Leading Scots economist says SNP growth plan is so general it could be applied to Russia

One of Scotland’s leading economists has described as a “red herring” claims made by the SNP that “full fiscal autonomy” can deliver such growth that the process would require neither tax rises nor spending cuts.

Professor Brian Ashcroft, of the Fraser of Allander Institute at Strathclyde University, said that full fiscal autonomy would require annual growth increases of at least 6.5 per cent to make the claim true.

The scathing appraisal also suggested that such a “stratospheric” economic performance would only be enough to keep debt at current levels.

Speaking at a debate hosted by the institute, Professor Ashcroft called for a greater emphasis on attracting overseas investment to Scotland and for more focus on boosting the economic potential of the country’s cities such as is being done in northern England.

He also suggested that to stabilise the debt-to-gross domestic product ratio in a fiscally independent Scotland, growth of up to up to eight per cent a year may be needed.

Since the 1960s, the economy has grown at an average of around two per cent, roughly in line with UK levels.

Professor Ashcroft said: “In my view, you cannot get away from the fact that full fiscal autonomy will require an increase in the tax burden and a lower spending ratio. The argument that faster growth can secure the policy of full fiscal autonomy, without higher tax and lower spending, is a red herring.”

The assessment runs contrary to the Scottish government’s economic strategy, published in March, which placed a strong emphasis on links between a stronger economy and reducing inequality.

The academic said that the strategy did not do enough to explain exactly how growth would be achieved, and that rather than spelling out policies, ministers often “fell back on pleas for more powers”.

He added that the document was so general it could have applied to the US, Russia or Iceland.

Instead, he suggested the “overarching priority” for the Scottish economy should be placed on attracting overseas investment, while calling for a greater focus on cities. He highlighted the “Northern Powerhouse” agenda in England as a potential threat to Scotland’s economy.

His comments were backed up by most of the other panellists, with Jeremy Peat, former group chief economist at the Royal Bank of Scotland who until recently was director of the David Hume Institute.

He said it was “very clear” that full fiscal autonomy would introduce a “substantial challenge” for public finances if introduced.

Echoing Professor Ashcroft’s call for more detail, he added: “Eight per cent is not achievable. What could one do to get to three or four per cent growth to help a transition? I would love to see more focus on the hows — what policies that are or could be devolved in order to harness growth, and growth that is relatively equitable.”