7. To ask the First Minister what the Scottish Government’s response is to the recent revised growth forecast by the EY Scottish ITEM club. (S5F-00608)

The EY ITEM club’s recent growth forecast for Scotland signals a weaker outlook for the Scottish economy than was forecast in June, prior to the European Union referendum, and the report makes it clear that the referendum result has had an immediate impact on economic and business confidence in Scotland, from which slower growth is expected over the next couple of years. As a result, the Government’s immediate focus is on seeking to safeguard Scotland’s place in Europe and our membership of the single market in order to protect us from Brexit’s negative economic impacts, which I think are becoming clearer by the day.

Given that every economic forecaster has now revised its growth projections downwards and that growth is expected to be even slower in Scotland than in the rest of the UK, will the First Minister order a review of the economic strategy published in March 2015 and the inward investment strategy published in March 2016—before Brexit—to reflect the challenging market conditions for our businesses?

The First Minister:

Jackie Baillie has raised reasonable points. We keep our economic strategy under review on an on-going basis, as I think people would expect us to, and we are looking particularly closely at some of its aspects in light of Brexit. Our budget next week will set out our plans to ensure that Scotland is a competitive place to do business and that we are absolutely focusing on growth in our economy.

Of course, the enterprise and skills review is very much about making sure that all of our agencies in this area are working in a co-ordinated and comprehensive way to take forward the economic strategy. We will continue to review the strategy to ensure that we have the right measures in place, and the Cabinet Secretary for Economy, Jobs and Fair Work will be very happy to discuss the matter in more detail with any member in the chamber.

How will making Scotland the most highly taxed part of the United Kingdom help our economy grow?

The First Minister:

I intend to ensure that we have fair and balanced taxation for individuals and companies in this country. One of the things that has been imposed on us by the Tories and which we are dealing with is not just Brexit but deep cuts to public spending, which impact on this Government’s budget. We will balance all of those things in our budget and ensure that we focus not just on growth but on protecting our public services and the most vulnerable in our society. Conservative policies are hitting the most vulnerable and making it harder to protect public services.

Next week, the Cabinet Secretary for Finance and the Constitution will set out our budget, and that budget will be in the interests of Scotland in all of those areas.