Government Expenditure and Revenue Scotland

Background

GERS was first published in 1992 under the then Conservative Party Government of Prime Minister John Major. It was published then by the Conservative's Scottish Secretary, Ian Lang. In a leaked memo from Lang to Major he stated the purpose of GERS was to "undermine" the UK government's rivals. The GERS page of the Scottish Government website states, "The aim of GERS is to enhance public understanding of fiscal issues in Scotland. The primary objective is to estimate a set of public sector accounts for Scotland through detailed analysis of official UK and Scottish Government finance statistics. GERS estimates the contribution of revenue raised in Scotland toward the goods and services provided for the benefit of the people of Scotland. The report is designed to allow users to understand and analyse Scotland's fiscal position under different scenarios."

Political use and criticism

GERS is mentioned by politicians in the debate on Scottish Independence. Pro-unionist figures such as those in the British Government widely quote GERS as indication of negative health of the Scottish economy.

Merryn Somerset Webb in the Financial Times sought input to GERS credibility from James Ferguson of The MacroStrategy Partnership. Ferguson referred to the notes to the GERS numbers which say that, save for a few local revenues, “separate identification of most other revenues for Scotland is not possible. GERS therefore uses a number of different methodologies to apportion tax revenues to Scotland. In doing so, there are often theoretical and practical challenges in determining an appropriate share to allocate to Scotland. In certain cases, a variety of alternative methodologies could be applied each leading to different estimates.” It is, said Ferguson, a “pretty blatant case of starting with the answer and working out the more granular line-by-line ‘estimates’ backwards.” Webb added, "No economic figures are entirely accurate but this is different: the basic revenue numbers are more or less guesswork, to which is added an so far entirely un-negotiated share of UK oil revenues. So there you go. I’m giving you one less thing to think about: you can now happily ignore all the financial arguments for a separate Scotland on the basis that no one knows what they actually are."

Deloitte said of GERS, "GERS data is produced for Scotland as part of the UK – it does not model scenarios for an independent Scotland in which the Scottish Government would be enabled to make its own fiscal choices". Professor Richard Murphy criticised the figures saying the figures were unreliable and liable to manipulation by the London based UK Government. The University of Strathclyde published a "A critique of GERS: government expenditure and revenue in Scotland." This critcised primarily the adequacy of the methodology used and the accuracy of data sources as well as the purpose of a GERS exercise.