Meeting of the Parliament 07 May 2025
We have to create the growth first; we have to create the wealth first. That needs to be the first priority. If we do not have the wealth, we cannot share it around.
However, the reality is that growth has been too slow both across the UK and in Scotland. In the latest month for which we have figures, which is February 2025, Scotland’s onshore gross domestic product is estimated to have fallen by 0.2 per cent. Overall, the UK economy grew in the same month by just 0.5 per cent. The output of 11 of 14 sectors of the Scottish economy fell, with the services sector shrinking overall by 0.6 per cent. Too many people of working age are not working, and we have a higher percentage of people who are economically inactive compared with the UK as a whole.
That poor economic output is reflected in collapsing levels of business confidence. Just last month, Scottish Chambers of Commerce published its quarterly economic indicator in conjunction with the Fraser of Allander Institute. It shows business confidence evaporating across key sectors, with sharp drops recorded for tourism, manufacturing and construction compared with the same period last year. Taxation is now the number 1 concern for Scottish businesses, overtaking inflation, and rising labour and energy costs continue to be major factors. Overall, it is a very worrying picture.
Kicking in just at the beginning of last month was the UK Labour Government’s increase in employer national insurance contributions, which is literally a tax on jobs.