Independence 'could spark jobs boom'


John Swinney says the new Scotland Act powers will not be "nearly enough"

The Scottish government has suggested that cutting corporation tax in an independent Scotland would lead to a "jobs boom".

The statement was made at an event to launch a 200-page document setting out the economic policy choices available if voters said "yes" to independence.

The SNP-run government believes Scots will be better off if they back change in next year's referendum.

However, opponents have insisted a go-alone Scotland would struggle to cope.

Former chancellor and leader of the pro-Union Better Together campaign, Alistair Darling, said that in an independent Scotland the burden of the growing elderly would "fall on a population of five million, instead of 60 million [as part of the UK]".

Start Quote

To be clear, today was not a draft manifesto for the SNP - nor even a final list of Scottish government priorities. It was a menu, a declaration of what might be possible under independence, whoever might be in power. ”

End Quote

The independence referendum takes place on 18 September 2014, with voters in Scotland being asked the yes/no question: "Should Scotland be an independent country?"

Scotland's First Minister Alex Salmond and Finance Secretary John Swinney launched the government's economics report in Dundee.

It is the last of a series of documents ahead of next week's publication of the Scottish government's White Paper on independence.

It has set out the entire range of economic powers which would be available under independence - along with the argument that sensitive, sensible use of those powers would produce policies better tailored to Scotland's needs.

Mr Salmond said: "Scotland can more than afford to be a successful independent country, with a thriving economy and opportunities for everyone. We have vast natural resources and huge human talent - but those advantages have been stifled by having our economic policy run by Westminster.

Where might the jobs come from?

  • Increasing Scotland's productivity performance by 1% could boost employment by about 21,000 over the long-term.
  • Increasing Scotland's economic activity rate of one percentage point would be equivalent to an extra 30,000 plus people in the labour market.
  • Reducing corporation tax, and changing the tax system in general, could create approximately 27,000 jobs.
  • An increase in Scottish exports by 50% could create more than 100,000 jobs in the long-term.

Source: Scottish government

"The one-size-fits-all economic policies of successive Westminster governments have failed and are continuing to fail the people of Scotland. We perform well at the moment but we should be doing so much better.

"A simple glance at many other European countries of similar size to Scotland, some without the natural advantages Scotland has, shows that we have lagged behind their growth rates for decades.

"Independence will give us the chance to build an economy that takes advantage of Scotland's unique strengths and size to deliver a more outward focussed, fairer and resilient economy, boosting revenues and creating many thousands of more jobs."

Mr Salmond said the paper set out key policy areas post-independence, including;

  • Establishing an industrial strategy which rebalances the economy and diversifies Scotland's industrial base - promoting manufacturing, innovation and boosting productivity. (The SNP believes that increasing Scotland's productivity performance by 1% has the potential to boost employment by about 21,000 over the long-term).
  • Promoting participation in the labour market by delivering more efficient employability, welfare and skills programmes and transforming child care. (The SNP says an increase in Scotland's economic activity rate of one percentage point would be equivalent to an extra 30,000 plus people in the labour market).
  • Targeting measures to reduce outflow of labour and attract skilled workers to enhance Scotland's population growth. The Scottish government says this would build on the current projections of 9% growth over the 25 year period of 2012 to 2037.
  • Using tax incentives to support growth in key sectors, such as tourism and the creative industries, and target areas such as reforming Air Passenger Duty.
  • Using targeted tax measures, such as a reduction in corporation tax, to counterbalance the pull of London and the South East of England. The Scottish government says the initiative could create approximately 27,000 jobs.
  • And boosting the internationalisation and brand recognition of the Scottish economy. The Scottish government says a 50% increase in the value of Scottish exports could boost output by about £5bn and create more than 100,000 jobs in the long-term.

The latest paper from the Scottish government comes a day after a report from the Institute for Fiscal Studies (IFS) which suggested that an independent Scotland would face big challenges ahead.

The IFS forecast assumes a decline in North Sea oil revenues and a population ageing more rapidly than in the rest of the United Kingdom.

It warned an independent Scotland would need to cut spending or increase taxes for its finances to be sustainable in the long term.

It said Scotland would face a "fiscal gap" of 1.9% of national income, compared to 0.8% for the UK.

Better Together's Mr Darling said: "Yesterday the independent and impartial Institute of Fiscal Studies reminded the people of Scotland what John Swinney has been privately telling his cabinet colleagues for months.

When, Who, What?

  • The Scottish independence referendum takes place on Thursday 18 September, 2014
  • Only voters in Scotland are eligible to take part in the poll
  • They will be asked the straight "yes/no" question: "Should Scotland be an independent country?

"If we were to leave the UK we would face the prospect of big tax rises, damaging cuts to public services - or a combination of the two.

"Today, the Nationalists have chosen to ignore reality and to offer up a type of fantasy economics that beggars belief.

"Instead of admitting the obvious challenges caused by the rise in the number of elderly people, the fall in the number of people of working age and the eventual decline in North Sea oil, the Nationalists have reverted to type.

"Their response is to deny that there are any problems and to say, yet again, that the experts are wrong."


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  • rate this

    Comment number 170.

    I could be wrong here (apologies if i am), but does the Scottish Government not already have the powers to reduce CT and if so why have they not already done so! I know they certainly have the powers to reduce/ increase Scottish income tax!!! again why not do this if they have the scots best interests at hand

  • rate this

    Comment number 169.

    It will transform it,what will be their independent currency? Sterling is British so will it be the worthless Euro,no,EU sais Scotland won't get automatic or fast entry,how much of an independent Scotland's GDP will their defence cost? Won't be able to afford it,how much will electing and keeping a Scottish head of state cost? Independence is unaffordable for Scotland unfortunately.

  • rate this

    Comment number 168.

    I sincerely hope the Scots gain their independence, and use it to pursue those policies that had served them so well in the past"

    Except that Scotland has not been able to independently pursue those policies since 1707, which predates some of them. Indeed Salmond has explicitly ruled out some of what you advocate.

    BTW the industrial revolution was UK wide and benefited from protectionism.

  • rate this

    Comment number 167.

    How low do the SNP want Corporation Tax rates to go? They're being cut in the UK to 20% in 2015, which is below the average rate across Europe and well below the 40% rate in the USA. This is another SNP sound-bite that sounds reasonable but doesn't stand up to any scrutiny.

  • rate this

    Comment number 166.

    #156 Why won't it be the pound? The BoE will set interest rates but it has no impact on corporation tax levels.

    I'm fairly cynical though. Hollyrood has had the power to reduce base income tax rates since devolution which potentially could have attracted business yet chose not to do so. Why not if lower taxes would improve economic performance?

  • rate this

    Comment number 165.

    125. Mark Hobbs

    That'd be the Scots then? You know, the ones paying more % into the Treasury than they receive, per head?

    Scotland contributes 9.6% of tax and gets 9.3% of spend. The problem is 9.3% of spend is currently £12.7B pa more than 9.6% of tax. These are the Scottish Govt's own figures. So proportionately true, but in absolute terms we're all in a hole.

  • rate this

    Comment number 164.

    And yet another article by the BBC so the English trolls can come on and insult the Scots.

  • rate this

    Comment number 163.

    All very interesting, but does it taking into account what will be the currency?
    If not the Euro then there is the costs to implement the banking changes to not just banks, but retailers etc. If it is the Euro, same again, but will Scotland really be in control? Probably not as tighter integration will bring less control. Me? I'm all for cutting the Scots loose and stop subsiding them ;-)

  • rate this

    Comment number 162.

    The British public are smart enough to see through the nonsense spouted by Salmond, that is why he needs naive, gullible, jingoist 16 year olds voting to boost his numbers.

  • rate this

    Comment number 161.

    Here's an idea

    Let's take David Cameron, Nick Clegg, Ed Milliband, and Alex Salmond and take them out to sea onboard an RN submarine a Class or V Class will do fine. Then when we are out in the middle of nowhere, fire them out of the torpedo tubes, and use it as a warning to current and aspiring politicians.

    The UK will propsper and flourish, and once again Britain will be on top

  • rate this

    Comment number 160.

    I bet an independant Scottish Govt will carbon tax the population to death to balance the books, only in the interest of the environment of coarse.
    All cash strapped Govts are doing this.

  • rate this

    Comment number 159.

    So bored with this. Can we swap Scotland for somewhere warm and hospitable and good at football like Qatar

  • rate this

    Comment number 158.

    I wish they'd just get on with the vote! The delay allows more and more racist chat both ways, which is not in anyone's interest. As neither the Yes or No camp has properly approached the subjects of oil, royal family, currency, EU membership, defence contracts, I'm not sure how anyone can make an informed decision, which is unfair on both the voters and the other UK members unable to vote.

  • rate this

    Comment number 157.

    Let those that live in Scotland decide. It is clearly a leap of faith in the policies of the SNP to become independent but to stay part of the union is also a similar leap of faith that under this status quo the same people can thrive. Whatever their choice I wish them well.

  • rate this

    Comment number 156.

    Independence is a matter for Scottish people to decide and I am not a Scot. I would be sad if the union dissolved but it is not my choice. I think it's unlikely they will be better off. Promising tax breaks for business etc., is all very well, but in what currency will these tax breaks be made? It won't be the Pound and it won't be the Euro. Supporting your own currency will not come cheap.

  • rate this

    Comment number 155.

    125.Mark Hobbs

    I think people need to realise that Scotland has been subsidising the rest of the UK for nearly a generation now - Not the other way around.

    Maybe True,but you've also been whining about being oppressed like bratty children,but not realising you've got more power in terms of government control than any other UK nations. Stop playing the victim!!!

  • rate this

    Comment number 154.

    121. Paul
    That is the problem. If the Highlands & Islands reject independence then what right does anyone have to impose independence on such a large geographical area of Scotland if the people living there don't want it?

  • rate this

    Comment number 153.

    Of course Scotland will be transformer by independence; the question is: in which direction?

  • rate this

    Comment number 152.

    Every nation on this planet potentially faces an uncertain financial future, the UK perhaps more so than many others, if Scotlands government believes it can successfully implement economic policy suited to that countries particular needs then they should have the full powers to do so. It would benefit not only the Scots but the whole of the British Isles.

  • rate this

    Comment number 151.

    All this says is that "Options include cutting corporation tax ".

    Of course it's an option. As is raising corporation tax, when we run out of money.


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