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UK Government’s Business and Microeconomic Report

July 4, 2013

The UK Government published its latest Scotland Analysis paper on 2nd July – the report can be viewed here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/209891/13-635-scotland-analysis-business-and-microeconomic-framework.pdf

This is a strange report, though one packed with detail and a lot of debatable points.  One of its main problems is that is ‘futureless’. It looks at past economic performance and institutions but has nothing to say about the future – especially what a future UK will look like in relation to business performance, regulation, operation of services, investment, etc. This is a problem with many of the UK reports – it presumes that we live in the best of possible worlds and that nothing can be improved: Voltaire does economics in essence. It says nothing much about economic growth or business development issues in Scotland – which are real challenges for both Yes and No to address. What is there here that will solve Scotland’s economic difficulties……..well, keeping things the same seems to be the UK’s answer, as the report is very static in its economic assumptions [some folk will like that though, in being attracted to certainty].

Of course, the reason for this is that the point of these reports is to show that independence would be difficult – not to provide solutions or policy proposals. The report points to trade and currency barriers being created by independence and spends some time on these issues but pretty much completely sidesteps one of the solutions here – namely the Sterling currency zone. There is brief mention of this in one of the boxes on page 42, but that’s it. For its own reasons, the report decided not to engage with the Fiscal Commission Working Group’s report or the idea of a currency union at all.

Similarly, the report raises issues where it argues the UK benefits Scotland – three in particular are very odd ones. It picks HS2, the high speed rail link that doesn’t come to Scotland, aviation policy [when it opposed transferring air transport duty to Holyrood] and also the post office network, which it is closing down and proposing to privatise. These aren’t exactly stunning examples of UK success for Scotland but then the object of this type of report is to ‘worry’ people about independence rather than present a compelling case for the future of Scotland in the UK.

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