Jeremy Peat: 'Despite being a report for the First Minister, produced by a former SNP MSP, it is soundly based and objective

Further, Andrew Wilson has emphasised both in the report and at its launch event a desire to be inclusive in consultation and review; and also a desire to seek consensus rather than any debate dividing along party lines. A wide range of interested parties, not least the business sector, should consider its contents with care and contemplate what they believe can be done, starting now, to pick up key conclusions and recommendations.

In brief this report suggests a way forward to significantly stronger and more balanced growth, while enhancing fiscal credibility and, post-independence, moving over a decade or so from use of sterling shared with the UK to Scotland’s own sound currency backed up by financial prudence.

Consider the drive for faster growth. The first objective is to move over a period of about ten years to a GDP growth rate of some 2.5%, seen as the average for a range of successful, small, independent economies. This would be followed by some 15 years of growth around 3.5%, to close the GDP per capita gap with this target group of small advanced economies – and thereafter performance in line with this group.

The actual figures are no more than indicative, but the scale of the challenge is stark. Co-incidentally last Thursday say the launch event of this report, in the morning, and the publication, in the afternoon, of the latest forecasts from the Scottish Fiscal Commission. These are the official forecasts as used in Government’s new Medium Term Financial Strategy. In the view of the SFC, GDP growth is set to remain below 1% until the end of their forecast period – reaching the giddy heights of 0.9% in 2023. Note this end date is a couple of years beyond the start date for Andrew Wilson’s decade when growth moves up all the way to 2.5%.

Of course forecasts are worth no more than the paper upon which they are printed – and all we really know about them is that they will be wrong. Growth may be faster that the SFC anticipates. But somehow that seems unlikely given all the uncertainties at present surrounding Brexit and the impact that this is having on business investment and consumer confidence. Indeed the SFC now expects real wages in Scotland to fall again this year and not to start any upward progress before 2020.

Achieving even 2.5% growth over the next decade or so will be difficult under any circumstances, thanks to the folly that is Brexit. This difficulty would be compounded if at one and the same time an independent Scotland was working on a tough process of fiscal consolidation and EU negotiation, with continuing use of sterling but with no influence whatever over monetary policy from the Bank of England. Fiscal policy would likely have to be very tight, to work towards sustainability as an independent state and demonstrate prudence to those markets from which Scotland would wish to borrow. (Those same markets as would have to be supportive of a new Scottish currency as and when the time was seen as apposite.)

Nevertheless we must seek more rapid and better balanced economic growth and the Wilson Report does provide a valuable analysis of potential policies to achieve that end. Clearly we should seek more and better use of skills; and more and more innovative investment; and higher and more diverse exports; and improved governance arrangements. All of these improvements should contribute to stronger productivity growth and hence higher GDP per head.

However, none of these suggestions are new. It has been appreciated for many years that Scottish productivity growth is too low. We are familiar with the perversity of top of the league results for Higher Education R&D being accompanied by relegation levels of business investment in R&D. Many efforts have been made to address this issue, just as Scottish Enterprise et al have focussed on increasing the number of Scottish exporting companies and widening their target group of countries.

The results of all such endeavours have disappointed. Now we need a much sharper focus. There is no reason why our Government should not as of now implement some of the ways forward recommended in this report. For example: -

1. Let us have a fixed term Productivity Commission, with business and the STUC fully engaged, to work on both means to improve productivity and hence competitiveness of actual and potential exporters; and the disturbing issue of ultra-low productivity and hence low wages in our inward-facing sectors such as retail, construction and hospitality.

2. Likewise a fixed term Infrastructure Commission, set alongside the Scottish Futures Trust, to set priorities for physical and virtual infrastructure, based upon our economic imperatives.

3. And also an expert assessment of the ways in which Scotland can attract and retain more skilled folk from outwith Scotland, including overseas students able to stay on, all within the context of the UK’s restrictive policies. We need these people and there must be some ways forward.

Preferably this would all be with the support of other parties at Holyrood. There should be no political dispute of the essential requirement to improve economic performance – urgently!

Jeremy Peat is visiting professor at the University of Strathclyde International Public Policy Institute.