Friday, 15 August 2003

Scotland's economy

According to The Scotsman today:
SCOTLAND’s contribution to the UK economy has been in freefall since 1994, it emerged yesterday - a decline which is now costing the country some £11 billion in lost wealth every year.
Naturally, opposition politicians are making a noise:
The Scottish National Party yesterday said that the missing £11.2bn reflected business in Scotland taking flight through its lack of faith in the Scottish Executive to create a business-friendly environment.

Jim Mather, the party’s economic spokesman, focused on the substantially revised figures on London - whose GDP per head stood at £18,100 in 1999.

Scotland’s figure of £12,800 per head, he said, was inexcusable. "As a nation, we are now more than £5,000 poorer for every man, woman and child than in London. That is the price we are paying for staying part of the UK."

Commenting on that final paragraph, Andrew Duffin has pointed out:
The first sentence is pretty much correct. The last one, of course, should read "That is the price we pay for sticking with outdated statist nostrums"
It's certainly true to say that the Executive hasn't created a "business-friendly environment" but, with the possible exception of Jim Mather himself, the pronouncements of SNP politicians don't indicate that independence would make any difference. Scotland needs a profound cultural change if it is to become more prosperous. That would mean the generation of home grown businesses rather than being overly reliant on tax-funded inward investment.

Scotland's R&D is well below the UK average:

Iain Duff, an economist at the Scottish Council for Development and Industry, said there remains no policy in place that might cause a major turn-around in the Scottish share of the UK total increasing.

He said: "It couldn’t get any worse - there is only one way for the figures to go and that is up. It’s a perennial problem for Scotland as historically we’ve always been poor at R&D spending.

"I believe part of it is a reflection of the Scottish economy - it’s a branch plant economy where the R&D spending is not carried out in Scotland."

Note that "branch plant economy." We have used huge amounts of public money to bribe non-Scottish companies to come here and all too often they leave at the first sign of an economic downturn. Far better to leave the money in the hands of local businessmen, get rid of economic "development" agencies and watch what can be achieved free from the dead hand of government.

(The links on this post are somewhat temperamental. You may have to click a few times to get the correct article.)