GERS Scotland: What is GERS, why are the Scottish GERS figures important and politically controversial?

Today the Government Expenditure and Revenue Scotland (GERS) report will be published – but what is GERS, why does it matter and why is today such an important day in Scottish politics?

The GERS report is a summary of the difference between what Scotland earns in terms of revenue and what it spends.

The government website states the aim of GERS is to “enhance public understanding of fiscal issues”.

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GERS figures: What are they and why are they controversial?
Today sees the publication of the latest Government Expenditure and Revenue Scotland (GERS) annual report. Picture: PA
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However, the annual release of the data sparks annual and furious political debate about what the figures mean for Scotland and the potential for Scottish independence.

What is GERS?

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The Government Expenditure and Revenue Scotland report is compiled by impartial civil servants.

It was, however, originally a political idea.

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The first GERS report in 1992 was published when oil prices were low and calls for devolution in Scotland were mounting.

The then Conservative Scottish Secretary, Ian Lang, was behind the policy. In a leaked document from the minister, it was acknowledged that GERS could ‘undermine’ calls for more powers for Scotland.

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Lang wrote: “I judge that it is just what is needed at present in our campaign to maintain the initiative and undermine the other parties. This initiative could score against all of them.”

“GERS was intended, in part, to demonstrate to the public that devolved self-government was A Bad Thing,” former BBC Scotland political editor Brian Taylor would later observe.

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“Much later, with a devolved parliament firmly in place, matters transmogrified as the annual GERS figures were used by SNP ministers to suggest that Scotland’s economic position was relatively strong and that, with oil, we were potentially rich beyond ambition.”

Why is GERS important?

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“On the spending side, the figures are actual data and not estimates,” a blog by the Fraser of Allander Institute (FAI) has previously explained.

“For revenues, an increasing proportion of the data used is now collected in Scotland. This includes council tax, business rates, the profits made by Scottish Water, landfill tax, land and building transactions tax and local authority user charges and fees.

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“But for other revenues – particularly those collected by HMRC – estimation is needed.”

Take the example of Scotland’s whisky industry and the duty paid – GERS cannot define exactly how much is paid by consumers here in Scotland separate from how much is paid by other UK customers. Reliable estimates can be drawn though.

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Why is GERS so political?

Unlike elections or polls, there is rarely any hint before the publication of the report what it will contain.

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As a result, politicians, activists and reporters scramble to make sense of the complex figures and consider what the findings mean for Scotland now and in the future.

It has therefore become an annual battleground in the independence debate, a debate which has picked up fresh momentum with talk of a de facto referendum and an approaching Supreme Court decision.

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Since the aim of the report originally was to, effectively, show the low revenue raised in Scotland through tax and other streams, the findings are inevitably political each year.