BREXIT trade minister Liz Truss has been slapped down by the statistics watchdog over “incorrect” claims about the UK government's generosity to Scotland.  

Last month, writing in the Daily Mail, Truss gave the UK Treasury credit for “cushioning the blow” of lower than expected growth in Scotland.

Truss, who was Chief Secretary to the Treasury at the time, wrote: “Our mutually agreed fiscal framework is designed to benefit the Scottish Government if growth in Scotland is faster than the rest of the UK.

“Thankfully, it also cushions the blow when growth is down in Scotland. So I have confirmed that the Treasury will give £737 million additional cash through the block grant to the Scottish Government.”

However, the £737m was not additional cash because of poor growth, but rather money already deducted from Scotland’s block grant in 2017-18 due to an overestimate of how much money the government in Edinburgh would take in through the new devolved income taxes, and, in part down to taxes taken in by the Treasury for the rest of the UK.

Last week The National fact-checked the statistics and found they didn't add up.

READ MORE: Fact Check: Liz Truss’s claims just don’t add up

And Truss’s comments prompted a complaint from Derek Mackay to the UK Statistics Authority.

This morning, Sir David Norgrove, the chair of the authority, upheld the Scottish Finance Secretary’s complaint.

In a letter to Mackay (below), Norgrove wrote: “The statements in the press release, subsequently repeated by the Chief Secretary, clearly link the whole of the reconciliation in tax receipts and block grant adjustment to slower than expected economic growth in Scotland.

The National:

“We agree with you that this is incorrect. The principal reasons for the block grant adjustment were in fact an initial overestimate of the Scottish tax base and faster growth of tax receipts than expected in the rest of the UK.”

Norgrove also made clear that the authority would be writing to the Treasury, demanding they “improve the presentation of the Scottish fiscal framework in line with our Code of Practice for Statistics”.

READ MORE: Derek Mackay slams Treasury’s Liz Truss over ‘false' Budget claim

Derek Mackay said: “The Tories are so desperate to talk Scotland down that they have resorted to deliberately distorting the truth. Sadly for them they’ve been caught-red handed peddling a line the UK Statistics Agency have branded as ‘incorrect.’

“This will be hugely embarrassing for the Tories and shows that when it comes to Scotland’s economy they simply can’t be trusted to be honest with people.

“The reality is that Scotland’s economy is strong and our tax receipts show strong and sustained growth. Contrast that with the dismal future on offer in a Tory Brexit Britain and it is little wonder support for independence is on the increase.”

The figure quoted by Truss relates to the block grant adjustment (BGA), agreed as part of the Fiscal Framework. 

Effectively, the more revenue raised through taxes in Scotland, the less money the Treasury has to give the Scottish Government in the block grant. 

For 2017-18 there was an overestimation of what this deduction should have been. 

The amount that the treasury takes away is a best guess, based on what’s called the initial deduction - which is the amount raised from taxes in the 2016/17 -and the indexation measure which is the rate at which “comparable revenues” in the rest of the UK have grown.

Once out-turn data becomes available – the actual amount raised by taxes – there is an adjustment – or reconciliation.

Scottish revenues were lower than what was originally forecast by £940m. 

But the Treasury had also expected growth in taxes in the rest of the UK to be much greater, and so adjusted the block grant accordingly. However, they were out by £737m.

The net impact, which Scottish ministers will have to address, is £204m.

A HM Treasury spokesperson said:“We aim to explain our work in an approachable manner for the public and it remains the case that the Scottish Government now faces a far smaller shortfall due to the jointly agreed Fiscal Framework.

"We will of course look carefully at the UKSA recommendations”