A Scottish Government minster and the leader of Dundee City Council claim an independent Scotland would have the borrowing power to navigate the challenges of Covid-19.
Ben Macpherson, the Holyrood minister for public finance and deputy finance secretary, joined councillor John Alexander for a video interview with the Tele.
Both SNP politicians agreed party politics had been very much pushed to one side as the country deals with the global coronavirus pandemic, but agreed the debate on independence would not go away.
Mr Macpherson said £3.58 billion provided by the UK Government though the Barnett Formula – whereby Scotland receives a proportionate percentage of public service funding – had been topped up by payments of £255m and then a further £178m from the Scottish Government.
He also said the UK Government’s furlough scheme paying 80% of wages of workers was “welcomed” – but showed the Conservative Government should be held to account for what he saw as a decade of austerity.
The MSP for Edinburgh Northern and Leith, said: “The Scottish Government has used all their resources, including extra consequentials, to respond as effectively as we can during the crisis.
“To get to the heart of the question with all that context; the reason the UK Government has been able to spend in the way it has, is because it can borrow, the way a normal country’s government can, whereas the Scottish Government’s borrowing capacity is very limited.
“And we have been arguing for a long time, but particularly in the last number of months, that the Scottish Government, through the Scottish Parliament, should have much more substantial borrowing powers, because interest rates are so low, and that would allow us to do even more to help in this crisis.”
Mr Alexander added: “The reality is, if you think ‘Better Together’ is a functional argument right now I think your head might be in the clouds, because, under the current UK Government parameters, the UK Government have generated or have created £1.7 trillion of debt.
“And that is the current situation the entire UK is in. So I don’t think that smacks of great management from a UK perspective.
“And I think Ben’s points are absolutely integral to this whole conversation, which are; the Scottish Government are responding with one hand tied behind their back, and a blindfold on, because they don’t have the mechanism or vehicle in order to leverage in borrowing to support councils or support other initiatives at this point in time.”
He continued: “Local authorities, the 32 councils in Scotland, have a larger ability to borrow money than the Scottish Government. That’s just ridiculous. If we were ‘better together’ and there was a respect agenda at a UK level, then surely you would give the powers and the tools to the Scottish Government to be able to address and work through this problem at that level, in a Scottish context. And they’re not being allowed to do that.”
The Strathmartine councillor added that Scotland could look to other countries of similar size and population, like New Zealand.
He said: “It also has a similar scale of economy – the GDP of New Zealand is very similar to that of Scotland. So, if New Zealand can successfully manoeuvre through a crisis like this, there is no reason, there is no rational argument to suggest Scotland couldn’t do the same.”
Discussing finances in particular, he said: “Fundamentally, Scotland is receiving money which it contributes. We all pay our taxes, we’re all contributing to the current model, the current system – not a model or a system I would necessarily like – but that is the reality we face. So it isn’t a case that we are receiving something over and above our contribution, the reality is, we are all taxpayers, we are all paying into the system, and therefore at a crisis time we should all be expecting to receive some support from the UK Government and making sure that the Scottish Government has the tools at its disposal as well.”
Mr Macpherson added: “The furlough scheme has been very welcome, and it’s shown that austerity in the last 10 years, in the way that it was argued by the UK Government and by the Conservative Party, was not required in the way that they articulated.
“So it’s been a real illustration, this crisis, that the UK Government should be challenged on any rhetoric or any policy decisions they articulate or make about austerity.”