THE response from the Scotland Office and Alister Jack to last week’s Scottish economic output numbers was puzzling, to say the very least.
These gross domestic product figures showed the economy north of the Border grew at four times the pace of that in the UK as a whole in the opening quarter of this year. At 0.4%, quarter-on-quarter expansion in Scotland was unspectacular by historical standards but it was not bad at all given there were until recently fears that this might have been a period of UK recession. And what was even more striking was the comparison with the UK’s marginal, 0.1% growth in the first quarter.
This significant outperformance by Scotland could have come as a surprise to some, given that the general cacophony from many of the opposition politicians at Holyrood might have people believing the economy north of the Border is some kind of basket case, such has been the bellyaching in the echo chamber inhabited by these individuals and their acolytes.
It seemed notable that the Scotland Office press release, responding to the Scottish GDP figures, started out by observing the economy “remained flat in March this year”. This referred to there having been no month-on-month growth between February and March in Scotland.
To be fair, it did go on to state: “Looking at the broader picture, in the first quarter of 2023, from Jan-March, GDP is estimated to have grown by 0.4%, an improvement compared to the growth of 0.2% in the previous three-month period, October to December 2022.”
At least this provided some acknowledgement of the acceleration of growth in Scotland, even if the Scotland Office only went so far in looking at the “broader picture”, deciding to steer entirely clear of the fact that growth north of the Border in the first quarter was four times that in the UK as a whole.
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Maybe there was some gentle politics there. Who knows?
Then the press release got on to Secretary of State for Scotland Alister Jack’s response to the GDP statistics, and this is where things became somewhat strange.
He seemed rather positive about the strength of Scottish growth. Ah, but wait a minute, maybe this was only so he could go on and claim credit for it on behalf of the Conservative Government at Westminster.
And yes, this was indeed the case, as further reading confirmed.
Mr Jack declared: “Our economic outlook is looking encouraging with the first quarter of this year showing strength due to the swift action of this Government to avoid recession.
“The UK Government is creating jobs, boosting trade and encouraging investment.”
It is easy to see what the UK Government has been doing that might have increased the chances of recession, notably Brexit. For years now, Brexit has weighed heavily on UK trade and, if things continue as they are, will continue to do so in coming decades. Likewise, Brexit has hampered investment.
Coming to the “jobs” aspect flagged by Mr Jack, it is worth observing the UK’s Brexit-fuelled skills and labour shortage crisis.
In contrast, policies to promote growth from the Tories have remained conspicuous by their absence.
Mr Jack also declared last week: “Our priority is to halve inflation, reduce debt and grow the economy for the benefit of the whole of the UK.”
He did not allude to the fact that halving inflation would still mean that prices were rising at a rapid clip, with the excruciating increases which have been seen already now permanent. Or to the fact that a fall in inflation will be the result of base-year effects, rather than something the Tories have done.
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While growth policies from the Tories remain elusive, it is easy to see major drags such as baked-in austerity, continuing high energy costs and lamentably problematic food price inflation fuelled by Brexit, as well as the broader deeply damaging effects of leaving the European Union. So, if the Tories’ priority is to “grow the economy”, they have a funny way of showing it.
The debt reduction piece from Mr Jack is interesting too. UK public sector net debt soared from £1 trillion when the Tories came to power in 2010 to around £1.8 trillion just ahead of the coronavirus pandemic.
This is not to say the Scottish Government can or should claim all the credit for Scotland’s superior growth in the opening quarter of this year.
However, you can be sure that if Scotland’s performance had been weak, shrill opposition voices would have been blaming the SNP.
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And recent figures have shown the general business climate in Scotland is proving attractive both to overseas investors looking to set up or expand and create jobs in Scotland and to those weighing equity investments in companies north of the Border.
These figures certainly show that the sometimes almost apocalyptic portrayal of Scotland by opposition politicians is pure fantasy.
Comparing the first quarter with the opening three months of last year, Scottish GDP was up by 0.3%. This was ahead of year-on-year growth of 0.2% in the first quarter across the UK.
The Scottish Government was cautious in its tone in the first-quarter GDP release, which seemed appropriate for a statistical publication.
It said: “The start of 2023 has seen a slight improvement in economic activity and optimism compared to the second half of 2022, during which economic output remained broadly flat and inflation rose to its highest rate since 1981. However, economic conditions are extremely challenging and the outlook for the year ahead remains subdued."
This obviously does reference the UK’s inflation woe but - unlike Mr Jack’s curious tub-thumping claims about the Conservative Government having somehow taken “swift action” to avoid recession when the reality has seemed quite the opposite - this is based on cold numbers.
And it remains difficult to comprehend on what basis Mr Jack could possibly believe the UK Government is driving Scottish economic growth.
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