The Emotional Case for Union: Articulating an Implicit Moral Contract

Whether you’re still mourning the result of the EU referendum or are one of those who sees Brexit as some brave new dawn (I know you’re out there), if you’d rather not see the break up of the UK then take a moment to consider this: Brexit is an illustration of the price we pay if we neglect to counter relentless grievance-mongering against a long-standing Union.

Alternatively, if you’re against Brexit but in favour of Scottish independence based on some emotional or “democratic deficit” based argument, I hope what follows may at least give you some pause for thought.

If however you’re in favour both of Brexit and Scotland leaving the UK ... well I’m afraid I can’t help you, best you stop reading now.

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It’s probably fair to suggest that what we saw with the EU referendum was the rational economic arguments against Brexit losing out to the emotional “taking back control” arguments in favour. Conversely, the Scottish Independence referendum was won by many voting No because their head was convinced by the economic arguments against, despite their heart being tempted by the emotional case for.

That’s partly because the economic arguments against Scottish Independence were an order of magnitude more compelling that those against Brexit: however bad you think Brexit is for the UK, exiting the UK would be so much worse for Scotland.

But what I want to focus on here is the nature of the emotional arguments in favour of Union, and the fact that far from being distinct or conflicting, the economic and emotional cases are inextricably intertwined. The economic case only exists because of the emotional case, it’s just that the emotional case is so deeply ingrained in most of us that we struggle to articulate it.

This debate matters and it matters now. If we wait until the imminent threat of another referendum before bothering to make the positive emotional case for the UK, we risk seeing Scotland’s relationship with the UK following the same path as the UK’s with the EU. Relationships suffer if emotions are neglected; a good marriage needs to be worked at.

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Let’s start by looking at the SNP’s core - and superficially compelling - emotional argument:

"The SNP believes that decisions about Scotland’s future – about our economy and society – are best taken by the people of Scotland: the more powers we have in Scotland the more we can achieve for the people who live here" - SNP 2015 Manifesto

In part this formulation simply relies on the reader’s sense of identity meaning that “we” and “Scotland” are emotionally synonymous. Of course those who are happy to think of “we” as the people of the UK can simply substitute “the UK” for “Scotland” in the phrase above and - if you’re so minded - this phrase then becomes an articulation of why we should leave the EU. There’s an obvious irony to the fact that the SNP’s core argument for independence is effectively the same as UKIP’s “take back control” argument for the Brexit the SNP so vehemently oppose.

But what of those who intuitively have a primarily Scottish sense of identity? For those people, the fundamental issue should be that the implied logical connection between the SNP’s statement and the conclusion that Scotland should be independent doesn’t actually exist; you can agree that “decisions about Scotland’s future should be taken by the people of Scotland” without concluding that Scotland should be an independent country.

Representative democracy allows us to decide how best to define which group of “us” should make what decisions. We decide that some issues make sense controlled at local council level, some by the constituent nations within the UK, some by the UK as a whole. Of course many also believe that some are better taken at an EU level or by the United Nations. So what some lazily term a “democratic deficit” others see as simply the result of deciding to participate in a democratic hierarchy that allows some decisions to be taken as part of a larger whole for a wider common good.

The biggest weakness in the SNP’s argument is of course the fact that the 2014 independence referendum took place and that the result was so clear. That vote wasn’t just about self-determination, it was self-determination. It was the purest possible demonstration of the people of Scotland making a decision about Scotland’s future – and we decided that our economy and society would be best served by remaining part of a wider democratic union. Just because the SNP don’t like that answer doesn’t make it not so.

The SNP would of course be quick to point out that no decision can be permanent and since the indyref there has been “material change” with the EU referendum vote threatening to see Scotland “dragged out of the EU against our will”.

Of course there have been other “material changes”, not least those to the economic case for independence. The oil revenue forecasts used by the SNP to underpin their fiscal projections are now known to have been recklessly optimistic and the SNP have accepted that they need a more credible answer to the currency question than simply saying “we’ll keep the pound” (but have yet to find one). The deafening silence from the “SNP Growth Commission” suggests they’re struggling to find a palatable strategy for maintaining an independent Scotland’s fiscal sustainability without slashing public services and while also finding the capacity to invest to grow the Scottish economy faster that the rest of the UK. They may be finding that it’s a lot easier to complain about how things are than it is to outline a credible alternative for how things should be.

The Nationalist’s biggest economic problem though is Brexit itself. Their previous assertion that Scotland’s trade with the rest of the UK would be unaffected by independence has gone from being at best dubious to now completely indefensible. If Brexit means the UK becomes subject to trade barriers with the EU, then a decision about Scottish independence becomes in part a decision about which trading block we favour: we would have to choose between the UK and the EU (or quite possibly risk ending up in neither). The fact that we export four times more to the rest of the UK than we do to the rest of the EU is now a pretty compelling economic argument against Scottish independence.

So the economic case remains the Nationalists Achilles’ heel, and they know it. In the press this week Ian Blackford MP (Leader of the SNP in the House of Commons) was quoted as saying that the SNP must convince Scots voters that their “economic future is better as an independent country”. Given they’ve demonstrably failed to do so to date, you’d think the SNP might at least consider the possibility that they’ll need to convince people that having a worse economic future is a price worth paying for independence

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But just as the Nationalists need to work on their economic case, so those of us who intuitively feel that the Union is “a good thing” need to find better ways to articulate and communicate our emotional case. One blog certainly won’t do it, but let me make a tentative start.

The people of the UK are bound together by much more than a common language and the economic self-interest of a shared currency and the UK-wide single market. We have a long history of common endeavour and a shared a sense of responsibility to look after all of those who live on these islands.

This results in what we might term an implicit moral contract that most of us accept without ever really considering it. This assumed contract means that wherever you live in the UK, whatever your background, class or economic circumstances, we will pool together to look after you.

There are standards of education you should receive, healthcare you should access, public services you should be able to rely on, a sense of security you should feel and a standard of living you should be able to maintain which should exist wherever you live within the UK. These things should not be based on the economic contribution you individually (or your region collectively) make. As a matter of principle we pool and share resources to ensure that basic standards are guaranteed - and over time raised - for all of “us” in the UK.

Needless to say, politicians will make their own cases for how best to fairly go about it and we can argue the merits of their different strategies all day long - but I’d hazard that few of them would disagree that their aim is to deliver against this contract, that it transcends party politics.

This moral contract lies at the heart of the emotional case for maintaining the Union and fairly obviously underpins the economic one. If you accept this implicit moral contract, questions like “why should we share our oil?” or “why should Scotland need fiscal transfers from the rest of the UK?” just seem daft: pooling and sharing happens because it’s the morally decent thing to do.

Similarly the flaw in the thinking which suggests “full fiscal autonomy” for any constituent part of the UK is some kind of ideal end-game becomes clear: if we economically ring-fence any geographic area of the UK we necessarily break this contract. Fiscal transfers are not a symptom of regional economic failings, they're the tangible result of a positive moral choice.

Referendums certainly (and general elections possibly) can offer us the chance to choose to narrow the definition of the “us” that this moral contract applies to.  Just as the EU referendum appears to have shown that many believe “we” shouldn’t include our EU neighbours, so it’s fair that Scottish Nationalists are free to argue that “we” shouldn’t include those with whom we share these islands.

Those committed to breaking up the UK will keep working towards it. Those of us who disagree with them, who believe that more unites than divides us on these islands, who believe that this implicit moral contract is something precious to be cherished - it's time we got to work too.

The SNP's Indyref2 Mandate

There's a lot of nonsense being talked about the SNP's mandate to request a second independence referendum, so I thought I'd try and very quickly clear it up.

Let's start with what most people will probably have seen and heard - what was actually said during the final Holyrood 2016 TV debate (02/05/2016, just 3 days before the election):

So no ambiguity there, couldn't be clearer: 

"what I'm talking about is the Scottish Parliament having the right to propose a second referendum if it becomes clear that a majority of people in Scotland want independence, it would have to be a majority of people that want it"

Is it so naive of me to expect that Nicola Sturgeon might actually stand by her words?

The response from the SNP would of course be that what technically matters is the Manifesto that the SNP stood on.

So I took a look at the "Easy Read" copy. It is indeed an easy read and makes only one reference to another referendum (my highlighting):

"We believe that the Scottish Parliament should have the right to hold another referendum if it is clear that more than half of the people in Scotland want independence."

At this point I would suggest that - given their rhetoric and their "easy read" manifesto - the SNP morally only have a mandate to propose a second referendum if it is clear that a majority of people in Scotland want independence.

Needless to say a quick visit to What Scotland Thinks confirms what any fule kno: the "clear majority support for independence" condition isn't close to being met:

So how do the SNP justify attempting to drag us into an inydref2 against our will? By falling back on the fine print. In the SNP's long-form manifesto you will find - not in the Summary, not in the Vision, not in the Next Steps, but on the left-hand side of page 23 - that an additional clause has been added (highlighting mine)

So technically it is correct to say that the SNP's manifesto states:

"We believe that the Scottish Parliament should have the right to hold another referendum  if there is clear and sustained evidence that independence has become the preferred option of a majority of the Scottish people – or if there is a significant and material change in the circumstances that prevailed in 2014, such as Scotland being taken out of the EU against our will."

Given we're into fine detail here, it seems fair to be picky about these words. Stating that you believe something should be the case is not making a manifesto commitment to do it or indeed asking for a mandate to call for it - it's simply a statement of belief.

Semantics aside, this is akin to Amazon pointing out that they can do pretty much whatever they like with your personal data because you ticked their Terms & Conditions box¹. The SNP may be able to argue that technically their manifesto gives them a mandate to ask for indyref2, but - given their pre-election rhetoric and summary messaging - morally they're on distinctly dodgy ground.

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1. I wonder how many people who shop with Amazon realise they've accepted "Terms & Conditions" that state Amazon "reserve the right to make changes to any Amazon Services, policies, terms and conditions including these Conditions of Use, and Service Terms at any time."?

Oil & Gas: Will We Ever Learn?

That the current oil price crash exposes the weakness of the Yes camp’s economic case is undeniable, but those of us who argued against independence on the grounds of economic rationality would do well to avoid gloating. If we were currently experiencing a short-term price driven boom, the economically literate and rational among us would be arguing that we shouldn't make long-term judgments on the basis of short-term price fluctuations.

So instead of over-reacting to today's oil price, let's instead take this as an opportunity to reflect on how the economic case was presented by the Scottish Government and whether the electorate were suitably informed when votes were cast.

First of all it's worth noting that neither side of the Yes/No debate is celebrating the oil price decline. Even if we discount some of the more sensationalist headlines (North Sea Oil Industry Close to Collapse), measured voices such as Sir Ian Wood (North Sea Oil Collapse Fears 'Too Dramatic') and Oil & Gas UK (Oil & Gas UK have warned of up to 35,000) are warning of 18,000 - 37,000 job losses. Whilst the ever excellent David Smith argued in the Sunday Times (Relax: Lower Oil Prices Will Be Good For Growth) that the oil price slump may benefit the UK economy (because the UK is a net importer of Oil & Gas), nobody who cares for those employed in the industry will be celebrating the current market conditions.

Looking back to referendum debate I recall plenty of us complaining about the oil & gas forecasts in the White Paper (alongside many other complaints about the lack of a credible economic case) but hindsight can play tricks on us - so I have revisited the question using contemporaneous data sources.

The first and most obvious point worth making is that nobody predicted a price crash to today's levels. There are a lot of data points on the chart below but the overall message is simple - the price levels used in the White Paper (blue line) were at the high end of available forecasts at the time but no forecasts were as low as the prices we are now experiencing and expecting (the black line).

Full sources and explanations are given at the foot of this post.

Of course there is a very efficient market in oil price futures so we can look back to the time of the White Paper publication and see if the price assumptions used were consistent with market expectation back then.  The chart below shows the expected market price for a barrel of oil in December 2017 based on the Futures Market Price over time.  The blue lines show the $113 assumption used in the White Paper and the White Paper publication date; it shows us that the price assumption used in the White Paper did indeed fairly reflect market expectations at that time.

Of course revenue is a function of both price and production volume, so let's look at revenue forecasts produced at the time of the referendum debate.

In the chart below, blue lines are Scottish Government Scenarios (as per the Oil & Gas Analytical Bulletins in March 2013 and May 2014)  red lines are OBR forecasts, the black line is the actual outcome.  The dotted lines represent forecasts as of 03/13 and the solid lines as of 05/14 (i.e. periods bridging the publication of the White Paper).  The two highlighted data points in 2016-17 are the two scenarios the Scottish Government chose for the economic forecast used in the White Paper.

You can see how these forecasts evolved over time here (> 2 min video blog)

It's a pretty graph, isn't it?  But let's consider what it is illustrating.

• The dotted lines show how dramatically optimistic the Scottish Government scenarios were compared to the OBR at the time - they appear to have simply ignored the OBR forecasts (despite the fact that they have a consistent track record of being overly optimistic) and used a low case that was 60% higher than the OBR forecast
• The solid lines show that when the OBR revised down their forecasts the Scottish Government simply assumed away the downward trend. In fact the Scottish Government introduced a 6th scenario, presumably so that the higher of the two figures used in the White Paper could still be justified

Now let us pause and reflect on this.  The White Paper was produced by the Scottish Government; this means civil servants should have ensured that it didn't become an SNP manifesto or a case weighted unrealistically in favour of independence. Similarly the Oil & Gas bulletins should surely be impartial assessments of the economic outlook we face? It's hard to look at the graph above and not conclude that the scenarios presented in May 2014 were manipulated to try and support the White Paper scenarios.

This civil service failing has been covered by others (notably John McTernan: White Paper Damns Civil Service) and extends well beyond the issue of North Sea tax revenue forecasts - but this graph alone is surely a compelling illustration of the need for an OBR equivalent independent fiscal watchdog in Scotland. Maybe we could call it the Scottish Office for Budget and Economic responsibility and task it with providing SOBER assessments to inform policy makers and votes?

It gets worse; even if we take the Oil & Gas scenarios as objective forecasts produced in good faith, how can the two scenarios chosen for the White Paper be justified? Any business person will tell you that scenarios should be used to provide an illustration of the range of likely outcomes, to stress test the plan and ensure that the a downside scenario can be weathered.

During the Independence referendum the Alex Salmond claimed "There can be little doubt that Scotland is moving into a second oil boom" and there were forecasters who shared at least some their optimism (e.g. the OECD The Price of Oil - Will it Start Rising Again?) so it is perhaps understandable that yes camp pushed for a bullish scenario in the White Paper.

But what about a conservative scenario?  If you produce six scenarios in the Bulletin you should surely include at least one that reflects a worse case than the OBR forecast?  Given the credibility of the OBR within the UK surely at the very least that forecast should be used as a base case?

In effect the Scottish Government White Paper presented two scenarios for North Sea tax receipts: "Optimistic" and "Hopelessly Optimistic".

Look again at the graph above.  The White Paper "low" scenario for 2016-17 is £3.9bn higher than the OBR forecast that existed 6 months before the referendum.  That's more than double, that's £734 per person or (to use the "over 5 years" methodology Alex Salmond used when propounding his Shameless £8bn Lie) that's £19.5bn over 5 years or £3,700 for every man woman and child in Scotland.

Remember: this is not hindsight. There were voices of reason at the time counselling that the Scottish Government’s forecasts were extremely optimistic (e.g. in the FT The Scottish Government is Misleading Scots about Oil) and the figures I'm using above are simply the OBR forecasts that were available at the time - the shortfall between the White Paper "low" scenario and current OBR forecast is even greater.

Some of us argued against independence in part on the basis that an independent Scotland's economy would be over-exposed to this volatile commodity, we argued that the White Paper failed to make an economic case and that the economic risks were not being honestly presented to the Scottish voters. There were many other warnings being offered (e.g. around employment, currency, uncosted White Paper promises etc.) but the current oil price shock certainly provides a dramatic illustration of the point some of us were trying to make.

More thoughtful Yes voters might consider whether countering those rational observations made at the time with the simplistic, projected opinion that we were in some way suggesting Scotland was "too wee, too poor, too stupid" might not have been the most intelligent way to debate the issue. We weren't "talking Scotland down" or suggesting oil was somehow not an asset; we were simply trying to ensure that referendum votes were cast knowing the very real economic risks an independent Scotland would face.

Maybe next time (if there is a next time) we will succeed in having a more rational and informed debate, that those who counsel for rational economic assessments will not simply be shouted down and accused of negative campaigning.

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Oil Price Chart Data Sources
The black line on the chart below shows the current market expectation based on the Brent Crude Futures market (Futures markets are of course not infallible, but they do provide a truly independent, market based 'Wisdom of the Crowd' forecast as of today).

• The blue line represents the price forecast used in the Scottish Government White Paper published in Nov 13 (both scenarios used)
• The orange figures (2014/15) represent the range of 22 forecasts monitored by HM Treasury as quoted in Scottish Government Oil & Gas Analytical Bulletin May 14 
• The red figures (2017/18) are OBR forecasts as quoted in Scottish Government Oil & Gas Analytical Bulletin March 13 and as published in the OBR Economic & Fiscal Outlook Dec 14
• The Green  figures (2017/18) are figures from DECC as quoted in  Scottish Government Oil & Gas Analytical Bulletin May 14

BBC Bias and the Independence Referendum

“The only bit of the media that disappointed me during the referendum campaign was the BBC. There is a difference between being a public service broadcaster and a state broadcaster, and I don’t think the people at the top of the BBC understand the difference. That is a tragedy.”

- Alex Salmond (Daily Record, 17/11/2014)

"The BBC were pretty disgusting throughout all of it. You only have to look at the time given to the candidates, you only have to look at the fact that in the majority of cases the last word was given to a No campaigner. The BBC backed that."

- Ken Stott (The Scotsman, 29/11/2014)

Accusations of bias against the BBC were relentless during the referendum campaign and it appears the Yes camp are determined to keep that narrative running.  So I thought I'd look into it.

Long before the Independence Referendum campaign started it was clear that the Scottish people's respect and admiration for the BBC meant that a clear majority wanted to keep this UK institution;

This presented an obvious challenge to the Yes campaign. There were similar issues with the Royal Family and the Pound.  The Monarchy question was finessed by throwing a net over the Republicans in the Yes camp and saying "Scotland will be a constitutional monarchy for as long as the people of Scotland wish us to be so".  The currency question was to prove trickier; the best they could come up with was to adopt the (legally incorrect and ultimately unsuccessful) position of "it’s our pound and we’re keeping it". But what to do about the BBC?

The White Paper made assurances that viewers would still  be able to access EastEnders, Dr Who, and Strictly Come Dancing - but there were bigger problems;

• As Severin Carrell said in the Guardian: "The national broadcaster is identified by critics of independence as a great unifier for the UK's nations and regions, an institution that helps bind Britain's citizens into a common family."
• More pragmatically it could be argued that we could rely on the BBC to carry out the sort of thorough, impartial journalistic scrutiny that might expose any gaps in the SNP's economic case.

If you think that over-states the case in favour of the BBC's journalistic integrity, here are the words used by Alex Salmond himself in a Herald interview the week before the vote

• “If the BBC were covering, in my estimation, any referendum, in any democracy, anywhere in the world, they would cover it impeccably, in a balanced fashion.”

Isn't that interesting?  He trusts the BBC to be impeccably balanced in any circumstances other than the one where he himself has the most extreme reason to be biased.

So the Yes campaign adopted a very straightforward strategy: consistently accuse the BBC of failing to be impartial and impugn the integrity of any journalist who asks difficult questions or highlights weaknesses in their arguments.  Cry foul frequently and loudly enough and you’re half way there. Well 45% of the way there as it turns out but you get my point.

Now none of this is to say that the BBC may not have been actually biased (we're coming to that); but it is to argue that the Yes campaign were - how to put this? - predisposed to find reasons to accuse the BBC of bias.

Of course this approach wasn't restricted to the BBC; take this interview with Sky News after the second TV debate. The interviewer is doing the job of a good journalist, questioning Salmond reasonably and firmly on his currency assertions (which I think most people agree deserved to be challenged). He reacts with spectacular petulance and ill-grace, resorting almost immediately to “you can’t play at being Alastair Darling” then - clearly stunned by the impertinence of an interviewer still pressing him for an answer -  “you cannot now impersonate the No campaign” before eventually resorting to condescension: “get with the debate man”.  It's only 3 minutes long - worth watching if you missed it at the time.

Arguing that any interviewer pressing him was tantamount to them working for Better Together - if you think about it an outrageously insulting thing to say to a journalist - became a standard tactic of Salmond's.

Which brings us to the now infamous press conference spat with the BBC's political editor Nick Robinson of the BBC. I promise this is the last anecdotal example before we look at more rigorous attempts to decide if bias existed - but the profile of this incident was so high it can't be ignored.

If you're curious these YouTube clips show the actual "evidence"

1. The actual 23 second news report that went




2. The full 7 minute 45 second exchange



It’s a little lengthy but I offer this summary.  Nick Robinson asked two clearly distinct questions (“two if I may”).  The first was a specific question about RBS moving their headquarters out of Scotland, the second: “And on a more general point; John Lewis’ boss says prices could go up, Standard Life’s boss says money would move out of Scotland, BP’s boss says oil will run out. Why should a Scottish Voter believe you, a politician, against men who are responsible for billions of pounds of profits?”

In Salmond's response he airily dismisses the second question:  “I think the people of Scotland have moved beyond these warnings and scaremongerings”, suggests some of the warnings were recycled from months ago (so this was in effect old news) before then addressing at length the specifics of the first (RBS relocation) question.

He also throws in a few digs at the BBC which - rather unusually for a press conference - are greeted with ripples of applause.  This was explained by the Huffington post: "Alex Salmond has been accused of "surrounding himself with Yes men" after hosting an "international press conference" where audience members clapped him as he responded to questions [...] The Yes Scotland pro-independence campaign admitted that "a small number" of supporters had been invited along with around 200 journalists"

Nick Robinson presses him to answer the second question but he simply repeats his answer to the first question and then (maybe not unreasonably) accuses Nick Robinson of heckling him.

The 23 second broadcast version was edited to only show the last sentence of the second question “Why should a Scottish Voter believe you, a politician, against men who are responsible for billions of pounds of profits?” and then Robinson’s voice-over “he didn’t answer, but he did attack the reporting of those in what he called the metropolitan media”

Now the question broadcast wasn't the best question a journalist has ever asked - it was really a rhetorical question posed to make a point rather than elicit a response - but the viewer can surely judge that for themselves. I've watched this several times and I think it's true (albeit hardly surprising) that Salmond didn't really attempt to answer the question broadcast.

Whilst I doubt there will be any Pulitzer Prize nominations heading Nick Robinson's way for this particular piece of reportage, surely only the most hyper-sensitive politician could take serious offense at this 23 second news clip.  Or a politician hell-bent on calling foul against the BBC at every opportunity.

You know the rest of course – extreme offence was taken, the outrage and grievance machine was set into motion.  Within a week protests were held outside the BBC with a massive printed banner calling for Nick Robinson to be sacked.

As reported in the Guardian , Alex Salmond backed the protests against Nick Robinson saying the BBC had been “unfair and unreasonable” in the way it edited the exchange.  The Guardian went on to report: “BBC sources disclosed that some political reporters have been repeatedly subjected to verbal and online abuse [...] Paul Holleran, the NUJ's Scottish regional organiser, said there had been an escalating series of incidents in which journalists in Edinburgh and Aberdeen had been abused [...] Alistair Carmichael, the Scottish secretary [ NUJ], urged Salmond to call the protests off. "These are serious, serious tactics to be adopted and really, the person who could stop it all and pull the heat out of this is Alex Salmond. But time after time, despite every invitation to do so, he just ignores it".  You might think Salmond's reaction was more likely to be "job done"; of course he didn't try to stop it.

As reported by the Telegraph he escalated the situation by subsequently saying to Allegra Stratton (political editor of Newsnight):  “You should have taken Alistair Darling’s place. You are doing much better than he did”.  You might not be surprised to read that this was in response to Ms Stratton pressing him on the currency question. The Yes campaign were nothing if not consistent in their tactics.

So let's step back a moment – Thousands of hours of news broadcasting, journalists working to tight deadlines and reporters and editors required to distill down lengthy exchanges into 30 second snippets (whilst providing a narrative commentary) and the 23 second news report by Nick Robinson is enough to create this level of backlash?  Is this really the case for the prosecution?

In the Herald interview during the days leading up to the referendum Salmond was asked “Is the BBC's referendum coverage biased?” his response was unambiguous:

• "Yes, absolutely," he says. "Of course it is. The problem with Nick … I mean, don't get me wrong, I like these folk, but they don't realise they're biased. It's the unconscious bias which is the most extraordinary thing of all.

Take note: he’s not complaining about a specific incident or a specific journalist; he’s saying that “absolutely”, “of course” the BBC’s referendum coverage was biased.  In the quote at the beginning of this piece he accuses the BBC of behaving like a “state broadcaster”.  For the faithful followers of the Independence cause this is a self-evident truth, an article of faith; to question whether or not it was actually the case is considered heretical .  Trust me I know this.

I’m sure I could find plenty of examples where I could – were I to adopt the mind-set of a petty grievance-hunter – pick issues with the BBC’s reporting and argue that there were occasions where the No campaign was unfairly represented.  We could look at the airtime given to Business for Scotland; look how weakly presented the economic arguments were in Robert Peston's documentary; question the failure to pick up on the £8.3bn lie Salmond repeated in both live TV debates; challenge the failure to follow-up on the obfuscation and susbsequent back-tracking on the one-off cost of independence.  But I won’t because I recognise that there will always be occasions where one side feels hard done by; that individual journalists are human beings not automata and that a degree of journalistic judgement is applied in the reporting of any political story.  There are 2,000 BBC news journalists; they will have differing opinions and will inevitably apply some of their own spin to stories.  The question is not whether there is ever any bias - there will surely inevitably be some from time-to-time - the question is whether it is systematically in one direction or another.

So here we turn to assertions like Ken Stott's "you only have to look at the fact that in the majority of cases the last word was given to a No campaigner" which - if true - would suggest there was indeed systematic bias.  It would be interesting to know how Stott justifies asserting this as fact - there is no further source given in the Scotsman piece (that itself cites a Radio Times interview).

Allegations like this are certainly extraordinary given the BBC is a Trust governed public service broadcaster whose impartiality is under extremely close scrutiny.  There are clearly defined BBC Editorial Guidelines around impartiality (“Impartiality lies at the heart of public service and is the core of the BBC's commitment to its audiences”), relating to Elections and Referendums (“Special considerations apply during the campaigns for elections and referendums and, in some cases, the period running up to campaigns will involve greater sensitivity with regard to due impartiality in all output genres") and Broadcasting During Elections ("We should make, and be able to defend, our editorial decisions on the basis that they are reasonable and carefully reached, with due impartiality [...] news judgements at election time are made within a framework of democratic debate which ensures that due weight is given to hearing the views and examining and challenging the policies of all parties")

I appeared on a few BBC Shows (Radio Scotland’s Morning Call and a couple of John Beattie shows, Radio 4’s "Voter’s Voice" and BBC Breakfast News) and they were scrupulously balanced with presenters clearly trying to balance each side’s airtime and alternating who got the last word.

But of course this might be confirmation bias - I'm seeing the balance I hope to see and if the BBC's accusers are right I'm unlikely to think differently.  So where's the evidence to back the claims against the BBC?

In a strongly worded online piece published in January 2014 Derek Bateman stated: "The effect, as proved by the research, is the same…the public, a majority of whom have lost trust in the BBC, can now accurately say that the BBC is biased against independence". Derek describes himself in the article as a "recent long-term employee"; the reader can judge whether there may be some bitterness behind his post.  He admits "I can’t find a copy of the actual report " but is confident enough to say the case is "proved" and those who have lost trust in the BBC can "accurately say" the BBC is biased against independence.  If he was still an employee of the BBC one wonders if he would make such bold assertions without having read report the in question.

The report may not have been available when he wrote the piece but it certainly is now: there were two main phases to the work (Bateman was writing after the first) and in my search for analytical support to the question of bias in the BBC's reporting all the examples I found (eg. Open Democracy, MediaLens, The Conversation) lead point back to this same study.

The work was sponsored by the Yes campaigning website Newsnetscotland.com  and carried out at the Creative Futures Institute of the University of the West of Scotland by Dr John Roberston (who according to the Guardian "favours independence").  It would seem prudent be wary of the risk of some confirmation bias here.

The first Report covered BBC & ITV coverage from Sep 20132 to Sep 2013 from which the table below

Let's look at Ken Stott's assertion that "in the majority of cases the last word was given to a No campaigner".  Looking at "anti-pro" vs "pro-anti" order for BBC output (BBC1 + Reporting Scotland) the analysis shows that pro (pro Independence) was the second argument 79 times versus 43.  The narrative provided by the report suggests "this tends to normalise the No/anti-independence position and put the onus of the Yes/pro-independence position to justify itself". Well forgive me but that's as clear a confirmation bias spin as you can imagine - as Mr Stott highlights having the last word is generally seen as an advantage in theses situations; the data shows that Yes had the last word more often.  I think we can safely assume that had the data been reversed we would have seen that alternative argument deployed.

But what about finishing with "Anti-evidence unchallenged" out-weighing finishing with "pro-evidence unchallenged" by a ratio of 4;1 (40 vs 10)?  Well the definition used is "finishing a broadcast item with a clearly [pro or anti-] piece of evidence unchallenged.  The word "clearly" in there may give us a clue as to the subjectivity that has been applied. There are 192 BBC reports analysed and only 50 are attributed as "clearly" finishing with one side's evidence unchallenged.  I wonder if a different subjective assessment might decide some of those unclassified may finished with pro evidence unchallenged?

The rest of the analysis frankly gets a bit silly as it's predicated on the assumption that there is an equal amount of anti vs pro news or anti vs pro evidence to report.  It doesn't require the greatest intellectual leap to consider that it's just possible there may have objectively been more anti evidence emerging.

For example: the commentary states "Anti-independence statements were heavily concentrated on economic affairs such as alleged increased unemployment or closures after independence"; but if that was the news that was coming out - what the vast majority of economic experts and businesses were saying - it's hardly evidence of bias to report the fact.

The report carries on in the same vein :"there was clear tendency to use anti-independence over pro-independence evidence."; now I was pretty buried in the data and - to be frank - when it came to evidence there was simply a lot more anti-independence evidence than there was pro.  The job of the Yes campaign was to find or generate pro economic evidence- it was hardly the BBC's fault that the Yes campaign couldn't produce evidence in favour of their economic assertions.

Maybe it's easier to look at the current news to illustrate this point; the falling oil price is clearly anti the economic case for independence - to suggest that shouldn't be reported unless there is some balancing pro economic news is patently ludicrous.  This analysis would, however, suggest that to simply report this news would be evidecne of vias.

Similar argument apply to the "personalisation" judgements which are described in the text as "a heavy personalisation of the debate around the character of Alex Salmond".  That is surely a function of how the campaigns were run and/or the nature of the personalities involved: who is being put forward, what speeches and photo-calls are being arranged, how are they behaving (see above).  One could equally argue that this shows Alex Salmond was getting an unfair share of the limelight (or maybe the researchers arew implicitly suggesting that his personality was an electoral liability?).

Of course to really test the research one would need to see the raw data (which reports and incidents were score how). As Newsnet Scotland reported, when the BBC formally asked Dr Robertson "we wonder if you might be willing to share that with us?" the good Doctor's response was clear: "No."  Why on earth would you be unwilling  to share your back-up data if the evidence for bias was so unequivocal?

Enough on the first report - maybe if Derek Bateman had been able to read it he wouldn't have suggested his assertions were "proved" by the research - may be if Ken Stott had studied the data he wouldn't assert that in the majority of cases "the last word was given to a No campaigner".  The research certainly doesn't back up either of these claims.

The second report covered Good Morning Scotland during April 2014 from which the table below

The commentary states: "it must be pointed out that no imbalance in the crude number of statements favourable to the Yes campaign and of those favourable to the Better Together (BT) campaign is evident in these results. Indeed we get a ratio favouring the Yes campaign 7:6".  I love the phrase "must be pointed out" - the author is so disappointed at having to make that observation.

But of cause the report's author is undaunted, carrying on to draw the conclusion that the broadcasts were "unfair to the Yes campaign and favourable to the Better Together campaign".

Of course the argumentation for reaching that conclusion is built on the same obviously flawed assumption that to be fair, coverage must have equal positive and negative statements for each side, equal interruptions, equal good news / bad news stories appearing first.

The point is neatly summed in  Ofcom's defnition of "due impartiality”: “Due is an important qualification to the concept of impartiality. Impartiality itself means not favouring one side over another. Due means adequate or appropriate to the subject and nature of the programme. So due impartiality does not mean an equal division of time has to be given to every view, or that every argument and every facet of every argument has to be represented.”

To offer a pragmatic example: if one side makes arguments that are error strewn or based on unsubstantiated assertion they probably deserve to be interrupted or challenged more than the other. That wouldn't be evidence of bias; it would be evidence of journalists doing their job.

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So I've looked long and hard - I've tried to be objective - and I certainly can't find anything to justify the rabble-rousing statements that are still emerging from the Yes camp.

So how come the mud appears to be sticking?  Whilst writing this blog post I've realised there is a powerful irony here.  The organisation most damaged by Mainstream Media (MSM) bias is the BBC itself.  It's hard for the BBC to defend itself (because "they would say that wouldn't they") and other MSM players (including the print media in an increasingly digital world) see the BBC as a major competitor.  The people who it could be argued should be leaping to the BBC's defence are those who have most to gain from seeing the BBC weakened.  It may not be coincidence that the most supportive MSM quote I used above is from a report in the Guardian - itself Trust owned and independent of any proprietorial influence.  I don't imagine that the Murdoch press is losing any sleep over the beating that the BBC has been taking.

You Read it Here First

This is shamelessly self-congratulatory - but it's been an interesting week and I feel my Blogging activities have been somewhat vindicated.

1. Business for Scotland

On June 17th I blogged at length about the reality of this group, highlighting that they were a thinly disguised SNP construct with few significant employers and no businesses who trade with rUK   > Who do Business for Scotland Represent.

On August 31st Andrew Gilligan used my blog (supplemented with his own research and an interview with me) to publish this excellent piece in the Sunday Telegraph

2. Dunleavy & Start-up Costs

On June 25th I wrote an angry blog.  Our First Minister and the Yes campaign were claiming one-off costs of independence would be £200 - 250m and rubbishing treasury estimates of £1.5 - 2.7bn.  Alex Salmond went as far as demanding a retraction of HM Treasury's "highly misleading briefing".   Citing a report commissioned by the Sunday Post the First Minister wrote: "Professor Dunleavy’s report this weekend has vindicated the Scottish Government’s position and demolished that of the UK Government".

I analysed Dunleavy's report and concluded "no matter how hard you try you can't disguise the fact that the true cost will be significantly more than £1bn and in fact look to be closer to the Treasury estimates than Alex Salmond's" > Dunleavy & The Costs of Independence

On August 31st the Sunday Times published specially commissioned work by the Centre for Economics and Business Research (CEBR) which concluded: "The set up costs for an independent Scotland would run to nearly £2.5bn"

3. Independence threat to jobs in companies who rely on Trade with rUK

On May 18th I wrote at length (> Independence and Scotland's Trade with rUK) about the fact that businesses who trade with rUK would be damaged by independence and jobs would inevitably leave an independent Scotland as a result.  I concluded: "This is not a marginal issue, the businesses I can speak for are not unusual.  This is not about making threats or protecting the interests of a few rich shareholders [..]  there are wider implications for employment and the economic success of an independent Scotland that I feel should be understood by anyone wishing to make an informed decision as to how to cast their vote on September 18th".

On August 13th the Scotsman reported: "Around one in ten Scottish jobs depend on trade with the UK and would be “in danger” after a referendum Yes vote,according to Treasury analysis."

4. Misleading Conclusions from GDP/Capita Data

On May 20th I wrote about the ridiculousness of concluding that Scotland is a wealthy country based purely on the single GDP/Capita measure (> Look at our GDP/Capita; Look at Ireland).  I pointed out that Ireland has an even higher GDP capita but is in no meaningful way a "more wealthy" country and suggested GNP as one of the measures that should be considered (as it measures the wealth that falls to the citizens of a country as opposed to that owned by overseas companies)

On May 29th the Guardian published an article (New doubt cast over Alex Salmond's claims of Scottish wealth) which drew attention to the issue of foreign ownership of production, highlighting GNI / GNP measures and observing: "Alex Salmond’s claim that Scotland is one of the richest countries in the developed world has been challenged [..] it is a middle-ranking economy with high levels of foreign ownership. The domination of non-Scottish firms, particularly in key industries such as North Sea oil, financial services and banking, whisky and salmon, means a significant amount of Scotland’s wealth is exported to the rest of the UK and overseas"

5. Scotland and the EU

On May 16th I wrote about the realities of the negotiation hurdles that Scotland would face to remain within the EU (Independent Scotland & The EU).

On August 29th Professor Adam Tomkins published this definitive article on the subject (Scotland and the EU).  He makes his case with far more logical rigour and authority than I do - but I would venture his conclusions are wholly consistent with my own.

6. The "£8bn Better Off" Claim

On August 12th - responding to our First Minister Alex Salmond's claim in the first Live TV debate that an independent Scotland would have been "£8bn better off" over the last 5 years I cried foul and wrote this blog > The £8bn Misdirection.  When it was defended by Business for Scotland and I saw they were using the same claim I followed up with this blog (August 16th) to try and simplify the point > £8bn Better Off.

On September 2nd I appeared on John Beattie's Radio Scotland Lunchtime show where I was able to clarify the issue for a wider audience.  Business for Scotland sent along a representative to try and defend it - listen for yourselves and decide if he succeeded*

Listen from 35:30 in > John Beattie Show

*He didn't

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I reckon that's not a bad track record.

It's Not About The Numbers

Here's the thing: I don't think the independence debate should be about the numbers.

My heart tells me that the Union works, that being part of the United Kingdom makes us stronger, that sharing with our neighbours makes good sense and is - frankly - a morally sound way to behave.

I recognise of course that there are many decent and rational Yes voters who don't share my view.  At the heart of the difference between us is that they see a constitutional problem that needs fixing and I don't.

You see: I have no problem with "us" being the people of the United Kingdom, so I believe that we already get to decide who governs us.

I accept that the party I vote for won't always be the party in power and I know that will still be the case in an independent Scotland because that's how representative democracy works.

I recognise that politicians sometimes disappoint us, sometimes make mistakes - but I don't see that as a problem confined to Westminster; I don't believe that the Scottish political elite are in some way immune from these human failings.

I also recognise that Scotland faces demographic and economic challenges that mean our priorities will sometimes differ from those of the rest of the UK.  I see the devolved parliament as an excellent way to address those differences whilst retaining the benefits of Union (of which having a shared currency is but one powerful example).

I do understand that some Yes voters believe that - as the rest of the UK lurches to the right -  an independent Scotland could cast itself free and become a shining beacon for social justice.  I don't doubt that this is a view held with heartfelt conviction by many; but I wonder if some of these voters forget that for 13 of the last 17 years we had a UK Labour government that Scotland voted for. Disenchantment with New Labour and the Blair years is not a uniquely Scottish phenomenon. Similarly, just because the Tories are in power now doesn't strike me as sufficient reason to discard 307 years of Union.  Some - few in my experience, but some - Yes voters rise above the party political distractions and argue instead that (implicitly) Hadrian's wall defines the optimal trade-off point between economic scale and getting what "we" want all the time. I question whether the Scottish electorate will turn out to be as politically different from the rest of the UK as this view implies, but that is by-the-by.

So from these diametrically opposed starting points (gut feelings that we should either stay together or go it alone) each side views the evidence through our own prisms, refracting away unhelpful truths and drawing focus on the arguments that support our prejudice.  I don't claim to be immune from this tendency but I try very hard to maintain objectivity. I have spent the last three months immersed in the arguments of the Yes camp and consciously avoiding Better Together literature.  I wanted to face the counter-arguments and challenge my intuition rather than seek the reassurance of evidence that reinforces my beliefs.

I have been shocked by what I've found, particularly with respect to how oil & gas revenues are shared.

I expected to have to make the argument that within a Union it's only right and proper that you share resources; I expected to use the tortured analogy that if you were to discover after you'd been married for a few years that you'd had a winning lottery ticket in your back-pocket all along, it would be morally indefensible to argue you shouldn't share it with your partner. Particularly if you'd already been married for 270 years; I mean - do you ever wash those jeans?

I've covered the detail elsewhere on this blog: the numbers are all there, sourced directly from the Scottish Government's own GERS report (and presented in full and using most up-to-date figures) > £8.3bn Better Off?

I offer the following as a fair summary:  Scotland receives "back" from the Treasury as much in additional public spend per head as we contribute in additional tax per head if you attribute all "our" oil & gas income to us on a geographic basis.  It's remarkable how well this balances out; the average annual per capita difference shows Scotland making a £2 per person net contribution over the last 7 years if you assume we should keep all of "our" oil & gas income. Over the last 4 years we were in fact net beneficiaries to the tune of £156 per person and last year  by £512 per person.

Pause for a moment.  Isn't that an incredible observation?  What a wonderfully well balanced Union this is. Despite the fact that the rest of the UK could quite reasonably lay claim to "keeping" their per capita share of oil & gas income, in fact we in Scotland get a higher level of public spending per capita that almost exactly matches "our" higher tax contribution.  Indeed in recent years being part of the UK smooths the volatility of Oil & Gas income; we're able to maintain our level of public spending even when our Oil & Gas tax income (hopefully temporarily) dips.  You'd think even the most hardened Nationalist must look at that and - begrudgingly perhaps - accept that we get a pretty fair deal.

But of course we don't hear the Yes camp admitting that. Instead we hear - from the likes of First Minister Alex Salmond and the risible Business for Scotland - that we would have been "£8bn better off" if only we'd had our "fair share".   That is a frankly ludicrous statement.  They attempt to justify it by saying we should have had an even higher percentage of expenditure than we actually did - the implication being that we should have spent £8.3bn more than we actually did resulting in an even higher per capita deficit (as a result of which of course we would have been responsible for far more than our per capita share of UK debt).  If you're the sort of person who thinks running up a bigger credit card debt makes you "better off" then you may buy that argument; I'm not and I don't. The detail is all here > The £8bn Misdirection

Of course if you're a committed Yes or a committed No then the numbers frankly make no difference to you anyway; but if you've been swayed to vote Yes because you believe we're hard done to by the Treasury you really should think again.

Go back 25 years and the story is broadly the same ... but it's only fair to observe that if you go back even further (to the 1980's when we benefited from the main Oil & Gas boom) then - not surprisingly - you find a decade during which Scotland was a significant net contributor to the UK.  If we were voting to rewind to 1980 - and if you took a purely selfish view - then you could make a case that Independence would have made "us" better off.  But of course we were part of a Union then and - not to put too fine a point on it - we're not voting for a time-machine.

We can only change what's ahead of us and nobody is predicting another 80's style boom. At current public expenditure levels and keeping all "our" oil and gas we in Scotland run a very significant deficit (£2,268 for every Scottish man, woman and child last year).  Its worth noting that before the fabled Oil Fund can be created we need to at least be running a surplus (as per the Scottish Government's own criteria) and that's not forecast to happen in any of the projections I've seen.

So how would an independent Scotland address the deficit? The data show quite clearly that the current run-rate structure of UK tax and spending is in fact beneficial to Scotland (neutral at worst).  Voting Yes doesn't make us wealthier - but of course it facilitates different tax and spending decisions than Westminster might make.

So what tough choices would an independent Scotland make to address the reality of the deficit?  Well if you want to get past glib statements like "by investing our enormous wealth for the benefit of future generations" I'm afraid you're out of luck.

There are some examples given in the White Paper - primarily centered around Trident and defence spending - but famously the figures simply don't stack up. Don't take my word for it; the highly respected and impartial Institute for Fiscal Studies had a very close look and concluded Spending cuts or tax increases would be needed to pay for Independence White Paper giveaways.  Specifically they concluded the specified tax increases & spending cuts would save £500m p.a. but that spending increase and tax cuts would cost around £1.2bn p.a. in the short term and potentially considerably more in the long term. I am not aware that the Yes camp have even challenged this IFS analysis.

So we have to look beyond the White Paper and see what both sides are saying.

The Yes camp suggest that independence will allow us to avoid the austerity measures and spending cuts imposed by "Westminster" - without of course suggesting how an independent Scotland would address the very real deficit problem.  They argue that remaining in the Union and taking our share of the necessary cuts is somehow unfair - whilst simultaneously arguing that we should keep the pound.

As for the Yes camp's argument about the risk to Scotland's NHS caused by creeping privatisation in England ... well that is possibly the most cynical ploy of the lot.  They are relying on successfully obfuscating the difference in voters eyes between privatisation of provision (which is happening North and South of the border but does not imply spending cuts) with a move to a "patient pays" private healthcare model (which would  lead to spending cuts but is not happening and would be electoral suicide for any party to pursue).

At the risk of stating the obvious: if UK spending cuts are required to address the deficit and debt problem (and protect the value of our currency) then of course Scotland should have to take our fair share of the pain. But devolution means we already make our own decisions about where that pain is felt - we can prioritise protecting the NHS for example - but we can't escape the harsh economic realities.  The same would of course be true for an independent Scotland: independence is not a Get Out Of Jail Free card.

We've got this far without discussing currency or EU membership.  I've covered both at length before (Currency Union & Economic Asymmetry  and Independent Scotland and the EU) and nothing from the recent debates has changed my conclusions;

• Currency Union is arguably the least worst option for Scotland but even if it could be achieved our relative scale means it would mean de-facto sterlingisation - we would inherit monetary policy designed for rUK that would be increasingly inappropriate for an independent Scotland aspiring to pursue a divergent economic path.  Whatever happens with currency it is a clear downside of independence
• There are significant risks to at least the terms of our membership of the EU and quite possibly to our membership at all  (given the need to achieve unanimous approval from all 28 member states and the very real risk that we won't be able to satisfy the requirement of having a stable currency).

So where does all that leave us?  Well for me - after covering all of this ground - I'd like to leave this debate at the point where I came in.

Jobs.

I am a founder, investor, shareholder and Director in businesses that employ over 300 worldwide, 220 of them in West Lothian (I've laid out my bona fides for all to see).

As I have explained elsewhere (Independent Scotland and rUK Trade) the dot.com businesses I run would change overnight  from being domestic businesses to being businesses that export 90% of their turnover to rUK. This exposes us to new costs, risks and uncertainties; it would place us at a competitive disadvantage to our competitors based South of the border.   In addition to the obvious currency and EU membership uncertainty (which includes the risk that we will have different VAT regimes or that one of Scotland or rUK is in the EU while the other is out) we are faced with practical issues such as changing shipping costs: the Royal Mail Universal Service Obligation survives privatisation but won't survive separation and we can expect couriers to vary pricing across national borders.

Of course there is a simple but deeply painful solution to those problems; we would move our warehouse operations South of the border and make people redundant as a direct result.  

We are not unique; we're not even unusual.   Scotland exports 4x as much to rUK as it does to the whole EU.  To put it another way: independence shrinks our domestic market by 90%.  Are my employees just an unlucky few? Let's see what other businesses think;

• Bibby Financial Services' SME Survey found "Over a quarter (26 per cent) of Scottish small and medium-sized businesses fear they will lose business if there is a ‘yes’ vote in the referendum and some 70 per cent have rejected the idea that independence would be a positive step for the nation"
• A Federation of Small Business Survey of 1,800 small Scottish Businesses observed (note the question was not directly asked): "In the comments section of this question, 134 members volunteered that they would consider or would definitely be relocating their business outside of an independent Scotland, while a further 51 stated that they would look to close, downsize, sell, or retire early. This totals 185 respondents (10%) who would consider withdrawing their business from the Scottish economy"
• Working for Scotland have assembled testimonials and public statements from a wide range of businesses and Unions voicing their fears and concerns for businesses and jobs in an independent Scotland.  Not suprisingly the defence and financial services sectors feature heavily

• The Treasury estimate that 270,000 jobs are on the line: that's 10% of all employment in Scotland

It's clear to me that - even if you assume the Treasury is over-stating the case - the impact of a Yes vote on employment in Scotland would be little short of devastating.  I certainly believe over 100,000 jobs would be lost.  Of course that has an impact in terms of GDP, tax income and welfare spending all of which negatvely impact  the deficit.  

But it's not about the numbers.

It's about the people who will lose their jobs, their livelihoods, their families.  Ten's of thousands of people, ten's of thousands of households.

For those who'll react to this blog and accuse me of scare-mongering:  I'm one of those who'll have to look people in the eye and explain why I'm making them redundant - I've had to do it before and I can assure you that focuses the mind; it was the worst day of my professional life.  If I have to do it again I at least want to know that I did what I could to avoid it happening; I don't want anybody to turn round to me and say "I wish you'd told me that before I voted".  I won't hide the truth from my employees simply to protect myself from the abuse I will inevitably receive for speaking out.

Thank you for reading.

£8.3bn Better off?

An independent Scotland would definitively not have been £8.3bn "better off" over the last five years.  The only argument offered by the Yes camp to justify this figure is that we could have run an even higher deficit and increased Scotland's debt by a further £8.3bn.  That's like saying I could have been better off over the last five years if only I'd been allowed to run up a higher credit card debt.

This follows on from two previous posts: The £8bn misdirection and Independence & Economy "Facts": A Response which address both our First Minister's use of this fabled £8bn figure and the risible Business for Scotland's use of it within a video presentation.

Business for Scotland refused to explain how that figure was arrived at when I posted queries on their site (they take a rather censorial approach to any comments that question their analysis or seek clarification: they simply don't publish them).  They were however spurred into action when I posted that - when this figure was used by our First Minister - it represented a blatant lie.  You can follow the detail if you like here and see how Ivan McKee of Business for Scotland leapt valiantly to our First Minister's defence.

Now obviously Business for Scotland is a non-political organisation - they make that very clear on their website. It's true that one of their founding Directors (Jim Mather) is the former SNP Minister for Enterprise, their CEO (Gordon MacIntyre-Kemp) is a failed SNP local council candidate and the First Minister is fond of using them for photo-opportunities and is attending their annual fund-raising dinner - but I don't think one can necessarily conclude from that that they're some sort of poorly disguised SNP campaigning vehicle designed to give the Independence case a veneer of business credibility.  I imagine Ivan McKee of Business for Scotland simply felt he should intervene out a sense of civic duty rather than because somebody suggested he should.

It's true also that Business for Scotland's membership appears to lack any businesses involved in material trade with the rest of the UK (I looked very closely as you can see here): perhaps that's unsurprising as those are the businesses (employing over a third of the Scottish work-force) who will be most badly impacted by Independence.

Anyway: having now finally received an explanation of the £8.3bn figure I looked again at the slide in Business for Scotland's bizarre Video Presentation - I include it in all it's glory below.

Now knowing how they calculate that figure (you can follow the painful detail here): it certainly doesn't demonstrate that "Independence would have made Scotland £8.3bn bettter off over the past 5 years".  That is a blatant lie.

They arrive at that figure by saying that if our percentage of UK public spending had been the same as our  percentage of UK Tax contribution then we'd have spent £8.3bn more.  Think about that for a moment. The argument is that we (Scotland) should have been running an even higher per capita deficit than we did; we should have been increasing our debt levels even more.  This is like me saying "I could have been better off over the last five years if only you'd let me run up a bigger credit card debt". It's sheer lunacy.

For completeness: if you go back 7 years (as far as I could be bothered to go) our share of deficit generated is 8.4%, exactly in line with our share of population (i.e. this level of "deficit contribution" is consistent with us receiving a per capita share of debt incurred over that time).  The implication of spending an additional £8.3bn over the last 5 years is that our share of the deficit over that period would have been 9.5%; we'd be responsible for significantly more than our per capita share of national debt.

To believe the statement on this slide you'd need to believe that Scotland would have been "better off" if we'd have spent more, run an even higher deficit and incurred even more (hypothesised share of) debt. That's palpable nonsense.

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For those who care about the detail (and have time on their hands) I repeat my workings below.  I wish Business for Scotland were so open: it would save me a lot of time.

Have we paid £8bn more in than we've had out?

When I initially made this post I wrote: "No.  The First Minister lied."  Since then I have received two helpful clarifications (see comments at the foot of this post) and am happy to apologise and retract the accusation of lying.

I think however that you'll agree - if you wade through the following logic - that the First Minister's statement was intentionally misleading.  While appearing to say we paid £8bn more to the UK than we got back over the last five years he was effectively suggesting that over the last five years Scotland should have been running an even higher deficit than we were to the tune of £8bn. Remarkable.

[A briefer summary o this logic can be found here > £8.3bn better off?]

To elaborate:  there was a statement made by Alex Salmond in the STV debate that bugged me; I managed to source the exact wording and Mr Salmond is quoted as saying

• "In each one of the last 33 years, Scotland has paid more in tax per person than the average of the UK. Over the last five years we have [paid] 8 billion pounds more into the Treasury than we have had out of it, in relative terms. That is 1,500 pounds a head for every man, woman and child in Scotland."

Now I think I known the GERS numbers pretty well by now and I simply couldn't see how on earth that statement could be justified.

Taking first of all what most people watching will have thought he was referring to: in fact

• In the last 5 years public expenditure in Scotland (what we've "had out of" the Treasury) exceeded our tax receipts (What we have "put in" to the Treasury) by £51.3bn¹ .. or over £9,000² a head for every man woman and child in Scotland.

These figures of course assume we keep "our" geographic share of oil using the Scottish Government's most favourable definition of geographic share.  We run a deficit.  The UK runs a deficit. Of course we get more back from the Treasury than we put in.

Of course the subtlety in our First Minster's statement comes in the use of the phrase "in relative terms".  The BBC suggested this explanation:

• "Alex Salmond said Scotland had contributed £8bn to UK finances. According to Scottish government figures, Scotland has contributed more to the Treasury per head than the UK average, if you assume a geographic share of North Sea revenues. In 2011-12, it was £1,500 more per head (the figure Mr Salmond quoted) and, if you multiply that by the Scottish population, you come to £8bn"

With apologies to the BBC: whilst that explanation fits the numbers unfortunately it bears no relation to the First Minister's words.

• The figure quoted is for 2011-12 - not the last five years
• The figure represents tax contribution (what's "put in") and takes no account of the public expenditure received (what's "taken out") - the First Minister said the figure represents an amount "more into the Treasury than we have had out of it"

So I turned to the raw data.  I chose to go back 7 years (there is normally a reason why a figure is quoted over a particular time period so I wanted to check the sensitivity to longer as well as shorter periods). As well as comparing Scotland to UK total (as GERS and IFS do) I compare to rUK (the rest of the UK excluding Scotland) which would seem to me a more helfpul comparison.  I show the full table of data below for those who (like me) prefer to see an audit-trail of the figures.

Before I received the steers as to how the figure was arrived at I applied the implied BBC methodology (grossing per capita differences to full year figures by multiplying by the Scottish Population).

To correctly describe the figures the BBC use to explain the First Minister's statement (highlighted in yellow in data table);

• In 2011-12 (the year before last): assuming a full geographic share of oil (and using the Scottish Government's definition of geographic share) Scots contributed £1,500 more per capita to the treasury than the the UK average (before taking account of how much more we received back in the form of public expenditure).  In absolute terms that is equivalent to £8bn

To fill in the figures for the statement our First Minister made as I would interpret them (highlighted in light green)

• "Over the last five years we have [paid] £1.4bn pounds more into the Treasury than we have had out of it, in relative terms. That is £270* a head for every man, woman and child in Scotland."

* Using 5 year average and multiplying by 5

To make what I might humbly suggest is a more fairly representative statement (figures in green)

• In recent years Scotland gets more back from the Treasury than we put in, even applying the most favourable assumptions around keeping "our" geographic share of oil revenue.
• If you want to be precise in the numbers; looking at this on an average annual per capita basis relative to rUK;
• Over the last 7 years on average we've paid £2(!) pa. more in than we've had out
• Over the last 5 years on average we've paid £54 pa. more in than we've had out
• Over the last 4 years on average we've received £156 pa. more out than we've put in
• Last year we received  £512 more out than we put in to the Treasury

So we can see why the 5 year time period was chosen; take a longer or shorter time period and the picture changes dramatically.  I have neither the time nor the inclination to go back even further than 7 years - we should really be discussing the future after all.

But hold on; we still haven't explained the £8bn figure.  It was at this point that I initially concluded our First Minister and his script writers must have simply lied - I accept now that I was wrong and am happy to put the record straight.  I'm indebted to Ivan McKee of Business for Scotland (and another Anonymous contributor) for giving me a steer on this.

The figure can be arrived at if you assume over the 5 year time period Scotland should have received the same share of expenditure as its share of tax contribution.  Sure enough you can get to the £8bn figure on that basis (highlighted in blue).  There is a massive and - once you've thought it through - fairly obvious problem with this approach; it would mean our share of the deficit would become the same as our share of tax contribution - we would be disproportionately responsible for the deficit and the debt associated with it.

Let me offer a narrative interpretation of the figures (figures not already quoted above are highlighted in the table in orange.)

Assuming Scotland keep "our" oil money on a geographic share basis (and taking the Scottish Government's most favourable definition of geographic share);

• The higher levels of public spending we currently receive mean we run a very similar per capita deficit to the rest of the UK (although in recent years Scotland has been running a significantly higher per capita deficit)
• Over the last 7 years £2(!) per capita per annum lower
• Over the last 5 years £54 per capita per annum lower
• Over the last 4 years £156 per capita per annum higher
• Last year £512 per capita higher
• If our share of expenditure was the same as our share of tax contribution (the First Minister's hypothesised case) we would run a higher deficit (as our share of deficit would become the same as our share of tax contribution).  
• Over the last 5 years Scotland's share of deficit generated (8.2%) is very similar to our population share (8.4%); over the last 7 years its identical (8.4%) and over the last 4 years its higher (8.9%)
• Under the hypothesised case we would have spent an extra £8.3bn; of course that means our deficit would also have been £8.3bn greater
• Under the hypothesised case Scotland's 8.4% of the UK population would have been responsible for 9.5% of the deficit (i.e. debt requirement) - that's an additional £1,332 of debt for every man woman and child in Scotland

So what can we conclude from all of this number crunching?  Funnily enough the same as when I looked at these figures nearly 3 months ago here > Oil & Gas Part I: For Richer for Poorer;

• Scotland receives back in higher expenditure about the same amount as we contribute in higher tax if you assume we get to keep "our" oil and gas
• On this basis Scotland historically runs a similar deficit/capita as the rest of the UK (although last year it was £470/capita higher)
• A corollary of this would be that we are (at least over the period I've analysed here) responsible for our per capita share of debt even if we are allowed to retrospectively  keep "our" historical oil & gas revenues

To account for the First Minister's statement we can add;

• If we decided that Scotland should have produced a higher per capita deficit than rUK because we contributed a higher share of tax (assuming we keep "our" oil) then we would indeed  have needed to receive an extra c.£8bn over the last five years ... and our deficit (and hence implicit share of debt) would be £1,332 per capita higher than our per capita share

1. 5 year average deficit of £10.3bn x 5
2. 5 year average per capita deficit of £1,949 x 5