Alice Enders was quoted in an article on the SNP’s Sustainable Growth Commission’s report which has been finally published on Friday to be hailed as a realistic and optimistic assessment of the economic prospects of an independent Scotland – and dismissed as worthless pie-in-the-sky projections built on guesswork and blind faith.
THE GROWTH - The report identifies annual outward migration as the core symptom of the economy’s malaise.
The brain drain of Scots to England has been on-going for decades, lowering Scotland’s growth potential and further inciting migration.
The ageing population then places growing demands on public services while the tax base shrinks.
Solving this has stumped every post-devolution Scottish government.
Many also believe such a high dependence on the UK makes independence unfeasible.
Not so, says the Commission, making two crucial assumptions: Scotland keeps Sterling (backed by the Bank of England), and starts life debt-free (as the debts belong to the UK, though there will be a £5bn annual “solidarity” payment to service the historic debts).
This gives Scotland an unprecedented ability to borrow to finance the set-up costs of a new state and also the ongoing budget deficit. The Commission pledges to eventually reduce the deficit to the 3% ceiling required of EU member states.
To achieve this, the Commission assumes Scotland averages growth of 2.5% in the first decade of independence.
While Scotland’s growth averaged 2.3% in the decade prior to 2006, it has been under 1% for the past decade so it is a big ask and the report seems overly reliant on heroic assumptions.