Stephen Boyd's slides from his presentation at the Nevin Economic Research Institute's seminar on devolution post the Scottish referendum on independence. The seminar was held on November 18, 2014.
Post Referendum Scotland: An STUC Perspective on New Devolution Powers
1. Post referendum Scotland: an STUC perspective
Stephen Boyd, Assistant Secretary, STUC
Nevin Economic Research Institute, 18 November 2014
2. Content
•
The Scottish economy – some background
•
Political economy of the referendum campaign
•
Referendum aftermath – Smith Commission, themes driving new political economy
5. GVA per head (£), 2012
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Wales
North
East
Northern
Ireland
West
Midlands
East
Midlands
Yorkshire
and The
Humber
North
West
South
West
East of
England
Scotland
UK
England
South
East
London
6. Output per Head across UK Countries, 1999 to 2011 (excluding North Sea Output). UK =100
8. Employment rate (%), July-Sept, 2014
64.0
66.0
68.0
70.0
72.0
74.0
76.0
78.0
Northern
Ireland
North East
Wales
West
Midlands
North
West
Yorkshire
and The
Humber
London
United
Kingdom
England
Scotland
East
Midlands
South
West
South East
East of
England
9. Unemployment rate (%), July-Sept 2014
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
South East
South
West
East of
England
East
Midlands
Scotland
England
United
Kingdom
Northern
Ireland
London
North
West
Wales
Yorkshire
and The
Humber
West
Midlands
North East
10. Current Revenue (total £47.56bn) 2012-2013
22.8%
6.0%
17.9%
19.7%
4.7%
4.2%
4.2%
20.5%
Income tax
Corp tax (excl North Sea)
NI
VAT
Fuel duties
Non-domestic rates
Council tax
Other taxes
11. Total revenue (£m)
Total current revenue (excluding North Sea revenue)
47,566
North Sea revenue
Per capita share
552
Geographical share
5,581
Total current revenue (including North Sea revenue)
Per capita share
48,118
Geographical share
53,147
12. Spending on services, Scotland total as % of UK
0
50
100
150
200
250
Total services
Health
Education
Enterprise& Econ Dev
Transport
Public order and safety
17. The economy was the key issue
"I firmly believe who wins the economic argument will win the referendum”
Nicola Sturgeon, January 2014
18. Independence referendum
•
Economic issues at forefront of debate
•
Huge, diverse (in origin and quality!) associated literature: HMT, SG, NIESR, IFS etc
•
Macroeconomic issues dominated: especially currency & fiscal sustainability
•
Micro/economic development issues largely ignored (although Scot Govt did try!)
•
Debate reflected lack of capacity at Scottish level: political, media, academic, civic
19. Yes/No key themes
•
NO: emphasised macro framework and fiscal sustainability; pooling and risk sharing; integration of UK market; transition and set up costs; PROJECT FEAR!
•
Yes: aspirational; emphasised social policy; independence as austerity avoidance mechanism; animal spirits/productivity dividend; reindustrialisation; Nordicism (childcare); social partnership
20. STUC ‘A Just Scotland’
•
Launched summer 2012; aimed at 1) informing trade union members and wider society 2) shifting debate firmly onto grounds of social justice
•
Three reports: December 2012, February 2014, September 2014
•
Seminars & policy conferences across Scotland
•
Didn’t take a Yes/No position but not neutral!
21. Key STUC views
•
Heavily critical of Scot Govt/Yes on macroeconomics (currency, fiscal sustainability, oil fund) and of UK Govt/No on Project Fear approach
•
Sceptical of sector specific analysis: financial sector; energy; defence
•
Positive about Scot Govt’s economic development plans (e.g. reindustrialisation) & aspirational social policies
•
Emphasis that No didn’t necessarily mean endorsement of constitutional status quo
23. Current devolution settlement
Devolved to Westminster
•
agriculture, forestry and fisheries
•
education and training
•
environment
•
health and social services
•
housing
•
law and order (including the licensing of air weapons)
•
local government
•
sport and the arts
•
tourism and economic development
•
many aspects of transport
Reserved to UK
•
benefits and social security
•
immigration
•
defence
•
foreign policy
•
employment
•
broadcasting
•
trade and industry
•
nuclear energy, oil, coal, gas and electricity
•
consumer rights
•
data protection
•
the Constitution
24. Scotland Act 2012
•
The ability to raise or lower income tax by 10p in the pound. Any change is applied equally across all tax bands
•
Other minor tax powers: control of stamp duty and landfill tax.
•
The ability to borrow money, up to £2.2 billion a year.
•
Guaranteed Scottish representation in the BBC and Crown Estate.
•
Legislative control over several more issues including limited powers relating to drugs, driving, and guns.
25. Smith Commission
“To convene cross-party talks and facilitate an inclusive engagement process across Scotland to produce, by 30 November 2014, Heads of Agreement with recommendations for further devolution of powers to the Scottish Parliament. This process will be informed by a Command Paper, to be published by 31 October and will result in the publication of draft clauses by 25 January. The recommendations will deliver more financial, welfare and taxation powers, strengthening the Scottish Parliament within the United Kingdom”
26. STUC Smith Submission – key features
•
Very critical of process: timing and lack of civic engagement
•
No to Devo-max! But support devolution of…
–
…and assignment of taxation amounting to at least two thirds of Scottish public spending
–
employment law, health and safety, trade union law, NMW
–
Housing Benefit, Attendance Allowance, Carer’s Allowance
–
the Work Programme
27. Themes driving post indyref political economy
•
Astonishing level of political engagement (growing Left influence?)
•
Austerity and welfare reform
•
Inequality – new ‘purpose aim’ of the Scot Govt?
•
Labour market reform – new Scottish institutions e.g. the Fair Work Convention
•
Economic development – reindustrialisation; the Foundational Economy
•
Newly invigorated English cities/regions?