7. To ask the Scottish Government what analysis it has undertaken of the potential impact on Scotland’s exchequer and public finances of the measures referred to in the speech by the First Minister on 8 January. (S6O-02972)

The speech set out measures for effective industrial policy in an independent Scotland, including a programme of targeted investment through the building a new Scotland fund. Modelling shows that a fund of an equivalent scale to the proposed building a new Scotland fund would have both a short-term demand effect and a longer-term supply effect by increasing long-term productive capacity and providing a sustained boost to the economy. The speech also highlighted how Scotland lacks macroeconomic powers, including over migration, with economic modelling suggesting that, with higher levels of migration, a growing labour force would have a positive economic impact.

In that speech, the First Minister referred to a Resolution Foundation report that stated that, if the United Kingdom had

“the average income and inequality” of similar countries,

“the typical household would be £8,300 better off.”

The First Minister added that

“If we use the same analysis for countries that are similar to Scotland”,

households here could be £10,000 better off.

Does the Cabinet secretary agree that those figures serve as a stark reminder of the failure of Westminster governance and that only through the full powers of independence can Scotland’s true potential be realised?

The speech served as a stark reminder of the economic stagnation that the UK is in. For far too many people, the UK economy has stopped working. It is characterised by low growth, high inequality and poor productivity, which are the key drivers of living standards.

No one is saying that an independent Scotland could achieve transformation overnight. Whether we succeed or not will be down to our decisions as a country. However, the success of countries similar to Scotland, such as Denmark, Ireland and Norway, surely demonstrates the potential prize of independence and improving our economic performance.