Scott argues for loan powers

Published on Saturday 6 December 2008 18:41

THE Scottish Government should be given borrowing powers in order to revive the struggling economy, it was claimed last night.

Tavish Scott, the Liberal Democrat leader, has argued for a radical change to Scotland's powers so cash can be made available to boost ailing building projects and prevent the loss of thousands of jobs.

Scott said the recession had changed the nature of the constitutional debate and added that Holyrood should be given more powers to react to the financial crisis.

"The economic events of the last couple of months convince me that people will want to see more lively and responsive government at all levels," Scott said. "I have argued for Scottish controls over different kinds of taxation. We would gain proper accountability for our Scottish Government rather than relying on an annual handout from another parliament.

"Whenever I visit engineering or construction companies or architects and planners, they all tell me the same thing: their industry is in trouble because the Scottish Government simply isn't getting new projects moving."

Scott, who has written an article published today on scotlandonsunday.com, made his comments after this week's publication of the interim report by the Calman Commission, the body set up by Labour, the Lib Dems and the Conservatives to examine new powers for Holyrood.

Scott reinforces his position as the most outspoken leader of the pro-Union parties when it comes to arguing for more powers to be devolved.

His comments came the day after the Council of Economic Advisers said Scotland needed to borrow and build its way out of recession. The group called for the Scotland Act to be amended to allow the Scottish Government to borrow.

A spokesman for the First Minister said: "The Council of Economic Advisers' recommendations make it clear current arrangements do not meet the challenge of the times."

Additional comment from Tavish Scott

Recently we've seen a return to politics on a grand scale. In the Pre-Budget Report big choices were made. VAT down here. Top rate tax up there. Previously we might have seen Gordon Brown put pensions up by just 75p, or he would tinker with the economic cycle to make his Golden Rule seem a bit more plausible. Compared to that, the actions we are seeing now are revolutionary.

And I think this changes the way the debate on new powers for the Scottish Parliament will run from now on. The economic events of the last couple of months convince me that people will want to see more lively and responsive government at all levels. That has big implications for the work of the Calman Commission on the future of devolution.

As the economy tumbles, as tens of thousands of bank jobs are put at risk, as home repossession becomes a real risk for thousands, people in Scotland aren't much impressed by a Scottish Government that varies its Budget by just 0.3% to respond. I am not sure there are many people who find it a sympathetic sight to have a Scottish First Minister apparently without the levers - or gumption - to react to a crisis.

The old argument from the do-nothing brigade has gone out of the window. They used to tell us that Scotland shouldn't have any more powers because it might interfere with the Golden Rule on the economy, or bring some other calamity. That was before the Golden Rule went out of the window.

I have argued for Scottish controls over different kinds of taxation. We would gain proper accountability for our Scottish Government rather than a Scottish Parliament relying on an annual handout from another parliament.

And, perhaps, powers for the Scottish Government to borrow money are right in the frame. Whenever I go to visit engineering or construction companies or architects and planners they all tell me the same thing. Their industry is in trouble because the Scottish Government simply isn't getting new projects moving.

People used to say that the old Barnett formula offered stability and predictability. But, facing economic and financial shocks, that all looks a bit arbitrary and wooden right now.

Who could have predicted that a log jam in health service building projects in England would mean a compulsory reduction in capital investment in Scotland? And that it would come just at the moment when Scottish industry needs it most, when value for money might be the best it's ever going to be, and when tens of thousands of construction jobs are at stake.

So this is where the Calman Commission need to focus. Look at the economic landscape. Look at how governments have had to react around the world. Be convinced that Scotland would benefit from a Government and a Parliament able to exercise lively and responsive government when we need it most. Government needs to be there for a crisis. And it needs the tools to do the job.