AN independent Scotland should set up an anti-corruption authority to help tackle economic crime which is costing billions of pounds every year, a new analysis has suggested.
A paper from independence project The Bottom Line has warned the UK is “decaying” and there is the risk that economic crime and corruption will eventually crowd out “legitimate economic and political pursuits”.
However it said under devolution the Scottish Parliament does not have the powers over institutions to tackle large scale financial crime and money laundering.
With independence, Scotland should take steps to make sure it does not “look the other way” when it comes to stopping corruption, the report concludes.
The Bottom Line initiative, which aims to add to the debate around the economics of an independent Scotland, involves David Simpson, founding director of the Fraser of Allander Institute at Strathclyde University, Graeme Blackett, previously economic adviser to the SNP Growth Commission, and former SNP MP and Treasury spokesperson Roger Mullin.
READ MORE: SNP conference: Former MP Roger Mullin slams UK corruption
They state: “We argue that for too long the impact of economic crime and corruption on the working of the economy and on the lives of individuals has been ignored.
"Yet the negative impacts on the economy and on the day to day lives of individual citizens can be severe, ranging from a noticeable reduction in economic growth to a destruction of the lives of many innocent individuals through fraud.
“It is clear that small advanced economies are amongst the least corrupt and most economically prosperous.
“Scotland should aspire to match their performance, but needs the powers to have the agency to do so.”
The analysis says it is impossible to put an accurate figure on economic crime in the UK, as much of it is hidden from view.
But it points to figures from the UK Government's National Crime Agency (NCA), which estimated in 2017 that the current annual extent of UK fraud was £190 billion per year.
In another report the NCA outlined a cost of £100 billion per year linked to money laundering.
“Put simply, the scale of economic crime and money laundering dwarfs the entire annual budget of the Scottish Government,” the paper states.
It noted there is no country in the world completely free from financial crime and corruption, but points to the example of Ukraine in establishing a “significantly resourced National Anti-Corruption Bureau” in 2014 after the overthrow of President Victor Yanukovych, who amassed a large personal fortune and faced accusations of cronyism and corruption.
But it added: “The UK, despite the scale of financial crime, money laundering and political corruption, has no equivalent overarching anti-corruption authority with sufficient resources to act to prevent corruption and track down the corrupt and criminal.
“Indeed, the UK Government has specifically rejected calls to establish one. The UK has a great deal of legislation and regulations that look good on paper, but which are not sufficiently enforced."
READ MORE: Oliver Bullough to come to Scottish Parliament to discuss money laundering
The report said Scotland’s lack of powers means it cannot use “business vehicles used to front criminal activities” such as Scottish Limited Partnerships (SLPs), which have been exposed as being used for money-laundering and tax evasion.
“Politically, the buck stops entirely with the UK Government,” the analysis said.
“This encourages a political helplessness that is harmful to Scotland’s economy and society. SLPs harm Scotland’s reputation abroad, but the UK Government denies Scotland the powers to act.”
An independent Scotland would have to take action on a number of fronts, it stated, including establishing an anti-corruption authority, strengthening regulation of major financial institutions such as banks, reforming or abolishing SLPs and tackling a “revolving door” between politicians and business by considering measure such as a time bar on taking up directorships.
“Scotland must not turn its head the other way,” the report concluded. “We have been paying too high a price for our political dependence, and it is time for change. We must look to the future.”
The UK Government has been contacted for comment.
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules here