IT’S time to discuss what kind of Scotland we want for the future. It has been very telling that the Growth Commission chose only to engage with fiscally conservative financial groups when researching for its report – and Common Weal is not the only organisation that was disappointed not to have been sought out. That such a report was written without including the views of any trade unions or third-sector organisations will surely come to be seen as an oversight.
As it is, the Growth Commission’s title says much about the underlying philosophy of the report. It has fallen into the trap of obsessing over economic growth at all costs. It is also obsessed with the national public deficit in exactly the same way that the UK Government is.
The Growth Commission commits itself to permanently tight budgets which may well result in austerity despite their claim that it wouldn’t.
READ MORE: Common Weal campaigners say start new currency on day one of independence
Just to give an example. If we take a school of 1000 pupils and cut its budget by 10%, it can now only teach 900 pupils. Everyone would agree that this is austerity.
The Growth Commission wants to grow the Scottish economy – its GDP – by, in part, growing our population – a worthy goal in my opinion. But it also restricts public spending growth to below GDP growth. Take our school again.
If increased population means that there are now 1200 pupils there but the budget is only increased to enough for 1100 pupils its budget will still be squeezed. Even though the school’s budget has increased it’s hard to call this anything other than austerity.
READ MORE: Why a prosperous Scotland needs its own currency
The debate over national deficits is blinkered anyway. When a country has its own currency, government deficits are, in effect, surpluses for you and your household (if an austerity government privatises the NHS, you’ll need to buy insurance to pay for the healthcare you’re still going to need – if you can afford it). The last decade of UK austerity has been economically crippling, physically harmful and has caused a crisis in terms of mounting household debt. It can’t go on and an independent Scotland shouldn’t attempt to repeat these policies.
The early years of independence are not the time to cut and to scrimp. It is the time to invest, build and actually try to develop the Scottish economy in the ways that we have been unable to up until now.
Nor should independence be fettered by copying the UK’s deliberately inefficient tax system and its near-powerless financial regulations.
Some policies advocated by the Growth Commission are politically indefensible. This includes policies like the Annual Solidarity Payment which, in part, advocates that Scotland should not have a foreign aid policy but should instead just give £1.3 billion per year to the remaining UK to spend on foreign aid as they see fit.
READ MORE: It’s vital we get the economic strategy right from day one
Our paper published today explores these topics in far more detail than can be managed here but the conclusion is clear. Instead of obsessing over GDP growth and the public deficit, an independent Scotland should run an economy based on preserving the environment, reducing economic inequality and maximising the wellbeing of the people of Scotland.
This is the opportunity of independence. But we won’t get there by copying the same mistakes that the UK has, by pandering to a profit-hungry financial industry or by trying to “calm the markets” at the expense of everyone else.
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Callum Baird, Editor of The National
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