Alex Salmond’s economic policies would drive an independent Scotland into the ground

Within the white paper on economic policy in an independent Scotland that was published by Alex Salmond’s government this week there is a liberal economic manifesto trying to get out. The First Minister speaks about using new ‘levers and instruments’ to revive Scotland and that, freed from Westminster control, he might lure businesses by slashing corporation tax, reducing national insurance contributions and cutting air passenger duty.

Unfortunately, none of these ideas is likely to get off the page because the SNP has a much more prominent agenda which could not have been better designed to promote economic stagnation. This one promises more generous welfare, a higher minimum wage, renationalisation of the Royal Mail and possibly setting up workers’ councils whose views on management companies would be obliged to take into account. We can see what a Scottish workers’ council would look like, in the shape of Unite at the Grangemouth oil refinery.

It is difficult to say what kind of party the SNP would be were its uniting policy — the demand for Scottish independence — to be achieved. Salmond’s tactic has been to use the language of the right (enterprise, jobs, tax competition) and offer the policies of the left (nationalisation, massive welfare and state spending). While the SNP flirts with economic liberalism, it remains at heart a high-spending party of the left which has shown no inclination to contemplate what would be necessary to sustain a low-tax policy: namely to cut spending and shrink government.

This week’s white paper is a triumph of wishful thinking over reason. It asserts that after independence, ‘Innovative, high–value firms are more likely to export and to invest in research and development.’ How come? It doesn’t say. We learn that an SNP-led independent Scotland would ‘establish an industrial strategy which rebalances the economy and diversifies Scotland’s industrial base, promoting manufacturing innovation and boosting production’.