I have sent the following response - I publish it here on the off-chance the Herald choose not to print it.
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Dear Sirs
Today's Readers' Opinion from Alasdair Galloway under the headline "GERS tells us nothing about prospects of an independent Scotland" includes a number of incorrect assertions.
With reference to the GERS figures he stated "we don't know the true situation with precision".
The UK Statistics Authority designates the GERS figures as National Statistics and - unsurprisingly - statisticians know how to deal with statistical uncertainty. In fact the GERS report explicitly addresses the question of precision, showing [p.36, Table A12] that we can have 95% certainty that the figures are accurate to +/-£0.5 billion. So we know exactly how precise the figures are and should recognise that they're equally as likely to be generous by this amount as they are to be pessimistic.
He goes on to assert that costs associated with Crossrail and the London Olympics are attributed to Scotland on a population basis.
This is a widely held misconception and simply incorrect. The GERS report states [p.37] "In GERS, Scotland is allocated none of the expenditure associated with the London Olympics". Similarly the 2015 GERS report [p.77] explains clearly that railway costs are attributed to Scotland on an "in" basis, which means that only money spent in Scotland is allocated to Scotland. The only explicit exception to that policy is HS2, where Scotland is allocated just a 2.0% share based on our assessed share of the economic benefits - this is of course far less than our population share of 8.3%.
So Mr Galloway is wrong to state that being independent would mean we'd "no longer contribute to" transport spending in London - we aren't allocated any of those costs in GERS anyway.
He then cites economists Jim and Margaret Cuthbert as supporting his assertions. I presume he's referring to comments they made before the GERS methodology was overhauled under the SNP's watch. In this very paper in June 2008 the Cuthberts lauded the Scottish Government's work on GERS, stating "HM Treasury data [..] has been vetted thoroughly by statisticians in Scotland, and they have shown themselves willing to override the Treasury's figures"
Putting the methodological misunderstandings to one side, it's clearly ridiculous to assert that the GERS figures tell us nothing about the prospects of an independent Scotland. The figures explain our run-rate, describe how our independent public finances would look if we carried on raising taxes and receiving spending at these levels. Nobody's suggesting we would continue doing that. Indeed some of us are at pains to point out that we clearly couldn't carry on with this rate of tax and spend and want to hear a credible description of the sacrifices we'd need to make for our independent economy to work.
The Scottish Government's White Paper on independence rightly referred to GERS as the "authoritative publication on Scotland's finances" and cited them no less than 15 times while trying to make an economic case for independence. Unfortunately that case was built on recklessly optimistic assumptions about North Sea oil revenues.
Those who wish to champion the case for independence would do well to actually understand and address the issues raised by the GERS report rather than adopting the head-in-the-sand approach of GERS deniers.
Yours sincerely
Kevin Hague
Lynwood, Gifford
Sources:
GERS 2016
GERS 2015
Herald Scotland June 2008
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