N-56 challenges IFS on fiscal autonomy
The Institute of Fiscal Studies last month declared that full fiscal autonomy would leave the country with a £7.6 billion shortfall in its budget.
However, N-56, a loose alliance of businessmen led by the property developer Dan Macdonald (pictured) said the IFS report fails to consider that since the 1980s Scotland made a net contribution to the UK public finances.
It claims that, on average and since 1980-81 Scotland received 9.6% of UK Government spending while being the source of 10.5% of UK taxation revenues.
N-56 also says the IFS forecast is based on an oil price of $55 per barrel, with OPEC predicting that in the long-run the price will return to around $100.
“This would clearly make a significant contribution to Scotland’s fiscal position and could lead to a return to surpluses,” says N-56.
“Moreover, the devolution of substantial fiscal powers to the Scottish Parliament would mean that the Scottish Government would be motivated to put the mechanisms in place.”
N-56 said full fiscal autonomy would add strength to its claims first made last year that Scotland could double the size of the economy through a targeted strategy based around exports, investment in infrastructure and innovation, and a simpler taxation system.
It believes Scottish GDP could increase by 86% from a baseline of £153 billion in 2012 to £282bn over 25 years, elevating Scotland to become one of the top five wealthiest countries in the world.
This would also increase GDP per capita by two-thirds from around £27,000 per capita to more than £45,000.
Such an increase in GDP of £129bn would also result in an improvement in public finances of some £52bn per year.