Jim Cuthbert

IN an article in The National on August 15, I highlighted one of the damaging consequences of the devolution fiscal settlement: namely, that it pushed Scotland into an unequal economic race with the rest of the UK. But there are wider dangers with the fiscal settlement as well: in particular, that, as Scottish ministers seek to do their best within the arbitrary constraints of the settlement, they will be forced into sub-optimal and damaging decisions. A good example of precisely this is provided by the recent decision that Scotland will adopt a new model for funding investment in public infrastructure, known as the Mutual Investment Model, or MIM. I will explain why this PFI-like model is a bad decision, and how Scottish ministers were forced into it by the constraints in the fiscal settlement, and then go on to look at some of the steps the Scottish Government should be taking to improve the situation – either boosting the case for independence or finding a solution in the process.

Jim Cuthbert is an economist and former Scottish Office chief statistician

ONE of the unanticipated side-effects for Scotland of Irish independence, as well as the primary benefit of demonstrating that it can be done, is that it enables some light to be thrown upon the inner workings of the UK state. This is because, in the chaotic process of Ireland achieving independence, various internal documents concerning UK state activities ended up in publicly accessible Irish archives: documents which would otherwise have never seen the light of day from official UK sources. Some of these documents throw a fascinating light on the extent to which the UK was prepared to play very dirty indeed to prevent Irish independence. One such document is the subject of this note: but first of all some background is necessary.

SECURING adequate resources to back a new Scottish currency will be critical.

IT is an insufficiently appreciated fact that, following last November’s Scottish Budget, the marginal rate of income tax in Scotland, (or, to be precise, income tax plus national insurance), for employees earning between £43,430 and £50,000 will be 53%. This is more than 20 percentage points higher than the corresponding marginal rate for employees elsewhere in the UK. How this anomalous position has arisen illustrates yet another deeply unsatisfactory aspect of the fiscal settlement foisted upon Scotland following the 2014 independence referendum.

Economist and former Scottish Office chief statistician, Jim Cuthbert, gives his verdict on the Growth Commission report.

Jim Cuthbert, a former chief statistician for the Scottish Office, is the author of a new Common Weal report on PFI