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).
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.
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)