Meeting of the Parliament 14 June 2017
The Government has today presented a wide-ranging motion on the economy, which is a subject that it was curiously silent on before the election. Nonetheless, I will start with some areas of consensus.
We agree that there are opportunities for growth in Scotland’s economy. We have a world-class workforce, world-class universities and world-class cities. With the right Government and the right policies in Holyrood, Scotland’s full economic potential could be realised.
We also agree that the economy in Scotland faces a number of challenges that need to be addressed. However, despite what the Government motion says, those challenges reach far beyond the oil and gas sector and they existed well before Brexit. In fact, Scotland’s economy has suffered below-trend growth for the past 10 years under the SNP, with average annual growth of 0.7 per cent. Last year, growth in Scotland was only 0.4 per cent, while growth for the rest of the UK was almost five times faster.
It is no wonder that Ernst & Young described Scotland’s economy as
“being stuck in the slow lane”
with Scotland halfway to recession and forecast that, for every year until 2020, Scotland’s economy will continue to underperform the rest of the UK.
At this stage, the cabinet secretary usually intervenes to tell me that I am talking Scotland down. I will save him the bother by saying that I am not. Rather, I am identifying the economic challenges that the country faces. Those challenges are evident across a range of other indicators. For example, innovation and productivity levels continue to lag behind OECD averages; foreign direct investment jobs declined by 47 per cent last year, despite a small increase in FDI projects; and Scotland’s export base is too small, according to Scottish Enterprise, with only 50 companies accounting for 50 per cent of exports. Further, according to EY, we need to diversify our sector base, as recent economic growth has been overreliant on public sector construction, which declined last year by 3.3 per cent, according to the “State of the Economy” report that was issued by the Scottish Government today—of course, I have to say that the construction sector has contributed to the Scottish economy for a bit longer than expected, due to the delays on the Queensferry crossing.
Despite those challenges, there are real opportunities to improve economic performance in Scotland, but only if there is a corresponding real change in the substance and direction of economic policy in Scotland. As the cabinet secretary said himself in this chamber less than three months ago,
“the status quo will not deliver the economic step change that is necessary”.—[Official Report, 30 March 2017; c 82.]
We agree with that. If the Scottish Government wants to deliver that step change in the economy, it must listen to key stakeholders across Scotland who have been calling for economic policy to change in a number of areas.