SNP deaf to economic issues that really matter

All of a sudden, the debate around Scotland’s future has gained the kind of substance that many have been yearning for.

All of a sudden, the debate around Scotland’s future has gained the kind of substance that many have been yearning for.

After months, if not years of constitutional navel gazing about when the referendum might take place, what the question would be, who would be eligible to vote and which government would oversee the process, the central question of the independence debate has surfaced, namely is an independent Scotland an economically viable option.

Surprisingly, the Scottish government believes that it is. Publishing today its economic case for independence, first minister Alex Salmond, never knowingly modest, stated in no uncertain terms in his forward to the document:

“Our economic strengths – our ingenuity, our natural resources and our advantages across a range of growth sectors – mean that we should be confident about our economic prospects as an independent country.”

The paper cites what it dubs Scotland’s “financial strength” with the country, according to ministers north of the border having generated more tax per head than the UK for every one of the last 30 years. Likewise, it cites rising food and drink exports, a “thriving” creative industry, a “global reputation in life sciences”, green energy reserves, oil and gas supplies, tourism and manufacturing as reasons why Scotland could go it alone.

In arguing that Scotlands’ biggest hindrance to growth remains a Westminster government that is working “against Scotland’s best interest”, deputy first minister Nicola Sturgeon has today argued:

“We have so much going for us as a country and as an economy: the resources, the talent, areas of real advantage and firm financial foundations. Our national balance sheet shows that for every one of the last 30 years Scotland has generated more tax revenue per head of population than the UK as a whole.

“But we currently lack the full range of economic powers to help create jobs, grow the economy and realise all of that potential…Westminster’s economic policies have seen the UK become the fourth most unequal country in the developed world.”

And yet for all the bombastic rhetoric that is the hallmark of Scottish nationalism, the inconvenient truths never really get addressed. Take for example their failure to outline how being part of a currency union with the UK, controlled by a Bank of England in what would be a foreign country, is actually the hallmark of an independent country?

And what of HM Treasury’s analysis of an independent Scotland being unable to absorb the kind of bank shocks seen since 2008?

Then there is finance secretary John Swinney’s assertion that Scotland’s oil market is volatile.

How can that be the basis of a sustainable economy?

As the Institute for Fiscal Noted in a paper last year, North Sea Oil revenues are falling. The paper explained:

“On a geographic basis they were more than 20 per cent of Scottish revenue in 2008-09 but just 12 per cent in 2009-10. Looking back further they accounted for nearly half of all revenue in the mid 1980s, falling to just 3 per cent in 1991-92.”

In light of this comment the IFS significantly went on to state:

“Without oil and gas revenues or, equivalently, assigning them on a population basis, there has been a bigger gap between spending and tax receipts in Scotland in recent years than in the UK as a whole.”

Declaring to the Scottish government’s paper to be short on the kind of detail Scotland should be able to expect, Alistair Darling, chair of the Better Together Campaign, responded:

“This is long on grievances about the past, but it is very short on Scotland’s future. What was billed as an economic framework for independence has turned out to be a list of objections with barely any mention about how leaving the UK would have any impact on them. In the absence of having any answers to difficult questions, the nationalists have reverted to negative type…

“What is most striking is that even the nationalists don’t seem to know why they want independence. Their high point is Air Passenger Duty. Is that worth breaking a 300 year old union with our biggest and most important trading partner?

“They must know that in a currency union, it is highly unlikely that Scotland would be able to undercut the rest of the UK.”

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