An independent Scotland would not be a “land of milk and honey” according to business leaders, amid growing concerns over extravagant spending pledges from both sides of the referendum campaign.
Scotland would face a bigger deficit than the rest of the UK and that even plans for more devolution, like Labour’s proposed 50p tax rate, would not help Scotland grow.
Holyrood’s economy committee took evidence today from leading business organisations including CBI Scotland, the Institute of Directors and Scottish Financial Enterprise (SFE) about the country’s economic future post-2014.
Ian McKay, of the Institute of Directors said: “We’re concerned that what we’re seeing from both sides is the prospect of more and more spending and less and less identification of where the money is to come from.”
Labour set out proposals for greater devolution in Scotland last month which could open to the door to a 50 pence tax rate for high earners, even if this is not introduced south of the border.
“I don’t see how something like that is encouraging us to grow the private sector which we desperately need to do whether it’s a Yes vote or a No vote,” Mr Mckay added.
“From both sides what we’re not seeing is how we will build the economy of Scotland and get rid of this mis-balance that we have.”
Iain McMillan of CBI Scotland said the UK’s national debt was “horrendous” and an independent’s Scotland’s share of this, estimated to be about £140 billion, would be relatively worse at 8.3% of GDP.
“In an independent Scotland there would be every bit as much need to attack the deficit and deal with the fiscal consolidation going forward,” he said.
“That would result in many difficult decisions about tax and spend - this would not be a land of milk and honey.
“It would be extremely difficult with many painful decisions to be taken.”