Economic Growth

– in the Scottish Parliament at on 29 March 2018.

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Photo of Ruth Davidson Ruth Davidson Conservative

The rate of economic growth in Scotland is a third of the rate in the UK as a whole. Also, the Scottish National Party’s economic plan has been lost in the weeds thanks to a myriad of different strategies, advisory groups and bodies that are now cluttering the landscape. Does the First Minister think that those two facts are connected?

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party

On the landscape, of course the Scottish Government has recently established the new strategic board to better align the work of our enterprise and skills agencies. I seem to recall that many aspects of that board were opposed by other parties in Parliament. We want to ensure that, through that strategic board, which is ably chaired by Nora Senior, we get maximum impact and value for the around £2 billion that we spend every year on enterprise and skills.

The point about economic growth is interesting. I suspect that Ruth Davidson has partly been prompted in her questioning by yesterday’s Fraser of Allander institute report. I am sure that she paid it very close attention because, for the past number of months now, she has hitched her wagon to the claim that growth in Scotland is projected to be lower than that in the rest of the UK. However, yesterday’s Fraser of Allander institute report shows that its growth projections for Scotland for next year and the year after are actually higher than the Office for Budget Responsibility’s projections for the rest of the UK, and that projected unemployment is lower than that for the UK. I suggest that, when we add that to the fact that productivity growth has been higher in Scotland over the past decade and the fact that our international goods exports are growing at a faster rate than those in the rest of the UK, Ruth Davidson’s arguments are simply shown to be nonsense and fall to pieces altogether.

Particularly today, which marks a year to go until Ruth Davidson’s party drags us out of the EU against our will, she has no credibility on the economy for as long as she supports a hard Brexit. She cannot lecture others on economic growth when she supports a policy that all the experts say will hit growth in this country by more than £2,000 per person. Ruth Davidson’s credibility on the economy is zero.

Photo of Ruth Davidson Ruth Davidson Conservative

I am delighted that the First Minister mentioned the Fraser of Allander institute’s report on the Scottish Government. If the Presiding Officer will permit me the time, I will quickly run through the list that it produced setting out the Scottish Government’s streamlined plan for the economy. There is an economic growth strategy, a digital strategy, an energy strategy, a circular economy strategy, a climate change plan, a trade and investment strategy, a labour market strategy, a social enterprise strategy and a hydro nation strategy. There is a strategy action plan for women in enterprise, a science, technology, engineering and mathematics strategy, a manufacturing action plan, a youth employment strategy, an innovation action plan, a national islands plan, an agenda for cities and, finally, an Arctic strategy. Those are overseen by a grand total of nine Government agencies and 32 local authorities and, in turn, they are informed by at least 18 further advisory boards.

Let us look at what the Fraser of Allander institute says. It says:

“Back in 2007, the Scottish Government promised a streamlined and effective policy landscape for the economy. Ten years later it may be time to look at this again.”

That is the institute just being polite, is it not?

The First Minister:

Ruth Davidson mentioned the Arctic; it is certainly true to say that Scotland is going cold on the Tories. That is the case.

Ruth Davidson lists a number of strategies. The women in enterprise strategy, for example, is extremely important. We know that if women were to start businesses in Scotland at the same rate as men do, it would be worth billions of pounds to our economy. Having listed the strategies, will she perhaps, when she stands up to ask her next question, list the ones that she wants the Scottish Government to scrap? I would be keen to hear her answer that question.

The strategic board is all about making sure that all that work is aligned. I think that Nora Senior, who is chairing the board, will do a very good job, and the board is already hard at work.

Ruth Davidson wants to quote the Fraser of Allander institute. Let me quote some more from the institute’s report:

“Scotland has a strong and prosperous economy”.

That is on page 4.

“Scotland retains clear economic strengths.”

That is on page 24.

“Scotland’s labour market has held up ... well despite a challenging growth environment.”

That is on page 16, as is:

“Unemployment ... remains low by historical standards”.

On page 4, again, the institute says:

“Scottish exports have grown relatively strongly in 2017.”

As I said, the Fraser of Allander projections for growth for Scotland are higher next year and the year after than the OBR’s projections for the UK are, which seems to hole Ruth Davidson’s argument entirely below the waterline.

I come back to what is possibly the most important quotation in the report. It is on page 4 again, if Ruth Davidson wants to look it up. As I said—and I know that Ruth Davidson does not like hearing this—it is particularly relevant today. It is:

“Brexit remains the biggest challenge on the horizon.”

As long as Ruth Davidson is supporting a policy that is going to damage growth in the economy, she has no credibility. Perhaps when she gets to her feet in a few seconds’ time she will tell us whether she will go back to her old position of supporting membership of the European Union. If she will not go back to that position, will she go back to her old position of retaining membership of the single market? If she does not, I say again that she has zero credibility on the economy.

Photo of Ruth Davidson Ruth Davidson Conservative

The truth of it is clear. If strategies and press releases were enough to grow the Scottish economy, we would be steaming ahead by now, but as it is, we are trapped in a Scottish National Party slow lane.

I know that the First Minister likes to point the finger at Brexit for everything. She has done that twice already today. How can she explain this, then? Not only is growth for Scotland running at a third of the rate of that of the UK but small business confidence in Scotland is at minus 18, whereas in the rest of the UK it is at plus 6—a 24-point gap.

The First Minister blames Brexit for everything. Is it just conceivably possible that our problems lie slightly closer to home?

The First Minister:

I can understand why Ruth Davidson wants to ignore what I have pointed out twice, which is that the economic growth projections in the Fraser of Allander institute’s report, for next year and the year after, are actually higher for Scotland than the OBR’s are for the rest of the UK.

I am not sure whether Ruth Davidson is prepared to lay the reasons for that at Theresa May’s door, but she wants to ignore the elephant in the room, which is Brexit, so let me remind her of some of the figures. It is simply not credible for a member to come to the chamber and say that they are really, really concerned about economic growth when they know—as Ruth Davidson does—what the figures show that the impact of Brexit is going to be.

If we fall back into World Trade Organization trading rules, we know that that will hit our economy to the tune of more than £2,000 per person, with an 8.5 per cent hit to our gross domestic project. A free trade agreement with the EU would reduce growth by 6.1 per cent, which is £1,600 per person. European Economic Area membership—the least damaging option—would still hit growth by 2.7 per cent, or £700 per person.

Does Ruth Davidson want to tell us which of those options she supports? All of them hit growth in our economy. It is the Tories who are taking us out of the EU, and as long as that is the case, they have no credibility when they come to the chamber and talk about economic growth—and everybody out there knows it.

Photo of Ruth Davidson Ruth Davidson Conservative

Here is where we stand. Scotland is economically underperforming now. The First Minister says that Brexit is to blame, but there is still a year to go. We have had 10 wasted years under an SNP Government.

This is the Government’s record. We have the lowest rate of business growth in the UK. Productivity in Scotland is at the lowest level for eight years. For the next three years, we have the weakest projected economic growth of any country, not just in the Organisation for Economic Co-operation and Development but in the European Union.

Is it not time that the First Minister stopped blaming Brexit and looked to herself to get Scotland’s economy moving?

The First Minister:

Let us look at Scotland’s performance. I will not repeat the Fraser of Allander report’s points about growth for the fourth time. Perhaps when Ruth Davidson gets the chance, she can go and read them.

Let us look at some of the other aspects of growth. Productivity growth has been higher in Scotland during the past decade than it has been in the rest of the UK. Figures from the past year show that international goods exports are growing at a faster rate than those in any other part of the UK, at 19 per cent. Unemployment is close to a record low. For 11 of the past 13 months, unemployment in Scotland has either been lower than or the same as it is in the rest of the UK. Youth employment is at a higher rate than it is in the rest of the UK. Female employment is at a higher rate than it is in the rest of the UK.

Scotland’s economy is strong and we are determined to make it even stronger. However, we are against the challenge of ideologically-obsessed Tory Brexiteers who want to rip our country out of the EU against our will. That is the reality.