Marr Fails To Grill Sturgeon

From the archive — published in 2016 on the original Chokkablog, kept as it was written.

Whilst nursing the effects of a night spent celebrating the immortal memory of Robert Burns - and contemplating the possibility that I may have bought the joys o'er dear - I watch the  BBC's Andrew Marr show this morning.

I was treated to the sight of Nicola Sturgeon being interviewed at Bute House


She sat fast by an ingle, bleezing finely
interview'd wi' care, treated divinely

As I glowr'd, amaz'd, and curious
an exchange took place that made me furious
to hear her lengthen'd, sage advices
on tax revenues and North Sea prices

[34:20]

 Andrew Marr: 
“At the time of the referendum the Scottish Government was predicting a 7.9 … up to a 7.9 billion revenue coming in from North Sea oil & Gas to the Scottish Government; that’s now .. a 13th1 of that is likely so it’s a huge, huge hole in the revenues. How does that change your thinking?
Nicola Sturgeon:
“Firstly let me say that the projections the Scottish Government made were in-line with [chuckle] all [/chuckle] external projections for prices and for revenues …
Andrew Marr (interrupting):
“I’m not saying they’re not”

What Sturgeon said is demonstrably untrue and Marr's panicky response suggests that - at best - he was poorly briefed.

Nobody could accuse Marr of interviewing her as if he was holding her toes to that handily placed fire, but maybe she felt on the back foot because - well - he was making a rather pertinent point to which the SNP have no good answer.

They have a bad answer though and it's the one that Sturgeon gave.

Those of you who read my recent post on The Masters of Spin will know the following, but let's take it step by step;
  1. The SNP will always answer questions about oil revenue forecasts with statements about oil price forecasts. Revenue and price are quite obviously not the same thing: North Sea revenue is a function of prevailing tax rates and oil producers' profit (which in turn is a function of price, extraction costs and production volume).

  2. Even asserting that the Scottish Government's $110 price assumption was in-line with all external projections is a stretch. In March 2013 (fully 8 months before the White Paper was published) the OBR was assuming $97 for 2016-17 (revised to $97.4 in the OBR's Dec 2013 forecast).

  3. This sophistry around price assumptions is par for the course. But in her reply Sturgeon either made an uncharacteristic slip or attempted to blatantly misinform the audience: she added the words "and for revenues".

That's a lot of numbers so let's look at the data in a graph (including more recent OBR projections);


It's very clear: no matter how generously we try and interpret Sturgeon's statement - even if she missed the caveat "at the time of the referendum" or she was thinking of  the lower £6.8bn scenario that the White Paper used - there is no credible way to argue that the Scottish Government projections used to make the case for independence were ever in-line with contemporaneous OBR forecasts. Or are we now to hear that the phrase "external projections" is somehow to be construed to exclude the OBR?

When pressed how the Scottish Government would fill the gap that's left "if you lose £7bn of revenues annually into the Scottish Exchequer" Sturgeon's response included the following:

[35:25]

Nicola Sturgeon
"Well, I've said our growth in onshore revenues over the next few years is projected to [chuckle] significantly [/chuckle] outstrip the decline in offshore revenues ..."
[...]
"the case for Scotland as a strong independent country was never based on oil"
[...]
"our projections were not out of line with external projections"

Let's take each of those in turn:
  1. For the growth in onshore revenues to significantly outstrip the decline in offshore revenues being referred to we'd need to see significantly more than £7bn of (real) growth in on-shore tax revenues. In 2013-14 our total onshore tax revenues (per GERS) were £50bn, so we'd need to see significantly more than 14% real growth in onshore tax revenues to "outstrip the decline". Given that the latest figures show a nominal rate of GDP growth for Scotland of 2.5% pa,  I'm curious as to which projections she's referring to and what she means by "the next few years".  It's also worth bearing in mind that we are used to seeing long-run real-terms increases in public expenditure - is Sturgeon suggested we would freeze Scottish public spending in real terms for the "few years" it would take for onshore revenue growth to fill the gap? How does that compare to what we can expect to experience in (Barnett funded) public expenditure growth over those same "few years" as a result of remaining in the UK?

  2. If including £6.8 - 7.9bn of oil revenues in the only financial projections you offered for the independence case isn't basing your case on oil then I don't know what is - £6.8bn is £1,273 annually for every man woman and child in Scotland. To put that in context, the Yes campaign claimed that independence would make us £1,000 per person better off within 15 years (without having to raise taxes). Just adjusting for the oil forecast error means that (optimistically) they'd now be suggesting we could get to the position of only being £250 per person worse off annually after 15 years of independence.  The White Paper mentioned oil 157 times and the fabled oil "energy fund" 9 times; just because Salmond and others sometimes asserted that "oil is just a bonus" does not make it so. The case for a "strong independent Scotland" was always based on oil.

  3. She's repeating here earlier claim, so let's repeat the truth; the Yes campaign's projections demonstrably were out of line with the external projections made by the OBR.

It's disappointing that Andrew Marr didn't pick her up on any of these rather fundamental points. Maybe the SNP's BBC bashing has worked and he was fearful of getting the Nick Robinson treatment?



****

See the full interview here

 1. This is simply wrong and extremely generous to the White Paper. The latest OBR forecast (published in November 2015, page 103) is for total North Sea oil revenues in 2016-17 of only £0.1bn - so in fact that's a 79th of the £7.9bn used by the Scottish Government.

 2. The total North Sea projection was £4.8bn, I have assumed 90% of this to be Scotland's geographic share, slightly higher than the recent average



All archive posts · What I'm writing now