Meeting of the Parliament 08 September 2015
When we debated the Scottish Government’s economic strategy in March, I described it as a glossy and colourful publication that had lots of pictures but was light on detail. We expected to hear today about an action plan with timescales and targets but, unfortunately, not much has changed.
There is no room for complacency. We have fewer businesses in Scotland per head of the population than is the case anywhere else in the UK. The number of businesses in Scotland has fallen. Our start-ups are fewer in number; business research and development spend is lower than the UK average; and, although our GDP is 2 per cent higher than the pre-recession peak, the rest of the UK’s is 5 per cent higher. We could trade stats all afternoon, but the truth is that the picture is very mixed.
Members should not just listen to me. The Federation of Small Businesses has reported a drop in business confidence, which is now at zero as revenues and profits fall. Importantly, the FSB highlighted skill shortages as a problem that hampers business growth. The Scottish Retail Consortium has also reported that retail sales are down on the previous year, and food sales are down, too.
Few people would fundamentally disagree with the aims of the Scottish Government’s strategy. Growing the Scottish economy and reducing inequality are sound ambitions that we share. The problem is that we do not know how the Scottish Government will do that, and we certainly do not know how success will be measured.
In her programme for government speech, the First Minister made a plethora of announcements, although I am not sure how many of them were all that new. If my memory is correct, this is the sixth time that the Scottish business development bank has been announced; I look forward to it appearing soon. However, what matters is the difference that the actions will make to outcomes. With no measurements or targets, we have few means of judging whether the strategy is working.
The Scottish Parliament information centre briefing on the Scottish National Party economic strategy is well worth a read. It notes the lack of any specific, measurable, attainable, realistic and timely targets. If there are no targets, it is not possible to assess the success of the new strategy. Professor Ronnie MacDonald summed it up beautifully when he said that the strategy is
“really quite bizarre. If you don’t have targets, it doesn’t take you anywhere.”
We therefore lament the lack of targets and measurements as a sign that the SNP is not really serious about making the strategy work.
I turn to taxation. The SNP’s previous economic strategy had an overreliance on oil and a belief that, if we cut corporation tax, that would in and of itself promote growth. I am pleased that the SNP has moved away from that belief and that it recognises now what we have been saying all along—that cutting corporation tax would simply mean a race to the bottom.
As for oil, the SNP overestimated the revenue that would be achieved from oil and gas taxation. Stats tell us that oil revenues for the most recent quarter were £168 million; for the same quarter last year, they were £969 million.