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Opportunities for an independent Scotland
Independence can boost Scottish business.
A major report, to be launched next week by the First Minister and Finance Secretary ahead of the white paper, will focus on the economic opportunities of independence and identify the key potential benefits to business of Scotland having full economic powers.
The report provides a detailed analysis of Scotland’s economic performance highlighting that although Scotland performs strongly within our current limited powers across a range of measures it lags behind those of comparable independent countries and sets out the tools available to an independent Scotland to boost jobs, increase prosperity and tackle inequality.
Highlighting the issues with the current UK model the report sets out the range of economic opportunities that future Governments of an independent Scotland may choose to pursue in order to rebalance the economy and create a more prosperous Scotland.
Commenting ahead of publication Finance Secretary John Swinney said:
“Ahead of the white paper, this week’s report will provide a detailed analysis of Scotland’s economic position and the range of economic policies that any future government of an independent Scotland could use to create a stronger and more prosperous Scotland.
“There can be no doubt that while Scotland is performing well within our limited powers we are lagging behind other comparable countries on key measures including productivity and labour market outcomes. Closing this gap would mean more jobs, higher income levels and an opportunity to tackle inequality in our society.
“Using the tools of independence we can target policies to Scottish circumstances instead of having to deal with a misguided one size fits all approach from Westminster government’s that doesn’t suit Scotland’s needs.
“We want to create the most supportive business environment we can to help create long term secure growth with greater job opportunities and more prosperous businesses.”
Focusing on the potential opportunities for future Scottish governments to support Scottish businesses through policies including taxation – for example capital allowances and policies around National Insurance - access to finance and improved regulation the Finance Secretary added;
“We will set out some of our early priorities for action in the white paper. With the full economic powers of independence, any future Scottish Government would have the opportunity to further boost the competiveness of our businesses therefore allowing them to flourish and contribute more to the Scottish economy.”
Key findings of the report are that;
- Scotland is wealthy and productive. Performance relative to the UK as a whole, and its nations and regions, is strong.
- Scotland has the economic and financial strengths to be a successful independent nation.
- Many other comparable independent countries perform better however, not just economically, but also on measures of equality and well-being, pursuing models of development that have delivered more sustainable and inclusive levels of growth.
- The key powers to protect, grow and transform Scotland’s economy lie at Westminster.
- The UK economic model has not always served Scotland well and has been prone to instability. It has embedded inequalities and concentrated economic activity in London and the South East.
- It is essential that Scotland takes a different path and does so as quickly as possible.
- Independence provides an opportunity to unlock Scotland’s full potential and, over the years and decades to follow, to create a fairer and more resilient economy.
On Business the report states
“Scotland’s business structure differs from the rest of the UK. The design of a one-size-fits-all tax system for the UK in terms of its support and incentives for start-ups and business growth may not always be optimal.
“Moreover, many of the challenges that Scotland faces, for example in diversifying the economy and encouraging business development, have been dealt with more successfully in other countries. This suggests that there is scope for more local policies and priorities to lead to better outcomes.
“Independence would provide the Government of an independent Scotland with significantly enhanced powers to boost the competitiveness of its business base and rebalance the structure and composition of the economy. The Government of an independent Scotland may choose to use these additional economic levers in a number of ways. For example it may wish to;
Follow a distinct approach towards targeting corporation tax and capital allowances as a means to encourage private sector growth and investment, particularly in SMEs;
Develop new policies regarding business taxation. Specifically around tax rate allowances, financing/equity support and the simplification of the current tax compliance system;
Use employer taxes – such as National Insurance reliefs – to support employment and outcomes more sectors/companies to recruit staff;
Simplify and/or follow a more joined up approach in relation to consumer protection and competition policy;
Design specific policies with the aim of enabling SME’s and start-up companies with a greater degree of Access to Finance; and,
Ensure the provision and maintenance of world-class infrastructure to support business.