By Bruce Robbins, business reporter

EXPERTS ASKED to consider the best way of funding Scotland as a country have concluded that there is not enough evidence on which to judge alternative fiscal arrangements.

The Scottish Council for Development and Industry commissioned the report from two Edinburgh University professors to “demystify” the debate surrounding the Scottish Parliament’s fiscal powers for its members.

Professors Drew Scott and Charlie Jeffery considered the economic ramifications and potential constraints arising from different methods of funding Scotland but decided that the debate lacks a compelling base of evidence against which competing proposals on fiscal policy can be judged.

SCDI chairman Shonaig Macpherson said, “A wide range of views on the subject is currently held by SCDI’s membership.

“However, most would agree that the recent debate on the extent of Scotland’s fiscal powers has at times been too entrenched and confrontational.

“This report represents an attempt to set out the terms of the debate in a balanced way that will help the SCDI membership and others contribute more fully.

“We would urge all parties in the current debate to focus on the ultimate common objective—a dynamic, growing Scottish economy that will provide the highest possible levels of employment in the best possible jobs, delivering higher quality of life and a better standard of living for more Scots.”

The professors found that Scotland’s long-term growth rate, although steady, is slow by international standards and also lags behind the UK average.

A number of proposals on fiscal policy for Scotland have been put forward by academics and political parties which in no way exhausted the range of alternative schemes which could be designed to reform or replace the current system.

However, the professors said, “Our view is that insufficient evidence is available to justify, at this time, any particular model being preferred over the alternatives—including the status quo.

“Looking at comparative experience more generally, there is no compelling evidence to suggest that devolving tax authority (or other economy-influencing powers) to a regional tier of government will, in and of itself, result in improved economic performance on the part of that region as a whole.

“However, the clamour of criticism that has now overtaken the current arrangements—and the spread of views advocating its reform—point to an urgent need for serious empirical research being done on the precise costs and benefits of reform. Those insights are precisely what the Scottish debate lacks.”

Ms Macpherson added, “There is much to be proud of in the Scottish economy, but Scotland’s long-term economic growth rate is relatively sluggish and SCDI is convinced that this should be the key concern for policy-makers.

“With the parliament a settled part of the political landscape, interest in whether it has the range of economic levers it needs to address this challenge has increased in business and across civic Scotland.”