Independence would Deliver a Scottish Economic Renaissance

24 May 2018

In advance of publication of the Sustainable Growth Commission’s report on 25 May, this briefing previews its core finding that an independent Scotland could deliver a Scottish Economic Renaissance, emulating the world’s best performing advanced economies.

 

Highlighting the strengths of Scotland’s economic assets and advantages, in terms of natural resources, the education and skills of people living in Scotland and sectors with existing and potential global competitiveness, the Commission identify ways in which Scotland can match the success of other countries using powers available now and with independence.

 

The advanced economies considered by the Commission were:

 

Austria, Belgium, Denmark, Finland, Hong Kong, Ireland, Netherlands, New Zealand, Norway, Singapore, Sweden and Switzerland, with a specific focus on Denmark, Finland and New Zealand.

 

Such economies have performed better than larger ones consistently by around 0.7% per year over the last 25 years. The report concludes that similar success would deliver additional economic output equivalent to an extra £4,100 per person in Scotland per year.

 

Small advanced nations share of the growing global economy has remained steady; competitive even against large emerging markets, while the share of many large economies, including the UK, shrunk substantially. The Commission also found that:

 

* Small advanced economies have done well in terms of labour market performance, with relatively low unemployment compared to larger advanced economies.

 

* The gains from growth are broadly shared, notably those in Northern Europe, with low levels of income inequality.

 

* Small, competitively strong economies invest in key sectors and clusters, to help them develop positions of advantage in a more competitive and challenging global economy.

 

* The overall performance is significantly ahead of the UK and other large economies.

 

Overall, the Commission found that small countries have effective, responsive governments, with a well-developed sense of strategic capacity, high levels of trust and social cohesion, and the ability to adapt in response to changing international circumstances.

 

Based on this analysis and an assessment of Scotland’s economic strengths the report makes 30 growth recommendations which, if implemented, now and with the powers that would come with independence would help Scotland emulate the growth rates of comparable nations.

 

The Commission have used these recommendations to design a ‘Next generation economic model” to drive Scottish economic growth over the next 25 years and beyond.

 

A key lesson is that a sustainable improvement in living standards can be delivered over a generation of purposeful, cross partisan strategic effort and focus.

 

We require a mature and balanced debate that is ambitious and learns from the best in the world. However, there are aspects of our economy unique to Scotland

 

The 12 points below are the key lessons from across the nations studied by the Commission:

 

1. Quality of governance & disciplined public finances

 

2. Long-term cross partisan strategy

 

3. Focus on innovation

 

4. Competitive location for international investment

 

5. Exploiting Scotland’s resource endowment sustainably

 

6. Export-orientation

 

7. Migration-friendly

 

8. Flexible labour markets combined with fair & progressive workplace & active employment policies including reducing the gender pay gap

 

9. Highly skilled workforce with transferable skills

 

10. Taxation for economic development; not competing as low tax location

 

11. Inclusive growth at the heart of the strategy

 

12. Quality of life as an asset and objective

 

Commenting ahead publication, Sustainable Growth Commission Chair, Andrew Wilson, said:

 

“Learning from 12 successful nations, our report will present a framework that demonstrates how Scotland can emulate the best performing economies and societies in the world sustainably. Our sincere hope is that this can raise the content and quality of debate at a time such a focus is sorely needed.

 

“As a first step there must be an acceptance that small nations can be successful and that Scotland can be one of those, delivering higher standards of living and lower levels of inequality than many larger economies.

 

“There is nothing intrinsic in any of the best performing economies that Scotland does not have. To secure an improvement in our performance will take purposeful strategic effort for over a generation. We require world class policy, world class institutions and cross partisan effort if we are to achieve our ambition to create a much more successful economy and cohesive and fair society.”

 

Added Kenneth Gibson MSP:

 

“This long-anticipated and very welcome report provides the most substantially considered economic policy proposals for Scotland and independence that have been produced to date, with challenge and opportunity for everyone with an interest in Scotland’s future.”

 

‘Scotland: the new case for optimism,’ the report by the Sustainable Growth Commission, will be published on Friday 25 May at: sustainablegrowthcommission.scot/

 

The Sustainable Growth Commission was established by the First Minister and Scottish National Party (SNP) leader, Nicola Sturgeon, in September 2016. Membership was at her invitation under the Chairmanship of Andrew Wilson. It has approached its remit through commissioned research, the insights and analysis of its members and through a series of meetings with economically important organisations across Scotland and from independently offered advice and analysis. Its members served pro-bono and its budget was entirely funded by the SNP.

 

The remit was to assess projections for Scotland’s economy and public finances, consider the implications for our economy and finances under different potential governance scenarios, and make recommendations for policy on:

 

* Measures to boost economic growth and improve Scotland's public finances – both now in the aftermath of the EU referendum and in the context of independence

 

* The potential for and best use of savings from UK programmes such as Trident, in the event of independence, such as Trident

 

* The range of transitional cost and benefits associated with independence and arrangements for dealing with future revenue windfalls, including future North Sea revenues

 

* In addition, the Commission took account of the 2013 Fiscal Commission report recommendations and the outcome of the EU referendum, to consider the most appropriate monetary policy to underpin a programme for sustainable growth in an independent Scotland.

 

ENDS

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