Friday 30 May 2014

They're both right - and both wrong

Competing claims this week as to whether Scots will be £1,000 per year better off (according to the SNP) or £1,400 a year worse off (according to the Treasury) after independence.  They can’t both be right – or can they?  Clearly both figures cannot be correct in an absolute sense, but although I haven’t checked their sums, I’m prepared to accept that both sets of sums (and therefore both conclusions) are correct based on the initial premises.  The problem, of course, is that they haven’t started from the same premises.
Any exercise like this must inevitably make a series of assumptions and guesses about future Scottish Government decisions, UK Government decisions, and the economic context in general.  And the assumptions and estimates chosen will have an enormous impact on the final result.  Given that the figures are intended to support two different perspectives, there should be no surprise that they’re different.  Opponents of independence will choose a more pessimistic set of assumptions; supporters a more optimistic set.
So which set of assumptions is correct?  Probably neither.  Economic forecasting is notoriously unreliable when performed by economists, but when performed by politicians with axes to grind…
The surprising thing to me was that, given the difference in perspective between the two sides, and the difficulty of making any predictions, the two results have come out as close to each other as they have.  For sure, the difference between the two will look like a lot of money to most Scots individually, and splitting the difference to overcome the worst aspects of bias one way or the other is hardly the most scientific approach, but a middle course between the two looks like independence wouldn’t actually make much difference – it must be well within any margin of error for an exercise of this nature.
Actually, we’ll never know who’s ‘right’ anyway; we can’t run history forward twice to see what really happens under each scenario.  Scots will have to listen to both sides carefully, and decide for themselves which set of predictions they find most credible.  I rather suspect that neither set of figures will have much impact on opinion; they will merely confirm existing opinions.
That’s far from being a bad thing, because ultimately, the idea of independence for the Scottish nation has never been based on economics.  There are economic consequences to independence, of course, but few people really doubt that an independent Scotland could be made to work.  But the decision as to whether people want to take responsibility for their own future or not has always been bigger than the question of whether they’d be better off by doing so or not.

1 comment:

G Horton-Jones said...

You could have written this substituting Wales for Scotland.
The numbers game is one of pure manipulation to justify the viewpoint of the interested party ie pro, anti or status quo their individual position
Of greater significance is the underlying principle that it should be the unalienable right for a Nation such as Wales to determine its own future. This is the message that Plaid needs to get over to the people of Wales