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Council of Economic Advisers
04/12/2009
The Council of Economic Advisers (CEA), chaired by Sir George Mathewson, has published its Second Annual Report.
The report considers the recent progress of the Scottish economy and presents the Council's recommendations to the Scottish Government for actions to increase sustainable economic growth - the Purpose of the Scottish Government.
The Council has formulated a total of 17 recommendations, which include recommendations that the Scottish Government:
- Establishes a Fiscal Policy Commission and emphasises the need for public accounts to present a clear and fair view
- Continues to use its ability to bring forward capital spending within a spending review period and seeks to have the ability to deploy year-end funds without discussion with the UK Treasury
- Considers how teacher quality can be prioritised at each level in the school system through the development and expansion of the Chartered Teacher programme
- Reviews the contribution made by the whisky industry to the Scottish economy with a view to ensuring that Scotland benefits fully from the activity and development of the sector
First Minister Alex Salmond said:
"I am grateful to the Council for their continuing work to support economic progress in Scotland and, in particular, for their second Annual Report published today.
"Scotland has experienced its share of the global economic turbulence of the last 12 months.
"The Scottish economy will emerge from these troubled times with greater strength and resilience, by using the great wealth of natural and human resources which we have at our disposal.
"We are assisted in that task by the first rate work of the Council and we look forward to responding in detail to the various recommendations made in today's report."
Chair of the Council Sir George Mathewson said:
"Since the Council published its First Annual Report last December, the world economy has experienced a deep recession from which it is only now beginning to emerge.
"While action has been taken to accelerate capital spending and reflate the real economy, the Scottish Government must remain focussed on the longer term thinking set out in the Government Economic Strategy; this remains as relevant as ever in achieving increased sustainable economic growth.
"Our Second Annual Report sets out 17 recommendations for the Scottish Government to consider, which we believe will act as significant drivers for increasing and sustaining economic growth.
"Productivity is a significant component of economic growth, but the productivity of the Scottish economy still trails someway behind its competitors. There is a need to encourage cooperation between universities, commercial firms and supporting agencies to combine the source of innovation ideas with those who can implement and commercialise them. The Scottish Government can also induce greater innovation through its procurement process.
"Schools also make a significant contribution to economic growth through improving the stock of human capital. When compared with OECD countries, Scotland's performance is only average. There is a need to prioritise teacher quality in schools - the quality of teaching must be measured and there must be effective training.
"Financial and Business Services is a key sector of the Scottish economy. Given the difficulties experienced by the sector over the past couple of years, it is important that the Scottish Government ensures it has the knowledge and influence to enable it to obtain the best possible result from the reorganisation of UK banks.
"As we highlighted in our First Annual Report, the Scottish Government requires and should seek the power to borrow. We recommend that when Scotland's borrowing powers are extended, a Fiscal Policy Commission is established to review the future fiscal position and outlook.
"These are just a few highlights of the 17 recommendations that we have made to the Scottish Government. Our remit is clear: to advise the First Minister on what we believe will help deliver increased sustainable economic growth in Scotland. This report sets out this advice and we look forward to receiving the Scottish Government's response."
Membership
- Sir George Mathewson, Chairman
- Crawford Beveridge, CBE
- Frances Cairncross, CBE, FRSE
- Professor Andrew Hughes Hallett
- Professor John Kay
- Professor Alexander Kemp, OBE
- Professor Finn Kydland
- Jim McColl, OBE
- Professor Sir James Mirrlees
- Professor Frances Ruane
- Lord Smith of Kelvin
Remit
The Council of Economic Advisers was established in June 2007 to advise the First Minister directly about the best way to increase sustainable economic growth in Scotland.