Mike Fenwick: The ins and outs of Scotland's economy – a ghost story

Campaigner Mike Fenwick takes a look at the ghosts lurking in Scotland's economy...

THERE is no doubt in my mind that the Yes grassroots movement is far better prepared to address and debate the issues which truly matter for the time when Scotland gains independence. 

No, I am not trying to jump ahead of what is necessary to win a second referendum. Last time there were questions left unanswered, some unexamined in sufficient detail, and some were the answers were simply wrong, all of which created doubts sufficient enough for those who oppose independence, the MSM and others to seize and exploit.

Slowly but surely we are witnessing the grassroots gaining greater confidence in the issues that really matter, not just to win a referendum, but to see an independent Scotland sure and confident in its future, because we have done the homework.

Beyond GERS, another, as yet unexamined issue as far as I can see, is the question of Scotland's trading position.

Many of these issues are not lightweight, they confound experts the better part of the time. The dissection of GERS is a good example: what do all the figures mean? How do they apply now, when the data has been garnered and established as part of the UK? How will they apply after independence? 

We are well aware of the importance of such questions, and we are doing the homework. Critically, in my opinion, that homework is being carried out visibly at the grassroots level. We are not waiting to be given answers, we are finding them for ourselves, and are so much more able to share the answers with those who may have had doubts the last time.

Beyond GERS, another, as yet unexamined issue as far as I can see, is the question of Scotland's trading position. What are the the figures that show Scotland's exports and imports? Are we in deficit or surplus? Or, once again like GERS, is the true position hidden from us? Have we another issue where we have some homework to do?

In The National this past Wednesday, the front page warned that £5.3bn Scots exports were at risk in hard Brexit. £5.3bn is a big figure.

In the HMRC Regional Trade Statistics (RTS), what you will find is worrying. It involves "unknowns", and even "ghosts"!

How big it is comes when you set it against £27.5bn, which is the total amount contained in the Export Statistics Scotland report issued by the Scottish Government in January 2016. 

That report records that the total nominal value of Scotland's International Exports (excluding oil and gas) fell from £28.4bn in 2013 to £27.5bn in 2014. £5.3bn is a really big chunk of £27.5bn.

Hang on though, you might well ask - why exclude oil and gas? That seems a fairly obvious question for a country with oil and gas resources – do we in Scotland use it all and not one barrel leaves Scotland? We don't export any oil?

To answer that question you need to go further into the above report and to what are called the HMRC Regional Trade Statistics (RTS), and what you will find is worrying. It involves "unknowns", and even "ghosts"!

We thought we might lose £5.3bn in a hard Brexit, but we have our very own Bermuda Triangle where, in 2014 alone, £37.3bn simply disappeared.

This is an extract: "HMRC RTS present some export information in an 'unknown region'. An example of this is where oil is processed on rigs in the North Sea and dispatched directly to other countries, the oil does not enter the UK and therefore does not obtain a regional coding. 

"This category is significant in terms of the value of trade falling within it. In 2014 the 'Unknown region' represented £37.3bn almost two times the value attributed to Scotland £19.6bn, and 13 per cent of the total UK exports figure for 2014." [sic]

Yes, I do suggest you read that again. Wow - we have oil extracted from the North Sea worth £37.3bn, allocated, not to Scotland, but to an "unknown region". We thought we might lose £5.3bn in a hard Brexit, but we have our very own Bermuda Triangle where, in 2014 alone, £37.3bn simply disappeared.

Then it gets worse: we now have "ghosts". This is another extract from HMRC under the heading "Overseas traders registered in the UK", it reads: "There are a number of traders who act within the UK on behalf of foreign companies overseas, operating as 'ghost presences'. 

Just like GERS, years of integration within the UK, means that accurate figures are missing, or distorted, or hidden.

"For ease of administration, these traders are registered for VAT purposes with Customs House, Aberdeen. The RTS system categorises this ghost trade as 'unknown region', as allocating it all to Scotland would falsely inflate the Scottish share and we do not have any information to enable us to re-allocate these data to other regions."

Just like GERS, years of integration within the UK, means that accurate figures are missing, or distorted, or hidden.

We have homework to do, unknown holes to fill in and ghosts to exorcise. And once we do, the confidence we will gain in the future of an independent Scotland will be the greater.

Picture courtesy of John Flannery

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