier picture that anyone willing to be blinded by a snappy-looking graph can convince themselves is real.
Anyone foolish or naive enough to attempt to engage in debate with them is told that the figures being discussed here refer to the past and are therefore irrelevant. But then the WBB clearly identifies that they’re historic, and outlines exactly what it’s referring to, citing most of the sources we’ve listed in this article.
The future, obviously, is unknown. Nobody – including the UK government – predicted the oil crash, for example. But as Prof. Ashcroft (again) noted earlier this year, while a low oil price damages the headline state of the economy the real-world effect is very different, and on balance probably beneficial.
“The Scottish economy will continue to pick up pace, despite the lower oil price having an adverse impact on the oil and gas industry. The Fraser of Allander Institute’s regular forecast shows the boost to oil users in Scotland outweighs the harm to North Sea producers.”
(Because the money the government loses in oil taxation is recouped in other ways, eg by taking in more corporate tax from businesses doing better thanks to lower fuel and energy costs, more personal tax from more people being employed and having more money to spend, and lower welfare expenditure. The low oil price also brings about a very considerable direct redistribution of wealth into people’s pockets – the cost of fuel has plummeted by around 50p a litre in the last couple of years, saving consumers far more money than any amount of tinkering around with tax rates.)
In looking to the future the angry Unionists also deliberately ignore the fact that the whole point of independence is to do things differently. Their figures are unfailingly based on an independent Scotland pursuing the same failed policies and spending plans pursued under the stewardship of the UK – which have left Scotland lumbered with a large share of the UK’s vast (and still growing) £1.5 trillion debt and the crippling interest payments on it, and a shattered manufacturing economy.
They also don’t take account of the fact that Scotland shoulders a disproportionately high share of the UK’s debt burden, nor the likely outcome of any negotiations over debt in the event of independence. The Scottish and UK governments have widely differing views on what would be a fair share for Scotland – partly arising from Prof. Ashcroft’s calculations – which would have a major effect on Scotland’s future deficit.
(The Unionists, of course, assume unquestioningly that the worst-case scenario would prevail, even though Westminster has no means of forcing an independent Scotland to accept any debt at all, especially if it holds to its bluff over refusing a currency union.)
All of these facts are self-evident. The figures showing Scotland’s huge net historical subsidy to the UK are uncontested by either side. Yet the obsessive attention-starved businessman is feted not only by a handful of loonies on Twitter, but also by a Unionist press which has been driven half-mad by its hatred of this site’s scrutiny of it, and which fawns over his comical, fundamentally-flawed blog posts and frantically tries to puff him up as a serious, credible counterpoint to our analysis.
Andrew Neil is only the latest victim of the No side’s desperate search for a hero. The angry Unionists’ attacks on the WBB, most of them built on deliberate, tortured semantic misinterpretations and the avoidance of awkward facts, fall to pieces under the slightest forensic gaze – not from us, but from expert neutrals and Unionists like the Cuthberts and Brian Ashcroft.
The simple truth is that the No side believes a second independence referendum is inevitable, and is terrified that they’ll lose it. They blew most of a 30-point head start last time, and have continued to see their lead eaten away in the 13 months since.
That means they mortally fear any powerful source of information and persuasion on the Yes side, and will clutch at any straw – no matter how transparently deranged – to try to smear and discredit it.
We, meanwhile, will continue to stick to the facts.