Barry White of the Scottish Futures Trust replied to my recent letter to the Herald on the subject of fiscal autonomy for Scotland, and my response is published today:
I thank Barry White of the Scottish Futures Trust for his informative reply to my letter about fiscal autonomy for Scotland.
If, as he alludes, his organisation is responsible for raising significant finance for capital investment in public infrastructure using non-traditional financing methods, then that certainly undermines the rationale for fiscal autonomy.
However, if the extent of public borrowing in the UK and other mature democracies detracts from the theoretical argument that making politicians more directly responsible for taxation and public spending leads to greater transparency and accountability, then surely handing a degree of de facto Scottish fiscal autonomy to a quango such as the Scottish Futures Trust must raise concerns, despite the fact that the organisation’s initial remit was to rectify various such shortcomings in relation to the PFI/PPP disasters.
Scotland’s economy already benefits from the fiscal stimulus provided by UK-wide measures such as last year’s VAT cut, and any divergence from the wider UK economy is, to an extent, addressed by the “automatic stabilisers” of a reduced taxation burden and increased benefit payments during an economic slowdown, which self-evidently confer most benefit on the worst suffering regions.
This, together with the SFT’s claimed ability to finance infrastructure investment, must mean that the justification for fiscal autonomy to address any divergence of the Scottish economy from the UK as a whole must be thin indeed.