UK must follow Salmond on economy

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The official Scottish GDP figures published on 18 July show a marginal 0.1 per cent fall in economic output in the first three months of 2012.

This contrasts with an equivalent UK decline of 0.4 per cent. Perhaps most significantly, however, construction sector output fell in Scotland by 6.9 per cent over the quarter, compared with 0.2 per cent growth in services and 1.2 per cent increase in production sector output.

The recent IMF downward revision to its growth forecast for the UK economy to just 0.2 per cent this year highlights a deteriorating prognosis which will only lead to further declines in consumer and investor confidence.

The Scottish Government has consistently argued for what First Minister Alex Salmond calls a UK Government “Plan Mac-B” based on the Scottish experience during the last recession from 2008. That downturn was shorter and shallower in Scotland than the UK as a whole.

Mr Salmond argues that his devolved administration’s decision to bring forward capital investment spending on infrastructure construction contributed significantly to this relative performance. We agree.

In addition, we support the First Minister’s repeated calls for UK Government capital investment to stimulate, not just construction, but by extension broader economic growth.

We argue that only through this form of fiscal stimulus can the UK hope to create a virtuous cycle of jobs, growth and confidence.

In this respect, the Scottish Government submitted a list of shovel-ready infrastructure projects to the Prime Minister in February, but no action has been taken by David Cameron or his Chancellor George Osborne.

We have no view on what a change in policy is called – “Plan A+”, “Plan B”, “Plan Mac-B” or anything else. We simply stress the importance of having the courage to admit the need for change when it is so desperately required.

(Prof Sir) James 
Mirrlees

University of Cambridge

(Prof) David 
Blanchflower CBE

Dartmouth College and University of Stirling

(Prof) Andrew 
Hughes Hallet

University of St Andrews and Harvard JFK School of Government

(Prof) Drew Scott

University of Edinburgh

Bruce Crichton (Letters, 6 September) is wrong: as a general rule, a country’s equality, as measured by its Gini coefficient, is positively correlated with its prosperity. It’s no coincidence that many of the world’s poorest countries are led by some of its richest people, salting away billions while their subjects starve.

It is in such countries, not in Scandinavia, that the “state  owns the individual and has the right to expropriate at will”.

One can legitimately disagree about the optimum level of taxation in an economy, including its average as well as its highest rate, but it’s vital to distinguish between the size of the cake and how it’s distributed, and just as important to recognise that these are complex issues.

There is no “simple fact” of any importance. That said, in this country we’re going through a period in which the cake is getting smaller and is more unequally shared out. I think this is neither inevitable nor desirable.

Andrew Anderson

Granton Road

Edinburgh