What does GERS have to do with Independence?

The Accounting Trick that Hides Scotland’s Wealth

Stephen Richard — Fri, 15 Oct 2021 22:10:54 +0000

The Accounting Trick that Hides Scotland’s Wealth Stephen Richard Fri, 10/15/2021 - 23:10

Author or Creator

Business for Scotland

It is common to see the report used as evidence of the size of deficit that would befall an independent Scotland but this would only be the case if one imagines public finances being set up exactly as they are within the rest of the UK. An independent Scotland would almost certainly look to control tax, spending and borrowing powers differently than the current set up, and that makes it more difficult to predict what the country’s finances would look like.

Scotland has everything that it takes to be an extremely prosperous and successful independent nation, and more. Scotland with only 8.4% of the UK population possesses 34% of the UK’s natural wealth.

This prompts the question – why does a naturally wealthy nation with a strong, resilient and diverse onshore economy, booming exports, a highly educated population, low unemployment, a wealth of oil and renewables, and a wide range of strong economic sectors have a set of accounts (GERS) that suggest that Scotland’s finances are weak? That is a trick question, it doesn’t. GERS is not a set of accounts for spending in Scotland it contains spending outside of Scotland that doesn’t benefit Scotland economy and that Scotland didn’t generate. GERS also contains clear evidence of mechanisms for removing wealth from Scotland’s accounts which then creates a phoney deficit. There are actually several hidden mechanisms for stealthily removing Scotland’s wealth.

Keywords

This is why the Westminster myths about independence are wrong. Open minds on independence #18

Stephen Richard — Sun, 10 Oct 2021 10:18:19 +0000

This is why the Westminster myths about independence are wrong. Open minds on independence #18

Primary Author or Creator

The National

Stephen Richard Sun, 10/10/2021 - 11:18

Additional Author(s) / Creators

Believe in Scotland

Date Published

Wed, 04/14/2021 - 12:00

Category

Independence

Type of Resource

News Media

Fast Facts

This looks at three myths about Scottish independence:

MYTH 1: You'll have had your referendum.

MYTH 2: Scotland has a huge deficit because we spend too much on public services.

MYTH 3: The costs of establishing Scotland as an independent country will be huge.

Resource Address (URL)

https://www.thenational.scot/news/19230554.westminster-myths-independence-wrong/

Keywords

Public services

Public Debt

Independence referendum

GERS

Language English

Government Expenditure and Revenue Scotland

Stephen Richard — Thu, 30 Sep 2021 08:04:43 +0000

Government Expenditure and Revenue Scotland

Primary Author or Creator

Wikipedia

Stephen Richard Thu, 09/30/2021 - 09:04

Additional Author(s) / Creators

Add additional Authors and/or Publisher

Date Published

Thu, 08/19/2021 - 12:00

Category

Economy

Type of Resource

Wikipedia

Fast Facts

Government Expenditure and Revenue Scotland (GERS) is an annual estimate of the Scottish economy as part of the United Kingdom.[1][2] It was first published in 1992, and yearly since 1995, with the exceptions of 2007 where there was no report due to a methodology review, and 2016 where there were two annual reports due to an acceleration of publishing timescale.

Resource Address (URL)

https://en.wikipedia.org/wiki/Government_Expenditure_and_Revenue_Scotland

Keywords

GERS

Language English

FFS explains: what is the GERS report and what can it tell you?

Stephen Richard — Thu, 30 Sep 2021 08:01:41 +0000

FFS explains: what is the GERS report and what can it tell you?

Primary Author or Creator

The Ferret

Stephen Richard Thu, 09/30/2021 - 09:01

Additional Author(s) / Creators

Add additional Authors and/or Publisher

Date Published

Wed, 08/18/2021 - 12:00

Category

Economy

Type of Resource

Fact check

Fast Facts

Published annually, the report details the difference between Scotland’s tax revenues and its public service expenditure. This is used to calculate a net fiscal balance. GERS is produced by Scottish Government statisticians, who decide on the methodology used. The report gives a picture of Scotland’s current public sector revenue and expenditure. The report tells us little about Scotland’s long term financial prospects after independence.

Resource Address (URL)

https://theferret.scot/ffs-explains-what-is-gers-and-what-can-it-tell-you/

Keywords

GERS

Language English

A Guide to the Government Expenditure and Revenue Scotland (GERS) Report

Stephen Richard — Wed, 29 Sep 2021 10:39:20 +0000

A Guide to the Government Expenditure and Revenue Scotland (GERS) Report

Primary Author or Creator

Fraser of Allander Institute

Stephen Richard Wed, 09/29/2021 - 11:39

Additional Author(s) / Creators

University of Strathclyde

Alternative Published Date

2021

Category

Economy

Type of Resource

Academic Paper

Fast Facts

The possible financial costs and risks, or savings and opportunities, of implementing a new constitutional framework are, naturally, not considered in GERS. Similarly, it does not report on the effects of faster or slower economic growth in an independent Scotland.

Resource Address (URL)

https://fraserofallander.org/gers-guide/

Keywords

Language English

Response to latest Government Expenditure and Revenue Scotland (GERS) estimates

Stephen Richard — Mon, 13 Sep 2021 08:29:12 +0000

Response to latest Government Expenditure and Revenue Scotland (GERS) estimates

Primary Author or Creator

David Phillips

Stephen Richard Mon, 09/13/2021 - 09:29

Additional Author(s) / Creators

Institute for Fiscal Studies

Date Published

Wed, 08/18/2021 - 12:00

Category

Economy

Type of Resource

Assessment report

Fast Facts

The large debts shown by the 2020/1 GERS are temporary and not structural. They do not indicate that Scotland cannot afford to be inedpendent.

More details

Hasn’t the massive borrowing carried out by the UK government and other high-income country governments during the COVID-19 pandemic, and at very low borrowing costs to boot, shown that an independent Scotland need not be concerned about running a large budget deficit? It’s not clear that it does.

First, there is a difference between a temporary surge in borrowing like the UK’s – especially at a time when the household sector is massively boosting its saving – and the large structural deficit that an independent Scotland would start life with. And the UK government has announced a package of tax rises and cuts to previous spending plans which amount to 1.8% of GDP a year by 2025-26 in an attempt to bring the deficit down over time – although the spending totals will almost certainly be revised up in this autumn’s Spending Review.

Second, nearly all of the extra borrowing by the UK government since the pandemic began has effectively been financed by the Bank of England creating additional reserves on which interest is paid at Bank Rate – i.e. currently just 0.1%, as it expanded its programme of ‘quantitative easing’ to boost liquidity and support the economy during the pandemic. The US Federal Reserve and European Central Bank have also carried out similar operations to support their economies. If an independent Scotland were to use the pound informally, as is current SNP policy for the short-term, such monetary financing would unlikely be available to it on the same terms. On the other hand, a separate Scottish currency, the SNP’s preferred option for the longer-term, could come under pressure if Scotland’s public finances were seen as unsustainable by the financial markets, pushing up the cost of any sterling-denominated debt obligations of the Scottish Government, households and businesses. Indeed, one of the six tests the SNP say will guide the decision of when to move to a separate Scottish currency is that the Scottish Government has a “sufficiently strong and credible fiscal position in relation to [its] budget deficit and overall debt level”. Action to reduce Scotland’s deficit is therefore a key part of plans for a new currency that further down the road would give Scotland greater fiscal flexibility.

None of this means that Scotland cannot afford to be independent, nor that there aren’t a range of opportunities for better policy to improve performance and better address Scottish needs and preferences. If such policies can be developed and implemented, this might in the longer-term allow more to be spent on public services and more to be kept in Scottish people’s pockets.

Resource Address (URL)

https://ifs.org.uk/publications/15581

Keywords

Language English

Revealed: The ACCOUNTING TRICK that Hides Scotland’s Wealth (2020)

Stephen Richard — Sun, 12 Sep 2021 06:39:18 +0000

Revealed: The ACCOUNTING TRICK that Hides Scotland’s Wealth (2020)

Primary Author or Creator

Gordon MacIntyre-Kemp

Stephen Richard Sun, 09/12/2021 - 07:39

Additional Author(s) / Creators

Business for Scotland

Alternative Published Date

2020

Category

Economy

Type of Resource

Assessment report

Fast Facts

The UK Government has diverted Scotland’s wealth to the UK Treasury to pay off its debts. Thus it creates 100% of Scotland’s supposed debts and 100% of its phoney deficit. This is the impact of Westminster’s debt loading alone, and upon that accounting trick, rests the entire economic case for the Union. Would an independent Scotland have to pay the rUK a population share of the UK’s historical debt? No – there is in fact a very strong case for Scotland to be compensated for having already paid more than it’s “fair share” of the UK’s debt

Resource Address (URL)

https://www.businessforscotland.com/revealed-the-accounting-trick-that-hides-sc…

Keywords

Barnett formula

UK debt

GERS

Language English