By a Newsnet reporter
The Scottish Government has outlined what it described as seven key strengths of the Scottish economy in response to doubts over the viability of indepence posed by the Economist magazine this weekend.
Challenging the claims made by the magazine, the Scottish Government pointed out that, according to official figures, Scotland would in fact be better off under independence.
Scottish Deputy First Minister Nicola Sturgeon insisted that the magazine had “blundered” with its controversial portrayal of Scotland as economically bereft. In a statement today Ms Sturgeon said that Scotland was already outperforming the rest of the UK in terms of employment and economic activity.
Ms Sturgeon said:
“Whilst The Economist blundered into the economic debate on Scottish independence, it is clear that Scotland has a strong economy – despite the global recession – and that we have huge potential for further growth and development.
“Scotland today has a highly skilled workforce, an acclaimed record of business investment, a large oil and gas asset base, huge natural resources, including our job-creating green energy industry, and an excellent export record, especially in the food and drink sector.”
Ms Sturgeon listed the following areas as evidence of an economy that was performing well:
- Overall Wealth: An independent Scotland would be ranked 6th in the OECD in terms of GDP per head, compared to the UK’s sixteenth place (in 2010).
- Oil: There is up to 24 billion barrels remaining in the North Sea. Such a figure equates to a wholesale value of some £1.5 trillion in today’s prices.
- Renewables: Scotland has around 25 percent of Europe’s potential offshore wind and tidal energy, and a tenth of Europe’s wave power potential.
- Food & Drink: The latest food and drink export figures show exports are at an all-time high of £5.4 billion, and growing.
- Public Finances: In terms of our public finances, Scotland is better off than the UK as a whole to the tune of £510 for every man, women and child in Scotland in the most recent year (2010/11).
- Education: Scotland has five of the top 200 universities in the world.
- Inward Investment: Scottish Development International are an award winning agency, with major companies continuing to locate in Scotland.
The Deputy First Minister added:
“There is much to be done to make Scotland even better, but Scotland’s Seven Key Strengths will remind every Scot that our nation is one we can be proud of now, and confident about for the future. While Scotland has a higher rate of employment and lower economic inactivity than the UK as a whole, we need to do more to reduce unemployment and tackle poverty.
“But we know that we have huge potential as a nation – and that with the powers of independence we can do more.”
The Scottish Government’s response follows the furore over what many believe was an offensive image that accompanied the Economist article and follows reaction from other respected commentators who also challenged the magazine’s conclusions.
Gerry Hassan, writing on his blog, said: “‘The Economist’ version of the UK is based on an outsourced, privately run NHS, a privately financed education system, universities in the hands of global winners and elites, privatised law enforcement, the Royal Mail sold off, the world’s oligarchs using London as their playground and the leading tax havens of the global economy centred around the Crown Dependencies, which while linked to the UK are constitutionally not part of it.”
The magazine article claimed that north sea oil was “gradually running dry” and that Scotland faced a deficit as a result of what it claimed was an over reliance on oil.
However critics have pointed out that there is more in terms of fiscal resources still to come from the Scottish oil and gas sector than has already been extracted.
In January, a leading industry player Wood Mackenzie published a report showing that in 2011 capital investment in North Sea Oil was £7.5 billion – the highest ever. It is expected to stay high with £2 billion being invested in the West of Shetland field alone in 2012.
The article also claimed that profits from renewables could be as “fabled as the Loch Ness Monster” and suggested that an independent Scotland might lose English power subsidies.
Critics have countered that around 25% of Europe’s potential offshore wind and tidal energy, and a tenth of Europe’s wave power potential resides in Scotland.
An extra 45 percent of renewable energy was generated in Scotland last year according to the latest figures from the Department of Energy and Climate Change – meaning that around 35 percent of Scotland’s electricity needs came from renewables in 2011 – surpassing the Scottish Government target of 31 percent.
Today Japanese corporation Mitsui & Co became the latest global compaby to invest in Scotland. The company announced that it has taken a 25% stake in Scottish company Global Energy Group in an effort at gaining a foothold in Scotland’s growing energy sector.
Gamesa also recently announced a £125m investment creating 800 new jobs in renewable energy at Leith in Edinburgh, rather than Hartlepool.
In addition, leading international companies such as Scottish Power, Samsung Heavy Industries, Glaxosmithkline, Amazon, Avaloq, Dell, Gamesa, BNY Mellon, State Street and Mitsubishi Power Systems have all recently announced significant investments demonstrating confidence in Scotland.
The Economist also attacked Scotland’s financial sector and claimed that in a financial crisis “Edinburgh’s fortunes as a banking centre would be hard to revive” and gave Iceland as an example of a struggling small nation. The Icelandic banks collapsed in 2008 crippling the economy.
However official figures cast doubt on the magazine’s conclusion. In terms of public finances, in 2010/11 Scotland was in a stronger fiscal position relative to the UK as a whole by £2.7 billion, according to the latest Government Expenditure Revenue Scotland (GERS) report.
This equates to Scotland being better off than the UK as a whole to the tune of £510 for every man, women and child in the country.