Salmond calls on Cameron to hold probe into Treasury’s bogus indy start-up figures

General

Tuesday, 24 June 2014 18:02

5 Comments

  By Martin Kelly
 
First Minister Alex Salmond has called on UK Prime Minister David Cameron to carry out an investigation into how an academic’s work came to be misrepresented by the UK Treasury, after it claimed the start-up costs of independence would be £2.5bn.
 
According to the Treasury, a newly independent Scotland would face having to set up 180 new departments at an average cost of £15m per department.

However within days of the figure being released by Westminster, the academic on whose research the UK Government based its estimate, complained his study had been “badly misrepresented” and that the UK Treasury claim was “misleading”.

Speaking to the Financial Times, Professor Patrick Dunleavy said: “The Treasury’s figures are bizarrely inaccurate.  I don’t see why the Scottish government couldn’t do this for a very small amount of money.”

The Treasury subsequently admitted its estimate had been a “misbriefing”.

This weekend Professor Dunleavy published figures which looked specifically at the start-up costs of a newly independent Scotland and calculated it would cost no more than £200m – thirteen times less than the Treasury’s initial claim.

In his detailed academic report, Professor Dunleavy said: “A UK Treasury briefing in late May 2014 did not help, containing as it did some spectacularly wrong information, which greatly muddied the waters.”

Now First Minister Alex Salmond is demanding an investigation into how the UK Treasury came to publish what amount to bogus figures.

In a letter to David Cameron, Mr Salmond says:

“You will be aware that last month your government gave a highly misleading briefing on the structure and cost of the Scottish Government in an independent Scotland.
 
“In a presentation which received extensive coverage, HM Treasury issued the following statement:
 
‘The Institute for Government (IfG) and the London School of Economics (LSE) have published independent analysis which puts the average cost of setting up a new policy department at £15 million. Applying this to the 180 departments the Scottish government states it would need could see Scottish taxpayers fork out £2.7bn.’
 
“That £2.7bnn figure was then repeated in the Treasury’s formal paper published on May 28th.”

“I would therefore ask that you launch an immediate investigation into why your government issued ‘spectacularly wrong’ information. The investigation should establish which minister signed off this grossly misleading claim.”

Yesterday, appearing on Good Morning Scotland, Scottish Secretary Alistair Carmichael appeared to accept the £200m figure.
 
He said: “In as much as it is possible to put a figure on these things, I have no basis on which to challenge it at the moment.”

Mr Salmond added: “Why did one part of the UK Government issue a figure of £2.7 billion when the Scottish Secretary himself believes the figure is around one-thirteenth of that claim? 
 
“The fact that such a misleading claim was made in a special briefing to journalists in London and Edinburgh – and published in a Treasury document – means it is now very difficult for people in Scotland to trust any information on the independence referendum issued by the UK Government.”

Calling for the Prime Minister to investigate the issue, the First Minister said: “As such, I am sure that you will want to clear this matter up quickly by holding an inquiry into this extremely damaging episode for the UK Government’s credibility.”

The First Minister also called on Mr Cameron to debate the issue of independence, face to face, claiming the publicly funded interventions were a sign of the UK Government’s ‘heavy involvement’ in the referendum debate.

“Your government’s intervention on this issue demonstrates once again the extent to which your administration is heavily involved in the independence debate.” he said, before adding:
 
“This week you have used public money to send out UK Government material to every household in Scotland as part of the campaign for a No vote.
 
“In addition we now know your administration has also spent around £140,000 on political polling in relation to the independence referendum.
 
“In the light of these developments and the deep involvement of the UK Government it is simply not credible for you to refuse to debate the issues. I therefore urge you once again to take up the invitation to debate with me on July 16.”