Independence would see Scots Â£4,000 richer, claims SNP report

Scots will be around Â£4,000 better off in an independent Scotland, according to a much-anticipated SNP economic report due to be published tomorrow.

By The Newsroom Thursday, 24th May 2018, 12:48 pm Updated Thursday, 24th May 2018, 3:06 pm

The SNP's Growth Commission said an independent Scotland could emulate the world's "best performing" economies. Picture: John Devlin

The SNP’s Growth Commission report, said an independent Scotland could emulate the world’s “best performing” economies and generate an extra £4,100 per person.

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Commission chairman Andrew Wilson says the model being set out will look at the best performing smaller global economies, like New Zealand and Finland, and that it will take more than a generation to achieve sustained improvement.

The SNP's Growth Commission said an independent Scotland could emulate the world's "best performing" economies. Picture: John Devlin

The report comes as it has emerged emergency measures to tackle a “Scotland-specific economic shock” are in line to be triggered if growth continues to lag behind the rest of the UK. The procedure is enshrined in the Fiscal Framework that accompanies the new income tax powers transferred to Holyrood as part of the tranche of new post-referendum powers. When implemented, it unlocks extra borrowing powers of £600 million to “bail out” any shortfall in tax receipts.

MSPs were told the “shock” criteria have been met in the most recent GDP figures – although the procedure will not formally go “live” until the next set of GDP statistics are published for the first quarter of this year.

First Minister of Scotland Nicola Sturgeon. Picture: Andrew Milligan/PA Wire

But the current stuttering growth and prospect of emergency “shock” measures was seized on by opponents who say it undermines First Minister Nicola Sturgeon’s push for a second independence referendum.

“This clearly highlights the scale of the economic crisis Scotland is currently in,” Tory finance spokesman Murdo Fraser said. “There is no room for excuses from Nicola Sturgeon – this is a shock made in Bute House.

“The SNP has failed to energise the economy, preferring to write strategies and create quangos rather than deal with the systemic issues Scotland faces. It is absolutely clear that the last thing Scotland’s economy now needs is another divisive referendum.”

The 2016 Fiscal Framework states that a “Scotland-specific economic shock” occurs when annual Scottish GDP growth is both below 1 per cent and one percentage point below GDP growth in the UK.

The Scottish Government’s most recent GDP statistics state that Scottish GDP grew by 0.75 per cent between 2016 and 2017. UK growth was 1.78 per cent, leaving a gap to Scotland of 1.03 per cent.

Andrew Chapman, from the Scottish Government’s Fiscal Responsibility Division, told MSPs on Holyrood’s finance and constitution committee yesterday this would meet the conditions to trigger a “Scottish-specific economic shock”.

But he said: “At the minute we do not have four rolling quarters of out-turn data from April 2017 onwards, so we cannot access the additional flexibilities associated with the Scotland-specific economic shock borrowing powers.”

Economy secretary Keith Brown last night insisted the criteria had not yet been met for an economic shock to be triggered.

“In any case, it is the Tories’ obsession with an extreme Brexit – taking Scotland out of a market eight times bigger than the UK’s alone – combined with their unnecessary austerity which is causing real harm to both the Scottish and UK economies,” he said.

The GDP figures up to the end of April will not be published until July. But a slowdown in the broader UK economy in the first three months of the year, at just 0.1 per cent, may mean Scotland comes within a percentage point of this and prevent an “economic shock” north of the Border.