Today’s Institute of Fiscal Studies report on the fiscal implications of Scottish independence fails to take into account the impact of independence on Scotland’s economy. As with many Westminster centric think tanks they lack ambition for and an in depth understanding of Scotland’s economy.
The report understates the central purpose of Scottish independence – that bespoke business and economic policies for Scotland implemented and managed from Scotland will grow Scotland’s economy, while reducing the costs of Westminster.
– This is a rehash of last year’s report which identified that Scotland pays far more tax per person than the UK average and is therefore is in a strong economic position.
– The evidence demonstrates that Scotland is one of the world’s wealthiest nations. Scotland’s Gross Domestic Product is 14th highest is the developed world compared to the UK at 18th.
– The economic powers of independence present numerous opportunities to improve Scotland’s position. Control over taxation, labour rights, immigration policy, industrial policy and international promotion can improve Scotland’s economic prospects.
– Even the IFS report recognised that a positive immigration system for Scotland can improve Scotland’s fiscal position by over £65 billion in future decades.
– The IFS report relies on offshore revenue predictions from the UK Government Office for Budgetary Responsibility. Alistair Darling, Chair of the No Campaign, described the OBR as “part of the Conservative Party”. Their politically motivated projections present a more negative picture of Scotland’s economy than the record investment in offshore services suggest.
– Scotland faces a choice between two economies. With a Yes vote Scotland will gain the opportunity to reshape and improve the economy, to implement bespoke policies to encourage growth and entrepreneurialism rather than the one size fits all policies handed down from Westminster. With a No vote Scotland will continue to depend on Westminster thinking, with the resulting stagnation predicted by the Institute of Fiscal Studies.