Swinney unveils Scottish OBR-style watchdog plans

John Swinney: watchdog plans. Picture: TSPL
John Swinney: watchdog plans. Picture: TSPL
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Plans to create a separate Scottish Government economic watchdog north of the Border were unveiled by finance secretary John Swinney.

The announcement follows concerns that the UK-wide Office for Budget Responsibility (OBR) has downplayed Scotland’s economic strength, especially the value of North Sea oil and gas. But the move was branded an attempt to “cook the books” by opposition leaders and cover up shortfalls in the economic case for independence.

Mr Swinney told Holyrood’s finance committee that he wants the new body up and running by 2015, when Scotland takes on new responsibility for stamp duty, landfill tax and income tax. “We acquire a certain responsibility that will be about revenue raising,” he said.

“My view is that Scotland will require to have an independent forecasting body that can provide independent assessments to both the government and the parliament about what we will generate as a result of these taxes and I’m giving consideration to how that would be established.

“I would want that to be in place to be able to give meaningful input to the process in the run-up to the implementation of these proposals in 2015.”

Committee convener Kenneth Gibson, an SNP MSP, described this as “an OBR in Scottish context” and said there has been “some concern among committee members about some of the OBR forecasts”.

He cited a recent readjustment in the projected income from the new Scottish rate of income tax. This will see 10p cut from income tax north of the Border and Holyrood responsible for raising the remainder in line with need.

Mr Swinney also attacked an “utterly inexplicable” projection of a 36 per cent rise in landfill tax at a time when recycling is on the rise and landfill deposits are declining. “Any rudimentary assessment … would identify that the trajectory for landfill tax must be going down because of the effectiveness of recycling initiatives and the increase in propensity across the country for more recycling and less landfill.

“Some of the estimations about the rise in receipts for stamp duty land tax look, again, to be on the over-optimistic side, given what we know about the property market in recent years.”

The SNP government was prompted to produce its own oil and gas estimates earlier this year, after complaining that the OBR predictions were too low.

The OBR predicted oil tax revenue would drop from 
£6.7 billion last year to £4.1bn by 2017-18, but the Scottish Government figures were considerably higher, with estimates of up to £57bn in tax revenue between now and 2018.

Liberal Democrat leader Willie Rennie said: “John Swinney doesn’t like the answers he’s been given on the economy, so he’s cooking the books and looking to appoint his own chef. Setting up a ministry of half truths won’t cover up the holes in the Nationalists’ independence assertions on the economy.”

Labour finance spokesman Michael MacMahon added: “As usual, the SNP simply don’t want to listen to anyone who disagrees with their policy or views.”