tag:blogger.com,1999:blog-1603438996450817644.post5134343610495951579..comments2024-01-12T01:56:21.933-08:00Comments on chokka blog: Explaining the £7.6bn "FFA Black-Hole"Kevin Haguehttp://www.blogger.com/profile/14587343060415859159noreply@blogger.comBlogger25125tag:blogger.com,1999:blog-1603438996450817644.post-39437214168879077672016-01-21T11:25:39.611-08:002016-01-21T11:25:39.611-08:00Scottish economic growth (when you exclude any bli...Scottish economic growth (when you exclude any blips from oil) continues to trail behind the rest of the UK, which is overly reliant on the South East / London. The same is probably true for the other regions and Wales. <br /><br />It has always been this way as long as i remember. Therefore under the current governance the black hole will surely continue to rise unless either there is more focus centrally on equalising the areas outwith London (through infrastructure etc) or more economic powers are devolved to regions / Scotland. As neither of the above are likely to happen in any meaningful way (APD anyone!). Then you have either have a job for life updating the defecit gap or a chance perhaps to promote ways to shrink it. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-24366898011665627972015-05-14T03:50:15.113-07:002015-05-14T03:50:15.113-07:00@craigie1 - thank you for redefining the definitio...@craigie1 - thank you for redefining the definition of the word 'Idiot' for the world to see. I rarely insult people on comments but I will make a special exception for you since I don't think you would understand my reply otherwise.<br /><br />I have but one question - How is the democratic vote of last September less valid than the democratic vote this month, when more people voted in the former than the latter?<br /><br />At some point you, other members of 'the 45' and the SNP have to concede that in order to respect democracy they will have to honour it. Please let me know when this time comes and we can start having some serious discussions about the future of this wonderful country.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-35846076001720580892015-05-13T21:20:10.148-07:002015-05-13T21:20:10.148-07:00God almighty I started reading your blog had to st...God almighty I started reading your blog had to stop I have never read such trash in my life. It is obvious that you are absolutely and utterly obsessed with trashing the SNP. I mean psychotically obsessed.<br /><br />Listen simpleton the people of Scotland voted in 56 SNP mps we want them get over the will of the people your inane rants mean nothing. I'm away to take a headache pillAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-2663973832219400412015-04-18T02:03:57.110-07:002015-04-18T02:03:57.110-07:00Interesting to note that GERs claims a geographica...Interesting to note that GERs claims a geographical share of oil & gas, on other items it claims a population share to boost revenues.<br /><br />For example Crown estates revenue in Scotland is less than £10m geographically, but more than £20m based on population.<br /><br />A FoI request confirms the dubious accounting trick.<br /><br />https://www.whatdotheyknow.com/request/the_crown_estates_and_gers#incoming-642362<br /><br />Crown Estates Scotland accounts<br /><br />http://www.thecrownestate.co.uk/media/300060/scotland-report-2014.pdfAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-37318882357162293072015-04-16T13:44:25.324-07:002015-04-16T13:44:25.324-07:00Oh blimey Ian.
1. its the full 90% geographic sha...Oh blimey Ian.<br /><br />1. its the full 90% geographic share as per Scot Gov's preferred definition<br /><br />2. There is no missing whisky revenue - duty is a consumption tax - for same reason we don;t send tobacco duty back to cigarette manufacturers - see footnote not 1 <a href="http://chokkablog.blogspot.co.uk/2015/03/how-scotlands-economy-contributes-to-uk.html" rel="nofollow">here</a><br /><br />These are Scot Gov own numbers - they create GERS to paint best possible picture of Scottish finances - they based the White Paper on them!Kevin Haguehttps://www.blogger.com/profile/14587343060415859159noreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-33395410748938828682015-04-16T12:13:34.633-07:002015-04-16T12:13:34.633-07:00Lots of info to digest great effort congrats
I am ...Lots of info to digest great effort congrats<br />I am guilty of fuzzy thinking I am sure<br />Would FFS mean that Scotland would get 100% of the Oil revenue or only the 5% (I think) it currently receives<br />Would the same apply to the taxes applied to annual 2.4 billion pound whisky industry for which Scotland's share currently is around 220,000 pounds annually<br />When we talk FFS we seem to only be hearing how rUK want to interpret itianhttps://www.blogger.com/profile/11824646821035437771noreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-49933279774388772232015-04-16T11:15:15.851-07:002015-04-16T11:15:15.851-07:00Calgacus: You say that there are decades of oil an...Calgacus: You say that there are decades of oil and gas prices "steadily rising". I can't find any evidence for this. Could you post your sources?<br /><br />The data provided here - http://inflationdata.com/inflation/inflation_rate/historical_oil_prices_table.asp - would not appear to support your view. Rather, it shows periods of low prices and periods of high prices. I cannot detect the trend you describe.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-38266989574450425022015-04-13T17:43:02.299-07:002015-04-13T17:43:02.299-07:00While i think the assumption that oil and gas pric...While i think the assumption that oil and gas prices are likely to remain at the same level or fall in future is probably wrong given the trend over many years and decades of them steadily rising overall despite short term falls; and while I'm not sure that either UK or Scottish government figures can be trusted to be unbiased (and even the IFS is relying on them to make its estimates), this is a well written, clear, and well sourced post with well made graphs to illustrate it and i'm impressed by the quality of it even if i don't agree with all the assumptions made or all the conclusions.calgacushttps://www.blogger.com/profile/18253675072578015749noreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-4698162774080628912015-04-13T16:19:31.949-07:002015-04-13T16:19:31.949-07:00Gary: because the £7.6bn is relative to rUK - if r...Gary: because the £7.6bn is relative to rUK - if rUK grows at same rate the gap isn't narrowed - to close the *gap* we have to grow faster Kevin Haguehttps://www.blogger.com/profile/14587343060415859159noreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-52033295993969856922015-04-13T15:22:31.219-07:002015-04-13T15:22:31.219-07:00Kevin, You say: "Scotland's onshore tax r...Kevin, You say: "Scotland's onshore tax revenue (2013-14) was £50bn so 15% growth would generate the additional £7.5bn pa.. Of course that needs to be growth over and above that the rest of the UK achieves." I don't understand why the last sentence applies i.e. if Scotland are 15% better off on tax revenue then why can't they use that to offset the £7.6 Bln? Sorry if I'm being thick but I don't understand that.Gary Ethernoreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-63446413849262044512015-04-13T11:28:11.449-07:002015-04-13T11:28:11.449-07:00Anonymous - the UK is constantly borrowing to bala...Anonymous - the UK is constantly borrowing to balance the books. And wastes a fortune on PFI/PPP contracts for schools and hospitals to subsidise PFI consortia at the expense of increased costs and cuts in beds and fully trained staff, giant aircraft carriers that won't even have any planes available for them when they're built to subsidise BAE Systems, and Arms Export Credit Guarantees which prinicpally subsidise arms firms and dictatorships that don't pay for the arms the UK government has let them buy from them. Then there are taxpayer subsidies to the privatised train companies bigger than British Rail got when adjusted for inflation, while they increase fares well above inflation and keep all the profits. If an independent Scotland stopped subsidising the banks, arms companies and big multinationals at everyone else's expense, the deficit could be eliminated pretty easily. And when the UK government issues new money through quantitative easing it hands it all to banks, hedge funds and pension funds, not disabled or unemployed people or small or medium businesses, who all get their government support cut, because the big parties are run for the benefit mostly of donors to party funds, not voters.calgacushttps://www.blogger.com/profile/18253675072578015749noreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-154984751709664712015-04-13T11:11:57.883-07:002015-04-13T11:11:57.883-07:00Oil prices are over $50 a barrel. That's only ...Oil prices are over $50 a barrel. That's only considered low because they had gone up to $80 or $100 a barrel previously. Before the Iraq war $50 a barrel was considered a high price. The oil price in 2002, adjusted for inflation since then, was just under $30 a barrel.calgacushttps://www.blogger.com/profile/18253675072578015749noreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-1024346899223807262015-04-13T11:07:31.612-07:002015-04-13T11:07:31.612-07:00From that graph the average annual relative defici...From that graph the average annual relative deficit in the 15 financial years it covers is only about 1.25% greater for Scotland than for the UK as a whole, which does not seem like a big difference. Also on what basis do you assume that oil prices will remain permanently low? They've always fluctuated in the short term, but gone steadily up over the long term. There's no reason to think that won't also be the case for the next several decades, especially as globally the remaining oil reserves are harder to get at (deeper sea, tar sands etc) and more expensive to extract both in money and energy, while the demand is likely to continue to increase as more countries industrialise.calgacushttps://www.blogger.com/profile/18253675072578015749noreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-2249735405583608822015-04-12T14:50:59.975-07:002015-04-12T14:50:59.975-07:00Kevin, I must confess ignorance on GERS and the £7...Kevin, I must confess ignorance on GERS and the £7.6 Bln black hole. Thanks for this article on the black hole and other articles on this site on GERS. It has helped my understanding greatly. I'm intending voting SNP but have been concerned about FFA and the black hole(even more so now!). I hope the FM announces detailed plans on how she intends to balance the books on FFA soon (and certainly before the election. Thanks again.Gary Ethernoreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-7321318814027175072015-04-12T13:46:01.837-07:002015-04-12T13:46:01.837-07:00Today the FM said growth to cover the £7.6bn is re...Today the FM said growth to cover the £7.6bn is required.<br />Problem is, according to HMT the reduction on spending for the 5 year period commencing 2015/6 amounts to £39.6bn.<br />Given the average onshore revenue/ GDP ratio an increase of GDP circa £105bn is needed tp plug this £39.6bn gap.<br />Highly unlikely that this can be achieved even pulling those famous magical economic levers, that no other country has tried or considered before.<br />I cannot see how it can be realised without, raising taxes, expenditure cuts or borrowing or a combination of any of them.<br />What borrowing limit will be imposed by the market, 3% of GDP?<br /><br />Commencement year of 2015/16 will not happen any change will take effect from year 2016/17 at the earliest and it will probably take 1 to 2 years to see any benefit of policy.<br />Therein lies the dilemna, what do you do in the period before policy takes effect?<br /><br />The duty is now on the SNP to publish full costings of FFA ahead of the GE, and I do not mean at the last minute.<br />If they don't, the charge that they are being scared of telling the voters will have a strong whiff of the truth. <br />Ron Sturrocknoreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-36029199682514900252015-04-12T13:25:35.530-07:002015-04-12T13:25:35.530-07:00The depressing thing about Kevin McKenna's art...The depressing thing about Kevin McKenna's article is that was received so enthusiastically by so many of those who commented b.t.l.<br />The percentage of Scottish voters unwilling to accept that FFA<br />or Independence would not lead to economic nirvana is worryingly high.<br /><br />Florian Albert<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-79202202071726603812015-04-12T10:56:41.158-07:002015-04-12T10:56:41.158-07:00According to the OBR in its March 2015 Economic fo...According to the OBR in its March 2015 Economic forecast, UK GDP falls by £5.5 billion in 2015 due to lower oil price trade.<br /> <br />3.106<br />"Based on these assumptions, trade in oil subtracts 0.3 percentage points from GDP growth in 2015."<br /><br />http://cdn.budgetresponsibility.independent.gov.uk/March2015EFO_18-03-webv1.pdf<br /><br />According to SNP government produced figures, in 2013/14<br />£137 billion GDP onshore <br />£153 billion GDP Including offshore <br /><br />table x1<br />http://www.gov.scot/Resource/0047/00470304.xls<br /><br />To reach a GDP figure of £165 billion by 2015/16 , GDP in Scotland would need to rise by £8.5 billion each of the next 2 years.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-26906512100332993392015-04-12T10:52:22.903-07:002015-04-12T10:52:22.903-07:00Great article.
Can you explain what would the dif...Great article.<br /><br />Can you explain what would the difference be between FFA and a currency union?<br /><br />Surely the UK government would have difficult issuing debt if it had a part of the economy that was autonomous and continually having to borrow to balance the books?<br /><br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-62560059118454666192015-04-12T10:00:26.704-07:002015-04-12T10:00:26.704-07:00Kevin,
Many thanks for your reply. Yes you did co...Kevin,<br /><br />Many thanks for your reply. Yes you did cover it; I missed that you covered it in a couple of words, but (a) that's my fault and (b) it's not as if you should have to completely deconstruct every lie from BfS, Stuart Campbell or indeed Kevin McKenna. Life is too short!<br /><br />I think you do an excellent job of pointing out the woolly thinking prevalent on the pro-Indy/FFA side. I am willing to give Kevin McKenna and even some politicians <i>some</i> benefit of the doubt that they don't understand the hard data and thus make false conclusions.<br /> <br />But I do want to reiterate that the BfS lie I quoted is something else. Being charitable, it was written by someone who has no idea how duty works (and thus has never traveled abroad), and approved by an equally ignorant leadership of the organisation to be printed. No one at any time said "wait a minute, this is completely wrong", and they've never made the time to correct the mistake. This would be an organisation of such incompetence that their very name would be an ironic joke.<br /><br />Being less charitable, it is a deliberate lie with no basis in reality, solely designed to reassure the uncertain, or embolden the true believer. <br /><br />I think it's possible both assessments are true.<br /><br />Anyway, the fact that canards like this are still being quoted by nationalists today says something really bad about the lack of critical thinking skills in a lot of people, and sadly how much of an up hill effort your work is.<br /><br />But thanks anyway!Martinhttps://www.blogger.com/profile/14830160543665934846noreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-90918717405218543332015-04-12T06:13:06.692-07:002015-04-12T06:13:06.692-07:00The £15bn extra onshore revenues is a mystery to m...The £15bn extra onshore revenues is a mystery to myself as well.<br />The FAS say from 2015/16 to 2019/20 onshore revenue will increase by £11.2bn. So what criteria, eg base year, have the SNP used?<br />The current onshore fiscal balance for the same period is currently -£16.1bn reducing to -£8.8bn by 2019/20 due to deficit cuts effect. <br />It is worth recalling the SNP anti-austerity stance, does this imply a circa a -£16bn rolling onshore deficit.<br />Ron Sturrocknoreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-88483412365950130222015-04-12T01:58:28.421-07:002015-04-12T01:58:28.421-07:00I now wonder whether the pain that would come from...I now wonder whether the pain that would come from FFA is in fact the goal of the Nats. They have convinced themselves that "fear" was what stopped a win for Yes. What was the basis of this fear in their eyes? It was the loss of revenue from Barnett, in its simplest sense (ignoring the downsides to business which they do not accept anyway). With FFA, you have already lost that Barnett spending in a bout of mass austerity, and you would be in a position where the fear from going alone is removed. As Janis Joplin once sang, "Freedon's just another word for nothing left to lose". <br /><br />My worry is that the SNP tactic will goad the Tories into a form of FFA. Why spend your efforts trying to cut £12 billion from welfare (as planned by Osborne), when you can go more than half way to those cuts and focus the pain entirely in Scotland where you have no MPs anyway?Anonymoushttps://www.blogger.com/profile/03531701900378718072noreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-43915503468497483882015-04-11T16:16:39.961-07:002015-04-11T16:16:39.961-07:00Martin - I've covered this before - there is n...Martin - I've covered this before - there is no such thing as export duty (in fact you get export duty credits) - duty is a consumption tax - see footnotes in this post > <a href="http://chokkablog.blogspot.co.uk/2015/02/yes-or-no-makes-no-difference.html" rel="nofollow">Yes or Now Makes No Difference</a>Kevin Haguehttps://www.blogger.com/profile/14587343060415859159noreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-36713220915266831222015-04-11T13:53:16.834-07:002015-04-11T13:53:16.834-07:00Could you also explain where the frequently-quoted...Could you also explain where the frequently-quoted (by the SNP) figure of the extra £15 billion in onshore revenues by 2020 comes from? It seems such a massive amount, about 30% over and above current onshore revenues, and yet I cannot find a reference for the origin of this figure anywhere - and you seem a good person to ask! Thank you, and thanks also for your blogs.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-27211524072421407212015-04-11T11:44:25.938-07:002015-04-11T11:44:25.938-07:00Personally I think the FFA is a red herring.
Th...Personally I think the FFA is a red herring. <br /><br />There's no way a Labour minority govt is going to give the SNP this one-step-away-from-indepedence concession. <br /><br />It won't happen. Move along now. Nothing to see here. <br /><br />Let's focus instead on where the UK's economy is going please, and less of the relentless focus on what isn't going to happen, as in-depth as the analysis is.<br /><br />And just why are the Conservatives and Labour are so unpopular in the UK that neither party will form majority governments?Jason Hoffmannoreply@blogger.comtag:blogger.com,1999:blog-1603438996450817644.post-63615466922199276942015-04-11T09:55:06.580-07:002015-04-11T09:55:06.580-07:00Kevin,
Excellent post as ever. Without trying to ...Kevin,<br /><br />Excellent post as ever. Without trying to go too far off-topic, I've been noticing a new variation on the "GERS methodology is wrong anyway" argument from the pro-FFA side.<br /><br />I know you've already addressed VAT and Whiskey revenue being correctly apportioned in the GERS methodology, despite company headquarters being in London. However, the argument I'm seeing is slightly different and isn't addressed directly in the methodology (but I think I know why).<br /><br />Have a look at this from our friends at BfS:<br /><br /><a href="http://worldofstuart.excellentcontent.com/repository/BFSCaseforIndy_Nov13.pdf" rel="nofollow">BFS Case For Indy Nov 13</a><br /><br />It says:<br /><br /><i>There are other ways in which Scottish revenues are invisible in GERS. Much of the alcohol duty paid by the whisky industry<br />is not counted as revenue from Scotland. Alcohol produced in the UK which is exported abroad becomes subject to UK<br />alcohol duty at the point of export, and a large proportion of Scotland’s multibillion whisky exports gets shipped out from<br />ports in England. The UK Treasury counts the duty levied on this whisky as income from the tax region in which the port is<br />situated.</i><br /><br />Sounds reasonable, right? But the thing I don't understand is that duty in my experience is never levied on export. It's levied on import. You can buy as many bottles of whiskey duty-free as you like when you leave a country, your problem starts when you try to import them somewhere else.<br /><br />Is there such a thing as export duty? If there is, is it a significant amount of revenue not accounted for? I'm suspicious, so I figured I'd ask an expert :-)Martinhttps://www.blogger.com/profile/14830160543665934846noreply@blogger.com