Press & Journal, 17.3.08
Scotland has the potential to become one of the most successful economic nations in the world, a report by a new independent think tank claims today.
Reform Scotland said that with the right framework for growth in place – based on lower taxes, smaller government and more financial control – the country could become an international leader, providing Scots with greater prosperity and higher living standards.
However, reaching that goal will require an average growth rate of 3.5% over 10-12 years, according to research carried out by the think tank.
Reform Scotland says that, over the last 30 years, Scotland’s annual average growth rate was only 1.8%.
Ben Thomson, chairman of Reform Scotland, said: “Our research examines why Scotland’s trend rate of growth lags behind other countries as well as other parts of the UK.
“It does this by highlighting differences between Scotland and other areas in relation to key economic indicators such as productivity as well as areas more directly within the control of government such as levels of taxation.
“The report shows that lowering the overall tax burden and reducing the size of government has a positive impact on economic growth. We would therefore urge all political parties to adopt policies which would deliver these outcomes and bring benefits to the Scottish economy.
“However, Reform Scotland’s research also recognises that the impact of such policies cannot be fully realised without greater financial powers for the Scottish Parliament.
“If Scotland aspires to match the most successful economies, there are additional benefits to be gained from a tax system that is differentiated from the rest of the UK and provides Scotland with a real platform for higher economic growth.
“This would also mean that the higher revenues resulting from higher economic growth would stay in Scotland and not return to the Treasury.
“At present, public spending in Scotland is largely governed by a block grant from Westminster. Raising more revenue in Scotland would also provide an incentive for greater control of public spending.”
Mr Thomson is chairman and former chief executive of Scottish investment bank Noble Group.