The Empire Strikes Back

The controversy over the treatment of Professor Andrew Hughes-Hallet and Professor Drew Scott by the Scottish Parliament committee scrutinising the Scotland Bill shows little sign of abating.

It's certainly irregular, if not downright discourteous to invite witnesses to submit evidence, ignore it completely, then try to quiz them on a matter which the committee has already decided is to be separate, without giving notice that this is what you intend to do. It's also disappointing that the Committee appeared to want to spend more time scrutinising a policy which it won't be helping to legislate for, at the expense of examining the Bill which it is responsible for.

While the anemic response of Presiding Officer Alex Fergusson to the complaint of Professors Scott and Hughes-Hallett was perhaps sadly to be expected, the decision by Professor Alan Trench, a man who appears to hold no particular brief for the SNP, to also withdraw is one which ought to dismay anyone hoping that the Bill might receive the sort of expert, impartial guidance that it so badly needs. The sniping partisanship of certain MSPs after the event has also done little for the Parliament's public image.

Today's Scotsman leader writer, presumably Bill Jamieson, is grasping frantically at the straw left behind by Professor Lars Feld – namely, that tax freedom does not of itself lead to increased growth. Of course it doesn't – if the Scottish Parliament got full fiscal autonomy and taxed at 100%, the economy would crash – a point so crushingly obvious it really shouldn't need to be stated.

It's a truism to state that it is government spending and increased freedom on how to spend resources, rather than tax freedom per se which drives growth. Yet it is true only up to a point. GDP is the sum of government spending plus investment plus consumption plus exports minus imports. Although the tax system isn't a factor in that equation, it's simply daft to claim that this is the end of the matter.

As the Professor points out, economic growth is driven by a number of factors away from tax and tax collection mechanisms. The quality of human capital is one, the ability to exploit physical resources another, as is the ability to take advantage of technological advancements, to be able to transport goods and services effectively, the existence of law and order and a legal framework which protects individual and property rights, together with the ability to access market information and to share ideas freely.

For all but the most ideologically pure libertarian, however, Government remains an important factor. One way government might made be more efficient by fiscal autonomy is to spend money more effectively. For if government is encouraged to be more efficient, it can get more bang for buck in its spending, which could be expected to increase economic activity. This can lead to a further positive economic effect by freeing up more resources to spend, or it can give all or some back as a tax cut, which will either be spent on consumption, or saved and used for investment. All of which helps to make GDP higher than it might otherwise be, resulting in benefits for government, private individuals and businesses.

Our present system doesn't reward the Scottish government with higher tax revenues if growth is enhanced. Barnett creates a disconnect, sending back to Scotland an ever decreasing percentage of public spending in England. Cut spending on, say, universities, and Scotland experiences an equivalent cut in funding, whether it wishes to follow the policy or not. Sad to say, Calman would do exactly the same.

The trouble with Calman and the resulting Scotland Bill is that it set out with a destination in mind and then tried to bend the evidence to fit. It's dispiriting to see the same vice being exhibited in committee by those for whom constitutional change is simply a means of trying outflank the SNP, rather than seeing it as something which could be beneficial on its own terms. It's particularly distressing for those of us who want to see a mature, self-governing Scotland that some of our supposedly better MSPs appear to consider it fair game to engage in guilt by association attacks against those whom they deem to be politically unsound.