WHAT do you do if you make a mistake? Apologise? Try to make amends?
What do you do if you make a mistake and you’re Murdo Fraser? Refuse to acknowledge it seems to be the answer to that.
The Conservative MSP tweeted gleefully about what he called a “hugely significant” finding from the Institute for Fiscal Studies – only to be corrected by the very expert he was quoting.
Sharing a tweet from IFS associate director David Phillips, Fraser wrote: “This is a hugely significant finding from @TheIFS – the income tax rises imposed by SNP/Greens have actually REDUCED the amount of money available for @scotgov to spend, due to relatively poorer economic growth in Scotland.”
Unfortunately for Fraser, it wasn’t long before Phillips came along.
The expert pointed out that the tax rises the Tory MSP had complained about had “almost certainly” increased the amount of money the Scottish Government had to spend, not “REDUCED” it.
I should correct this misunderstanding. We are not saying the tax rises have reduced revenue. The tax rises almost certainly have raised revenue. In their absence the slow employment and earnings growth (mostly not due to tax policy) would have seen revenues fall even further. https://t.co/1c7tPgNaMO
— David Phillips (@fiscalphillips) May 28, 2022
Phillips wrote: “I should correct this misunderstanding. We are not saying the tax rises have reduced revenue.
“The tax rises almost certainly have raised revenue.
“In their absence the slow employment and earnings growth (mostly not due to tax policy) would have seen revenues fall even further.”
So what are the facts of the matter? It’s complicated, but you might expect an MSP who has served as the Scottish Tories’ finance spokesperson to have a better grasp of such things.
Fortunately, the Jouker spent a wee while working the tills at the souvenir shop at M&D’s, so should have a stronger grasp of finance than Fraser.
Now, the full IFS report states: “Relatively slow growth in the income tax base in Scotland relative to the rest of the UK is an increasing drain on the Scottish Government’s budget.”
This relates to how income tax is devolved. The UK Government deducts from the Scottish block grant an amount equal to what should be raised if the Scottish Government keeps the same income tax policy as the rest of the UK and income tax receipts per head grow at the same rate.
However, policy changes may mean that the Scottish budget could be larger or smaller than it would have been before income tax was devolved.
Recently, Scotland’s tax base has seen slower growth compared to the rest of the UK – for reasons largely outwith the Scottish Government’s control, such as a more rapidly ageing population.
The IFS says that thanks to the devolution of income tax giving the Scottish Government an “important” new lever, there are “relatively straightforward” ways to raise funds.
Phillips added on Twitter: “We've explained in previous analysis that it’s highly unlikely the tax rate change caused the fall in the tax base which has driven the relative fall in tax revenues.”
Hopefully that’s clear. It obviously wasn’t to Fraser.
Economist and Tax Justice Network chief Alex Cobham has asked the Tory MSP to correct his post.
He wrote: “I hope you can correct your widely shared tweet, murdo_fraser, now the IFS expert you cite has explicitly stated that the reverse is true.
“The tax debate is too important (eg for reaching the child poverty target) to allow false impressions to take hold.”
I hope you can correct your widely shared tweet, @murdo_fraser, now the IFS expert you cite has explicitly stated that the reverse is true. The tax debate is too important (eg for reaching the child poverty target) to allow false impressions to take hold https://t.co/ejyenaZzws https://t.co/dPhywD1u3F
— Alex Cobham (@alexcobham) May 29, 2022
No response yet. But a Tory wouldn’t just leave a lie on the internet, would they?
