Scottish fiscal deficit overstated

Sir,

Once again the GERS figures (Government Expenditure and Revenue Scotland) have been released. It estimates the revenue raised in Scotland and the goods and services provided for the benefit of Scotland.

Just how accurate are these figures?

It should be noted that Scottish GDP is not determinable with any accuracy because much of the data required to calculate it such as taxes, imports, exports, investment, savings and more besides, is simply not reliably available for Scotland and is instead based on estimates provided from London.

Scottish VAT is declared on the whole of UK VAT returns: no-one knows how much is due for Scotland. GERS compares tax paid in Scotland with spend for Scotland. That means the following are ignored:

Scottish income taxed outside Scotland such as rents, interest, profits, royalties and maybe more, all of which can be significant; tax paid on providing the benefits for people in Scotland when that spend occurred outside Scotland; tax paid on the multiplier benefit in the spend outside Scotland nonetheless charged to Scotland.

It allocates £3.4bn for Scotland’s share of military spending as part of the UK. Compare this with Ireland which, in October 2019, announced that its defence budget for 2020 would just exceed €1bn.

We are also allocated the following, over which we have no say:

■ £4.5bn to service Westminster debt.

■ £1.8bn for UK ‘service costs’.

■ £966m for ‘international services’.

The result is a system designed to overstate the Scottish fiscal deficit.

GERS tells us nothing about how an independent Scotland would fare or even run its affairs.

It does, however, tell us how Westminster-linked organisations would like us to be seen.

Elaine Mackenzie, Tarbert.