By Martin Kelly
The campaign against Scottish independence has been hit by an embarrassing gaffe after it emerged a briefing for activists contained a glaring factual inaccuracy.
According to an official document circulated by the Better Together alliance, recent calculations showing an independent Scotland with a smaller deficit than if it remains in the UK, are reliant on the Barnett formula – which it points out would end with independence.
The briefing says: “This calculation assumes that the Barnett formula – used to calculate Scotland’s budget – would still be in place of Scotland voted to break away from the rest of the United Kingdom. It would not. The Barnett formula would end with independence.”
The Barnett formula is a mechanism used to calculate the block grant handed to Scotland by the UK government and is based on levels of spending south of the border.
However, in what has been described as a “humiliation” for the Unionist alliance, the SNP has pointed out that the recent calculations which showed an independent Scotland would have a smaller deficit in 2010/11, had nothing to do with the Barnett formula but were in fact based on the Government Expenditure and Revenue Scotland (GERS).
In a statement issued by the nationalists, they said of the Better Together claim: “This assertion is completely false as the public sector revenue calculations contained in the GERS figures are based on taxes and other Government incomes generated in Scotland and have absolutely nothing to do with the Barnett formula.”
Recently published figures from GERS show that Scotland has been in a stronger financial position than the rest of the UK for each of the last five years.
A report published last month by the Institute of Fiscal Studies (IFS) confirmed that Scotland's public finances have been stronger than the UK's in every year from 2006-07 to 2010-11 with an average fiscal deficit lower than the UK's since 2000.
The report from the London based body, compiled on the back of the latest GERS figures, also concluded that an independent Scotland would have lower debt levels than the rest of the UK.
Based on revenues contained in GERS - and with borrowing at the same rate as the UK – Scotland would have had a relative surplus of £2.7bn in 2010/11, the equivalent of £500 per head.
The SNP said the lack of understanding of Scotland’s finances was a major embarrassment for Better Together head Alistair Darling, who is a former Chancellor of the Exchequer.
Commenting, SNP MSP Jamie Hepburn who sits on Holyrood’s Finance Committee said:
“This is either complete financial illiteracy from the anti-independence campaign, or a deliberate attempt to create an utterly misleading picture of Scotland’s finances.
“It speaks volumes about the No campaign’s lack of credibility that they appear not to even understand the basics of what the GERS figures are.
“Scotland produces a larger percentage of UK revenues than is spent in Scotland and significantly more than our population share. Those figures have absolutely nothing to do with the Barnett Formula, so why is the anti-independence campaign instructing their activists to claim that it is?
“Given the state in which he left the UK’s economy as Chancellor, perhaps we should not be surprised that a campaign headed by Alistair Darling has such little understanding of public finances.
“Misleading people in Scotland with such factually incorrect information is no way to fight a campaign and will inevitably only backfire on the anti-independence campaign.”
The full document from Better Together can be read here: http://b.3cdn.net/better/5b8b82ad2fa5b7fe48_1zm6i22gg.pdf
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