Scottish independence to cause jobs boom?

The Scottish Government has proposed cutting corporation tax and implementing several education, welfare and social programmes would create a “jobs boom” in an independent Scotland.

The statement was made at the launch of a document highlighting the economic policy choices which could be made if the public votes “yes” to independence; launched by Scotland’s First Minister Alex Salmond and Finance Secretary John Swinney – both of the Scottish National Party.

Salmond noted that countries across Europe of a comparable size outpace Scotland’s growth rate.

He states the rules outlined in Westminster do not serve the Scottish population, and that “independence will give us the chance to build an economy that takes advantage of Scotland’s unique strengths and size.”

Scotland will vote for independence in a referendum scheduled for the 18th of September 2014.

Where will the jobs come from?

Salmond has stated a reviewed look at Scotland would “deliver a more outward focused, fairer and resilient economy, boosting revenues and creating many thousands of more jobs.”

The SNP believes the following measures could deliver results if Scotland were to gain independence:

  • Diversifying Scotland’s industrial base and increasing its productivity performance by a proposed 1% could boost employment by around 21,000.
  • Increasing Scotland’s economic activity via programmes dedicated to employability, welfare and education at a rate of 1% would be equivalent to an extra 30,000 workers.
  • Reducing corporation tax to counterbalance the lure of London, in addition to changes to the tax system, could create 27,000 jobs.
  • An increase in Scottish exports, and increased knowledge of such exports, could create over 100,000 jobs and increase output by GBP 5 billion.

The opposing view

However, opponents have maintained a standalone Scotland would struggle.

Former chancellor Alistair Darling, the leader of the pro-Union campaign named Better Together, said that if Scotland gained independence, the care of the nation’s growing elderly would “fall on a population of five million, instead of 60 million.”

The paper came one day after an independent and impartial report from the Institute for Fiscal Studies (IFS), which forecasts a decline in North Sea oil revenues and a rapidly ageing population.

It therefore warned that an independent Scotland would need to cut spending or increase taxes to insure long-term financial stability, or face a “fiscal gap” of 1.9% of national income (compared to the UK’s 0.8%).

In light of the report, Mr Darling noted “the Nationalists have chosen to ignore reality and to offer up a type of fantasy economics that beggars belief.”

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