Meeting of the Parliament 01 April 2015
I am not quite sure whether that was Chic Brodie playing sudoku with a few numbers. It was probably nothing much more than that.
In all seriousness, the Scottish Government has thus far ducked the question, which is why we want this debate. It has not put forward its own figures and it has given very opaque answers. A couple of weeks ago, I asked John Swinney whether he accepted that we would be worse off in the short term. His answer, word for word, was:
“I have set out the fact that, by exercising responsibilities in accordance with the needs and priorities of the people of Scotland, we have the ability to achieve some of the improvements in economic performance that I have set out”.—[Official Report, 11 March 2015; c 27.]
That was his answer to a direct question. I hear Alex Johnstone ask what that means. I do not know whether it means yes or no.
The Scottish Government has not only ducked the question; it has published a document with a very partial analysis. If one were being cynical, one might say that that was a deliberately partial analysis of some of the effects. That is serious. Just a couple of weeks ago, the Scottish Government published “Benefits of Improved Economic Performance” and gave the scenario of what it called “Full Revenue Retention”. It concluded that its analysis demonstrates that our economy would be improved, our overall impact on the economy would be increased, and we could
“reinvest the proceeds from successful economic policies”.
The Scottish Government missed two critical factors. First, it showed potential upsides if there were greater productivity, greater business investment and a boost to exports. Crucially, it missed out how it would achieve any of those things. Its policies could easily fail, just as they could succeed. It is very easy to say what would happen if something happened; the Scottish Government did not demonstrate how.
Secondly, and more important, the Scottish Government looked at only one side of the profit and loss account. It looked at some potentially increased revenues that we might get if there were growth, but it ignored entirely the prospect that we would lose all the Barnett consequentials—the additional £1,200 per head that we currently get in public spending—as if that did not exist. The Scottish Government went to the trouble of producing a computer-generated equilibrium model over a 10-year time period for total factor productivity, but it completely and blatantly ignored the basic calculations on full fiscal autonomy.
That is a contrast with what happened two years ago, when the Scottish Government published “Scotland’s Balance Sheet”. In 2011-12, Scotland had a slightly lower deficit than the UK had, and John Swinney repeatedly said in the chamber and out there in public that, because we had a slightly lower deficit, that meant that we could have had higher spending and lower taxation in Scotland and still ended up with a lower deficit than the rest of the UK. If John Swinney was correct then—he said that dozens of times—that must mean by implication that, with the higher deficit in Scotland now and the projected increasing deficit, if we had full fiscal autonomy in Scotland, we could have lower public spending and higher taxation and still end up with a higher deficit than the UK.
We have pushed the Scottish Government to publish the figures so that members and the people of Scotland can look at the numbers transparently to see what the Scottish Government is actually planning for the people of Scotland.
I move,
That the Parliament notes that the Scottish Government seeks to achieve full fiscal autonomy for Scotland within the UK; notes that a number of experts predict a weaker fiscal position for Scotland should full fiscal autonomy be achieved and is concerned about the tighter fiscal challenge that could be faced; believes that a potential net fiscal deficit of over double that of the UK in 2015-16, as outlined by the Institute for Fiscal Studies, would be damaging for the Scottish economy; calls on the Scottish Government to arrange for publication of an update to the Outlook for Scotland’s Public Finances to take into account changes to the projected public finances since its original publication in May 2014 and to reflect the current Scottish Government policy of seeking full fiscal autonomy; believes that the update should be conducted and published by the Scottish Fiscal Commission, and calls on the Scottish Government to publish an updated oil and gas analytical bulletin as soon as possible.
14:55