As regular viewers of the SCOTONOMICS show will already know, I have a particular itch that needs scratching: and that itch is the Sustainable Growth Commission report written for the SNP Government in 2018.
Here is how Steven Hail, our second guest summarised part of the report – the bit that suggests we pay off “our share of the UK national debt”:
“It sounds like something you would hear from someone who doesn’t understand how the monetary system works” he said.
You can see Steven’s further thoughts on the Sustainable Growth Commission Report here and I agree with everything he said.
What I want to look at in this post are the reasons that this report really does get my goat!
And I know I am not alone.
I have yet to chat with any economist who is prepared to agree with the recommendations or the general themes contained in the report. Unfortunately, I wish I could say the same about our First Minister:
During the 2021 Holyrood campaign, First Minister Nicola Sturgeon reiterated her support:
“The general approach of the growth commission is one that I absolutely agree with”
Please, if anyone wants to come on to the show to walk us through the Sustainable Growth Report and tell us all why we are wrong about this report we will happily have them on the show.
The question you can rightly ask is, how come a report that has so few supporters, has so much influence? Well, the answer is not in the number of supporters, but the position of those supporting the report. And therein lies the problem.
SNP leader of the House of Commons, Ian Blackford and the Scottish Finance Secretary, Kate Forbes continually mention the need for Scotland to match “the six tests”, a key part of the Sustainable Growth Commission report before we move towards issuing our own currency.
This is a brilliant video from Tim Rideout, a member of the SNP Policy Committee, discussing the hopelessness of the six tests at the SNP Conference in 2019 (and watch to the end to hear the resounding round of applause)
Despite the obvious flaws and the resounding support of members of the SNP, this report is as sticky as a boiled sweet in the bottom of your trouser pocket.
THE SGC report creates a kind of hazy vision for Scotland and nowhere is the haze so strong as the meaning of the word “sustainable”
The sustainability that you and I think about is NOT the sustainability covered in the report.
Their sustainability is “financial sustainability / fiscal sustainability” and essentially growth, every year, forever!
And this is what is at the heart of the report, bolted into place by neoliberal ideals, conservative ideas, and don’t rock the boat policies.
The sustainability I want to talk about? That hardly gets a mention.
Guess how many times “climate change” is mentioned in the 354-page report. Answer at the end of this post.
Scotland, post-independence, guided by the Sustainable Growth Commission
The heart of the report as I have mentioned is the six tests for a new currency: “The introduction of a separate Scottish currency, would be subject to six tests” So in that spirit, here are my six major problems with the Sustainable Growth Report.
Number one: First up is the link between government spending and growth; without growth there is austerity.
Number two: Is the idea of sterlingisation: a medium to long-term transition to a Scottish currency that would realistically take at least a decade.
Scotland’s central bank would be the Bank of England (the problem with this is right there in the name) and we would be using a foreign currency. If you want to find out more about the issues with using a foreign currency check out our first episode that covers monetary sovereignty.
Number three: Is the solidarity payment; a unilateral decision to pay off around 3 billion of the UK’s “national debt”, a debt that the UK Treasury could clear with a few computer keystrokes. But of course it is a debt that they will never actually pay off.
Number four: The baffling decision to hand over around 1 billion pounds (English pounds) to Westminster to top up their foreign aid budget and to spend on our behalf.
This is unthinkable considering how the current Westminster government views support for the most desperate people on the planet.
Number five: Is the biggest of the many contradictions in the report. The idea, it really suggests this, that the EU would welcome Scotland into its arms, while Scotland’s monetary policies (effectively our economy) are controlled, not just by a non-member, but by an ex-member – rUK.
Number six: (in this list but I could go on and on) Is the grandfathering of financial regulation, which means adopting everything that the UK currently does with financial regulation into the Scottish economy. And corporate governance. And taxation.
Basically, this is designed to not rock the boat in the City of London and the financial services industry. It paints Scotland as a kind of smaller UK; no boat rocking going on here.
And here we find what this report is really about: the Sustainable Growth Commission report is a grand, 354-page plan, to plug Scotland into the offshore money laundering and tax avoidance infrastructure of the City of London. A morally dubious report at the heart of the SNP’s economic policy.
The Sustainable Growth Commission is an own goal and a dream come true for Unionists
Check out no-friend-of-mine Andrew Neil ripping into the author of the report Andrew Wilson. It IS a hard watch for a few reasons, but worth it to really get to how much of an own goal this report is, and how much ammunition it will give Unionists.
The Sustainable Growth Commission, if used as the blueprint for an independent Scotland, would be a disastrous way to launch a “new Scotland”
In summary, it sees Scotland occupying the loosely fitting coat of independence, with a central bank in London, setting interest rates for Scotland – a situation that would be even worse than it is now!
A country that, like the UK (in fact a lot like the UK in many ways) places neo-classical financial management at the heart of its thinking.
The Sustainable Growth Commission report offers more of the same. It is time for something different.
So how many times was “climate change” mentioned in the 354-page report…..
There is no better shortcut for realising that the Sustainable Growth Commission report is not a report for our times.