A guest post by Samuel Miller
They say timing is everything and given the nature of my previous post, this Q.E.D. moment couldn’t be allowed to pass. It appears that some folk yesterday were quite concerned about Scottish economic performance lagging behind the UK. Others? Not so much. Very much a glass half empty or glass half full kinda story. Four quarters of continuous but modest growth, or why aren’t you doing as well as…etc? Depends on your outlook really. Regardless, what really caught my eye were the statements made by Mr Mundell, oor Secretary of State for not being consulted very much.
“It is good news that today’s GDP figures show that Scotland’s economy continues to grow. I note a modest improvement in Scotland’s important services sector, and encouraging growth in production industries.” (Super so far)
“However, it is increasingly concerning that a significant gap persists between Scotland’s economy and the rest of the UK. The Scottish Government has the powers to boost productivity and strengthen the economy, and must use them to close this gap. By making Scotland the highest taxed part of the UK, the Scottish Government risks damaging, rather than growing, our economy.” (Aaaand there we have it. Also? My bold)
Which begs a question or two now doesn’t it?
Those unspecified powers Mr Mundell mentions must be quite the package. It’d probably be helpful if the Secretary of State for… whatever… could tell folk exactly what they are right enough. Also safe to say that there are folk out there who might disagree on whether the Scottish government has the powers it requires. How and ever, and for the sake of clarity, you’ll find who has competence over what HERE.
You’ll note where the responsibility for the economy of the entire UK rests pretty rapidly and don’t let tourism and economic growth fool you either. The Scottish government can invite investment, but it relies on Westminster to set favourable economic conditions. The SG can also stimulate growth in certain sectors, but again this relies heavily on the budget granted/available and those economic conditions set elsewhere at the time. The SG have only a percentage of tax raising powers and zero control of essential resources and revenue streams. They have no treasury and therefore no control over monetary policy. No control of employment legislation or benefits and clearly no control over foreign policy, borders, trade, immigration and so on.
I’d say they’re doing pretty well all things considered. In fact it sounds very much to me like a case of tackling some fairly severe economic challenges with the legislative equivalent of having one arm and both legs tied behind your back. Personally I’d have thought it perfectly reasonable to assume that when a Scottish government in full control of ALL of the above powers fails, then folk could have a wee gripe. Mibbies it is just me though. (shrugs)
Just to put things into further perspective given the impending Brexit. HERE is a link to a list of UK recessions and their effects on the overall economy, with 2008’s crash on the bottom. Worst Q was -2.2% in Q4.
So, just to be clear. It’s taken a central government, in full possession of all economic levers, ten years NOT to have ditched austerity ideology. A period which has seen unprecedented wage stagnation, draconian changes and swingeing cuts to the UK’s benefits system, massive growth of food bank culture and cuts to services reported across the board. A state legislature in FULL possession of ALL economic levers. Personally I’d say that’s worthy of a gripe or two, but then I would.
Anyway, now we get to the interesting question on the subject of those economy growing zooperpowers. Given both HMG and Scotgov’s impact assessments consider a 2-2.5% contraction is currently the best case (soft Brexit) scenario for Scotland. Also taking into account the all too evident hardships which the recession of 2008 has delivered over the past ten years. Just what do you reckon the effect will be of a 9% contraction of Scotland’s economy in event of the worst case scenario?
Readers, of course, can decide for themselves whether they consider the economic powers of the Scottish parliament sufficient for the challenges ahead.
After all… how bad could it be?