Experts say Fiscal Powers Essential to Protect Scottish Economy

51
2021


Leading economic experts have backed calls for Scotland to be given full fiscal autonomy in order to combat the effects of Labour’s financial deficit.

Irish Economist Marc Coleman and Savvas Savouri, the Chief Economist with Toscafund Asset Management, both say that fiscal responsibility is essential for Scotland if the nation is to grow its economy sufficiently in order avoid the impact of the cuts from the Westminster coalition.

Writing in Holyrood Magazine Mr Savouri said:
“Fiscal responsibility for Scotland is not only practical but desirable if the UK economy is to move to a more solid budgetary footing.
 
“From the perspective of Whitehall, devolving tax policy to Holyrood is sensible, both economically and politically, as it will finally end the disconnect of a Scottish Parliament that is charged with spending money without the responsibility of generating revenues.
 
“What’s more, I am convinced it would serve interests on both sides of the border for Holyrood to be granted economic powers well beyond those being offered in the Calman report.”

Irish Economist Mr Coleman also backed fiscal powers and responded to recent attacks by Scottish Labour politicians who have again claimed the Irish economy is struggling.  Labour’s Iain Gray recently repeated attacks originally made by ex Secretary of State Jim Murphy on Ireland’s economy.

Writing in The Scotsman Mr Coleman said that Labour would “do better to look at their own record in Scotland” and pointed out that:
 
“Ireland’s GDP per capita is 30% above the European Union average, while Scotland’s, sadly, is well below it. Labour has ruled Scotland for 13 years, and it’s been a very unlucky 13 indeed with Scotland’s population and relative living standards falling far behind…
 
“And, according to forecasts of the International Monetary Fund, the Organisation for Economic Co-operation and Development and the European Commission, once the correction of the last two years is past, the Irish economy will resume its record of growing faster than both Britain and the eurozone…

Mr Coleman accused Scottish Labour politicians of putting their careers before Scotland saying:
 
“The nation that invented the phone, television, penicillin, the Enlightenment, modern economics (I could go on), is just as capable as Ireland, if not more so, of rapid growth. But not if its politicians love their Westminster careers more than their country. And not if a one-size-fits-all economic policy – ideal for the south-east of England but devastating for Scotland – draws economic activity and talent away from the north and towards an already over-congested south-east.”

However despite Mr Coleman’s clarification, Labour’s shadow Secretary of State for Scotland Anne McKechin has again attacked Ireland’s economic situation when in a Radio Scotland interview yesterday she said that Ireland was heading for a double dip recession.

Listen to Ann McKechin here:

Ms McKechin also claimed that it was “fiction” to claim that Labour were solely responsible for the UK financial deficit the was now causing severe public sector cuts.

The backing from renowned international experts is good news for the SNP who have consistently argued that Scotland needs full control of fiscal matters in order to effectively grow her economy.  The backing follows an announcement from the First Minister Alex Salmond that Nobel prize winning economist Joseph Stiglitz has agreed to become an economic advisor to the Scottish government.

The SNP’s demands for a Scottish oil fund were also bolstered by reports from Norway’s central bank who have announced that their oil-fuelled state pension fund has grown to a massive 3 trillion Norwegian kroner (£324bn or $513bn).

Commenting on these latest developments SNP MSP, Joe FitzPatrick – a member of the Scottish Parliament’s Finance Committee – said:

“On the day we discover the fate of the Scottish economy from a London government determined to cut too far and too fast it is ironic that we also see new information on the success of the Norwegian oil fund in cushioning it’s economy and protecting public pensions, Labour’s attack on Ireland turn to dust, and new voices supporting real financial responsibility for Scotland.

“With full responsibility for our finances we could avoid the worst impact of the cuts coming from London that threaten Scotland’s economic recovery. Financial powers will not magic the cuts away but they would make a difference and allow Scotland to grow our way out of recession instead of being stuck with the Conservative and LibDems economic ideology.

“As Alex Salmond said at our party conference our belief in independence is about creating jobs and growing Scotland’s economy. In contrast our opponents prefer party advantage instead of economic advantage for Scotland.

“A North Sea oil fund could provide greater stability, protect the economy, create jobs and support the creation of a low carbon economy.

“Scotland can learn from our neighbours and experience the benefits of investing a share of energy revenues into a fund that provides a permanent source of wealth for our nation.

“With Cameron and Clegg’s cuts now starting to hit hard working people in Scotland, more powers and independence are an essential part of making Scotland the better country we all want it to be.”

The Scottish government’s own measures aimed at protecting the Scottish economy were exonerated with yesterday’s figures showing Scottish economic growth for the last quarter outstripped the UK and was the best since 2006.  There are fears that without obtaining the real levers of economic power that the Scottish recovery could be severely hampered by the cuts from Westminster.

Notes

1. Marc Coleman’s article in the Scotsman
http://news.scotsman.com/politics/Marc-Coleman-Scottish-politicians-would.6589717.jp

2. Savvas Savouri’s article in the Holyrood Magazine
http://www.holyrood.com/component/content/article/83-special-report/4198-taking-responsibility
 
3. A report on how Norway’s oil fund has grown to 3 trillion Norwegian kroner
http://www.bbc.co.uk/news/business-11571650