JUST what is the real state of the Scottish economy?
Figures out last week indicated that growth in Scotland slipped by 0.2 per cent in the final quarter of last year. Cue shock-horror in parts of the media. In fact, overall economic growth in Scotland in 2016 was a positive 0.4 per cent despite the fall in oil prices, the uncertainties caused by Brexit and more than £10bn in real terms sliced off the Scottish Government’s budget.
Nor, for the record, does Scotland have an overall tax take greater than England’s: if you take lower council tax into account, it’s cheaper to live north of the Border.
So how do we explain slowing Scottish growth compared to the UK average? Let’s start by asking what’s happening in other regions of Britain. We don’t know exactly because the Conservative Government does not bother to publish up-to-date figures for the English regions. But all the evidence suggests growth is slowing outside of London. For instance, we do have some robust estimates for Northern Ireland, where growth is dropping sharply. What we are seeing is a Britain-wide deceleration caused by declining business investment – itself the result of worries over a hard Brexit.
Delve down into the recent numbers and you will find that what growth there is in the UK is based on rising consumer debt, which is sucking in foreign imports. The national savings ratio has dropped to an historic low as folk borrow to spend. This is hardly sensible or sustainable. The deceleration in growth across the country is a sign folk are no longer willing to run up credit card debts. Brexit has caused the pound to collapse and sent inflation rocketing.
Which means now is a good time for First Minister Nicola Sturgeon to be abroad publicising Scottish products. Unlike the UK as a whole, Scotland runs an account surplus on its external trade thanks to high-tech companies like East Lothian’s Lemac, Sunamp, Astrosat, Bruntons Aero Products, Robop and Marott Graphic Services. Let’s not talk Scotland – or East Lothian – down.