John Swinney: Prosperity is our key ambition for Scotland
Finance secretary John Swinney pictured during a recent interview with The Scotsman
Independence will allow this country to contribute to widespread economic growth
THE Scottish Government’s ambition for Scotland is clear. Faster sustainable economic growth with opportunities for all of Scotland to flourish; a public sector and economy that reflects the unique character, skills and values of the Scottish people; and a nation taking its full place in the international community and global economy.
We therefore face a choice over the future of our nation and how we achieve that ambition. In my view, it is only with full access to job-creating powers and the powers of independence that we can fully deliver these ambitions.
Two weeks ago, output figures for the third quarter of 2011 were published, alongside the latest labour market and export statistics. They showed that GDP grew by 0.5 per cent over the quarter – the same as in the UK – with an upturn in services and continued growth in manufacturing.
Overall, the figures confirm that Scotland’s recession – while deeply damaging – was shorter and shallower than for the UK as a whole. Manufactured exports grew for the third consecutive quarter, while the Purchasing Managers Index for December indicated private sector growth for the 12th consecutive month. Yesterday’s retail sales figures showed growth of 0.7 per cent in the final quarter of 2011 and over the year as a whole.
But economic conditions are challenging. Last month’s labour market statistics show a further rise in unemployment. There are now almost 2.7 million people unemployed in the UK – the highest number since 1994. Scotland’s unemployment rate at 8.6 per cent is slightly higher than the UK’s 8.4 per cent, though we continue to have better employment and economic activity rates.
Tackling unemployment and its devastating impact on families and communities is an absolute priority for this government. That is why we are investing heavily in our young people. These recent trends and the weak growth outlook for this year highlight the failure of the UK government’s strategy.
While I accept the need to address the legacy of debt left by the previous UK government, this can only be achieved if there is sufficient growth in the economy. This is not what we are seeing.
Just last week, the Office for National Statistics published figures showing that output fell by 0.2 per cent in the final quarter of 2011, while the Office for Budget Responsibility forecast that the UK economy will effectively flat-line over the first six months of 2012.
And the result is all the more tragic as the Chancellor’s actions are proving to be self-defeating with borrowing now rising.
There must be an alternative. We have long argued for boosting public-sector capital investment, improving access to finance and encouraging new private investment and enhancing economic security. As the First Minister set out in his Hugo Young lecture last week, the benefits and opportunities from Scotland as an independent country will not be felt just here at home, but for all of these islands.
In recent weeks, we have all been struck by the interest shown in developments in Scotland and the 2014 referendum on independence.
We have spent a great deal of time speaking to overseas journalists and we keep being asked the same question: What are our ambitions for Scotland?
We wish to create a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth. In a global marketplace, where competitive advantage and resourcefulness are key to economic success, countries need a balance of flexibility and stability in economic policy. Independence would allow Scotland to choose the optimal balance of economic policy.
My vision of an independent Scottish economy is one in which monetary policy acts to underpin price and macroeconomic stability, supported by fiscal and economic flexibility to promote growth and create jobs. Price stability is the key to creating an environment that is conducive to trade, investment and economic growth.
Indeed, this is one reason why all major industrialised economies including the UK, the Eurozone, Japan, Australia, New Zealand, Canada and the USA have established independent central banks with the core focus upon maintaining price stability. Scotland would continue with such an arrangement post-independence in a Sterling Zone with the Bank of England responsible for monetary policy.
But monetary policy cannot directly tackle youth unemployment, promote innovation, boost skills, target overseas investment or promote investment in key sectors. To address these issues we need greater fiscal powers and an opportunity to use them.
In an increasingly interconnected world, independence offers an opportunity to put forward a distinct voice in the global economic community. Independence would allow us to maximise the opportunities available to our businesses and our people, to give certainty about the tax environment to our oil and gas industry, to set competitive levels of corporation tax and to incentivise those industries where Scotland already enjoys competitive advantage.
We expect to encourage and support more headquarter functions and the skilled jobs for those who wish to make their careers in a newly independent Scotland. With independence we will have the freedom to pursue those partnerships and make the choices that secure Scotland’s interests, that will transform the prospects for this country.
• John Swinney is SNP MSP for North Tayside and finance secretary in the Scottish Government.
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Comments
There are 19 comments to this article
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True Scot
Thursday, February 2, 2012 at 11:46 PMA lot of warm words -all political parties want what the author of the article mentiosn in terms of growth and prosperity. However : "Scotland would continue with such an arrangement post-independence in a Sterling Zone with the Bank of England responsible for monetary policy" so 1. you forgot to mention this in your manifesto -probably no room to put it in with all the airbrushed photos. 2. you must agree then that Scotland is too small to have it's own central bank. 3. You're trying to make the best job of salmond's maverick approach to spearation, where the policy appears to be made up on the hoof.
Dr. James Wilkie
Thursday, February 2, 2012 at 09:48 PM#15: Thank you for confirming what I wrote in #14 about lack of constructive content. John Swinney's article is objective, factual and entirely professional, and any criticisms of it should be addressed on the same level. Incidentally, my full title is Professor Doctor, and the reason I still use part of it here is that it is the form under which I have been known in the pages of The Scotsman since the first of my innumerable contributions to the newspaper in 1973.
and
Thursday, February 2, 2012 at 08:35 PMi read this through an online link and wondered why there was so many unionist replies, ahhh.....scotsman.com. Busted flush?????? have you ever played cards, who would show their best cards at the start of the game, oh but you dont want the hand played at all do you?????
abc
Thursday, February 2, 2012 at 08:11 PMCould Mr Swinney please explain clearly what he means by "Sterling Zone with the Bank of England responsible for monetary policy"? I am puzzled by what he is saying (and there are similar comments underneath his article for the FT of February 2nd, from others who do not understand his language about a relationship between the Scottish government and rUK's central bank). Does he mean that Scotland is happy to accept whatever legislation rUK puts in place for its central bank from time to time, without comment from Scotland? Or does he mean 'I would like the government of the UK to agree to establishing a Sterling Zone, although I have not yet put this proposal forward in any detail?' The rules governing the UK's central bank, Bank of England, are written by Act of Parliament changing them from time to time (the current bill changing giving greater powers to the UK Chancellor in times of economic crisis, for example). Is Mr Swinney proposing that, after independence, Scotland would seek to have a say in the way in which the government of rUK writes its legislation in respect to its central bank? Will this be by a treaty he proposes to ask the UK government to sign before independence? If not, how does this work? What if the government of rUK declines to sign a treaty? Is signing such a treaty critical to Scotland going independent so there can be no independence without the government of rUK agreeing to it's central bank (and some financial services regulation?) undertaking continuing functions in relation to an independent Scotland? How does this relationship with rUK's central bank relate to Scotland's membership of the EU? Whilst I understand the Mr Swinney is saying that he expects Scotland to inherit the opt-out from joining the euro, there hasn't been a recent member joining which uses another member state's currency as far as I am aware. How does that work if Scotland's EU membership depends on a currency of another member state (which is of course free to leave the EU) - would this involve asking rUK to make commitments to the EU regarding Scotland's use of its currency and central bank? I am unaware of a 'shared' central bank between 2 countries in this fashion (if that is what is proposed). Of the central banks quoted by Mr Swinney: UK, Japan, Australia, Canada, the US have one central bank for one political union. The Eurozone has a treaty with divided responsibilty between the European Central Bank and individual member states' central banks e.g. Central Bank of Ireland. If the government of Scotland is going to speak in any meaningful way at all to the Bank of England after independence, how does that work? I am finding these short articles confusing. Could we have the proposal clearly explained sooner rather than later, please.
amicus alba
Thursday, February 2, 2012 at 02:34 PMTsk tsk. Uppity angry Nats. Typical of our sycophantic Nats to robustly defend one of their disciples in scientologic fashion. 14. "why don't you just shut up if you dont have something positive to say" - from someone who calls himself a Doctor no less!! Why he feels the need to put that on a pen name shouts out "recognize me I'm a doctor" ! Goes with the inferiority complexed Nat psyche. 2. "You're a clueless idiot" 8. "work shy FUD" You truly are cultish and the reason why there will be great division in Scotland within us all. Listen all ye doubters - Swinney has all the answers. Do not question, do not doubt, do not ask for evidence( it's rude), just spread the word and unshackle us from the evil yoke of England (but we will use the pseudonym WM) We will all be rich I tell ye!
Dr. James Wilkie
Thursday, February 2, 2012 at 10:53 AM#13: There is not a single constructive sentence in your comment. It is nothing but blind irrational bile. John Swinney would be a super-competent finance minister in any government anywhere. There are not so many of his calibre around. I might - possibly - disagree with individual details of his policies, although I have not so far come across any to which I would object. He has put up an admirable performance in office under adverse circumstances he did not create. Why don't you just shut up if you have nothing positive to contribute.
derekafarmer
Thursday, February 2, 2012 at 09:55 AMOh Dear. Yet more pie-in-the-sky from our "finance minister", and the now expected dearth of detail and rubbishing of uk government economic management. We have yet to see from Mr Swinney, ANY credible financial or economic detail that might persuade us to vote for SNP policies. This man is a "busted -flush", to use the poker players' expression. The sooner he's replaced by someone who can more demonstrably show that he is in charge of his brief, the better for us all
Hearthammer
Thursday, February 2, 2012 at 08:31 AM#5, yep, he really is getting aroubd for a resident xenophobic Englishman. Luckily for us, nobody pays him any attention whatsoever.
SlyFifer
Thursday, February 2, 2012 at 07:45 AMIts all very well shooting for future prosperity but have you taken an objective look at our infrastructure, 19th century at best, main roads no better than paved cattle tracks. Did we miss the 20th century, were we asleep or were we tied to a moribund asset stripping union ?.
Kon
Thursday, February 2, 2012 at 02:54 AM8 Wardog, if you knew anything about business then you would know that a drops tax living next to b so b does the same and no business moves, if I want you to be my bank would you do it if you knew I was trying to take your customers?, troll along now as your snp are out of there depth when it comes to reserved matters.
The Harder They Come
Thursday, February 2, 2012 at 02:46 AMKon by name......
The Harder They Come
Thursday, February 2, 2012 at 02:46 AM1. If you knew anything about business you'd know that we are already in competition with businesses from England, they a;ready have different regualroty frameworks to Scotland in everything from medicines to building houses to business rates. Only a feckless workshy F.U.D. wouldn't know this, hiya Kon.
Kon
Thursday, February 2, 2012 at 02:35 AM6 Old Jim, 51 billion! OK, 25 billion block grant 19 billion benefits 20 billion tax credits, that gives a deficit and I haven't even added on defence\foreign affairs costs\coastguard\judiciary\EU costs\foreign aid costs\every other non devolved costs.
Old Jim
Thursday, February 2, 2012 at 02:26 AM#3 Kon Oh dear, spouting another lie are we Her IS a fact : Block Grant £25.5Billion + £16Billion pensions = £42Billion approx Tax revenues raised in Scotland £39Billion + Oil tax revenues £12Billion = £51Billion I would say thats a surplus of around £ 10 billion Also it has been revealed by a civil servant that Scotland has been in surplus since the 70's The pro union arguement is in tatters FACT Scotland WILL be far wealthier after independence You got any other scare stories you want destroyed?
Beachdair
Thursday, February 2, 2012 at 02:21 AMI see Supertroll Kon has spread his misinformation to this article too.
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