Revealed: Nicola Sturgeon's SNP Growth Commission looks to New Zealand for fresh economic case for independence

In the wake of the loss of the independence referendum, party insiders admitted the economic argument had been faulty and weak and the new Commission is an attempted reboot.

It is understood that David Skilling, a former adviser to the New Zealand Government who has worked for management consultancy McKinsey, has been an important figure for the Commission.

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However, the move could cause a rift in the Yes movement. New Zealand is a market-based economy and left-wing supporters of independence yesterday sounded a note of caution.

Patrick Harvie, the co-convener of the Scottish Greens, said: “Growth on its own is not the metric by which we should judge success.”

Voters are widely believed to have rejected independence at the 2014 referendum over fears about the economic case for leaving the UK.

Labour, the Tories and the Liberal Democrats ruled out the Scottish Government’s currency union proposal and a $110 a barrel oil price, on which the economic case was largely based, was also deemed to be hugely optimistic.

Since the referendum, oil prices have collapsed - although partially recovering to around $63 a barrel - and the Scottish Government’s statistics revealed a deficit of over £13 billion in 2016/17, which amounted to 8.3 per cent of GDP, triple the UK figure.

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In September 2016, First Minister Nicola Sturgeon announced the creation of a Growth Commission chaired by Andrew Wilson, a former SNP MSP, who is a founding partner of an Edinburgh-based communications and lobbying firm, Charlotte Street Partners.

The Commission, which has been tight-lipped about its work, was tasked with producing a fresh economic prospectus for an independent Scotland. The report has been completed and a communications strategy is being finalised.

The Sunday Herald understands the delayed report has three major strands: growth, public finances, and monetary and regulatory policy. A separate Scottish currency has been considered by the Commission.

The report is believed to focus on fixing the “three Ps” – productivity, participation and population growth – and the Commission has honed in on around a dozen small advanced economies in a bid to learn lessons for an independent Scotland.

In previous years, independence supporters claimed that Scotland could be like oil-rich Norway, but with prices plummeting the Nordic country is no longer judged to be the most favourable case study.

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Similarly, former First Minister Alex Salmond used to laud tax-cutting Ireland, but with UK Corporation Tax levels at historically low levels, the so-called Celtic Tiger model is considered to be outdated.

It is understood the Commission believes New Zealand, which has mostly enjoyed positive growth rates for around 25 years, is a better model. Finland has also been looked on positively.

According to official figures, economic growth in New Zealand has regularly exceeded three per cent since 2011, of which immigration is said to have been an important factor.

Scotland, by contrast, has witnessed sluggish growth in recent years, and the Scottish Fiscal Commission forecasts expansion of less than one per cent a year until 2022.

The Commission has drawn on advice from Skilling, who is the founding director of Singapore-based economic advisory firm Landfall Strategy Group.

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According to his biography, he recently served as a senior advisor to the McKinsey Centre for Government and to the Secretary of Foreign Affairs and Trade in New Zealand.

Until 2003 he was a “principal advisor” at the New Zealand Treasury where he worked “primarily on economic growth issues”. He has also written extensively on smaller countries.

In a co-authored article on Brexit last year, he wrote: “Independence would allow Scotland to develop policies that are more in line with other successful small economies – not least by retaining EU membership. As Scotland confronts the strategic challenges of Brexit, it will also have an opportunity to develop policies that are better suited to it.”

In a separate co-written piece Skilling addressed currency and independence: “Scotland does not need to settle that question now: an independent Scotland could easily retain the pound, at least at first. In the meantime, the country should set up a monetary authority, which in the run-up to independence would allow for the development of a group of technocrats who could learn about the technical aspects of managing a currency.”

He added: “They should also look closely at historical episodes of new currencies, such as that of independent Singapore in the mid-1960s, in order to better understand the practicalities of launching a new currency.”

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In January, Sturgeon was appointed by former New York mayor Michael Bloomberg to serve on a global health taskforce, a body that includes former New Zealand Prime Minister Helen Clark. However, although economic growth has been strong in New Zealand, the country’s Labour Prime Minister Jacinda Ardern recently adopted a sceptical tone.

“Has it [the market] failed our people in recent times? Yes. How can you claim you’ve been successful when you have growth roughly three per cent, but you’ve got the worst homelessness in the developed world?” she said.

Harvie said his party rejected any economic theory based on a “growth fetish”, adding: “The evidence shows that for developed countries growth isn’t the thing that increases the well-being of people. Even in this country there have been times when we have had strong growth but rising inequality.”

Colin Fox, the Scottish Socialist Party co-spokesperson who sat on the board of Yes Scotland, said: “The Growth Commission was supposed to repair the SNP’s hopelessly inadequate economic case that cost us the referendum. It now looks like the Commission is backing a neo-liberal economic model at a time when neo-liberalism is on the way out. Norway is a better progressive example than New Zealand, which has had Blairite Labour governments that do not challenge the economic model. New Zealand offers us nothing new.”

An SNP spokesperson said: "We don't have any comment on this."