Is economic growth the elephant in the room?

Is economic growth the elephant in the room?

by Jack Perry
article from Monday 21, May, 2018

THIS is the question I posed when speaking at a Scotland in Union meeting in Edinburgh last month.

We’re facing a bit of an oxymoron here in Scotland. We have a fantastic business heritage, a proud track record of innovation, as well as a list as long as your arm of inventions that have been adopted the world over. How have we achieved that?  Through hard graft and an in-built desire to grow and learn, personally as well as nation-wide. Scots’ ingenuity and entrepreneurialism is alive and well. It is ironic, however, that it is the Scottish Government that is now holding us back.

We are in this vacuum where the Scottish Government really has no affinity for or gives any real priority to wealth creation and growth. Instead it chooses to support populist consumption measures to the detriment of economic development and investment. They are doing a number of good things but just not enough.

Scottish Enterprise for example now receives £208m and HIE £56m. Some may say that £264m is a reasonable figure for economic development, however it pales by comparison against the £1.4bn the Scottish Government invests in recreation, culture and religion; or the £1.2bn allocated to environmental protection – or indeed the debt service that costs the taxpayer £3bn each year.

No-one can deny that these are all vital services to support the country, however economic development is the foundation that builds the jobs, brings in the work and secures international commissions. Looking at the stark figures, it is no surprise that Scotland is underperforming against our major competitors and rUK. Out of total public spending of £71 bn per annum and against the backdrop of a poorly performing economy, is this not an indicator of a government who really don’t get it?

We have an administration that talks the talk about business and wealth creation, but is content for us as a nation to bump along without paying our way and prioritises consumption over investment. All these problems are fixable but we need a government that is focused on economic growth rather than the constitution. I am not saying it is an easy fix, but as the old analogy goes, how do you eat an elephant? The only sensible answer is to tackle it one bite at a time.

In other words, we are now in a situation where years of constitutional fixation by ministers has left a huge legacy of missed opportunity for the economy. We now need them to focus on the fundamentals of wealth creation and that means encouraging businesses to invest and grow step-by-step.

Patriotism is a love for your country and as a proud Scot I have spent my career helping to build economic opportunities and in attracting investment. I am also proud to be British and passionately want the United Kingdom to endure.

To succeed in that aim, we must acknowledge that remaining part of the Union is a key lynchpin in growing Scotland’s wealth.

Jack Perry CBE
Scottish-Business.UK

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