The FT featured an article on Thursday that I thought relevant to my recent debate on the quality of Scottish economic data. The Telegraph then came in with another spin on the issue.
What both noted was that the Office for National Statistics has now realised that their survey basis for calculating GDP can be quite misleading on occasion and that VAT and PAYE based data might be considerably more useful. I was, of course, making this same point when suggesting that the absence of any dedicated VAT and other tax data for Scotland was a severe impediment to its effective self management if its own economy in the contributions I made to debate.
There were those (oddly, and I think perversely) of mainly Unionist persuasion who seemed to take issue with me on this, claiming that I should be quite happy with the use of what I think to be poor quality apportioned UK data for the purposes of Scottish economic management. Respectfully, I now suggest my points have been made by the ONS for me. Not only is survey data not as good as VAT and tax data but we also know as a matter of fact that reliable VAT and PAYE data is not available for Scotland, meaning it will have to make do with second rate information. That is, until it takes matters into its own hands, of course, whether a devolved or independent state.
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The Scottish Government has just published GDP data which estimates a contraction of 0.2% for Q4 (Oct to Dec) of 2016. This is being used to complain about lack of action on the part of the Scottish Government.
The explanation of the methodology behind the results seems to confirm what you say here.
The document, at http://www.gov.scot/Resource/0051/00516398.pdf, says “There are three ways of calculating GDP. This publication uses the output approach which calculates GDP as the sum of all production activity within Scotland. This is estimated by measuring the output of each industry in Scotland and combining them together to form an estimate for the whole economy.”
The associated FAQ, at http://www.gov.scot/Resource/0051/00516448.pdf, says “The main source of data for the private sector is the Monthly Business Survey (MBS) which is carried out by the Office for National Statistics (ONS). This survey provides detailed company level information for a large sample of businesses in different industries and of different sizes from across Scotland and the rest of Britain. In addition, where available we use a range of Scottish data sources relating to specific industries or companies, as well as employment and activity data for the Scottish public sector.”
The rest of the short FAQ may be worth a quick read (for a chuckle).
As I think you are suggesting – when the ONS starts to use VAT data, this will do nothing to improve the Scottish results. I imagine the survey-based methods involved in estimating “Scottish VAT” will just confirm the survey-based results for GDP. Thereby (im)proving nothing.
There is a good case for using GVA in any case
Give Scotland its VAT and its Tax back.
Richard
Thank you for your focus on this important issue. Both sides in the Scottish debate, but more importantly the public, need clear, solid data on which to base their decisions. It is scandalous that Scotland cannot have data on its own economy. Worse, any data now produced is unlikely to be trusted, after so many years of being told we’re too wee, too poor.
I completely agree that, whilst the civil servants compiling GERS figures may be acting in good faith, UK Government departments have (or had) little if any way to break down their department’s data by country, i.e. England, Scotland, Wales and Northern Ireland – as it was all one big sent of UK data as far as they were concerned.
This applied very much so to HMRC and income tax data, which led to it having trouble identifying Scottish taxpayers for the SRIT.
http://www.bbc.co.uk/news/uk-scotland-scotland-politics-38369882
http://www.bbc.co.uk/news/uk-scotland-south-scotland-31194496
The civil service has slowly moved towards being better able to crunch data, but not necessarily for the purposes of devolution. The mindset necessary to implement such considerations in a UK-wide Government department would simply not have existed not too long ago.
Whilst it is hard to say how inaccurate the data is currently (time will tell), and it may even turn out to be at least fairly accurate or reflective of the actuality, I would be surprised if everything was so and there didn’t turn out to be some significant differences between the actuality and what GERS has been telling us.
At the very least, it will become more accurate and precise.
Agreed
And addresses do not prove residence….