The Future of Scotland

Part of the debate – in the Scottish Parliament at 10:58 am on 29th March 2007.

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Photo of Brian Monteith Brian Monteith Independent 10:58 am, 29th March 2007

I understand what the member is saying, but the real growth has been in the public sector. Whether it then engages the private sector in some cases is neither here nor there. It is my belief that, if public sector spending was not growing so much, the private sector would be growing far faster and would make up the difference. Indeed, the economic evidence points to that, even just comparing Scotland with England.

Let us consider globalisation. For me, it is not just about emerging markets and the benefits that accrue to so many people from being able to open up trade. Globalisation is about the growing tax competition that is faced, in particular, by Scotland within the United Kingdom. We need just to look at other countries, particularly those that have come out of communism, and the tax rates that they are introducing—to encourage entrepreneurship where once it lacked and to ensure that people want to stay there rather than come to more developed western economies—to see that in Scotland we will be faced with real competition from the Baltic states and central Europe. We can already see the growth in their economies, and we need to be sure that we can keep our best talent and effect a culture change for people who want to start up businesses in Scotland.

To respond to the competition, we must first have a tighter rein on public spending. We must also use the powers that we already have to make a 3p cut in the standard rate of income tax—let us see that power used—and to have an annual reduction in business rates. Never mind corporation taxes, we should use business rates to encourage business and help it to locate here. It is a great pity that in the coming election we see economic policies with very little difference among them.

In the medium term, the Parliament must prepare to replace the block grant and the Barnett formula, not just to make us as politicians more accountable, but to ensure that the union is rebalanced and to remove the potential conflicts, which we are know are still lurking for when Governments change, between this Parliament and Westminster and, in particular, the Treasury. Unionists of all parties must recognise that threat.

In concluding, let me say that we should not settle for running just our country. We are not subservient. The English talk in London of a Scottish raj, with many consuls, ambassadors and people from Scotland running English and UK institutions. We should not settle for running Scotland when we can run Great Britain.

Scotland has an opportunity within the union. If the Parliament is to remain within the union, it must reform. In reforming, we can prosper.