Is Scotland’s economic fate already sealed for the next 50 years?

From stewartb

From today’s Scotland Politics section of the BBC News website: ‘Scottish economy FORECAST to grow slower than UK’. (my emphasis)

It begins: ‘Scotland’s economy is PROJECTED to grow more slowly than the UK over the next 50 years, according to the Scottish Fiscal Commission (SFC). The independent body projected that Scotland’s GDP would grow by 0.9% per year on average between 2028-29 and 2071-72.’

As an aside, it is astonishing how statistically precise economists claim to be! It begs the question: is Scotland’s economic fate already sealed for the next 50 years?

This is the source report: https://www.fiscalcommission.scot/wp-content/uploads/2022/08/Trends-in-Scotlands-population-and-effects-on-the-economy-and-income-tax-August-2022.pdf

Here we read this (with my emphasis): ‘1.3 Our approach to the long-term fifty-year projections is different to our five-year medium-term forecasts, …. Long-term projections are ILLUSTRATIVE, there is LARGE UNCERTAINTY REGARDING POLICY CHANGE as well as HOW THE POPULATION AND ECONOMY MAY EVOLVE. Instead the key aim is to highlight how broad trends will affect the public finances over time. WE USE THE DESCRIPTION ‘PROJECTION’ RATHER THAN ‘FORECAST’ in relation to the long-term analysis to reflect this. The projections shown here indicate what would happen given our assumptions about the population and economy.’

So this is explicitly NOT being put forward as a 50 year FORECAST for the reasons stated by the SFC – EXCEPT it is in the BBC’s headline!

In another notable part of the report: ‘1.4 We outline how our approach to fiscal sustainability NEEDS TO CONSIDER UK GOVERNMENT FUNDING AND SPENDING PROJECTIONS as well as UK ECONOMIC PERFORMANCE, not only the Scottish Government’s Budget and the Scottish economy in our ‘Approach to fiscal sustainability: consultation’ paper’.

‘For example, the INCOME TAX NET POSITION MATTERS RATHER THAN THE LEVEL OF SCOTTISH INCOME TAX REVENUE. The net position is the difference between Scottish income tax revenue and the Block Grant Adjustment (the amount removed from the Scottish Budget to reflect what would have been raised or spent in Scotland, had Scottish revenues grown in line with the rest of the UK since its devolution). The INCOME TAX NET POSITION IS AN IMPORTANT DETERMINANT OF THE SCOTTISH BUDGET FUNDING POSITION and is important for the future sustainability of Scottish Government finances.’

I can’t claim to understand all the issues being raised here but it does seem that the Scottish Government’s long term financial position is conditional on a complex of dependencies on UK-wide factors. This includes UK government policies beyond its control – and effectively beyond the influence of Scotland’s electorate. And this is the set of circumstances that give rise to a dismal 50 year projection!

BBC Scotland’s Douglas Fraser, writing in the BBC News website on this SFC report, leaves his readers with a rather scary, negative conclusion – but he is expressing a negative outlook based on 50 year projections for a Scotland WITHIN the UK! (I wonder if even for a moment he pondered that as he wrote his piece?)

Mr Fraser begins: ‘Economic projections depend on taking recent trends and pushing them into the future. And if the past few years are any guide, there’s a lot that will squeeze Scotland’s economy in the next 50 years.’ Later he adds ‘So the demographic forecasts tell us the course we’re on, if other things don’t change, and IF WE DON’T MAKE CHOICES TO CHANGE THEM.’ Notably on possible changes, he acknowledges the potential impact of changing migration policies: no mention that these are reserved to Westminster!

He concludes: ‘Today’s report from the Scottish Fiscal Commission is the prelude to a study, due next March, of what this could mean for the taxation base (shrinking) and public spending (rising).

‘The Commission has already warned about more shorter term PRESSURES ARISING FROM SCOTTISH GOVERNMENT PROMISES ON WELFARE BENEFITS THAT WILL BE HARD TO SUSTAIN, while Audit Scotland points to health and social care pressures that are already unsustainable.’

(Presumably in writing this, Mr Fraser is aware that the next UK PM – the one we haven’t been able to vote on and who will lead a political party which a majority in Scotland hasn’t voted for for well over 50 years – considers that the UK’s economic ills will be solved by tax cuts. )

Mr Fraser ends: ‘You can safely predict that the (SFC) report next March will not be comfortable reading for policy-makers, and particularly those who wish to retain the current range of public services that are free to use.‘

So back to the question, IS Scotland’s economic fate already sealed for the next 50 years, with ever poorer public services? Mr Fraser seems unsure: perhaps having noted that the future is not inevitable, it is easier for him to frame his final words negatively than end by referencing the blindingly obvious alternative, positive and aspirational case for Scotland, its electorate and government, namely to acquire the agency of a normal nation-state and so enable necessary, less fettered change. appropriate to Scotland’s needs and wants.

In the SFC’s projections there seems to be much emphasis on factors which depend on what happens at a UK level – UK government funding and spending; the UK’s economy, of course with a performance dominated by London and SE England, relative to the economy of Scotland; UK government policies including e.g on the reserved matter of immigration. Faced with a dismal projection, why maintain the status quo in terms of who has the powers to deliver change? The case for self-determination just gets more compelling!

13 thoughts on “Is Scotland’s economic fate already sealed for the next 50 years?

  1. SPOT ON SCOTLAND DEEDS AND WANTS TO DETERMINE THEIR
    FUTURE
    AND MR FRASER NEEDS TO BAC OFF HIS DELIRIUM OF UNION SUPREMACY

    SCOTLAND WILL PROSPER OPIN ITS OWN FASHION
    NOT AND ENGLISH ONE

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  2. Read the History as to what happens when Westminter comes to realise that one of its colonies will enventualy
    Break free and escape
    If the likes of Canada, Australia and New Zealand
    Are open and ameniable to
    Say Dominion status or something similar then matters basically fine
    If however just like Ireland or India then Westminster
    Enacts policies that when those who desire to break free, that leads to impovershing and diminishing of capabilities
    All while they speed up the
    Plunder of the would be departer, s
    and when any chance arises such as demographic changes that
    Will lead to the aforementioned then Westminster just sits back
    And let’s such do the dirty work
    But in Scotland, s case they are presented with a very real enigma in that if they lose us soon , the problems for Westminster become almost impossible to resolve, This in turns to them going canny but rub their hands in glee at the effects of the impending demographic disaster that awaits Scotland
    Westminster views this as
    Winning no matter what
    And that is exactly why it is imperative that we free ourselves as fast as possible
    .

    Liked by 2 people

  3. Not if Scotland is Independent but as part of the UK?

    Mystic predicting the future. How on earth could anything be predicted in 50 years time. Look at the past but not predict the future that is impossible. The past illegal wars, financial fraud, tax evasion. Scotland paying dear for all Westminster muck ups and breaking International Law. The world economy damaged. £Trns lost that could have been better spent.

    The Troubles in NI. Illegal partition. The 1WW caused by the British royal family. Victoria’s children and grandchildren. Conflicts and the ‘divine right to rule’. Millions killed. Spanish flu killed even more. WW2 killing even more and still leading to disputes. Could anyone predicted these disputes and matters in 1900. Doubt it. Universal Suffrage 1928. The Establishment scared of revolution.

    It is too ridiculous for words the psychic ball. Malthus theory. Depicting the over population. Contraception Medical science development. The Pill and contraception available. 1970s. Change in the world structure. The Internet. Exchange of ideas and information. The reduction in absolute poverty worldwide.
    Hans Rosling.

    Scotland will lose £Billions because of Brexit. It cost nothing and brought greater benefits. Whole of UK Accounts. 2019/20. Published June 2022. Page 35. Internet.

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  4. Economic outcomes are mainly the result of political choices.
    Should Scotland choose to remain dependent on policies determined by London,then our economic outlook is indeed dire.
    The most charitable thing to be said about successive Westminster administrations with respect to their management of Scottish affairs is,incompetence.
    There are however many other things that could be said,none of which are favourable.

    Liked by 2 people

    1. 50 yr projections are not that unusual. In fact corporate and government long term planning would be reactive rather than proactive. Defence, social care, housing to name but a few. The UK is in serious trouble now because of successive governments unable to see past investor profits and the next scam. Water shortages, nuclear power stations and the lack of gas storage facilities are prime examples of governments failing abysmally at even basic forward planning.

      Liked by 1 person

      1. Tory dogma over small government is the principal cause – Their total faith in markets with minimum regulation from government is a recipe for disaster which continues to plague England over 30 years later.
        The prize one was running down national emergency stockpiles before Covid hit, the ventilators they used to stock were flogged off for a song to Asia because the “market would respond when required”.

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  5. Scotland has had lower growth than the UK over the last century and more.
    A stagnant economy and a stagnant population while under the control of Westminster (or “England” as the letter writing conspirators want us to call it).

    Colonialism—The practice of one country taking political control of another, with the purpose of exploiting its economy, people and resources.

    What can change this dire prediction? As the old guy had it-“doing the same thing over and over again, and expecting different results is the definition of insanity”.
    So change. What could that be?
    Why dont we do what all the other small countries round about us do, and run our own affairs.
    Use our own cheap energy for our own benefit. Sell the rest at a profit.
    We have everything we need in Scotland.
    Energy; water; food; land; educated people.
    As the global south heats up, Scotland’s population will RISE not fall.

    It will be difficult to control our borders as people will want to be HERE, including those in southern Britain (England)!

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  6. They cannot predict month to month. The wholesale price of gas is falling. More Westminster Gov controlled hysteria. Not doing a thing to rectify the situation. Never have so many been promoted above their capability.

    The Scottish Gov has to mitigate and try to sort out Westminster unionist failing. Without the full power that are needed for successful governance.

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