Sunday, April 29, 2007

Scotland: the best wee country in the world. Not

It seems that a report commissioned by the Adam Smith Institute has concluded that an independent Scotland could do very well.
The economy of an independent Scotland could significantly outstrip the performance of the UK, a free market economic think-tank has claimed.

The Adam Smith Institute predicted that Scotland's economy could grow by up to 7%, imitating Ireland's recent success.

The report also said after 10 years of independence, household incomes in Scotland could out perform the UK average by as much as £6,000.
...

Author Gabriel Stein, director and chief international economist of Lombard Street Research, said: "If an independent Scotland chose to follow the Republic of Ireland's low-tax route, as SNP leader Alex Salmond has indicated it would, Scotland's growth rate might be expected, over a five-year period, to move closer to Ireland's trend growth rate of 7%.

The trouble is that this is all rather dependent on those leading Scotland having a fucking clue about the economy. And, as our Scotland-resident, poor little Greek boy highlighted, a certain Professor Midwinter does not view the SNP as being tremendously resposible custodians; in fact, he described the...
... creative accounting and rosy assumptions in the policy statements of the other major opposition party, the SNP.

Oh dear, oh dear.

There is another problem, and it's a biggie. Ireland funded their low-tax economy with extremely generous regeneration grants from the European Union. These grants will not be on offer to Scotland; at least, not in the same quantities. For pathetic though the economy of Scotland is, it's still vastly larger and more robust than that of Romania, Poland or any of the other Eastern European countries.

The SNP are, of course, hoping that the North Sea oil revenues will help out but the fact is that these simply aren't as lucrative as they once were. Plus, of course, whatever the truth of the sea assent carve-up (see the comments for discussion), the major gas fields are in English waters. If Scotland were to take swift action, it is possible that the oil would hold out long enough to fund some of the tax-cutting but if independence were to take ten years, for instance, I doubt that this would be the case.

It is certainly true that if an independent Scotland were to continue with its current economic policies and failed to boost private enterprise, it is likely that it would become, not another Ireland, but a total fucking basketcase.

And I have yet to see any real will to make that change.

3 comments:

Bag said...

Shhhh. We need them to go independant so that Labour disappears forever and we make some tax savings.

If it goes so bad they will be back and we can negotiate better terms.

Plus, I may apply for a passport so I don't need to register for an ID card.

james higham said...

And like Russia and the Ukraine, who'll take care of the fleet?

chris said...

No need to worry about the fleet, the SNP is firmly anti-nuclear (as are their likely coalition partners the Greens) having taken a big slurp of the CND kool aid. In the case of Scotland going independent the nuke subs will be heading for Devonport. They can have a few of the surface fleet (we can buy them back latter) and will be wanting a fair number of the River class fisheries protection vessels but the important bits will be with England.