Four problems with Sturgeon’s defence of the ‘Growth Commission’
First Minister Nicola Sturgeon has taken to twitter to defend the Growth Commission report after it was thoroughly slated by the press, the opposition, and the left of the Yes movement over the weekend.
But her defences of the report are very weak. Here’s four reasons why:
1) She attacks ‘Westminster Parties’ for backing Brexit, but neither the Growth Commission nor the SNP have committed to rejoining the EU
The First Minister writes that Scots have two alternatives: to ’stay as we are, locked into the Brexit spiral and continued austerity that the Westminster parties offer no alternative to - or decide to equip ourselves with the powers to build our way to a better future.’
Ignoring the risible assertion that no party in Westminster is opposing austerity, let’s tackle the Brexit assertion. The report makes no recommendation to reverse the ‘brexit spiral’, and the SNP themselves have committed to a ‘soft Brexit’, but that is still, inescapably, Brexit. Unlike the Liberal Democrats, the SNP are not committed to reversing the referendum result or re-entering the EU.
In fact doing so would undermine one the of the commitments the report does make: that Scotland should adopt its own currency in the long run. All new EU countries must agree to join the euro in the future, even as the currency union continues to wreak havoc in Southern Europe.
2) She blames the existence of the deficit on the ‘Westminster system’
This is probably the most surreal assertion from Sturgeon’s twitter defence. The First Minister claims that ‘Independence is a better option [than] sticking with Westminster system that created the deficit.’
Deficits were not created by the ‘Westminster System’ but are natural consequence of business cycles under capitalism coupled with democracy. Deficits can never be abolished in the long run, and a growing number of economists believe it is counterproductive even in the short term.
3) She claims the report ‘makes no assumptions about higher growth’, but that is the entire basis of the report
The entire report is premised on the idea that the 13 small countries examined have ‘[performed] better than larger ones consistently by around 0.7 percentage points per year over the last 25 years on average.’ The countries chosen, and the time period over which they’ve been examined are largely arbitrary, but the basis on which they chose them is inescapable - because the Growth Commission’s authors believe ‘smaller countries’ have higher growth rates.
4) She claims that the report rejects austerity, but the report commits Scotland to an austerian economics
Unfortunately, declaring that you oppose austerity is not enough to actually end austerity. The report makes four commitments which would completely bind Scottish Governments to pursuing austerity, if they were followed. One - they’ve committed to reducing the deficit to below 3% of GDP, a completely arbitrary figure. Two - they’ve committed to reducing the national debt to under half of GDP. Three - they’ve committed to providing tax incentives for rich expats and transnational corporations, essentially ruling out a windfall tax on the rich. Four - by unofficially adopting Sterling, Scotland’s debts would be denominated in a foreign currency - which means the only way to achieve commitment one, two, and three is - you guessed it - cuts and more cuts.