Stacking the deck
Yesterday, right-wing think-tank the Institute of Fiscal Studies issued a document entitled “Fiscal sustainability in an independent Scotland“. It’s rather less than glowing about the prospects of an independent Scottish economy.
For seekers of facts, the most important aspect of the report is not its findings but rather what data was used and from where it was gathered, which severely slanted the outcome of the report before it was even written. Because it doesn’t matter how diligent, honest and thorough an economic assessment is, if the input information that the economists are asked to work from is heavily skewed to begin with.
Initially, the report is pretty much what you’d expect. It highlights how Scotland’s economy is stronger than the UK’s at present, and how historically we’ve paid more in taxes and run a lower deficit than the UK.
“When expressed as a share of national income, Scotland is estimated to have raised a similar share of national income in revenue to the UK as a whole (37.7% compared to 37.5%) and spent a smaller share publicly (42.7% compared with 45.5%).
This is because Scottish GDP per person is higher than that for the UK as a whole if we allocate North Sea Output on a geographic basis.
As a result, in 2011–12, the gap between spending and revenues in Scotland stood at £1,550 per person (or 5.0% of national income in total), compared with £2,039 per person (or 7.9% of national income) in the UK.”
Yet the report then goes on to say that this situation will reverse in the future, with Scotland becoming an economic basket case over a very short time period of only the next few years. The main reason provided is that Scotland’s borrowing is projected to decline at a slower rate than the overall UK borrowing levels over the next five years.
Their argument is that North Sea revenues (a more important source of income for Scotland than for the UK as a whole) fell sharply between 2011–12 and 2012–13, and are forecast by the OBR to fall even further by 2017–18. As such Scotland’s strong financial position relative to the UK will degrade and eventually reverse. This isn’t new information – it was asserted as part of the No camp’s “dodgy dossier” months ago.
However, alert readers may recall that the projections used by the OBR are inconsistent with most other forecasts and don’t agree with the UK governments OWN oil and gas specialists in the Department for Energy and Climate Change, being a full $43 per barrel lower than the DECC projections (almost a third).
The IFS has also chosen not to factor in the likelihood that new fields will be coming online over the next decade as investment in the offshore industry continues at record levels, the latest of these being the massive Kraken field to the east of Shetland, which has an estimated 25-year lifespan and 140m barrels of recoverable oil, as well as providing up to 20,000 jobs. It also ignores the recent report that said changes in the industry could generate an extra £10bn a year for the next two decades.
The report then goes on to say that Scotland has an ageing population, with birth and migration rates too low to plug the gap in the short term:
“ONS projections suggest that the size of the Scottish population will increase less rapidly in future than that of the UK as a whole.
In the ONS ‘low migration’ scenario, which is deemed by the OBR to reflect current UK government policy most closely (with net immigration into Scotland from the rest of the UK and abroad at 9,000 per year), the size of the Scottish population is projected to increase by 4.4% between 2012 and 2062, compared with 22.8% growth for the UK as a whole.”
Readers may be wondering why Scotland would continue to use UK immigration rules in these circumstances, especially given the Scottish Government’s far more pro-immigration policies. But it’s true that were it to be part of a Common Travel Area (CTA) Scotland would have to apply the same rules and checks to prevent illegal immigration and stop undesirables gaining access to the rUK by the back door.
However, for visa applications for jobs or study the Scottish government would be free to issue as many as it wished – although that may not even be required as immigration from EEA countries (which is uncontrolled) could be promoted.
And as for birth rate, it’s already been projected by National Records for Scotland that the nation’s population will grow by 10% over the next 25 years – more than twice the IFS figure, in half the time.
When it comes to finances the IFS report takes on an even stranger view: that an independent Scotland’s revenues and spending will be identical to now.
“Our basic model assumes that the latest OBR forecasts (March 2013) for spending and revenues for the UK as a whole up to 2017–18 are correct. We allocate these between Scotland and the rest of the UK using estimates produced by the Scottish government and some of our own modelling.”
Interestingly, the IFS has used the OBR projections for UK growth and borrowing and applied that to an independent Scotland. In so doing, the IFS has ruled out increased economic activity through tax and stimulus measures – thereby discounting any additional revenues generated through growth.
It assumes that Scotland won’t benefit by having control over its own fiscal levers to generate growth over and above Scotland’s projected UK performance – an assessment which would presumably be contested by anyone who doesn’t think the current UK government is doing a good job of growing the economy (eg Labour).
This assumption clearly skews the entire study before it even starts, but the IFS aren’t finished yet. By allocating spending as per current UK projections it means that they are allocating spending to Scotland which currently occurs outside of the country and offers no economic payback.
(The most obvious example being defence, where around £1.5bn pa is spent “on behalf of” Scotland that isn’t spent in Scotland and brings no economic benefit to Scotland.)
On Scotland’s inherited debt, the IFS assume a split of UK debt on the basis of population. While this may be the correct starting point in any negotiation, it is by no means certain to be the actual amount agreed upon.
The result of what total debt is inherited cannot be overlooked as part of the deficit, as the deficit is dependent on how much Scotland is paying in debt interest. (Indeed, Scotland’s deficit and its share of UK debt interest payments are almost identical.) Should Scotland negotiate a better split of debt, then it would have less interest and therefore a lower deficit initially than assumed by the IFS.
On borrowing, the IFS also use the projected interest rate for an independent Scotland of 5% (which is the OBR’s projected rate for UK borrowing), but that figure is high when compared to the borrowing levels of many of our northern European neighbours, and especially given that current UK borrowing comes in at a reasonable 2.5%.
The IFS doesn’t explain why this high rate would be imposed on an independent Scotland supported not only by economic output that’s 114% of the UK’s, but also by the security of a $1.4 trillion asset in the form of oil and gas reserves. It’s difficult to see how an independent Scotland in such a situation would be a risky prospect for lenders, and therefore why borrowing costs would escalate in this manner.
Now comes the interesting bit.
All of the assumptions above are not the base assumptions used, or even the lowest. As gleefully seized on by Danny Alexander, they’re the best-case scenario that the IFS can muster. Bizarrely, the IFS uses these low projections as the maximum possibility – effectively rubbishing (to highlight just one example) all the alternative independent projections for oil revenue, including that of the UK government’s own DECC, as being fantasises concocted by delusional idiots.
So let’s recap: the IFS is expecting, at best, an independent Scotland to have abnormally high interest rates on borrowing; population growth a quarter of other estimates; oil prices about 33% lower than the UK government’s own experts predict; spending remaining at the same level, with no benefits accruing from diverting billions of pounds from defence to the economy; and no economic benefits from controlling all the country’s fiscal levers.
So what have we learned? Well, not a lot about the future economy of Scotland and rather more about bias in forecasting. If you base an economic report on the lowest projections you can get away with, you’ll get a pessimistic outcome. We could have told you that for a lot less than we suspect the IFS charged.
Excellent analysis Scott. I’ll ensure it gets wider coverage elsewhere especially at Guardian where Sneekboy has been missed 🙂
Perhaps we should crowd fund the IFS to produce a report on the UK economy based on the same methodology and see what the results are? Also, no mention by the IFS of the implications of Scotland becoming independent on the UK economy. Now that would be interesting.
Brilliant.
Excellent, insightful work. In the good old days this is exactly the type of analysis that backroom staff working for the state broadcaster would do to brief presenters and interviewers so they could do their job properly.
Not a sign of that in yesterdays BBC etc. IFS fawnfest – despite it being obvious that the BBC and others had been given prior sight of the report.
I was thinking about the whole crowdfuing thing earlier today as well. Wonder how much IFS would charge to recreate the report based on the inputs as outlined in this piece?
Just remember, they only do it because they care.
This comment, or rather the comment from the Deputy Director of the IFS astonished me –
– comment in the HeraldAlastair Gordon, West Lothian
• 20 hours ago
I’ve just watched a recording of today’s ‘Daily Politics where Carl Emmerson (deputy Director, IFS) says, “Certainly an independent Scotland could do a better job the current UK Government in terms of setting tax policy.”
Answering another question from Jo Coburn, he said, “Over
the longer term we can expect some combination of tax rises or spending cuts
for the whole of the UK
. . .”
The interview went on,
JoCo: “Will independence basically mean the Scots having to
pay back for their extraordinary level of spending on public services?”
CE: “Well
essentially in the longer term it would mean they would have to finance that level
of spending themselves.”
JoCo: “But is it difficult to predict exactly Scotland’s economic future because of the variables like oil revenue that you talk about? All right it is diminishing but we don’t know exactly what’s going to happen to it or how quickly it will diminish and also the level of debt that Scotland would inherit.”
CE: “Certainly the fiscal position that Scotland has over the longer term is very sensitive to exactly how and when oil revenues decline, exactly what level of debt they will inherit. So we considered a range of scenarios, the most optimistic where we say ‘Suppose Scotland gets half the debt the UK has, suppose that oil revenues follow higher level, as predicted by the Scottish Government for the next few years’, even under that more optimistic scenario. It still looks that the fiscal challenge. . . .”
What? iScotland has to take 50% of UK debt?
With 8.x%of UK population
With 9.x% of UK GDP
With ~33% of UK land mass
Who other than a gibbering idiot would decide its optimistic for iScotland to take on 50% of UK national debt? Not even OBE would try that one on.
Without even bothering to read the report, if it’s based on assumptions like that it’s not worth the paper its printed on.
Bill,
50% of Westminster’s debt? Me thinks they are trying it on. So we get 50% of the asset value?
If our tax revenue to GDP % is roughly the same as UK, and our GDP is about 20% higher you would expect our average income to be about 20% higher too. It is not.
Scotland will be an economic basket case if we don’t get out next year.Even if the oil was running out,it’s better we take charge of what is left before it’s all gone.
Population of England 1901-2011 increased by 76.3%
Population of Scotland 1901-2011 increased by 18.4%
(Wikipedia)
If we’re so much better together, how come everybody wants to live south of the border rather than north of it?
@Bill Frazer;
He’s got to mean per head, surely.
Great article Scott, maybe someone could pass it on to Iain Grey and Darling & co, of course you will need to explain the big words for them.
Vote Yes, Vote Scotland.
I noticed on the Guardian that John Ruddy et al were extolling the virtues of how respected the IFS are when I and many on the left have always viewed the IFS as a right of centre neo-liberal organisation big on deregulation. They are not as barking as say the Taxpayers Alliance but they are most certainly on that side of the dividing line. Bit depressing that Labour peeps like John and Niclas set so much store in the IFS. I am pretty sure they will not be so sanguine if Labour get in and the IFS produce a report saying their policies are rubbish….which they will.
Wait a minute-does that say that immigration is too low?A report welcomed by uk govt that says immigration is too low lol.Now i know it’s rubbish.How many Scots are forced to England for work every year,how many come back,and how many will return from all destinations after independence that have left over the decades?Immigration might rise with our own folks returning home to a forward looking economy in a renewed country.
@Bill
The only rational explanation is that he meant 50% of the debt per capita, then again rational is an elusive thing these days.
Excellent analysis Scott, cheers! Perhaps send this to NewsNet and Business for Scotland too?
Excellent stuff a definite bias shown by another London think tank, one that used to be respected. What alerted me though was the timing of the release, just before the First Minister announced the SG ideas on improving business and boosting employment in a Free Scotland. With the coming White Paper firmly in their sight.
The concerted efforts of ALL the MSM including Uk Labour and SLAB ( yes I know they are the same !) Darling’s usual slaverings and the hapless Ian Gray also putting the boot with a conviction that he thinks anyway, that he knows what he is talking about!
You could not make this up, no longer will the IFS be trusted after this, they have joined the BT big time.
Should we expect better, yes, absolutely but let us remember, they are based in London, every person I have actually heard from them is English. So we should not doubt their allegiances, Westminster rules and corrupts, remember.
I will trust the opinion of Alex Salmond’s team, solely having Scotland’s interest at heart, they HAVE balanced the books for years now. They have a good track record that Osborn and Cameron can only aspire to. We need no lessons from them, I will include Darling in that even more especially him.
Then of course there is all info used by the IFS as pointed out in this very good article. Oh don’t get me started!
I remember when, in a past life, I was employed to produce cost/benefit analyses – the critical piece of information required was what answer the client wanted. The rest was easy.
Cross checked my figures with Office For National Statistics(http://www.ons.gov.uk).
Their figures are:
England’s Population 1901-2011 = 72.5% increase
Scotland’s population 1901-2011 = 15.6% increase
If our population had gone up at the same rate as England’s we’d be at about 7.8 million by now.
The IFS placed great importance on discussing the debt that Scotland would aquire from the UK after Independance. In fact the word debt is used 186 times in the report.
However there is no mention of the assets of the UK that Scotland would be entitled to a share of, (having paid for them via taxation) whether by a tax paid share or even simply a population share.
When I search for the word “asset” it appears only 3 times and then only in connection with assets that Scotland might need to aquire from an oil fund after Independance.
The cynic in me suspects that certain ‘respected’ and ‘independent’ opinion polling organisations will be very busy in Scotland this week, post orchestrated IFS propaganda blitz, pre White Paper…
Great article Scott.
As well as the regulatory and collaborative changes in North Sea oil & gas, I guess they are also discounting ANY technological developments that prolong production and/or sustain current stocks.
It’s not the ecomony stupid, it’s the stupid economists.
Re this IFS report: It seems to me that whoever put it together assumes that everyone else will adopt the same irresponsible, spendthrift lifestyle of some-one who constantly has to borrow till payday.
King’s Fund
The King’s Fund is an independent charitable foundation whose goal is to improve health, especially in London.
One of the IFS’s funding bodies. The rest of their paymasters seem to have the same goal.
link to ifs.org.uk
Curiouser and curiouser.
Beautifully and succinctly expressed Scott. Really cheered me up after an inexpressible rage at that weasel Alexander.
But, but, but Danny Alexander said they’d looked at every scenario.
Nice dissection Scott. 🙂
Great stuff Scott. Analysis like this alternatively makes me laugh and cry at the inability or unwillingness (more like) of any of the MSM to do this stuff themselves. We know we’re marching against the monster but sooner or later the monster’s going to turn and run from the mass-ranks of informed people.
Or from ill-informed people that tell it to fuck off because they’re going to vote Yes anyway. (for more info on this phenomenon, refer to the FiF on Bateman’s blog)
Great breakdown Scott of the methods used by IFS to ridicule Scotlands prospects. These bullshit papers and scare stories are nothing less than ridiculous.
unfortunately the damage has been done by messrs posenby,darling,fraser,and others last night.The IFS is funded by Vince Cables dept.for business via the ESRC.and unless there is some way of getting this information out to the public the yes campaign are going to struggle.There has to be some way to hold these people to account.It has to be exposed that the IFS is not the independent body that we are led to believe.
Now that the IFS has had its say, I was of course interested in the Scottish government’s Economic Policy document. What’s just as interesting is the BBC’s coverage of it. I listened to Radio 2’s news and flicked onto the home page of the BBC website. Radio 2 led with Jeremy Hunt and some [English-natch] NHS story, relegating a 20 second piece about the document and linking it to the IFS stuff to near the end of the bulletin. The beeb’s website has it hidden away in its Scotland section, ie not on the home page, where it would have had to compete with some nonsense story about the mayor of Toronto.
My point is (and I know the same point’s been made ad nauseum here before) is just the sheer lack of interest by the rUK to the potential break up of their country. It’s simply staggering the way that they treat Scottish independence as just a wee story about what the jocks are up to.
They’re going to waken up on September 19th asking WTF happened there? Where’d Scotland go?
Very enlightening….thank you Scott!
@roberto
unless there is some way of getting this information out to the public
There is and they’re all above us sticking links on every news site, every facebook and twitter page, every blog …
It’d be nice to have unfettered access to MSM like the opposition, but we still get the word out. 🙂
Wondering why it takes yourselves and Biz for Scot to comprehensively dissect these things instead of the Scottish Government. Don’t they get an advance copy?
This de-bunking is fantastic and as quick a response as anyone could expect, but the original paper has already been impregnated into the minds of the undecided, few of whom will delve into the follow-up articles.
How about crowdfunding some Norwegian economists?
Well written and researched article which goes a long way to debunking the witch doctors who proport to know about economics. Unfortunatly I feel many ordinary Scots lack the specific understanding of basic economics to understand the counter arguments and the unionists play on this fact by using sound bites to con the general Scots populace into acepting their arguments. Yes Scotland need to simplfy the facts and bombard the msm with the counter argument
Trying to forecast so far ahead is just ridiculous, especially when it depends on what economic decisions are made.
And a lot can happen in a short period of time – look at the financial crash for example.
Or a massive new oil field could be discovered at any time, maybe off the west coast.
It basically comes down the question of who should have the power to delivery policies that will put Scotland’s interests first – Holyrood or Westminster ?
I’m afraid to say Eck and John Swinney should have brought forward their economic plan statement a week to outflank the IFS report – they surely must have known that the media would be saturated with its doom & gloom. It’s tactical slip-ups like that that can cost us.
However, the little we heard from John Swinney is spot on – this report more paints a picture of Scotland if we stay in the union and follow the Westminster hegemony, who have no plan to reignite and transform Scotland. Once we get a better idea of what will be different with independence eg immigration policy, defence, that we’ll know what we’re choosing between.
Plus, I will have more faith in the heavy-hitters in the Scottish Fiscal Commission (the Nobel laureates & international experts) with genuine global insights, than the London-centric IFS.
I’m also sure that Westminster will probably be funding the IFS NOT to produce a similar UK forecast until after next September. See if I’m wrong.
The various spokespeople for IFS went large on “the most optimistic scenario” and this was left unchallenged. Various graphs were produced by the IFS – would it be possible to redo these using the revised starting points and trends you’ve identified Scott?
I feel that they’ve not factored in the premature death rate for Scots in their projection of health care costs.
Great work.
Folks, I think you are in the main being a bit harsh on the scottish public….they have gone from No’s to Undecided in the face of pish like this.
Think about it.
Someone made the simple straight forward point elsewhere – why would Scotland’s economy go pear shaped just because a different hand holds the purse strings?
forget the numbers bluff and bluster Mr Darling a simple answer will do ?
I watched Reporting Scotland this afternoon to see what the coverage was like. Jackie Bird came perilously close to aping the Unionists’ ‘but independence is too much hassle’ argument. Apparently the opposition are kicking up a fuss over the release of the White Paper next week. They want to have a debate on Tuesday after it gets released, while the SG is proposing to have a debate at Holyrood on it next Wednesday. I was perplexed when I listened to this. Did or would the Labour government of 1997 onwards listen to Tories objections about their devolution White Paper?
Anyway the bold Jackie said something along the lines of ‘and there’s even a row about the White Paper!’… I think the SG are wanting to make a big presentation of the release of the White Paper. The cynic in me thinks that the Unionists want to have a debate at Holyrood on the same day to say something ridiculous, and thus take away attention and coverage from the WH. Seriously though, why the fuck would the SG listen to the opposition, and do exactly what they want them to do, when they are the ones who have been staunchly opposed to independence for decades? Do BBC Scotland/SLAB not understand that they are in opposition, having got hammered in the last election. The self entitlement shows absolutely no sign of lessening, despite that fact that they have been out of office at Holyrood for 6 years.
Tom Hogg
I’m with you on that crowd fund Scott to take a wee while off, start with the IFS figures and add £1 until we reach break even, we then have a target to meet. How do the varios political parties intend to get there. How does Westminster intend to get there.
Three things in life are certain: death, taxes and a poll published on 26 November showing support for Yes at an all time low. I guess there’s a fourth certainty – saturation coverage on the BBC and ‘Scottish’ television of said poll.
Page 3 – For the UK “. We estimate that a permanent tax increase or spending cut (or a combination of the two) equal to 0.8% of national income (or about £13 billion in today’s terms) would need to be implemented in 2021–22 in order to put debt on course to reach 40% of national income by 2062–63. This is more optimistic
than the OBR’s long-term projections for the UK. “
Interesting that they don’t just use the lowest expectations for Scotland, but more optimistic about the UK!
“
@Training Day
Dare we hazard a guess that the poll in question will be from You gov?
Muutley
One doesn’t have to be cynical, The BT mob (very like the Ant Hill Mob) are terrified that the Yes campaign gets any air time or any traction in the media. Theirs is a dismal,wrist slashing message of self hate. They know it is horrible and depressing and that the antiseptic of sunlight from a bighter message kills it stone dead. It is why Davidson totally loses the plot and starts calling Newsnight NewsNat if a single positive vibe is allowed out. It is why the BT release umpteen polls and have Sinclair breathing down the BBC’s neck with utter drivel as soundbites every time there is a Yes event. It is why Blair McDougall was interviewed saying absoilutely nothing in place of coverage of the Yes rally. It is why Labour want to be heard on the 26th. They do not dare rest because they know they have nothingpositive to say about Scotland and have to drown out Yes and the Yes message at every singlepoint along the way. In Sarwar’s case he actually did the fingers in the ears NANANANANA in front television because it was the only thing he could do to counter what was being said.
These people are not stupid, they know they are trying to sell horse meat as prime fillet steak and the last thing they need is someone saying “that looks like horsemeat to me” They have no option but to pull every dirty trick in the book and lie shamelessly because they have no fillet steak to sell.
IFS Report could usefully have suggested the level of cuts/tax rises that will be required if Scotland votes No, when Westminster decides to abolish Scotland’s higher level of “identified public expenditure”.
That’s the comparison required. Not Scotland v UK, but Independent Scotland v Scotland stuck in a Union that can then do as it likes.
Jamie A
I’ve noticed a trend where the Scots Government tends to play its card AFTER an announcement by the other side. Sometimes it’s better to have the last laugh. Let’s you see what they’ve already said and then counter it on the return.
@Muttley
Should add of course that the all time poll low for Yes which appears on the 26th will be followed by another poll ten days or so later showing a new all time low as ‘Salmond’s White Paper is rejected by Scots’.
Our enemies are nothing if not predictable.
‘Their argument is that North Sea revenues (a more important source of income for Scotland than for the UK as a whole) fell sharply between 2011–12 and 2012–13.’
Aye, and we all know why that happened. Osbourne’s taxation cash grab. The oil companies didn’t appreciate it and lowered production rates. They could afford to do that, and Osbourne got the message relatively quickly that his wee wheeze wasn’t going to work.
Of course the OBR are taking this reduction as indicative of a trend, but they’re cheerfully ignoring that wee George reversed that taxation decision and new investment is currently at something of a high point.
I recall describing the IFS as a right wing group some time ago to someone who argued that they weren’t. So I went and found some convenient articles from such unbiased sources ranging from The Sun to the BBC all of which referred to ‘the right wing think tank Institute of Fiscal Studies.’
Well done Scott the way you break this down you could write An Economy for Dummies book brilliant stuff
The issue for me is how come we independence supporters can get together and debunk this info within a day of it being released but the Yes Campaign or SNP have trouble stringing one sentence together on any news show to criticise the IFS ?
You have to start de-bunking the IFS and their methods, and from what I saw of John Swinney yesterday and some others on various news programmes that simply didn’t happen.
As someone said in an earlier post, that’s the damage done now – thousands of Scots will have been watching the news yesterday having their tea thinking ‘ bugger independence’. These people aren’t particularly engaged in the debate yet, and this news seeps into daily life through a constant media barrage. The clear message is we are an economic basket case and people do believe that because they have been told it so many times.
We need a more robust performance from the SNP and Yes campaign.
“The issue for me is how come we independence supporters can get together and debunk this info within a day of it being released but the Yes Campaign or SNP have trouble stringing one sentence together on any news show to criticise the IFS ?”
Stewart Hosie did a pretty good job on the late-night shows.
Anyone have the info and skills to produce a graph showing Scotland’s excessive contribution over the last 30 years, set against the disastrous predictions set out in the IFS report? I suspect it will reinforce the notion that the report findings have been deliberately skewed to show a nation previously in surplus .v. the UK now heading into hopeless decline when set loose.
@Tinyzeitgeist & others.
Please don’t think for 1 minute a right wing Westminster think tank would come up with a different analysis if WE funded it.
They’re a Westminster machine designed to do what Westminster says it wants it to say and it will come up with the same outcome.
@Beastie…
There were also several North Sea platforms not producing because of maintenance and one was shut down because of a gas leak. This contributed to a loss of output which Oil and Gas UK say will head back up to two million barrels a day (currently 1.7m) by 2017 and that is expected to rise even further when the new fields come on line. It’s always good to get information about oil from the industry itself and certainly not the UK government.
link to oilandgasuk.co.uk
Tartanfever
Just getting equal airtime would be one hell of a start. It is almost impossible to debunk a report on the hoof. The media have a summary of key points which they read uncritically. To counter, one has to, as SCott has, read the report, look at the data, and compare sources and assumptions. That takes a couple of days and for sure the media might run a tiny “data challenged and found wanting” story a week later by which time the public have moved on to the next story.
Better Together are not winning the economic arguments but they do have a compliant media that allows them a free punch at the start of every round.
should it not be for the worst case scenario for the UK as a whole 9% of that at most should be for an Independent Scotland’s 🙂
Good piece Scott.
No one knows what Scotlands finances will be like in 50 years time, nor the rUK finances, and for IFS to boldy state they know it will be at the very least in decline, is another piece of unionist backed nonsense.
Though I hasten to add, I believe Robin McAlpines theory that the rUK will suffer some sort of financial melt down, long before an independent Scotland would. As London, and Westminster badly mismanage revenue.
O/T Alistair Carmichael on BBC News outside Westminster, demanding answers from the SNP, over the massively flawed IFS report.
Has there ever been a Scottish Secretary, who fought for Scotlands rights? or were they all just Westminster, yes men.
Wikipedia has a risible (provoking laughter through being ludicrous.) article about the IFS, I strongly recommend, wich start by informing its founders were
A banker (not a tipo) Tory MP
A stockbroker
An investment fund
A tax consultant
And as we already know these professions had nothing to do with the actual crisis.
link to en.wikipedia.org
“The Institute came into existence because four financiers – a banker and Conservative Party politician (Will Hopper), an investment trust manager (Bob Buist), a stockbroker (Nils Taube) and a tax consultant (John Chown) – were appalled at the way in which the 1965 Finance Act became law. James Callaghan, the then Chancellor of the Exchequer, had made a speech announcing his intentions to make far-reaching changes to the tax system, including the introduction of a capital gains tax and a corporation tax.”
I think this nonsense from the IFS is BT’s best weaponry being rolled out ten months in advance of the referendum. The fear factor of increased tax and reduced services is the best canard they have got to fight against our independence because it creates punchy headlines that the vast majority of people assume to be the truth when pumped alongside the so called ‘respected’ status of the IFS. This will be very difficult to counter given the wall of media support it is getting.
I note the headline in the herald online refers to the Scottish Government’s paper on the economy released today as ‘Fantasy Economics’. No matter the what the real evidence of our economic position and future might be the media will not allow any reasoned discourse to happen and this is big trouble for the yes campaign over the coming months.
@Andy B
Has there ever been a Scottish Secretary, who fought for Scotlands rights? or were they all just Westminster, yes men.
Tom Johnston was a very good Scottish Secretary.
Another good take from http://www.businessforscotland.co.uk/ifs-is-out-of-touch-with-the-reality-of-an-independent-scotland/
I would like the IFS to do the same with the ruk economy once Scotland gets her Independence, that would make for a very interesting read. Would love to know how they will manage without their cash cow.
Willie Ross was the worst. A patronising bully.
I read in Iain McWhirter’s book that Willie Ross said we did not need a Scottish Parliament because we had him…Tells you all you need to know about that guy.
“The issue for me is how come we independence supporters can get together and debunk this info within a day of it being released but the Yes Campaign or SNP have trouble stringing one sentence together on any news show to criticise the IFS?”
Lots and lots of negative stuff coming from the No campaign and UK government may not actually play that well with people.
“If our population had gone up at the same rate as England’s we’d be at about 7.8 million by now.”
Which could possibly be providing a very much more stable economy.
Looking at the population of Scotland since the second world war might also be interesting – it’s now barely above just above what it was then, and it went down after the mid 1970s, only returning to the same level a couple of years ago.
Denmark’s and Norway’s population changes are also possibly worth a look.
A crowd funded poll on Mackay and Ponsonby of STV would be interesting.Lesley Riddoch was magnificent on STV last night.
Having Ian Gray on STV and the BBC to discuss economics is simply ridiculous.Same too of Hammond as UK defence minister. What do they know of their assigned subjects?
Lots and lots of negative stuff coming from the No campaign and UK government may not actually play that well with people.
Totally agree. On the morning of the 2007 Scottish Parliament election I stood in the newsagent and looked down at five or six newspaper front pages all screaming “don’t vote SNP”, one of them with a picture of Alex Salmond with his head in a noose.It didn’t work then, and the panic within BT at the moment is because they are terrified that their scare tactics will be even less effective now.
Fear fatigue started a long time ago, so they turn up the volume, as that is all they can do.
Too wee, too poor, too stupid, TOO OLD!!!!
This is their best shot and they’ve brought it out with 10 months to go! They’re filling their pampers as we speak. All the media were emphasizing the “highly respected” IFS yesterday, after Scott’s analysis, the “highly respected” emphasis is oot the windie. Naebody will now believe anything the IFS says.
To summarise the underlying methodology of the IFS report lets start at the beginning with a hypothetical conversation leading to a remit
1. Who funds us.
2. What answer or outcome do you want to achieve.
3. What erronenous information can we base it on ( OBR figures ) to give it some semblance of credibility.
4. How far into the future do you want to project the figures to make it real scary because we know, the further into the future you project it, the more meaningless and inaccurate the figures become..
4. What essential information and factors can we leave out ( and hope no one spots it ) because if we include them, everyone will know we are talking mince.
5. How scary do you want the projected outcome to be. Bloody scary – nobody will believe us, Medium scary – they might believe us so they will think its safer together.
The reality of the future of Scotland is that it is ours to shape and control.
Let all Scots grasp this opportunity without hesitation, fear, intimidation or doubt.
Its a massive YES for independence from me.
This bunch of ‘thinkers’ have just binned any residual reputation that they may have had. Have they no professional pride? Typical statisticians. They just make the numbers up to fit their (client’s) pitch. Seriously, have this lot been guiding the economic policy of the UK government? Let them continue with rUK.
Hand&Shrimp and Rev Stu.
The trick that the Yes and the SNP miss is using soundbites. We know the independence camp don’t get equal air time, that’s been the case for years now. Don’t you think it’s about time they adjusted their responses ?
John Swinney could have said:
‘The IFS report is based on OBR oil revenue figures that are unexplainably lower than any other respected economic institution and lower than the UK government’s own calculations. This brings into serious doubt the IFS report and indeed, the credibility of the OBR, whom Alastair Darling has already labelled as an extension of the Tory government.’
That takes about 15 seconds to say, it’s to the point and it would be difficult to edit. It would also be an effective short rebuttal of the IFS.
When Swinney did his interview for the BBC, he probably talked for about 5 minutes on various aspects of the positives of the report, which gives the BBC plenty of material to work with in editing. It’s then easy to look for the least effective section of the interview and to use that.
If however, he came out and just said the bit I have written, the BBC will either use it or they won’t. If they don’t, then you have good grounds then to call into question their impartiality and make complaint. Sometimes having an ineffective answer can actually damage your position.
You know that your clip in the news is only going to last 10-15 seconds, so why not just give them 10-15 seconds worth of material, and make it the material you want to get out ?
Stewart Hosie did do a good job on the lat night shows debunking this rubbish. It’s just a shame that the viewing audience for that programme is about 100k – whereas all the news bulletins that day from the BBC, C4 and STV have viewing figures of 10’s of millions.
So which side of the debate had their message heard overwhelmingly more than the other ?
@Theunicorn
That’s a bit of a hatchet job – implying that the purpose of the report was to trash independence is a different thing from suggesting the results are flawed. The latter is a legitimate argument, the former is pretty much impossible to prove.
Take the OBR figures, for instance. They’re not “erroneous” as such, they’re simply the lowest estimate from a range of sources. The OBR didn’t explicitly weigh into the independence debate, it simply predicted the future revenue from oil and gas for the whole of the UK and those figures have then been used by other reports (such as this one) to judge the effect of independence. In fact, it’s not that surprising they used OBR estimates because the Director of the OBR used to be the Director of IFS.
I also think we have to be careful about making arguments along the lines of “Scotland would pursue different policies so the estimate doesn’t count”. The point that Scotland would pursue different policies is absolutely valid, but it’s impossible to predict what sort of government the Scottish electorate will support for the next few decades. You can’t model that, so you have to assume all things will remain equal in coming up with an estimate.
In general throwing accusations of bias around and going into full attack mode over issues like this does more harm than good. I would say, for instance, that the point about the ageing population is an interesting one. It’s interesting even if we vote yes in the referendum because we’d need to adapt our policies to account for it – which might mean having a more pro-immigration policy (something I’d support).
“I also think we have to be careful about making arguments along the lines of “Scotland would pursue different policies so the estimate doesn’t count”. The point that Scotland would pursue different policies is absolutely valid, but it’s impossible to predict what sort of government the Scottish electorate will support for the next few decades. You can’t model that, so you have to assume all things will remain equal in coming up with an estimate.”
What that means, of course, is that the “estimate” is completely meaningless, over and above the fact that economists’ estimates are never right anyway. What’s the point of modelling something that isn’t going to happen?
“Lots and lots of negative stuff coming from the No campaign and UK government may not actually play that well with people”
You know in a way when the no camp removed devo max they snookered themselves.Salmond is always quoted as saying a positive campaign always wins. Actually he’s never said that. He’s said when a positive campaign goes against a negative one it tends to win; and when two negative ones go against each other the most negative wins.
Trouble for the no camp is they can’t be positive as they’re offering nothing. So the yes campaign will very easily out positive them. But they are a London run, Westminster campaign being negative about Scotland and Scots. So their room for negativity is kind of limited too. It’s not like American politics where you just have to get 51% to hate the other 49% across the entire country. They have to get Scots to be negative about ourselves! Okay i know it’s worked before but there’s real danger in that. Meanwhile other parts of the political campaign can easily out-negative them bashing Westminster if need be at far less cost.
They’ve left themselves with very little ground to fight on or room for manoeuvre. I’m not sure what happens if a negative campaign is outflanked on both sides 🙂 I guess having total control of the media so no one gets to hear any positive debate is their main weapon.
Hang on, let me get this straight. The people who produced this report have no idea how the Government of an independent Scotland would use the additional powers that independence would bring? As such their report must be based on, lets call them “British” economic policies. These policies would lead to Scotland becoming poorer. If Scotland stays in the UK it keeps these policies?
Have I got that right? Cause it sounds like a good reason to vote yes to me!
Brilliantly put John Lyons.
The IFS report basically boils down to “vote NO and you’ll be able to hope the rest of the UK will subsidise your inflated public spending even though the threat of independence will be lifted and the rest of the UK will be undergoing severe austerity, and by the way stop worrying about that oil stuff, we’ll take care of that”
Folks, can we just make something clear:
Scotland’s population is not aging faster than anywhere else. We just die earlier.
who commissioned the IFS report and who decided to release its findings the day before the Scottish government released their own economic forecast? …. hmm ???
“The issue for me is how come we independence supporters can get together and debunk this info within a day of it being released but the Yes Campaign or SNP have trouble stringing one sentence together on any news show to criticise the IFS ?”
Go to newspaper web sites and comment, join up to Twitter. There have been many of us on Twitter since the Report was first published tweeting and re-tweeting and debunking the OBR and IFS, and rubbishing its Report. Some of that has definitely got through to the No-Men judging by the howling from them. But we want more. And there is no censorship or moderating on Twitter. As well as reading the articles on this site you need to take the info gained and use it to smash the oppositions’ views. Sitting here talking to the converted does nothing.
The Guardian seem to have a high opinion of the IFS these days, and report their figures and analyses (on Scotland, at least) as if they were unarguable facts. But it was not always thus:
“I presumed when approaching the material that I would find reports whose objectivity accorded with the IFS aspiration to be “seen to be free of bias”. I have been profoundly disappointed.”
link to theguardian.com
From 2008. Much more at link, with some good examples of IFS silliness.
@ Dcanmore.
Good point, well said. Production was down for several reasons, and I am personally a big fan in not believing a word the UK Government, or any its pet think tanks, say about the oil industry unless by some miracle it happens to be close to industry assessments.
Which it never is.
If anything the industry could conceivably underplay the remaining resource; and their reports are still miles above anything the UK Government says.