Economic Policy Report

The SNP has published a report on the economic policy of an independent Scotland. Weighing in (if that’s the right word for a digital document) at a hefty 200 pages, it’s more than likely that it will take around a week before it has been fully analysed. However, there’ve been a few facts and claims floating about that are worth considering.

A quick overview is available here. Amongst other things, the big claim is that cutting corporation tax could create around 20,000 jobs. As a generally underemployed job seeker, this is welcome news. According to this graph, Scottish corporation tax is higher than the UK average. Cutting it would bring it down to what the UK is getting away with, whilst still ensuring the loss is covered by oil revenues. This is a smart move, as it will also encourage companies to establish themselves in Scotland, which will provide future revenues for when the oil money starts to run dry. Also, it will encourage immigration, which will compensate for Scotland’s ageing population. What the government will need to do is to ensure that the corporation tax cut does is encourage the creation of skilled, well-paid jobs. Not only will this provide the immediate boon of more money circulating in the country, but it will provide the means for many people to start families, which will further alleviate the problem of an ageing population.

What I’m more sceptical about are the claims like “1% increase in Scotland’s economic activity rate could see an extra 30,000 people in labour market,” and “A 50% increase in Scottish exports is worth £5bn and has the potential to create over 100,000 jobs”. Even a 1% increase in economic activity is a tall order, one that many developed economies are struggling to manage right now. The massive explosion in exports, and the manufacturing boom that would be needed to manage it, seems almost impossible. As it stands, I wouldn’t base my vote on these over optimistic dreams.

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