The current Scottish government believes the NHS should not follow the privatisation agenda of the Westminster government and is committed to maintaining a publicly owned, fully funded healthcare system
To maintain a Scottish healthcare system free at the point of use, Scotland would need the financial levers afforded by having our own currency and central bank. Having our own currency and central bank, coupled with sound fiscal policy, will ensure that investment can be made in measures to reduce the human and economic costs of unforeseen crises, e.g. any future pandemic.
It is vital that Scotland can take its experience of the Covid pandemic and cost-of-living crisis and seize the opportunity to create a positive legacy by establishing our own currency and central bank. By doing so, the country is able to cope with future threats and safeguard Scotland’s population and economic future.
Dependence on the central government augments delays in preparedness
The so called ‘four nations‘ approach, which involved a UK government supplying vaccines and furlough payments, need not have been an issue. Scotland’s own central bank with powers to create our own currency could adopt the exact same tool (i.e. quantitative easing that the Bank of England used, if it were needed).
The dependence on the UK government to provide vaccines and the disconnect in supply chains and environmental costs have highlighted the gaps in preparedness to handle the pandemic. The human cost could have been greatly reduced and the spread of the virus contained if clusters were identified early and mitigations put in place, and more importantly if we had control of our own economic and fiscal policies.
Delays in UK government spending decisions and differing priorities coupled with Scotland’s dependency on currency availability would not have featured had we had our own currency supply. The means by which pandemic-related contracts for service provision and vital resources were executed by the UK government resulted in abuse of pandemic funding and is only now being identified. A stricter regulation of procurement practices and government funding could have been in place.
Scotland with its own currency supply and tighter regulations could have prevented resources from being squandered or misappropriated. The social benefits of better management of economic pressures, increased support for education and employment opportunities, and making better use of available resources would have resulted in better health outcomes such as fewer deaths, and reduced numbers of people affected by long term disease and disability as a result of long Covid and delayed diagnosis.
Life science sector needs appropriate funding
It is not only the health service itself that is being underfunded. There are other areas that play a pivotal role in maintaining our health and wellbeing which would benefit from additional funding. Life science research for example, has been affected by the withdrawal of European funding since Brexit.
The recent news from Cancer UK that funding for cancer trial units in Scotland and Wales is to be cut highlights the need for a dedicated Scottish Research Council, which should not be reliant on charitable donations. The advancement of our life science sector to research, develop, and produce low-cost generic pharmaceutical products, including vaccines, is of paramount importance to the growth of this sector and Scotland’s economy.
How much does the life science sector contribute to the Scottish economy? The latest GDP data from December 2022, indicates that output in the life sciences growth sector increased by 0.7% in the quarter October to December 2022, whereas output across the economy as a whole decreased by 0.2%.
Investment in Scotland’s wellbeing is restricted because the Scottish government operates on a fixed budget. The UK government uses a mechanism called the Barnett formula to allocate funds to the devolved nations for healthcare, education and other public services.
There have been calls to review this mechanism with the introduction of a bill in the UK parliament, which would require the chancellor of exchequer to report to parliament on proposals to replace the Barnett formula with “a statutory scheme for the allocation of resources based on an assessment of relative needs; and for connected purposes”.
How these ‘relative needs’ are to be determined and what will constitute ‘connected purposes’ will be decided for Scotland by the Westminster government. The replacement Barnett formula bill has now had its second reading.
The establishment of a wellbeing economy, which is the goal of the current party in power in the Scottish parliament, is not possible without control of the financial levers to invest in the Scottish Health Service, life science and associated sectors. However, there are measures which could be taken now to build the platform on which a wellbeing economy could be built.
Work could begin on the establishment of a central bank, ensuring that digital payment systems are ready to be launched by a post-Independence government and the currency designed and agreed, so it’s ready to be introduced as soon as practicable. During the transition to a new currency, sterling should be used for a period as short as possible.
The new currency will be needed as soon as practicable to avoid the need to borrow in a foreign currency. Evidence-based policy development and planning is critical to Scotland’s future economic and societal wellbeing. The feasibility of the Scottish Currency Group’s proposals have been extensively researched and their execution carefully considered.
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