BREXIT trade minister Liz Truss has been slapped down by the statistics watchdog over “incorrect” claims about the UK government's generosity to Scotland.
Last month, writing in the Daily Mail, Truss gave the UK Treasury credit for “cushioning the blow” of lower than expected growth in Scotland.
Truss, who was Chief Secretary to the Treasury at the time, wrote: “Our mutually agreed fiscal framework is designed to benefit the Scottish Government if growth in Scotland is faster than the rest of the UK.
“Thankfully, it also cushions the blow when growth is down in Scotland. So I have confirmed that the Treasury will give £737 million additional cash through the block grant to the Scottish Government.”
However, the £737m was not additional cash because of poor growth, but rather money already deducted from Scotland’s block grant in 2017-18 due to an overestimate of how much money the government in Edinburgh would take in through the new devolved income taxes, and, in part down to taxes taken in by the Treasury for the rest of the UK.
Last week The National fact-checked the statistics and found they didn't add up.
READ MORE: Fact Check: Liz Truss’s claims just don’t add up
And Truss’s comments prompted a complaint from Derek Mackay to the UK Statistics Authority.
This morning, Sir David Norgrove, the chair of the authority, upheld the Scottish Finance Secretary’s complaint.
In a letter to Mackay (below), Norgrove wrote: “The statements in the press release, subsequently repeated by the Chief Secretary, clearly link the whole of the reconciliation in tax receipts and block grant adjustment to slower than expected economic growth in Scotland.
“We agree with you that this is incorrect. The principal reasons for the block grant adjustment were in fact an initial overestimate of the Scottish tax base and faster growth of tax receipts than expected in the rest of the UK.”
Norgrove also made clear that the authority would be writing to the Treasury, demanding they “improve the presentation of the Scottish fiscal framework in line with our Code of Practice for Statistics”.
READ MORE: Derek Mackay slams Treasury’s Liz Truss over ‘false' Budget claim
Derek Mackay said: “The Tories are so desperate to talk Scotland down that they have resorted to deliberately distorting the truth. Sadly for them they’ve been caught-red handed peddling a line the UK Statistics Agency have branded as ‘incorrect.’
“This will be hugely embarrassing for the Tories and shows that when it comes to Scotland’s economy they simply can’t be trusted to be honest with people.
“The reality is that Scotland’s economy is strong and our tax receipts show strong and sustained growth. Contrast that with the dismal future on offer in a Tory Brexit Britain and it is little wonder support for independence is on the increase.”
The figure quoted by Truss relates to the block grant adjustment (BGA), agreed as part of the Fiscal Framework.
Effectively, the more revenue raised through taxes in Scotland, the less money the Treasury has to give the Scottish Government in the block grant.
For 2017-18 there was an overestimation of what this deduction should have been.
The amount that the treasury takes away is a best guess, based on what’s called the initial deduction - which is the amount raised from taxes in the 2016/17 -and the indexation measure which is the rate at which “comparable revenues” in the rest of the UK have grown.
Once out-turn data becomes available – the actual amount raised by taxes – there is an adjustment – or reconciliation.
Scottish revenues were lower than what was originally forecast by £940m.
But the Treasury had also expected growth in taxes in the rest of the UK to be much greater, and so adjusted the block grant accordingly. However, they were out by £737m.
The net impact, which Scottish ministers will have to address, is £204m.
A HM Treasury spokesperson said:“We aim to explain our work in an approachable manner for the public and it remains the case that the Scottish Government now faces a far smaller shortfall due to the jointly agreed Fiscal Framework.
"We will of course look carefully at the UKSA recommendations”
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereLast Updated:
Report this comment Cancel