Scottish Independence and Scotland's Future
Economy & Taxation
makes economic case for Independence
21st May 2013
analyses Scotland's economy focusing on it's financial strengths, how
additional levers could enhance the performance of the economy and looks
at the economies of other small nations.
This documents looks at
the following areas:
• An illustrated version of Scotland’s Economy Today
• Scotland’s Foundations
• Advantage Scotland
• Westminster isn't Working for Scotland’s Economy
• Independence – Scotland's Future In Scotland’s Hands
Annex A: Scotland’s Balance Sheet
Scotland can more than afford to be a successful
independent country, as a paper published today outlines the
nation’s key economic strengths.
The document, launched at Alexander Dennis in Falkirk
by the First Minister and Deputy First Minister, offers a
consolidated picture of the country’s strong financial foundations,
diverse economy, ingenuity and natural resources – all of which will
help ensure a prosperous nation with independence.
But it shows that rising inequality under Westminster
and consistent economic mismanagement by successive UK governments
is costing jobs and depressing growth.
The report highlights Scotland’s core economic
strengths in the areas of :
Our financial strength – with
Scotland having generated more tax per head than the UK for
every one of the last 30 years
Our world-class food and drink industry which is
seeing rising exports and the most recent annual turnover of
Our thriving creative industries which are
recognised throughout the world and have an annual turnover of
Our global reputation in life sciences and an
annual turnover of £2.9 billion
Our oil and gas industry, which is seeing record
investment and which, in 2011, contributed £26bn to Scotland’s
GDP and boosted the UK balance of payments by £40bn.
Our green energy reserves, with an estimated 25
per cent of Europe’s tidal and offshore wind resources.
Our tourism industry which employs almost 200,000
Our manufacturing sector, which exported £14.7bn
The paper concludes that Scotland has more than
enough resources to become a wealthier and fairer country with the
powers of independence.
Launching the paper, First Minister Alex Salmond
“This document sets out the enormous attributes and
key strengths of the Scottish economy across a diverse range of
sectors. We have a vast array of human, financial and natural
resources, which many other countries do not enjoy.
“Scotland has a strong onshore economy and vast
offshore potential, as well as a highly educated workforce and world
class technology and research.
“But despite all of these inherent economic
strengths, Scotland’s long-term economic growth has lagged behind
that of comparable European nations, many of which do not have the
natural advantages we do.
“The explanation for that rests in the fact that
Scotland’s economic strength is not yet in Scotland’s hands.
“Despite our strong economic foundations and
excellent global reputation Scotland, with Westminster in control of
our economy , is not reaching our potential as a nation and this
report clearly lays out the ways in which UK Government economic
policies have not worked in Scotland’s best interests.
“We need the powers to boost our competitive
position, support greater innovation and investment, become more
internationally-focused instead of threatening to leave the EU and
to become a wealthier, fairer country.
“Too many of the economic policies pursued by the
Westminster Government are not best suited to Scotland’s priorities,
and have held back our progress – and this report cites a number of
tangible examples of UK Government policies which are damaging
The decision of the last two
Westminster governments to cut capital spending which would have
supported an additional 19,000 jobs in Scotland
The UK Government’s failure to establish an oil
fund for future generations, similar to the Norwegian fund now
worth an estimated £450 billion
The decision by the UK Government to engage in a
boom in credit and debt expansion, damaging the economy
Allowing income inequality to grow dramatically
in the UK, to the point where the UK is now the 4th most unequal
society in the developed world
The decision to concentrate economic activity in
The decision to pursue austerity rather than
focus on growing the economy.”
Deputy First Minister Nicola Sturgeon said:
“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.
“That’s why even the leading opponents of Scottish
independence say that of course Scotland could be a successful
“But we currently lack the full range of economic
powers to help create jobs, grow the economy and realise all of that
potential. Instead Scotland’s economic policy is largely determined
by Westminster – often by governments we didn’t even vote for.
“The UK Government’s concentration on London and the
South-East of England, which the Prime Minister himself has called
‘unstable and wasteful’, has also worked against Scotland’s best
“Westminster’s economic policies have seen the UK
become the fourth most unequal country in the developed world. This
document sets out policies to boost wealth while also reversing that
trend of inequality, including our intentions to examine childcare
costs to improve the opportunities for women to enter the workforce.
“It sets out the full range of powers and options
that any future independent Scottish Government, of whatever party
or parties, would have available to them. Scotland has got what it
takes to be a successful independent country. But we need the tools
to build that better, more prosperous and fairer country we all want
Rebuttal by Better
In the last few days
there have been several reports published which asked serious questions
about the economic consequences of leaving the United Kingdom. We were
promised that the SNP Government would respond with an economic strategy
document. What we got was a flimsy 70 pages, a “booklet” as the First
Minister described it.
Reading the document you
are struck by the sense that even the nationalists don’t seem to know
why they want Independence. Their high point is suggesting a cut to Air
Passenger Duty. Is that worth breaking a 300 year old union with our
biggest and most important trading partner? Is that it?
The whole nationalist
economic argument is undermined by their failure to articulate a clear
currency policy. The rest of the UK have made it clear: there is no
guarantee they would agree to set up a Eurozone-style Sterlingzone so
that Scotland could keep the pound. Faced with this Alex Salmond won’t
say what our currency would be. Yes Scotland are more
honest: they want either a separate currency or to join the Euro.
Both of these would be bad news for jobs and bad news business in
But even if the rest of
UK hadn’t rejected a Eurozone-style deal to keep the pound, the truth is
that such a deal would mean that Scotland’s budget would have to be
signed off by what would then be a foreign government in London. Why on
earth would the rest of the UK allow Scotland to undercut their economy?
Scotland sells more
to the rest of the UK than we do to the rest of the world combined.
It simply doesn’t make sense to erect an international border
between our businesses and
their biggest market.
The great irony of
today’s booklet is that the industries Alex Salmond rightly talks about
as Scottish successes have been successful as part of the UK.
- The green energy growth in Scotland is
backed by investment which is paid for by the energy bills of customers
across Britain – we get about a third of the
total investment but pay in just 10% in line with our population.
- The oil industry can squeeze every
last drop out of the North Sea before it runs out because the huge
decommissioning costs are underwritten by taxpayers across the UK.
- Our scientists and inventors are backed by
UK funding – Scotland has received
nearly double our population share of UK research funding.
- The financial services sector which
employs 185,000 people in Scotland(that’s around 7% of
total Scottish employment) sells to the single UK market in financial
services of the almost 200,000 pensions sold by Scottish firms fewer
than 20,000 were sold to Scots.
What all of these
successes demonstrate is that when we work together we can better unlock
our human and natural resources as part of a bigger UK.
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