For the last few weeks, in preparation for my trip to Scotland, I have dug deep into the economy, the devolution, and the operation of the country. As I mentioned in an earlier post here, I feel both frustrated and constrained by my lack of knowledge about Scotland. These last few weeks have changed that lack of knowledge to confusion.
None of it makes any sense, and the picture emerging is that of an elaborate Rube Goldberg machine, if the definition of such a machine is one that is designed to do a simple task in an incredibly over-engineered and complicated way.
If one set out to make the organisation of an area as muddy, occluded, and opaque as possible, it’s difficult to see how you could do a better job than what’s already been done with the devolution settlements for both Wales and Scotland. Fudges and compromise only excuse so much. These arrangements are the equivalent of blind parliamentarians deliberately forming a committee to pass a bill about the colour of smoke.
The most difficult bit is to get a sense of the Scottish economy. Scotland, and this is true of both sides of the constitutional debate, rely on a document that even the architects caution about.
As sensible statisticians, the authors of the annual Government Expenditure and Revenue Scotland report, or GERS, dutifully warn people about relying too much on it. My bolding below. That’s about as firm of a statement that you’ll ever get out of a proper statistician. And it is the academic equivalent of banging a pan into one’s forehead to catch one’s attention. Beware, it says, because here be dragons.
In some cases, revenue figures can be obtained for Scotland directly. Examples include local government revenues and particular elements of public corporation revenues. Such taxes are the exception and separate identification of most other revenues for Scotland is not possible. GERS therefore uses a number of different methodologies to apportion tax revenues to Scotland. In doing so, there are often theoretical and practical challenges in determining an appropriate share to allocate to Scotland. In certain cases, a variety of alternative methodologies could be applied each leading to different estimates.
This document has achieved a status of strange authenticity in the Scottish debate, despite the authors’ concerns about the challenges involved in writing it. Therefore, over the last few days we’ve had a predictable back-and-forth between those who take it as a damnation of independence and those who take it as a verdict on Westminster administration of Scotland. Then there are those who outright reject that any of it is true, or that it’s a big conspiracy.
Some sensible people are lost in the furore, or become tools in the fight between the two camps. This article, written by Margaret Cuthbert, has become a hammer to beat up independence supporters with, even though it does not support the defenders of the union in any way. All it does is request more data; better data.
The truth of the value of GERS is not along the lines of “somewhere in between” a lie and a truth, but more along the lines of “GERS isn’t economics. It’s a poll”. “GERS is calculus, not accounting.” Take your pick. All that is very simplistic, but if you squint when saying any of those things, it is close to the truth. GERS is statistics. That’s another simplification, of course, but it’s generally true.
As with any poll, there must be a margin of error, and that’s what the authors warned about in the quoted bit. They don’t really know, and that makes it important for the reader of it to not rely too much on the numbers. Think about it this way, if you have a margin of error of five per cent in this “poll”, then that’s £7.5 billion right there, given a GDP of £152 billion.
Margaret Cuthbert is right, in her article. Somebody has to publish far better data. As long as Scotland has to rely on GERS, the economy can’t really be measured properly. The available data as presented in GERS is not a definite verdict on the Scottish economy.
The independence side has to take into account that the situation could actually be a lot worse than it is, and the pro-union side has to admit that Scotland could probably make a fine job of it as independent. GERS is not the evidence that will prove anything either way.
And GERS stands as evidence for the real truth about Scotland’s situation. It is messy, convoluted, and confusing. Devolution really is a Rube Goldberg machine applied to a whole country.
Alas, people get used to “how things are”. They stop thinking about “how things are”. It morphs into “how things should be”. Christ knows we Swedes do it, as well as the Germans and the Spanish. But, without trying to offend anyone, I’d say that the Scottish (and Welsh) devolution arrangements take the prize.