Andrew Wilson: New investment shows Scots progress

THE ease with which we rush to condemn public service endeavour is one of the less edifying habits of public discourse. Whenever errors are made or performance dips, public opinion is quick to scapegoat, condemn or criticise.

A new easyJet plane operating new routes to Scotland. Scottish FDI outstripped the UK in new data. Picture: Neil Hanna

So when real success stories are told we should be quick to offer praise where it is due. And it was due last week.

In 2012, Scotland’s economy attracted its greatest number of foreign direct investment (FDI) projects for 15 years. The total number of projects identified by accountants Ernst & Young’s annual survey was 76 – a rise of nearly 50 per cent on 2011, compared with a UK-wide equivalent growth of just 3 per cent.

Sign up to our Opinion newsletter

Sign up to our Opinion newsletter

Moreover, this was our highest share of UK FDI since 2004, with only the global-city behemoth of London outstripping us among the UK “regions”.

Five thousand new jobs were created and new income, buying power, tax revenues and growth were all brought to life for Scotland. In a period of such turmoil in the global economy the performance is all the more remarkable.

So credit is surely due? Firstly to the teams across the “Team Scotland” model which have integrated development agency and government efforts. Scottish Development International has quietly gone about its business expanding its promotional network in potential growth markets and advocating the value of our small corner of the world.

But after the cheers for this success we must refocus on the unrelenting need to keep the momentum going. With each tick on the clock the world becomes a more competitive place. Whatever our politics or outlook it is mission critical to our wellbeing that we resolve to place the health of our economy at the heart of public policy and endeavour.

We are making progress but we must do much, much more if we are to raise the Scottish game to where it can and must reside.

In culture terms, for me at least, too much of our politics since the Second World War has focused on debating the distribution of public funds to dry the tears of under-performance. No matter how noble the motivation behind this, it is a symptom for me of the reality that the policy powers at the disposal of successive Scottish secretaries and then Holyrood administrations have been only on spending rather than raising revenue. Much more needs to be done to demonstrate a focus on strengthening the economic sinews and the tax base of Scotland, rather than figuring out ways to take revenue from it.

And we must never think in isolation from the competitive landscape in which we operate within our British Isles, within Europe and within the global economy. So we have to create policy measures that put us at an advantage to our competitors, wherever they are and however close they are.

One of the great benefits of being relatively small as an economy is that our policy moves need not cause major waves in the wider global competitive environment.

As an SNP economic spokesperson more than a decade ago, I argued for taxation on business and wealth creation in Scotland to play a part in tilting the competitive landscape that slopes towards London back in our own direction. I hold to that logic and believe that all of the evidence supports it. Get the mix right and we can boost growth outside the metropolitan centre and strengthen the revenues we need to fund public service, as well as reducing dependency on state support caused by the economy not performing as well as it could.

For me this is deeply pragmatic and rational, and a must if Scotland is to progress within whichever constitutional arrangements we determine upon.

It is true, of course, that a race to the bottom on taxation cannot be a sustainable way to work forever. But size is on our side, and doing nothing in the face of an increasingly unequal British economic model is much more unsustainable than seeking to put that right.

The days of listening to the forces of centralising conservatism have to be over. The evidence of the weakness of that model is crystal clear. Scotland has the potential to offer a different policy approach that can both learn from the best lessons elsewhere and provide an example and benchmark to the regions across the rest of our islands who currently struggle to catch the scraps from London’s table.

Remember, the same politicians who tell us Whitehall and Westminster must hold on to power and uniformity are the same people who told us that foreign direct investment was sure to suffer in the face of “constitutional uncertainty” caused by Scotland’s referendum debate.

That irresponsible lie should shred their credibility. They are demonstrably wrong about that, and the performance of the model they promote is so self-evidently poor and sub-optimal for everywhere in the UK outside London. So why on Earth would any rational citizen or business leader buy their prognosis any more?

Twitter: @AndrewWilsonAJW