Bella readers may recall, (Bella Caledonia, 8th October), that, soon after the Referendum, we complained to the BBC about Robert Peston’s statement that England subsidises Scotland: a statement that conveniently missed out the fact that Scotland had subsidised the rest of the UK since 1980 by an amount with a worth conservatively estimated at £150 billion. Following the BBC’s initial reply, we were able to establish, (see Bella, 26th October), that Peston had missed out oil revenues from his calculation. We went back to the BBC, but then heard nothing, despite repeatedly raising the matter with the BBC Trust, until a further letter from the BBC arrived in early April.
The BBC are still attempting to justify their position, using, as we will show, a nonsensical argument. The nub of the argument in the latest BBC letter is the following statement, with this quotation from the BBC’s head of statistics:
“If it [oil revenue] is divided on a geographical basis then Scotland had a positive net fiscal balance between 1980/81 and 1989/90. It had a negative net fiscal balance every year between 1990/91 and 2012/13 except for 2000/01. Despite the uncertainty surrounding the data, I think the figures for the last twenty years are strong enough to reasonably conclude that Scotland’s public spending is subsidised by the rest of the UK.”
The essence of the BBC argument is therefore that Scotland’s history of public sector deficits over the past twenty years implies that it is being subsidised by the rest of the UK. As we pointed out in both our earlier letters, however, this type of inference cannot be drawn simply from public sector deficit figures. To illustrate why not, the same data source as the BBC head of statistics uses, namely GERS, shows that while Scotland has been in public sector deficit for 23 of the last 24 years, the rest of the UK has been in public sector deficit for 21 of the last 24 years. And taking a longer time period of 34 years, (back to the start of the Barnett formula), Scotland has been in public sector deficit for 23 of these years, while the rest of the UK has been in public sector deficit for 29 of these years.
In other words, both parts of the UK have been in deficit for most of the past 24 or 34 years, with, over the longer period, the rest of the UK actually being in a much worse position. On the BBC’s logic, these figures would imply that both parts of the UK were actually being subsidised – which is clearly a nonsensical conclusion.
The fallacy in the BBC’s position is that they have mistakenly equated a public sector deficit for Scotland with subsidy. Whereas, of course, since countries (like the UK) commonly run overall deficits, a deficit in one part of such a country in itself says nothing about whether that part is being subsidised by the rest or not. Questions of subsidy cannot be determined simply by looking at deficit figures, as the BBC are attempting to do, or indeed, simply by looking at relative levels of public expenditure. What is required is a much more nuanced calculation, along the lines we laid out in our original letter to the BBC. We have done these calculations for Scotland relative to the rest of the UK, (sent to the BBC with our original letter): the BBC apparently has not.
We have now moved on to the next stage of the BBC’s complaints procedure – namely, taking the complaint to the BBC’s Editorial Complaints Unit. We will report on further developments.
But our interim conclusions are:
a) the BBC really needs to raise its game. It should not be making pronouncements, (particularly such misleading pronouncements), and then be seeking to defend them on the basis of a completely inadequate methodology.
b) the BBC complaints procedure is itself very unsatisfactory. They did apologise for the delay of over five months in replying to our second letter: but an apology on timing is not enough when, at a critical time like this, misleading statements are out there in the public domain, uncorrected. And while the BBC can take more than five months to reply, the respondent has a strict time limit of 20 days to get back to the BBC, or the complaint lapses.
Finally, none of the above is inconsistent with the fact that Scotland has a relatively large non-oil deficit on its public sector account. But this is a different issue, and one which requires a more mature approach than it is getting from the mainstream media at present.