The Real Road to Growth

pound-coinsIn their ‘Growth Commission’ report, the SNP are once again cherry-picking data to suit their argument.  They want us to believe that there is something inherently good about small countries, and inherently bad about big countries.  This is nonsense.  They never tell us about the big countries that do well, or the small countries that do badly.

At least the Nationalists have finally acknowledged that the transition to independence would be difficult, and that it would take five to ten years to put Scotland’s finances on a ‘sustainable footing’.  The process of achieving this ‘sustainability’ would inevitably involve public spending cuts, since the costs of setting up new institutions (including the promised new Scottish Central Bank) would be steep. A degree of economic disruption would be unavoidable, and a newly independent Scotland would have little opportunity to borrow money.

Small countries often have less stable economies than big countries, growing quickly in good times and plummeting during recessions.  During the recent crisis, many small countries, including Ireland, Iceland and the Baltic States, suffered recessions so deep that they experienced mass emigration.  Due to their small domestic markets, small countries are reliant on external trade. Those with their own currencies suffer from steep transaction costs, which is why all of the small EU countries voluntarily joined the euro. Small economies can be particularly volatile if they are reliant on commodities: more than ten percent of Scotland’s economic activity comes from oil and gas.

Whether a country is big or small, economic growth comes from good governance.  Top class education, infrastructure and a business-friendly environment are the keys to a thriving economy.  All of these policy areas are the responsibility of Holyrood. During their eleven years in power, the SNP has been too distracted by nationalism to focus on the needs of Scotland.  The Tories in Westminster are equally to blame for promoting divide-and-rule politics rather than focussing on the best interests of the country, while the Labour party ducks the responsibilities of opposition.

The Liberal Democrats will ensure that attention is focussed on positive policies that promote stable economic growth, with a focus on infrastructure development, improvements in education, and nurturing an environment where entrepreneurship and innovation thrive.  Most importantly, we will focus on uniting society so that we can all work together for a better future.

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