What are “Scottish taxes”?

Seems like this should be a fairly straightforward question to answer but its interpretation, or rather some disagreement over its interpretation, led to a protracted ‘debate’ on Twitter which I thought deserved longer than 140 characters for me to explain.

The argument arose after I challenged this quote from pro-independence blog Wings Over Scotland, in an article attempting to undermine the GERS figures (my view of the article is that’s its a pretty poor collection of old information, strawmen and an unseemly, and unnecessary, personal attack but you can read a significantly longer response from Kevin Hague here).

Wings pish

The section is talking about Barnett consequentials and how they are allocated, arguing that Scotland doesn’t control the amount of money spent here as it is a function of the spending in England. That’s fine.

My objection was, and is, that the sentence highlighted clearly states that Scottish taxes paid for Olympics infrastructure spending in London. The pejorative inference is that we are being fleeced, why should Scots pay for spending in London when we receive no benefit from it?  Contrast this with the next part on the Glasgow Commonwealth Games where the “UK government wasn’t interested in contributing to the Glasgow 2014 Commonwealth Games, and the Scottish Government had to find 80% of the money itself”.

My objection is based on the fact that GERS assigns Scotland absolutely nothing from the infrastructure spend on the Olympics.  Zero.  And therefore any inference that Scots taxes paid for it is simply incorrect.

image

This then instigated a protracted, and frankly ludicrous, argument with both the author of the article and then Stuart Campbell, who runs the site.  Also Mhairi Hunter, an SNP councillor in Glasgow, although anyone who has come across Mhairi will know that the latter conversation was somewhat more civilised.

Their contention is that the highlighted section is technically correct because you cannot separate Scottish tax from that taken from England, Northern Ireland or Wales.

(if at this point you’re thinking that this is a ludicrous thing to be arguing about then you are quite correct)

Essentially there are two ways to interpret what happens with tax originating from Scotland.

1- it is all collected by the UK Treasury and goes on to form one massive pot.  Every pound of that is designated as UK spend.  You cannot differentiate any individual pound as having originated from any tax payer or area within the UK as it’s come from one homogeneous pot. Therefore every single pound spent by public bodies anywhere in the UK contains English tax, Northern Irish tax, Scottish tax and Welsh tax. Or…

2- spending in the UK is allocated by region, including the 3 devolved administrations, by UK Treasury Country and Regional Analysis data or, in Scotland, GERS.  According to the logic in GERS, Scottish tax is spent on that which is allocated as “Scottish spend” with the shortfall made up by the required amount of borrowing.  Hence why GERS identifies a “Scottish deficit” even though strictly speaking the borrowing is conducted by the UK.

Either of these approaches is valid but adopting the former would also mean accepting that every penny spent in Scotland on, for example, the Scottish NHS or the Glasgow Commonwealth Games comes from UK tax, over 90% of which comes from the rest of the UK.

I have become so used to treating the GERS figures as Scottish tax, Scottish spend and Scottish deficit that the second approach is what I now assume everyone uses.  I’ve certainly not come across anyone who would consider that English taxes pay for 85% of the Scottish Government block grant – a logic that is inherent in assuming position #1 above.

Either way, pick which approach you want to take but to claim, pretend or insinuate that Scottish taxes pay for 100% of spending in Scotland *and* a share of everything in the rest of the UK is simply factually incorrect.

And if you think that I’m ignoring infrastructure spending, Barnett allocations and non-identifiable spending then you can read what I’ve said about that here – https://whytepaper.wordpress.com/2015/09/13/meme-busting-wings-over-scotland-infrastructure-spending/ (spoiler – Scotland doesn’t pay towards all the infrastructure in England)

Advertisements

8 thoughts on “What are “Scottish taxes”?

  1. At this stage, when I see bold but unsubstantiated (and unfounded) assertions such as those by Mr Campbell addressed above, I am never sure whether this is a result of an acquired “political sight defect” – grossly oversimplifying Kant, judgment is most imperfect when people see (only) what they are determined to see, and screen out the rest – or whether such misrepresentations indicate a more deliberate garbling of real relationships, facts and figures, for narrowly convergent political ends.

    Sometimes it appears the “sunk cost fallacy” is strong – those of apparently unshakeable conviction feel unable to think again because they have invested too much effort, time (and credibility?) in a case they obdurately cling to.
    Persisting in the face of cogent and demonstrated contrary evidence can be tantamount to throwing good effort after bad – in such cases, a considerable rethink would still make more sense.

    Be all that as it may, this article is a comprehensive, properly evidence-supported and reasoned dismantling of a sample of self-blindingly unconditional political faith.

    It is also very well formulated.

    Like

    1. Thanks. I do think there’s an element of SNP rhetoric which relies on the use of interpretation 1 (in the article) whilst hoping people assume interpretation 2 so as to generate a false grievance that Scottish tax pays for everything in Scotland *plus* a percentage of rUK spending. It’s a pretty straightforward ploy that follows the same logic as the “Scots have provided more tax per head than rUK for each of the last 35 years”. That they would need to rely on such a misleading half truth exposes the poverty (no pun intended) of their economic case; and that they would want to mislead the electorate into a vote on such duplicitous terms exposes the base nationalism for what it is – ideological, not circumstantial.

      Like

  2. I almost admire your dogged determination to miss the point.

    The paragraph you object to discusses Barnett consequentials. It has nothing whatsoever to do with GERS. What is “assigned to Scotland in GERS” is of absolutely no relevance to the point.

    The UK government, not the Scottish Government, controls all spending, the size of the block grant, and what is and is not deemed worthy of Barnett consequentials. The article makes the point that spending such as that on the Olympics would normally attract consequentials, and so Scotland should have received hundreds of millions of pounds in additional block grant. Instead the UK government withheld such payments, making up its own reasons for doing so.

    (Your own previous article, which you link to here, acknowledges explicitly that the Olympics were exempted from consequentials, although there was a tiny token payment of £16m.)

    How figures were moved around on which or whatever bits of paper by one government or another changes none of that. The fact remains that £9bn was spent on a London-only project but Scotland was deprived of a significant sum of money that would usually have been paid to it in compensation (in order to reflect the fact that Scottish taxpayers contributed to a project from which they received no benefit, either as Scots or Britons).

    It’s not a complicated point. It’s got nothing to do with GERS. “Scottish taxes” are the money sent to the Treasury from Scotland. The Treasury sends some of that money back in the form of the block grant, and keeps some of it to spend “on and for” Scotland, both as Scotland and in Scotland’s capacity as part of the UK (to which end the money is pooled with the taxes of the rest of the UK).

    The former component is supposed to be adjusted to reflect when the Treasury spends some of the money on things which benefit neither Scotland nor the UK as a whole, but exclusively England (in part or whole).

    On this occasion that did not happen. Writing something on a page of GERS doesn’t magically make those hundreds of millions of pounds appear in the Scottish Government’s coffers after all. It doesn’t give it any more money with which to pay for the Commonwealth Games.

    It’s mystifying that you’re investing such an enormous amount of effort in failing to grasp such a simple fact, and in accusing me of printing lies when not a word in the piece is untrue. Much like Mr Hague, you’re the one constructing the straw men in an attempt to deflect attention from the uncomfortable truth.

    I have very little tolerance indeed for liars, the stupid or those who feign stupidity in an attempt to mislead, and I use language for its intended purpose, which is to express and articulate those feelings. If I call you a fucking idiot it’s because I mean to say precisely that, because merely “idiot” does not adequately convey my contempt. I make no apology for that and never will, and it embarrasses only you to pretend outrage by arbitrarily excluding certain words in the dictionary from acceptable usage.

    Like

    1. Hi Stuart, thanks for the comment – or most of it at least. I’m really not sure what your final paragraph is referring to – my description of Mhairi as more civilised has absolutely nothing to do with your choice of language. I have no aversion to using whatever vocabulary is necessary. It’s also not clear to me what “uncomfortable truth” you think you’re referring to.

      As for your “points”, you are again misconstruing what I am saying to suit yourself – ironically something of which you accuse me. This article isn’t even about the Barnett decision on the Olympics, I simply referenced the context for why the subject had come to mind and why I felt it worth clarifying.

      I really have no desire to argue with your invented point (again) – particularly given my already stated position that I disagree with the Treasury’s decision and think the Barnett formula needs replaced – but it might be worth pointing out that if this is your definition of when Scottish taxes become part of UK taxes…

      “…in Scotland’s capacity as part of the UK (to which end the money is pooled with the taxes of the rest of the UK)…”

      …then you are also arguing that Scottish taxes didn’t pay for the Olympics’ capital spend, given that you’re essentially describing the logic taken in GERS. And as GERS assigns the Olympics capital spend as attributable to London, not “UK spend”, then… Of course, that is about interpretation of what is meant by “Scottish tax” and how / where it is spent; or what this very brief post was about. I expect you not to understand this point and return with another angry rant about the Olympics grievance. Something to look forward to, I guess.

      Like

  3. Ah! ‘Tis yerself, Stuart … I hadn’t noticed your presence, bringing the door in with you. What a … pleasure to see you here.

    Your parting shot point above is apt – if you made it looking squarely into your Bathroom mirror.

    And the rest of your argument rests on the evidence only of a conjectural-but-glorious castle-in-the-air of your own chip-shouldered fantastical invention.

    Your strategy is clear enough: to attempt to discount & discredit ALL existing figures, because they do not support your intolerant prejudices. Your preferred alternative position is: Give us our free Scotland, and then we’ll sort it. Sign us a blank cheque – based on implicit trust, but no objective basis – and all will be great with our nation.

    But people as deviously manipulative, self-interested and self-regarding as you have repeatdly proved yourself to be are the very *last* who should be trusted. Trusted personally – or with facts – or with figures – or with any part in a nation’s finances, supposedly in Scotland’s interests as you would like to claim.

    “Give me a place to stand, and with a lever, I will move the whole world”, Archimedes is reported to have said. (In Ancient Greek, of course.) Your own stance appears to be: Here I stand, in my eyrie in Bath. Give me funds large enough, and with a casuistry second to none, I will lever Scotland to independence.

    Your pride and intolerance are quite remarkable. You are so desperately full of yourself and utterly blinded with red-mist hubris, I have to start to wonder if you knocked your father down at the crossroads and slept with your mother. “Stuartus Tyrannos”: hero of your own great classic drama. http://www.perseus.tufts.edu/hopper/text?doc=Perseus%3Atext%3A1999.01.0192

    And here you are again, bullying your way around. Same … strutting stuff, different blog.

    Your puerile defence of bullyboy language in your send-off – to cover an extraordinary gamer fantasy of a Scottish Avalon, imagined from Somerset – is by far the most grounded thing in your account. It’s puerile because it follows the caveman mentality that intense Rumpelstiltskin cursing is enough to annihilate any opposition. It doesn’t. It’s not big, it’s not clever. it simply shows you – once again – incapable of any sort of reasoned or civilised exchange.

    It collapses the tone of discussion to the disreputable, heavily narcissistic intellectual level of your arguments. Which is precisely the low level of exchange you always revel and wallow in. Mud wrestling befits you.

    Like

  4. It’s funny when Stu says something using facts and reason the someone comes along and blows down the whole argument without the use of a single fact.

    It’s just as well he swears sometimes. The union would be in mortal peril otherwise because you’d have no ammo left.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s