Listen
Independence would encourage business growth
26/11/2009
A more competitive and efficient tax regime is one of the many benefits independence can bring for Scottish businesses, John Swinney said today.
The Finance Secretary was speaking following the publication of Taking Forward our National Conversation: Supporting Business and Enterprise which finds that only the full powers of fiscal autonomy can end the decades of economic underperformance that have held Scotland back.
Key points from the paper include:
- Independence would allow the Scottish Government to introduce a more competitive tax regime which would be more transparent and less costly to administer
- Full financial powers would allow the Scottish Government to borrow to invest in vital, long term infrastructure projects - particularly in terms of Scotland's transport network
Mr Swinney said:
"For far too long Scotland's economy has underperformed, held back by constitutional arrangements that have restricted growth, rather than encouraged it.
"The current recession only serves to bring into sharp relief how poorly served Scotland is by the current devolution settlement.
"This paper highlights how independence could help us deliver greater growth in the long term and act more comprehensively to combat the downturn in the short term.
"Independence would ensure that it was within the Scottish Government's powers both to cut taxes like corporation tax and to introduce a more efficient, transparent system that is less costly to administer.
"For example the UK spent nearly twice as much as Norway, and almost two thirds more than Finland, on tax administration as a proportion of GDP in 2007.
"And full borrowing powers would create opportunities to address the clear infrastructure needs of Scotland more quickly. For example, by phasing funding for the new Forth Crossing, capital budgets would be freed to take forward more projects at the same time as the bridge construction, bringing additional immediate and long-term economic benefits."
Taking Forward our National Conversation: Supporting Business and Enterprise describes options for new constitutional arrangements and how Scotland's business competitiveness and sustainable economic growth could be improved. It takes account of National Conversation events and discussions which have taken place across Scotland. Discussion - with business, Trade Unions, the UK Government and others - will continue as an integral element of optimising Scottish Government support for business and enterprise.
The paper finds that many of the key policy levers relating to supporting businesses and enterprise and improving business infrastructure are reserved to the United Kingdom at present. Experience of the last 30 years demonstrates that the status quo will not deliver sustainable economic growth in Scotland which matches UK performance, or indeed the higher levels of long-term growth enjoyed by similar, independent nations.
Its conclusion is that only independence allows Scotland the freedom to use the full levers of government to create a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth. The document makes clear that business and enterprise benefits would emerge from outcome-focused reform of, for example: fiscal and tax policy and collection arrangements; competition and consumer policy; financial services regulation; promotion of international trade; skills and immigration; and transport infrastructure. An independent Scotland would enable government to be more responsive to local economic needs. There would be an opportunity for more effective and streamlined decision making processes, allowing government to work closely with the business community to create the conditions for successful businesses and for talented people to live, learn, visit, work and remain in a more prosperous nation underpinned by higher levels of sustainable economic growth.