THE line “Work as if you live in the early days of a better nation” – from a poem by Dennis Lee and quoted often by Alasdair Gray – is often cited by politicians but too often is not lived up to.
What should it mean as we face a new year, with new challenges and new opportunities? It means being ambitious for the future, creating that future however many obstacles are in our way and, as a parliamentarian, of accepting responsibility for doing so.
We must not always look to others to blame when things don’t go as planned. Edwin Morgan cautioned in his poem Open the Doors, written for the reconvened Scottish Parliament, that: “… the droopy mantra of ‘it wizny me’ is what they do not want.”
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When I first joined the SNP in 1981, two aims were stated on my membership card. First, self-government for Scotland and second the furtherance of all Scottish interests. They remain my, and I would argue should for us all, guiding lights.
We did not obsess over the reasons (or excuses) for not pursuing both aims, regardless of the situation Scotland found itself in. That said, I recognise there are huge costs of being dependent upon a failing UK economy. That is why we need to ensure our economic policies don’t increase that dependency. The more we can build our own resilient and growing economy right now, the more we can do for the people of Scotland and the better we are preparing for independence.
We need to break out of a mindset that leads us towards simply tinkering within the current fiscal framework. Our ambition should be for strategies that see us investing in the future.
To that end, I am surprised by the £60 million cut in Scottish National Investment Bank funding. This sum is marginal to the overall scale of the Scottish budget but much more significant in limiting a key component of a growth strategy, including investing to assist in meeting our net zero targets.
But you might argue, given that the Scottish Government still lacks effective borrowing powers and is required to produce a balanced budget, what is the alternative? There isn’t just one alternative, there are many. Let me share a few.
Governments are very good at creating and funding new projects but not very good at ending those that don’t deliver as intended. As a result, over time, there tends to be increasing expenditure on unsuccessful activity. That’s why, at the SNP conference in 2019, delegates passed a resolution that included a call for a “Stop Strategy”. Instead of creating multiple new initiatives, which in time develop their own vested interests, government must look to stop peripheral activity or less impactful work.
Leadership from government involves setting an example. If government deems cuts are required to important areas, such as housing, it should demonstrate a willingness to constrain its own central government operations too.
For example, there is scope for reducing the number of public bodies, currently standing at 129. They should also seek to avoid an increase in the overall cost of government as other areas are restricted.
To raise revenue in the medium and long term, the best and most sustainable way is to ensure there is healthy growth in the real economy.
Growth that brings more and better-paid jobs will increase tax revenues without increasing tax rates. These tax revenues can then be used to protect our public services.
In all of this, it is vital to be clear about priorities and to have them placed central to an economic strategy. For example, returning to housing, it should be considered as an integral part of a broader economic and competitiveness strategy aligning with a population and migration strategy.
We need more investment in affordable housing in particular. To cut the money available is to compromise future economic development as well as harming the lives of those in need.
A further example is to ensure our energy potential in Scotland is maximised both to the benefit of the Scottish people and to better align with the need to achieve net zero growth policies.
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At present we lack an effective industrial strategy to ensure the Scottish economy fully benefits from our sustainable energy potential. From harnessing wind to solar and hydrogen, there is much work still to be done.
An area of current controversy is taxation and not just for individuals. We need to understand that the backbone of Scotland’s economy is built on our small businesses and policies should be tailored to provide them with the scope and freedom to flourish. We gain value from being seen as a country open for investment.
The UK has one of the most complex taxation systems in the world. Adding complexity often produces undesirable tax avoidance incentives. At present the tax gap in the UK (the difference between what should be gathered compared with what is gathered) has been estimated by the UK Government to be £35.8 billion for the tax year 2021-22.
In Scotland we should be seeking to simplify those taxes over which we have influence, instead of adding to tax complexity. I think it is wise to remember the four principles of tax proposed by Adam Smith – namely certainty, proportionality, convenience and efficiency. In fairness, a belief in these principles is included in Scottish Government reports and statements – I simply question to what extent they have been fully considered in recent policy announcements.
Put simply, working towards independence requires decreasing dependence on a failing UK economy. This requires focus on a longer-term view, how we build financial resilience in our economy, ensuring we have the sort of growth that serves society and creates more and better-paid jobs. This will help us support our valued public services on our journey to independence and beyond.
We need to address all of these issues urgently to move us to independence as fast as possible.
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Callum Baird, Editor of The National
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