As I See It

We need to refocus policies on wealth creation

Brian Monteith portraitWe should be thankful to Andrew Wilson and his fellow members of the SNP’s Sustainable Growth Commission. For a week now the issue of obtaining economic growth in Scotland has been given a priority like it rarely has had before.  

Too often, indeed practically all of the time, our politicians, lobbyists, campaigners and single interest groups are talking about how to spend the wealth we create rather than how we create the wealth they want to spend. 

Invariably they introduce measures that actually stifle wealth creation and remove opportunities for self-improvement by handing over responsibilities to state agencies, add a tax here or a ban there – all the while making the poor poorer – and life less enjoyable. It really has to stop, but the Holyrood steamroller trundles on, flattening our aspirations, our entrepreneurship – encouraging people to move to London and other points south.

Rather than divide Scotland from England the Growth Commission’s report has divided the SNP instead. There is now a visible split between the far-left who see independence as an opportunity to turn Scotland into Venezuela without oil, Cuba without salsa or Albania without sun – or those incorrectly labelled ‘neo-liberals’ who believe an independent Scotland would have to live in the real world and thereby pay off debt, reduce deficits to manageable proportions and accept wealth creators have a place, however grudgingly. 

This is a false choice that should fool no one unless they are swayed by government munificence from receiving employment, contracts and subsidies. The choice should not be between Marxism or Keynesianism – for all that offers is a different dose of poison – but between state intervention and genuine liberal economics. What is required is supply-side policies of liberalising the obstructions to trade, deregulating needless rules, getting the government out of business and reducing business overheads that support overbearing inspectorates holding business back.

It is no secret that Scotland’s growth is persistently lower than the rest of the UK’s – and more pertinently that of London and the South of England – we over regulate, we over tax and we over complicate.  

Scotland’s establishment used to be run by risk takers – people who set up businesses, who used their own or other’s private finances and built empires of wealth that employed people who were prosperous in turn. Now we are run by people whose only likely experience of business is to offer a subsidy or cut a ribbon for a multinational landing here. Where are our home-grown multinationals going to come from? 

The Growth Commission cannot offer answers because the approach of central planning, central subsidies and more central institutions is what is killing Scottish growth. Instead we need to commit to opening Scotland up. Here are a few ideas for starters.

Rather than give tax breaks to people from outside Scotland so they might come here, give tax breaks to everyone in Scotland, but be clever about it. Demand from HM Treasury control of inheritance tax for Scottish residents – and then abolish it. With lower property values and relatively fewer millionaires in Scotland the cost to the exchequer will not be great – but the absence of death duties will act as an irresistible magnate for many wealthy and aspiring people to stay in or relocate to Scotland.

People build wealth not just for themselves but to pass on to their families. Overnight Scotland would be the place to make wealth and establish new businesses – and you don’t have to leave the UK to do it. Instead of moving to Jersey, Guernsey or the Isle of Man, Scotland would be an attractive proposition – and there would be much work for our lawyers and accountants too, in handling their other financial affairs.

Secondly, our biggest most important market is the rest of the UK, worth four times what we export to the rest of the EU – but we take it for granted. We need to change this approach and look at what we can do to improve our trade links with the rest of Britain. For starters the Scottish Government needs to sit down with Whitehall’s Department of Transport and the Treasury to hammer out a deal to dual the whole of the A1 to Newcastle. It’s is a scandal that so much of that important road remains single lane – especially when the A1(M) is being improved.  

The same goes for parts of the M6 north of Carlisle that need to be raised to triple lane status – these routes matter to Scottish business but no-one cares because it’s south of the border. 

Then there’s the state of our own trunk roads – connections between Cairnryan ferry port – north to Glasgow and east to the M74 via Dumfries are another disgrace. Political talk of a bridge to Northern Ireland is a pipedream when our Scottish roads to the ferries are themselves wanting. If our trunk roads were of better quality and greater capacity there would be no need for average speed cameras that slow down the movement of goods.

Sitting down with the Northern Ireland Office to improve links is in their interest – but what is needed is a UK fund that can accept bids to strengthen the trade routes between the four nations. That could never happen under independence so why the unionist parties don’t launch one beats me.  

Finally, for now, there’s the skills gap. We need more and better trained people – but it is a damning indictment of Scottish Government education policy that to find them Andrew Wilson thinks we need 400,000 migrants. We need to create vocational secondary schools run by FE colleges producing skilled Scots rather than leaving it to council education departments. It could be delivering within five years – so why wait on a referendum?

The point is, we don’t need independence to achieve economic growth; we just need to change the attitudes of those who govern us. Is that too much to ask?

Brian Monteith is a former member of the Scottish Parliament  

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