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Oxford criticism

Hunter report ‘poor and superficial’ says economist

Tony Mackay

Tony Mackay: ‘the analysis is misleading’

A Scottish economist has criticised the recent report commissioned by Sir Tom Hunter, claiming that it shows a “poor understanding of the current state of the Scottish economy.”

Tony Mackay says the Oxford Economics report “appears to have been a desk study” and questions the depth of discussions with “relevant” people.

“Consequently, the report lacks a good understanding of the current problems facing the Scottish economy, particularly the work of the Scottish Government and the main development agencies,” he says.

He also takes a swipe at the 27 business leaders who issued a letter supporting the report and questions whether they all actually read it. They included Andrew Wilson, chairman of the SNP’s Growth Commission.

Mr Mackay says it will be “very welcome if the report leads to a debate about the future of the economy and, more importantly, to sensible and effective changes in policies” but he says “some of the analysis is poor and misleading”.

He takes issue with the forecasts, saying: “I have reservations about the usefulness of producing long term forecasts to 2035 and the Oxford Economics’ explanation of those is superficial. I believe it would have been better to concentrate on a shorter term period.”

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He says that explanations of the huge differences in productivity growth are “unconvincing” and that there is very little in the report on the ongoing diversification into more renewable energy in the North Sea.

Mr Mackay claims the Oxford report makes very few references to the work of the two main development agencies – Scottish Enterprise and Highlands and Islands Enterprise – who, he says, have blacklisted his Inverness-based Mackay Consultants for the last three years for being too critical of their performance.

“In my opinion, their contributions to the Scottish economy have declined significantly in recent years and that is one of the main reasons for the overall underperformance.

“The Oxford Economics’ analysis of the likely or possible implications of Brexit is very superficial and disappointing.”

Mr Mackay says “that until about five years ago most of the spending by Scottish Enterprise and Highlands and Islands Enterprise had a positive impact on the economy. However, since then there has been a serious deterioration in the contributions of these bodies to economic growth.

“It is obvious that more expenditure decisions have been made for political reasons rather than economic ones. The political differences over independence between the Scottish and UK governments are clearly one of the main factors.”

Mr Mackay takes issue with the report’s response to high profile company failures and how they should have been handled.

“The report’s authors also do not appear to know of the problems the Scottish Government has had with big losses at Ferguson Marine, Prestwick Airport, Burntisland Fabrications (BiFab) and other investments. Most of these investments should never have been made.

The Oxford Economics’ analysis of the likely or possible implications of Brexit is very superficial and disappointing

– Tony Mackay

“I believe that it is very important for the Scottish Government, SE and HIE to take “risky” investment or expenditure decisions from time to time, rather than just “safe ones”. That means that there will be developments or businesses that fail from time to time.”

He adds that “an important issue is obviously the likely or possible implications of Scottish independence. That could have serious implications for attracting inward investment in the future but there is no reference to that in the report.”

Mr Mackay claims that the Scottish National Investment Bank is one of various recent initiatives by the Scottish Government which do not seem to have been well thought out.

“I expected more detailed analysis of this and other initiatives,” he says.

Last year Mr Mackay heavily criticised the report by Benny Higgins commissioned by the Scottish government on reviving Scotland’s economy, describing it as “very poor and very disappointing”.

He accused the government of choosing “a strange group of people” to produce it.



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