Saturday, September 20, 2008

Huntly 'First Responders'

Packing bags this morning at ASDA, in aid of the Huntly First Responders...


Richard Havers said...

A very good scheme...

Ricky Simpson said...

Getting the face known I see although the cause is very commendable; just out of interest - how well do you rate your chances in Gordon?

I am very much looking forward to the under-21 alcohol debate this week - should be enlightening ;)

Components of Independence said...

Long time lurker, reader here. And I know this probably isn't the right place to read this.

I was just wondering whether you or the SNP ever published a rebuttal to the recent Taxpayers Alliance report on the Barnett Formula "Unequal Shares". I've been through it myself and it uses a lot of economic slight of hand, giving a highly distorted take on things.

Hope I'm not being too cheeky in asking this!



Richard Thomson said...

I'll leave another to answer your question, Ricky:

Hi Grant,

No, we didn't, to my knowledge, do anything in response to the Taxpayers Alliance report. My problem with it is that it doesn't try to look at all revenues and expenditures, but instead makes the lazy assumption that higher 'identifiable' public spending in Scotland compared to the 'English' average is indicative of fiscal transfer from South to North, and that the only revenue stream collected in Scotland which might be above the English equivalent must be oil.

There's 5 points which puncture this case very quickly:

1) If spending above the English average on its own indicates subsidy, then that would mean the East Midlands, with one of the poorest tax bases in the UK, was subsidising London, with far and away the strongest tax base. It's nonsense.

2)Identifiable expenditure covers 80% of UK spending. That means there's a further 20% which isn't included in most spending comparisons, and it's this spending which tends to benefit London and the south of England the most, topping up considerably their 'identified' expenditure.

3) It costs more to deliver some public services in Scotland because of a combination of need, population sparsity and geography. With 1/12 of the UK population on 1/3 of the landmass, it's not unreasonable to expect that this will have a knock-on effect on identifiable spending figures per head.

4) The most recent GERS report indicates that despite higher identifiable spending in Scotland, currently the fiscal transfers are flowing from North to South.

5) The most common 'non-oil borrowing requirement' cited by previous editions of GERS was c. £11bn. This figure is open to dispute on sound methodological grounds, not least because it allocates precisely zero in the way of North Sea revenues to Scotland - something which has zero relevance or credibility. However, let's play with it for a moment.

For English taxpayers to be sending monies north to Scotland at a time when UK borrowing sits at c. £40bn, this would mean that Northern Ireland and Wales would need to account for the remaining £29bn being borrowed. Obviously, this number is ridiculously high, so it stands to reason that England must be in deficit as well.

As such, any mismatch in Scotland between revenue and expenditure which did exist currently would be being filed by the UK's international borrowing, and not subventions from the English taxpayer.

The TPA report isn't all bad, though. It does lead them to call for fiscal decentralisation - a classic example of getting to the right answer by the wrong method :-)