Stagflation

– in the Scottish Parliament on 15th September 2011.

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Photo of Colin Beattie Colin Beattie Scottish National Party

6. To ask the Scottish Executive whether there are any indications that United Kingdom Government policies are resulting in stagflation in the Scottish economy. (S4O-00149)

Photo of John Swinney John Swinney Scottish National Party

Economic recovery is taking place in Scotland, as shown by the strong labour market performance yesterday. We are concerned however that this progress could be undermined by the coalition's spending cuts, which are front-loaded to this year and are particularly severe for capital spending.

While we recognise the need to restore the public finances to health, that can be achieved only if there is sufficient growth in the economy. We have urged, and continue to urge, the chancellor to respond by implementing a plan B to promote growth and secure the recovery in Scotland and the rest of the United Kingdom.

Photo of Colin Beattie Colin Beattie Scottish National Party

Is the cabinet secretary aware that UK input prices overall rose by 18.5 per cent over the 12 months to July 2011? Significantly, imported food prices rose by 13.8 per cent, imported metals prices rose by 22.1 per cent and oil products prices rose by 45.4 per cent. Does the cabinet secretary agree that, with UK economic activity stagnating and serious inflation at our factory gates, Scotland—more than ever—needs the political and economic power to manage its economy?

Photo of John Swinney John Swinney Scottish National Party

I agree with the point made. The current economic circumstances demonstrate that it is possible to take a policy course appropriate to the Scottish economy that delivers results for the people of this country, as evidenced by the labour market statistics announced yesterday, to which I referred. The conclusion we must arrive at is that Scotland would be better placed to exercise judgment on economic issues on its own terms, which is the position of this Government.

Photo of Alex Johnstone Alex Johnstone Conservative

Will the cabinet secretary take the opportunity to explain the ground rules according to which every positive economic indicator is claimed as a credit to this Government yet every negative economic indicator is blamed on the evil Westminster Government? Will he also take the opportunity to explain how, in an independent Scotland, pigs might fly?

Photo of John Swinney John Swinney Scottish National Party

I will persistently remind Mr Johnstone of two things that he has said in the past 24 hours. First, he said that the United Kingdom Government is evil. Secondly, yesterday he showered me with praise for my economic management. I have not yet been to a framing shop to frame the Official Report of the debate, but I am sure that one of my colleagues will attend to the challenge.

I simply point out to Mr Johnstone that the Government accepts its responsibilities fully and is deploying a set of interventions in the economy to promote recovery. I just hope that they are not interrupted by the decisions of the United Kingdom Government.