Time for SOBR Reflection
From the archive — published in 2015 on the original Chokkablog, kept as it was written.
In today's Scotland on Sunday Jackie Baillie has called for the establishment of a Scottish Office for Budget Responsibility (SOBR) (Jackie Baillie: Weed out parties’ financial fantasy)Back in December I wrote a blog post highlighting the cavalier approach the Scottish Government had taken towards oil & gas forecasting (Oil & Gas: will we ever learn?) and at the time I suggested:
- This [...] is surely a compelling illustration of the need for an OBR equivalent independent fiscal watchdog in Scotland. Maybe we could call it the Scottish Office for Budget and Economic responsibility and task it with providing SOBER assessments to inform policy makers and voters?
It will therefore come as no surprise to readers of this blog that I support the idea of a Scottish OBR - even if I think including the word "Economic" so we could call it "SOBER" would be slightly funnier.
There have been numerous examples during recent political debate in Scotland where politicians have appeared to purposely mislead voters: use of outdated and dubiously interpreted GERS figures on the economy, White Paper promises that simply didn't add up and the use of forecasts on oil & gas revenues that chose to ignore the OBR figures that existed at the time are just three obvious examples.
Respected think tanks (the IFS and NIESR deserve special mention), enthusiastic bloggers like me and (all too infrequently) the Main Stream Media have attempted to highlight some of these issues - but are routinely dismissed with accusations of bias or drowned out by the noise of campaign rhetoric.
I whole-heartedly supporting this call for an impartial, respected and trusted body to hold our politicians to account - in fact I would suggest it's remit should include fact-checking of assertions made during political speeches and debates, thereby helping voters make informed choices confident in the knowledge that they haven’t been misled on points of fact. It would also save me a lot of work.
Maybe then we wouldn't have had some people voting based on economic forecasts in the White Paper that were based on scenarios of oil & gas revenue that could be generously described at the time as "optimistic" and "hopelessly optimistic" (A point I hope I illustrate simply and clearly here).
Maybe then a large proportion of the electorate would not still believe Alex Salmond's oft repeated and frankly ridiculous assertion that "we'd have been £8bn better off" over the last 5 years if we'd have been independent (I explain why that's simply untrue here).
Maybe then we wouldn't have elected MSP's such as Stewart Stevenson Tweeting such nonsense as this as recently as last night:
@Haitch7 NO - a smaller deficit per capita than UK. Unless you can show evidence different from GERS (UK statisticians' official figures).
— Stewart Stevenson (@zsstevens) January 17, 2015
As I patiently point out to him in that thread
- The most recent GERS figures (published almost a year ago) cover 2012-13 and show Scotland running a worse per capita deficit than the rest of the UK - £512 per person worse to be precise (and yes that's assuming we get to keep "our oil").
- Given these published figures are for the period before the oil slump, the deficit gap between Scotland and the rest of the UK is likely to have widened in 2013-14
- It's hard to imagine 2014-15 showing anything other than further deterioration.
If we had a SOBER (oh alright then SOBR) in place, hopefully elected representatives would be a little less fast and loose with simple facts.
Surely - whatever political party you favour - that can only be seen as a good thing?
Apparently not. According to STV News John Swinney has responded by claiming the Scottish Fiscal Commission (SFC) will fulfill this role. The SFC was established in July 2014 and their first report was published in October - just too late to cover any indyref promises. Their website states they are meant to provide "impartial and expert public scrutiny of the Scottish Government’s tax forecasts" - but limited to cover only existing devolved taxes. As demonstrated during the indyref, that leaves politicians free to make incredible claims about the value to our economy of further tax devolution without scrutiny. That's not good enough.
He also defends the oil & gas forecasts used by the Scottish Government in their White Paper by saying their predictions "were indeed lower than those predicted by UK Department of Energy and Climate Change (DECC)"
- As I never tire of pointing out: the lowest scenario they used assumed oil tax receipts 60% higher than the OBR forecast that existed at the time. If you show two scenarios they should surely show a realistic range of possible outcomes - ignoring the OBR forecasts that existed at the time is simply indefensible.
- When he says their predictions were lower than DECC I presume he is referring to the price projections. As I covered in detail here it's true that the Scottish Government's price projections were consistent with the DECC price forecast range (and indeed the futures market) at the time of publication - but you need to predict volumes and taxation levels to get to actual tax take and DECC don't (as far as I've seen) do that. The OBR do of course, but the Scottish Government ignored them. Its disingenuous to suggest that the only assumption required to forecast North Sea oil tax revenues is the future oil price.
- By the end of the indyref debate - in the months before votes were cast - it was clear that the White Paper forecasts were hopelessly optimistic. Independent scrutiny of campaign rhetoric used during that period would have surely highlighted this fact.
With the SNP apparently hell-bent on pushing for full fiscal autonomy, the need for a wide ranging SOBR body is clear. It would make a refreshing change if we could eliminate the political game-playing around known numbers and actually have a well-informed debate about the issues.