St Andrew's DayY yesterday was a natural moment for the Scottish National Party to publish its White Paper on options for a referendum on independence, including "devolution max", where Holyrood would get much greater fiscal autonomy. A pity, though, that the SNP published on the same day that accountant Ernst & Young released the latest Scottish Item Club forecasts for the country's economy.
What those forecasts show is that Scotland is suffering disproportionately in the UK-wide recession. Chiefly this is because Scotland's exposure to the financial services sector – and the worst performing parts of this sector in particular – has been so damaging.
Before the financial crisis broke two years ago, the SNP leader Alex Salmond used to talk of an independent Scotland joining an "arc of prosperity" with countries such as Iceland, which also once enjoyed an economic boom associated with banking. Such talk has left the SNP with a bit of egg on its face, but the more fundamental difficulty for independence campaigners is that Scotland's greater recessionary problems undermine their case.
After all, there is no point having greater fiscal powers if the economy is so weak that tax revenues are impossible to find.Reuse content