Hunter backs radical changes in policy to stimulate growth
Radical and ambitious policy changes are required if Scotland’s economic performance is to be transformed and significantly boosted within the next 15 years, according to a report published by Oxford Economics, commissioned by The Hunter Foundation.
The ‘Raising Scotland’s Economic Growth Rate’ report from the influential consultancy Oxford Economics is designed to inform The Hunter Foundation’s strategy and hopefully initiate a national debate with all political and interested parties in the UK and Scotland to help shape policy for transformational growth.
The aim is to address such issues as low productivity, poor business birth rate and lack of success with scale-ups that help to explain why Scotland’s GDP per head is a mere 44% of Singapore’s level, 48% of Ireland’s, 68% of Norway’s and 75% of Denmark’s.
The report finds that “it is not realistic to think that the current economic policies of either the UK or Scottish governments will produce a transformation of Scotland’s economic performance”. Indeed, nor will they for the UK as a whole.
It puts the case for policies that go beyond current government boundaries, and considers various options under three headings:
•Increases in government borrowing to stimulate stronger growth in demand and output.
•Significant tax cuts and deregulation to improve competition and incentives in the economy.
•Large increases in government support for businesses, either directly or through increased spending on infrastructure, education and skills, innovation and the green economy.
The report recommends an ambitious industrial policy, possibly centred around Scotland’s renewables industry, tapping into its rich tidal, wave and wind resources.
This would capitalise on the COP26 UN Climate Change Conference scheduled for Glasgow in November and would support the Scottish government’s commitment to net zero carbon emissions.
The report says “it is not implausible to suggest that there are business opportunities that resemble those that generated Silicon Valley, several decades ago”.
Sir Tom said: “I hope the calls made in the report for more, and different, economic stimulation from governments, tax cuts and deregulation, and appropriate and targeted state interventions, for example in renewables, will be listened to and acted upon.
“I’m calling on governments, politicians of all parties, industry and interested parties to work together to pave the way for transformational measures that will give the Scottish economy the significant boost it needs.
“Let’s use Covid-19 to reinvent what our future looks like.”