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Thursday, January 27, 2005


Yesterday I went to Professor Ashcroft's lecture on the Scottish economy. He is the Policy director of the Allander Institute & their Allander Series of lectures on the Scottish economy - a long series of worthy but incredibly useful lectures anybody interested in Scotland's future should read. He is also Mr Wendy Alexander.

The lecture was basically a precis of the series - which made it a pretty concentrated piece of information. Particular points brought out:

Ireland improved their growth because a crisis forced them to reform but we have no actual crisis on hand.

Scottish growth from 1964 to devolution came up from a low point because of regional subsidies, oil & financial services.

Scotland used to be 12% of the UK (Victorian era) & is now 8% - we also have the low fertility rate of southern Europe.

The main drivers of productivity are skills, innovation, reduced regulation, entrepreneurship, & money.

Innovation means 96% using foreign ideas & only 4% coming up with your own - its OK the same applies to other countries indeed Japan managed very well on near 100% import.

Government targets are likely to distort behaviour. (This, as well as being true, is a very strong argument for free marketism.)

Increasing productivity is most important in large states, increasing competitiveness is most important in small regions. (I'm not exactly sure what the difference is except that it means reducing business tax definitely works for small units like us)

Getting well off people in your country (either immigration or encouraging punters to get rich) works. (Amazing how much of economics consists of the bleeding obvious - when politicians would rather believe the opposite).

"Sun Skills & Sprawl" - to make cities in particular work you should encourage these. We don't have sun (tho' I think our countryside is a fair substitute, we arn'tto bad on skills, we have a definite downer on allowing anybody to live anywhere that is currently occupied by farms). It was suggested that Glasgow & Edinburgh should try to be treated & grow into one city (Personally I would prefer GlasPrestHunterBarton).

Public services are 28% of employment & 50% (I thought 52%) of economy - if they aren't considerably more efficient the economy as a whole cannot be efficient.

Incentives work to improve efficiency - even incentives in the public sector. (There was a politically correct genuflection to the point that incentives don't have to be money - this is true but money is easiest & most reliable).

In the Q & A section I impertinently asked why not just take the Irish reforms of 1989 (pretty much my Enterprise motion) as a template since Ireland has grown nearly 4 times faster than us since then. The answer was that while Ireland has done spectacularly well we should remember that since they started poorer than us it was easier for them to play catch up - I said that this doesn't explain it now as they are now 1/3rd better off than us & still growing - I was told that the figures are misleading because so much Irish productivity goes to owners overseas that the people are on average still poorer than us (which I am afraid I would have to see proved).

Another question came from somebody who said that we shouldn't be concerned about growth but only about the environment & should not seek to emulate the Irish who have achieved growth only at the cost of environmental misery (since Ireland recently placed first among the world's happiest nations I don't think we need be to solitious of there misery)(I had best mention that this gentleman was one of the Maryhill Lib Dems who squashed putting my enterprise motion forward to conference - his political principles do not impress me).

In general there was nothing I in the lecture I would disagree with in terms of direction tho' on many points I would go further & more importantly would ask Allander to be clearer & more confrontational in saying what needs to be done. On the other hand I can see that it is easier for somone with no background to be confrontational than members of a respected academic body. I believe that most politicians would do better by the country if they did nothing but veto but I can see that this is a painful thing to say to colleagues.

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