Tuesday, 19 April 2011

Key points from the Big Economy Debate

Q1 Where will the jobs of the future come from?

All emphasised the supporting role Govt plays in creating the right conditions and the importance of renewables. Some individual differences were apparent, particularly in Harvie’s stance against the “Tory-Liberal cuts” which surprisingly Labour didn’t echo.

Also, Purvis focused more on skills investment, Swinney on reindustrialising the economy and Kerr on the internationalisation of our economy.

Q2. How many public sector jobs will be lost by 2015?

Labour & SNP answered this question in a very similar fashion: namely, “you can’t put a number on it” (Swinney). They both stated that there will be no compulsory redundancies too.

Purvis agreed that you couldn’t put a number on it but rejected (as did Brownlee & Harvie) the belief that there will be no compulsory redundancies.

Q3 Should Scotland’s tax raising powers be used to reduce taxes to bring companies & employment into the country?

The panel agreed unanimously that they would not use existing (or new) tax raising powers to reduce tax levels. For Kerr it would “lead to a race to the bottom” Irish style; for Harvie we need to be “talking about progressively increasing tax from the wealthy”; and Purvis focused on the Coalition’s success in raising the threshold for personal income tax.

Meanwhile, Brownlee asked those who were offering tax breaks to “explain how they will deliver it” and Swinney believed it would “impede economic recovery” - Scotland needs full fiscal independence.

Q4 How long can the council tax freeze continue for?

Broadly speaking, all parties support the council tax freeze. The debate centres on the duration of the freeze and its long term replacement.

Labour will freeze it for 2 years but give themselves (and councils) the flexibility to increase it if they provide sufficient justification and it’s below the rate of inflation.

The SNP will freeze it for the whole term of the next parliament but explore the introduction of a local income tax.

The Lib Dems will share Labour’s position but like the SNP want to replace council tax with a local income tax.

The Tories will freeze it until 2012-13 and thereafter look at it year on year while the Greens want to replace council tax with a land value tax.

5. What would you do to encourage banks to lend to small/medium enterprises?

Given this is a reserved issue Brownlee summed it up well when he said “we can’t do much (other than) put pressure on the banks behind the scenes”.

Nevertheless, there were some different answers. Swinney said he would roll out the Scottish Loan Fund, while Kerr emphasised the importance of underpinning risks and increasing the role of co-investment.

Purvis said he would replace the current economic development infrastructure with a regional development bank, an idea supported by Harvie. The latter also stressed the importance of microfinance.

6. Was the £500m spent on the Edinburgh Tram project a good use of public money?

The responses offered were exactly what you would expect from this topical question. All lamented the way the project had been managed but committed to completing it. Moreover, 4 out of the 5 parties (not the Greens) stated categorically that there would be no more central government funding.

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