Chamber and committees

The fiscal frameworks in the Basque Country, Canada and the USA demonstrate the additional economic levers and opportunities that more ambitious levels of fiscal responsibility can provide. For example, the Basque Country has used its responsibility for the tax system to introduce a lower corporation tax rate than the rest of Spain. As of September 2010 the Basque Country also had a stronger credit rating than the Federal Spanish Government.

In the USA and Canada, devolving responsibility for natural resource taxation, has allowed States and Provinces to tailor the tax system to maximise long term production rates, and invest a proportion of the resulting tax revenue in an ˜oil fund'', to provide a permanent benefit for future generations, such as those in Alberta and Alaska. State and Provincial governments in the USA and Canada also have the opportunity to borrow to manage the pace and priority of investment in infrastructure and to manage volatilities in tax revenues.

All of these examples offer useful experience of how fiscal responsibility would benefit Scotland.

 

Under independence, the Scottish Government would have an opportunity to establish a regulatory regime that ensured sufficient safeguards were in place to address the weaknesses of the regulatory regime established by the previous UK Government. As highlighted in the National Conversation discussion paper Fiscal Autonomy in Scotland: The Case for Change and Options for Reform, under full fiscal responsibility within the UK, certain elements of economic policy could remain reserved “ including financial regulation “ with the exact division of responsibility dependent on the specific framework put in place.

Independence would also allow the Scottish Government to put forward an enhanced and better targeted stimulus package which met the priorities of the Scottish economy. For example, the temporary VAT cut implemented by the previous UK Government in 2009 was estimated to have supported 5,500 direct jobs in Scotland. If Scotland''s share of that cut had been used to increase capital expenditure, it is estimated that approximately 10,000 jobs would have been supported.

Fiscal Autonomy for Scotland: The Case for Change and Options for Reform is available from http://www.scotland.gov.uk/Publications/2009/02/23092643/0.

 

Under full fiscal responsibility the Scottish Government would be responsible for raising all revenues and providing public services in Scotland. This would provide the Scottish Government with a range of additional policy levers to protect jobs, promote economic growth and improve Scotland''s long-term competitiveness.

 

With independence, Scotland would be able to choose the right policy responses to suit its particular circumstances. The recent global financial crisis affected countries large and small. Norway, for example, managed its own banking crisis in the early 1990s, in the end emerging with a more resilient financial sector via a process under which the government actually made money on its investment in the banks. When the global crisis deepened in late 2008, Norway was able to offer securitised bonds totalling more than £33 billion should its banks have needed them.

Following the Scottish Parliament''s ratification of the Budget (Scotland) Act on 3 February 2010, which formalised the Scottish Government''s reluctant decision to cancel the Glasgow Airport Rail Link (GARL) branch line works; and in accordance with the requirements of the: Scottish Public Finance Manual (SPFM); the Scottish Government undertook an internal trawl of all of its Departments and Agencies to ascertain whether there was any other legitimate use that the land, previously acquired under compulsory powers for the GARL project, could be put to. The internal trawl concluded that there was no other use for the land and consequently it was deemed to be surplus to requirements. Therefore in accordance with the statutory obligations of the Glasgow Airport Rail Link Act (2007) “ Section 44 Application of Crichel Downs Rules was applied.

We have been in consultation with the following parties in order to comply with the requirements of the SPFM and Crichel Down rules:

Previous land owners

District Valuation Office

Land agents

Legal advisors

The Scottish Parliament has been informed of the intention to dispose of land, purchased under Compulsory Powers and subsequently deemed surplus to requirements, and I would refer the member to the answer to questions: S3W-31078 on 4 February 2010; S3W-32289 on 19 March 2010; S3W-33248 on 23 April 2010; and S3W-33171 on 22 April 2010. Answers to written parliamentary questions are available on the Parliament''s website, the search facility for which can be found at http://www.scottish.parliament.uk/Apps2/Business/PQA/Default.aspx.

The discussions that we have had with the previous owners of the land acquired using compulsory powers is set out in the following table:

Date	Summary of Letter ontent
10 November 2009	Informing previous owners that we were awaiting confirmation of the formal agreement of the Budget proposed on the 17 September 2009. Until outcome of this is known we were not in a position to dispose of any of the land previously acquired, however we confirmed that we would contact original owners shortly thereafter to advise of the Parliament''s decision and propose a way forward.
11 February 2010	Confirming that Parliament met on 3 February 2010 and voted on the Budget as proposed by Cabinet Secretary for Finance & Sustainable Growth. This formalised the cancellation of the GARL branch line. We would develop a strategy for the disposal of the land deemed as surplus to requirements and would make further contact to advise of likely timescales for concluding the process.
11 and 26 July 2010	Confirming that internal government land sale process complete and various plots have been declared surplus to the requirements of the Scottish Government and of our intention to sell.  Confirming that under Crichel Downs rules former owners are offered the opportunity to repurchase the land acquired from them.
November 2010	Formal price offer letters to be issued to former owners.

 

We are aware that Tesco has submitted a proposal of application to the local council and plans to hold a public exhibition of its plans in late November 2010. NHS Greater Glasgow and Clyde is continuing to work with Tesco to agree how to move forward with this potential development with regards to the health centre.

Estimates of the tax revenue raised in Scotland from 2004-05 to 2008-09 are available in Government Expenditure and Revenue Scotland (GERS) 2008-09. The report is available at http://www.scotland.gov.uk/Publications/2010/06/22160331/0. Estimates for 2009-10 onwards are not currently available.

There are currently 20 permanent employees* of the Scottish Government and associated agencies who are paid an annual basic salary of above £100,000. These are split into the following salary brackets:-

(a) 17 people currently paid between £100,000 and £150,000;

(b) three people currently paid between £150,001 and £200,000; and

(c) none paid more than £200,000.

The list of 172 senior civil servants in central government departments and senior staff in non departmental public bodies who earn more than £150,000 each year was published on the Cabinet Office website on 31 May 2010. Details are available at:

http://webarchive.nationalarchives.gov.uk/20100713194045/http://www.cabinetoffice.gov.uk/newsroom/news_releases/2010/100701-quangos.aspx

Note: *excludes employees on outward loan/secondment

 

 

The recently published Stage 2 National Renewables Infrastructure Plan (N-RIP) report provides the main source of information on a range of key sites for offshore wind manufacturing in Scotland. The report identifies the opportunity to create clusters of economic activity throughout the supply chains around these locations and highlights the potential to support an offshore wind sector manufacturing 750 complete offshore wind units per year. Scotland''s economic development agencies are taking forward the next stage of N-RIP involving investment in facilities and attracting offshore wind manufacturers to establish operations in Scotland.

The previous UK administration published, and subsequently updated, a UK offshore wind ports prospectus, which set out high-level site characteristics and contact details in relation to a large number of potential sites, including several in Scotland, designed to make it easier for offshore wind companies to make contact with port owners. However, as the prospectus made clear this was, and is, by no means an exclusive list.

The Scottish Government has made the following written representations to the UK Government on broadband since May 2010:

1. 24 June 2010 “ Scottish position statement to the UK Government on broadband policy, arising from a Scottish stakeholder group meeting (comprising the main Scottish business and consumer organisations and the Enterprise Agencies), held on 10 May 2010 and chaired by me.

2. 6 September 2010 “ Scottish Government submission to the UK Government presenting a robust case for one of the UK Government''s forthcoming superfast broadband pilots to be located in Scotland.

3. 15 September 2010 “ Scottish Government response to the UK Government˜s discussion paper Broadband Deployment and Sharing Other Utilities'' Infrastructure.

Documents 1 and 3 are available on the following website:

http://www.scotland.gov.uk/Topics/People/BroadbandforScotland/SEBroadbandInitiatives/History/digital-britain.

The non-confidential elements of document 2 will be published once the results of the UK Government''s superfast broadband market testing projects are known.