Swinney comments on House of Lords report

Issuing a detailed response to the latest report from Westminster on independence Cabinet Secretary for Finance John Swinney said:

“It will be no surprise to people across Scotland that out of touch unelected Lords think Scotland is too small and too poor. Westminster has been peddling this nonsense for decades and even the No campaign no longer believe it.

“All the evidence, including in this report, shows Scotland is in a far stronger financial position than the UK as a whole.

“Pensions and welfare costs are more affordable with independence and even this report has to admit with independence the level of public debt faced by Scotland will be far less than as part of the UK. Scotland will be in a much stronger fiscal position as an independent country than the UK is either now, or in 2016.

“What the Lords fail to mention is that a No vote would see Scots, within the UK, responsible for over two trillion pounds of debt and liabilities worth 145% of GDP, significantly more than an independent Scotland would face under any calculation.

“We are firmly committed to ensuring the people of Scotland have all the information they need on the opportunities of independence to take the positive step forward with a Yes vote in 2014, which amongst other things would bring an end to unelected Lords talking Scotland down.”

Responding to claims on currency and defence Mr Swinney said;

“Retaining sterling as Scotland’s currency within a formal monetary union is a proposal endorsed by the leading and nobel prize winning impartial economists of the Fiscal Commission who advise governments and economic institutions around the world and who are very clear that this is in the UK’s best interests as well as Scotland’s.

“The report’s claims on defence jobs are simply ridiculous. Their claim that 25,000 jobs could go is undermined by evidence from the UK Government in the same report that the number of Mod personnel is 15,000 and the defence industry accounts for 12,000 at most.

“The only area where the Lords have hit the right note is in their view that the UK Government is failing to take the prospect of independence for Scotland seriously. We have repeatedly suggested that officials from both governments begin discussions around Scotland’s independence and the UK Government has repeatedly refused.

“The Scottish Government has set out an 18 month process of transition to independence, how continued membership of the EU could be delivered, published detailed proposals for Scotland’s fiscal and monetary systems from four of the world’s leading economists and in the coming months the Scottish Government will publish a series of papers, including Defence and Security, covering the main arguments for independence, leading to a white paper in the autumn that will set out the Government’s proposals for an independent Scotland.”

Note: Evidence provided to the inquiry:

Professor Charlie Jeffery: --- “the pound sterling is the best option in an independent Scotland.”

Professor Alex Kemp: --- “One point is worth bearing in mind. Although it is a big plus for Scotland, it would help the rest of the UK as well. If Scotland were in the sterling area, it would help sterling as well, as there would be a need to acquire sterling to buy the oil.”

Paul Johnston -Institute for Fiscal Studies: “Well, the benefits might lie in the same place that they always might for a region or a country that is gaining more independence. It would be able to make its own choices over the way in which it raises taxes and the way in which it disburses those taxes; it would be able to take those decisions closer to the people who are affected. The UK tax system is not a perfect thing of beauty.”

Paul Johnston -Institute for Fiscal Studies: “I should start this by saying that a country in Scotland’s position can clearly economically and fiscally survive perfectly well inside or outside the United Kingdom”

Jeremy Peat (David Hume Institute): “Scotland would have a GDP per head that was higher than practically every region in the rest of the UK, if oil and gas activity was allocated on a geographical basis.”

Professor Robert Rowthorn: “The fact that Scotland is small is in itself not so important because some of the lowest interest rates, yields and 10-year bonds are from small countries like Denmark, Finland, Sweden and Switzerland.” (House of Lords Economic Affairs Committee, 12 June 2012)