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Independent Scotland's economy has what it takes to thrive, says Salmond Independent Scotland's economy has what it takes to thrive, says Salmond
(4 months later)
Alex Salmond has insisted that Scotland has "got what it takes" to be a thriving independent country because it has a healthier economy due to significant North Sea oil receipts.Alex Salmond has insisted that Scotland has "got what it takes" to be a thriving independent country because it has a healthier economy due to significant North Sea oil receipts.
The first minister said the financial evidence over recent decades made it absolutely clear that Scotland's relative debt levels and wealth meant it was better off than the rest of the UK, allowing it to cut taxes and raise living standards.The first minister said the financial evidence over recent decades made it absolutely clear that Scotland's relative debt levels and wealth meant it was better off than the rest of the UK, allowing it to cut taxes and raise living standards.
Speaking on Tuesday as he launched his government's economic case for independence before next year's referendum, Salmond said Scotland's potential had been stifled by successive Westminster governments and its resources squandered for decades.Speaking on Tuesday as he launched his government's economic case for independence before next year's referendum, Salmond said Scotland's potential had been stifled by successive Westminster governments and its resources squandered for decades.
Fending off allegations of peddling "old stories and bad sums" from his critics, Salmond said his government's figures showed Scotland's relative net fiscal deficit would have been £12.6bn less than the UK's deficit over the past five years.Fending off allegations of peddling "old stories and bad sums" from his critics, Salmond said his government's figures showed Scotland's relative net fiscal deficit would have been £12.6bn less than the UK's deficit over the past five years.
"Our argument is we've got what it takes, Scotland has got what it takes, to be a successful independent country," Salmond told an audience of workers at the Alexander Dennis bus factory in Falkirk. The UK's largest British-owned vehicle manufacturer, it builds the latest hybrid buses used by Transport for London, and employs 2,000 people in Falkirk, Scarborough and Guildford."Our argument is we've got what it takes, Scotland has got what it takes, to be a successful independent country," Salmond told an audience of workers at the Alexander Dennis bus factory in Falkirk. The UK's largest British-owned vehicle manufacturer, it builds the latest hybrid buses used by Transport for London, and employs 2,000 people in Falkirk, Scarborough and Guildford.
"Even the opponents of independence are now accepting that Scotland can thrive and prosper as an independent country," he added, as he sought to overcome a significant shortfall in support for independence."Even the opponents of independence are now accepting that Scotland can thrive and prosper as an independent country," he added, as he sought to overcome a significant shortfall in support for independence.
"Our message today is: give Scotland the economic tools so we can build a successful nation.""Our message today is: give Scotland the economic tools so we can build a successful nation."
But Salmond tempered that by warning that an independent Scotland could refuse to pay its share of the UK's debt – a figure his analysis showed would be £92bn – if the UK government refused to allow Scotland to join a sterling currency zone with the UK and use the Bank of England as its central bank.But Salmond tempered that by warning that an independent Scotland could refuse to pay its share of the UK's debt – a figure his analysis showed would be £92bn – if the UK government refused to allow Scotland to join a sterling currency zone with the UK and use the Bank of England as its central bank.
He said sterling and the Bank of England were joint assets of all the UK's nations. He rejected warnings from senior Treasury officials that refusing to pay Scotland's share of UK debt would cause severe damage to its international reputation.He said sterling and the Bank of England were joint assets of all the UK's nations. He rejected warnings from senior Treasury officials that refusing to pay Scotland's share of UK debt would cause severe damage to its international reputation.
"The financial assets of the country include sterling and sterling reserves," he said. "What we can't have is any country, any part of the arrangement, assuming it can keep control of the assets.""The financial assets of the country include sterling and sterling reserves," he said. "What we can't have is any country, any part of the arrangement, assuming it can keep control of the assets."
Salmond quickly faced accusations of dishonesty from his opponents after claiming on the BBC Radio 4 Today programme that the Scottish National party had wanted a sterling zone for "more than a decade". Better Together, the pro-UK campaign, said the SNP and Salmond had repeatedly referred to joining the euro in recent years.Salmond quickly faced accusations of dishonesty from his opponents after claiming on the BBC Radio 4 Today programme that the Scottish National party had wanted a sterling zone for "more than a decade". Better Together, the pro-UK campaign, said the SNP and Salmond had repeatedly referred to joining the euro in recent years.
According to the document published on Tuesday, even accounting for Scotland's higher per-head public spending, North Sea oil revenues since 2007-08 would mean an independent Scotland's public spending was 43% of overall GDP, compared with 45% for the UK as a whole. Instead, it had lost £7bn in capital spending due to UK government spending cuts.According to the document published on Tuesday, even accounting for Scotland's higher per-head public spending, North Sea oil revenues since 2007-08 would mean an independent Scotland's public spending was 43% of overall GDP, compared with 45% for the UK as a whole. Instead, it had lost £7bn in capital spending due to UK government spending cuts.
An independent Scotland could afford to undercut the UK's corporation tax rates by 3% and to reduce aviation taxes to stimulate investment and business, while investing billions more on capital projects and targeted social security programmes.An independent Scotland could afford to undercut the UK's corporation tax rates by 3% and to reduce aviation taxes to stimulate investment and business, while investing billions more on capital projects and targeted social security programmes.
However, the paper avoided trying to predict future oil revenues, economic growth figures or setting out a detailed tax and spending model. It selected the most favourable recent five-year period for North Sea oil incomes: economists argue that oil revenues over the longer term are far more volatile and unreliable.However, the paper avoided trying to predict future oil revenues, economic growth figures or setting out a detailed tax and spending model. It selected the most favourable recent five-year period for North Sea oil incomes: economists argue that oil revenues over the longer term are far more volatile and unreliable.
Bill Simpson, corporate affairs director for Alexander Dennis, said it was interesting to see more economic detail emerge.Bill Simpson, corporate affairs director for Alexander Dennis, said it was interesting to see more economic detail emerge.
But asked whether independence would help or hinder his company's business with the UK, he said: "I really haven't a clue. We don't know the detail of any financial or banking structure, so to speculate about that would be just ridiculous, to be honest with you."But asked whether independence would help or hinder his company's business with the UK, he said: "I really haven't a clue. We don't know the detail of any financial or banking structure, so to speculate about that would be just ridiculous, to be honest with you."
Salmond's critics were disparaging. Michael Moore, the Scottish secretary, said the document was "four chapters of contradictions with a glossy cover", as it failed to answer basic questions about finance, taxation and the longer-term economy.Salmond's critics were disparaging. Michael Moore, the Scottish secretary, said the document was "four chapters of contradictions with a glossy cover", as it failed to answer basic questions about finance, taxation and the longer-term economy.
"It is a contradiction to highlight the fact that Scotland does two-thirds of our trade with the rest of the UK and then propose building an economic barrier right through the middle of it," he said."It is a contradiction to highlight the fact that Scotland does two-thirds of our trade with the rest of the UK and then propose building an economic barrier right through the middle of it," he said.
"Once again, the fundamental flaw in their economic plan is to advocate leaving the UK so we can then try and renegotiate our way back into a currency union with the UK, shared banking regulation with the UK, a lender of last resort with the UK and a UK pension scheme.""Once again, the fundamental flaw in their economic plan is to advocate leaving the UK so we can then try and renegotiate our way back into a currency union with the UK, shared banking regulation with the UK, a lender of last resort with the UK and a UK pension scheme."
Willie Rennie, the leader of the Scottish Liberal Democrats, said the economy paper had ignored warnings from a Treasury analysis and finance industry figures that independence could lead to thousands of banking and insurance jobs moving to England.Willie Rennie, the leader of the Scottish Liberal Democrats, said the economy paper had ignored warnings from a Treasury analysis and finance industry figures that independence could lead to thousands of banking and insurance jobs moving to England.
"It's the same old stories, slogans and bad sums," Rennie said. "They want to spend the same money three times over, on an oil fund, capital spending and tax cuts.""It's the same old stories, slogans and bad sums," Rennie said. "They want to spend the same money three times over, on an oil fund, capital spending and tax cuts."
Ken Macintosh, for Scottish Labour, said: "After nearly 80 years of the SNP fighting for independence, the question has to be – is that it?Ken Macintosh, for Scottish Labour, said: "After nearly 80 years of the SNP fighting for independence, the question has to be – is that it?
"Instead of a serious assessment of Scotland's economic future, the SNP have singled out a few short-term political decisions and packaged them as the case for independence."Instead of a serious assessment of Scotland's economic future, the SNP have singled out a few short-term political decisions and packaged them as the case for independence.
"Last month they were in chaos on the currency, last week they published a weak strategy on banking, and then flip-flopped on tax cuts for businesses, and now we see their economic strategy is nothing but a series of assertions backed up with the flimsiest of evidence.""Last month they were in chaos on the currency, last week they published a weak strategy on banking, and then flip-flopped on tax cuts for businesses, and now we see their economic strategy is nothing but a series of assertions backed up with the flimsiest of evidence."
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