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
    0

    Comment number 430.

    202. Colombian Boffin
    46 MINUTES AGO
    165.ClaudeBalls

    That's true, but our "hole" will be less in terms of a percentage of GDP that EWNI, so that we will be economically in a better position.

    Indeed so. But it doesn't follow that having a smaller % of GDP as debt will make it easier for an Independent Scotland to pay.

  • rate this
    -1

    Comment number 429.

    Scotland can't keep the pound and be truly independent.
    The Scottish Goverment must address this issue somehow.

  • rate this
    +6

    Comment number 428.

    So 24 hours ago independence would be bad for the Scottish economy said one person or another, today independence would be good for the Scottish economy said one person or another... Could they bring the vote forward please, not sure I can put up with this for a whole year... #scottishfatigue

  • rate this
    +1

    Comment number 427.

    "cutting corporation tax to attract investment."..how thick is this as an idea? Corporation tax is rarely paid by any investor in the British Isles - which is why we are so stuffed economically. Starbucks, Amazon, G4S, Atos all illustrate how to avoid paying any corporation tax by registering elsewhere.

    "Paying more tax per head" illustrates how people - not companies, get fleeced by govts

  • rate this
    0

    Comment number 426.

    @395 If you are fed up with this issue being discussed then read something else. It's not difficult, is it?!

  • rate this
    +5

    Comment number 425.

    383.
    Giles Jones

    'Scotland has a great history in inventing things'

    More precisely Scottish PEOPLE have a great history of inventing things. Often in England backed by English money.

  • rate this
    -2

    Comment number 424.

    Sadly, once gone, it will be for good. The likes of Spain, Portugal, Italy and Ireland will veto EU membership as another risky country. The rest of the UK will vote against a return to Scotland in the UK.

  • rate this
    -2

    Comment number 423.

    So Scotland thinks that if they chose to keep the sterling currency the rest of the UK have no say in the matter. It will be for the UK to decide if we wish to allow a foreign country to share our currency. What if the Scottish economy were to collapse, as has happened to countries in the euro zone, will the UK have to bail them out to prevent a collapse of sterling?

  • rate this
    0

    Comment number 422.

    What will actually happen:
    Both sides of the borders MPs will be allocated £B's out of the tax money to investigate and promote independance or unity.
    There will be evaluations, quangos all over.
    Result:
    The money will be wasted on expensive rallys for the rich & expenses, the MPs will be seen to agree on 'compromises' and nothing really will change..

  • rate this
    +2

    Comment number 421.

    374 COOP
    "The bookies are never wrong"

    http://news.ladbrokes.com/en-gb/press-office/snp-slashed-for-majority-in-may-election_049746.html

    3 months before 2011 Scottish election, Ladbrokes had Labour as 1/12 favourites to get the most seats. How did that work out again?

  • rate this
    +2

    Comment number 420.

    @405.toast

    "Oh and by the way, there are more panders in Scotland than Tory MPs, again fact, go look it up!"

    We can send a few Tory MP's up if you like?

  • rate this
    0

    Comment number 419.

    How much overseas aid will we end up giving Scotland?

  • rate this
    +10

    Comment number 418.

    @ 397. whambam

    You must INSIST that you have ALL the facts.
    ---------

    'All the facts' will not exist prior to the referendum. The process is: vote for independence first - then negotiate the 'terms'. Thus it is impossible for Scotland to make an informed decision.

    Furthermore it highlights the point that the question of independence if for Scotland alone, but the terms impact all of the UK.

  • rate this
    +4

    Comment number 417.

    383.
    Giles Jones


    ""Scotland has a great history in inventing things. The telephone, TV and so on"

    Not to mention dodgy statistics on its contribution to the Uk economy , their biggest invention to date

  • rate this
    +1

    Comment number 416.

    Scotland generates 9.6% of the UK's wealth and spends 9.3%. Every year for the past 30 it has generated more wealth per capita than the rest of the UK put together. These are straightforward numbers so can we please move on from the affordability / subsidy argument? Why would David Cameron want to subsidise a whole country when he won't subsidise a disabled person's spare bedroom?

  • rate this
    +1

    Comment number 415.

    12. paul stewart
    I live in Glasgow. I'm not anti-English. Please don't class us all with the knuckle draggers that the SNP gov are hoping, vote for Independence just because they watched Braveheart the night before.

    Really Paul it's knuckle draggers like yourself who continually vote for Labour in Glasgow even though they have ran it into the ground for generations.. Wake up and grow up!

  • rate this
    +2

    Comment number 414.

    352.Alaric the Visigoth
    "So, you want the UK to become a single party state?"
    =
    I feel we already are.

    To me, the major parties are virtually indistinguishable, with only enough differences to hoodwink the great flock of sheep, ahem general public, into thinking there really is a difference.

    It's not Left vs Right, it's the State vs Freedom (you), and it always has been.

  • rate this
    0

    Comment number 413.

    BBC, is this in fact a Scottish Government report as you state? Or was it written by the Fiscal Commission? Who sits on the Fiscal Commission? We heard an awful lot yesterday about the independence of the IFS...

  • rate this
    -1

    Comment number 412.

    Scotish gas & oil etc is owned by the UK NOT Scotland. no matter how it was funded - it was fudned by UK money and UK companies NOT Scotiish companies or Scottish money as they currnetly do not exist. It will need ot be shared equally

  • rate this
    +2

    Comment number 411.

    "221. Ayrlee
    Sadly Scotland has one of the lowest life expectancies in Europe."

    Yes!! how awful of the English to choose to have a better diet and live 3 or 4 years longer than us!!! independence NOW!!!

    If you want to eat unhealthily as a nation, thats your own fault!!!!!

 

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