The Scottish economy will sink if the SNP does not change course

The Scottish economy will sink if the SNP does not change course

by Jamie Greene
article from Saturday 22, April, 2017

ONCE AGAIN this week in the Scottish Parliament my Conservative colleagues and I brought forward a motion on the worrying trend of the Scottish economy.  A subject, like its failings in education, which the Scottish Government has neglected to bring forward in its own time. Perhaps on the issue of the economy it is either too afraid to, or too ashamed to face the consequences of its actions.

I’ll begin by pointing towards page twelve of the manifesto the SNP stood on last year, entitled A Wealthier Scotland. It’s opening lines state:

Our focus is on growing Scotland’s economy and creating rewarding opportunities for all the people of our country”.

If that’s its focus, the SNP has a funny way of showing it. It is depressing we were required to have the debate at all, that after ten years of SNP government whilst the UK economy grows, Scotland’s has shrunk. We are no longer talking about lower growth in Scotland, we are talking about negative growth. Stagnation. 

We are slipping into a recession in Scotland under the less than watchful eye of this government.  

The Titanic warnings came like a political Frederick Fleet spotting an Economic Iceberg straight ahead. So why did the SNP sail Scotland straight into it? Bow first. 

The SNP will blame Westminster of course. Brexit. The Tories. Austerity. Anyone and everything but their own policies. 

So what does all this mean, on the ground, for real businesses in Scotland?

For months now I have been helping raise awareness of the private car hire industry. Small wedding and special event car companies, including one in Saltcoats in my region, are struggling with the additional financial burden of regulation.  One owner told me that hundreds of small private car hire firms are at risk of closing down due to flawed legislation. Real companies. Real jobs. Real people. 

You only need to look at the Federation of Small Businesses’ (FSB) recent survey on business confidence to understand the scale of the problem. The FSB’s trusted “business sentiment index” recorded a figure of +20 points for the UK and -9.6 points for Scotland – a gap of nearly 30 points.

This is an SNP government that thinks wealth creation and entrepreneurialism are dirty words. I have had enough. There is no shame in wanting to grow the economy, nor is there any shame in creating wealth – much needed to fund our public services, create employment and rejuvenate many of Scotland’s suffering high streets. 

Scotland lags behind every other region in the UK on job creation rates. The UK rate is 8.6 per cent.  In Scotland? Just 1.7 per cent – ONS figures, not mine.

Is it any wonder the Scottish economy is retracting?

How can firms have any confidence in a government that from April 2016 doubled the supplement on the rate for large businesses from 1.3 to 2.6 per cent. What kind of message does that give to business?

How can our agricultural industry flourish when farmers don’t even know if they’re going to be paid on time?

How can households have faith in a government that says if you live in a modest band E house, you should be taxed more? 

How can workers have confidence in a government that  says that in Scotland you will be taxed more than the rest of the UK?

A month ago today The Times published warnings from leading businesses and economists that an independence agenda could lead to investment uncertainty and that’s exactly what is happening. 

So much for focussing on creating a wealthy Scotland.

The SNP might pay it lip service in its manifesto but recent figures on Scotland’s slowing economy are a damning indictment of what taking your eye off the ball really looks like in the cold light of day. But the SNP’s refusal to even acknowledge that there is a problem has led us to where we are today. Indeed, the SNP’s amendment to our motion on the economy did not even acknowledge last quarter’s contraction, one of the most significant economic indicators released in the last 12 months. The SNP members were burying their heads in the sand to hide from their own shortcomings.

How many more warnings does the SNP need?

The FSB, The Fraser of Allander Institute, The Scottish Chambers of Commerce, The Royal Institute of Chartered Surveyors, the Institute of Directors.

Warning after warning. On income tax, on independence, on LBTT, on productivity.  Are they all wrong? Are we all wrong?  

So in the spirit of positivity and being helpful (and I like to be helpful) here is what the Scottish government should do: Three simple things:

1) Take the threat of independence firmly off the table to give  investors and businesses the certainty they deserve. The First Minister has the power to do this immediately. Not because I am asking her to. But because Scotland needs her to.  

2) Stop taxing Scottish workers more than the rest of the UK so you can attract the best talent to Scotland from elsewhere in the UK. I recently attended an IPPR event discussing the skills gap that exists across so many sectors of Scottish industry. How can we attract the best talent to Scotland when we have a sign at the border: Welcome to high tax Scotland?

3) Create an environment that rewards hard work not one which penalises ambition. You cannot tax your way into growth, even the Finance Secretary must know that. Then again, he had never heard of the Laffer Curve. So I wouldn’t take his financial expertise for granted. Yet the sad truth is that his ideology is in charge of the majority of levers that control the Scottish economy.  (Note to Mr Mackay: the curve studies the relationship between rates of taxation and the resulting levels of government revenue. Go have a read.)

We’ve reached the point where our economy is shrinking, there was almost no growth in 2016. These aren’t normal figures, they’re indicators of a lack of vision for the economy and a punishing market environment.

These aren’t just numbers in a spreadsheet, these figures represent the livelihoods of people up and down the country who are paying the price of an SNP government. And the sooner their ship sets sail, Scotland can say bon voyage, adios, au revoir to the SNP’s mismanagement of the economy. 

Think about this when you go to vote in the forthcoming two elections. 

Who do you want to Captain your economy? The Scottish Conservatives, or the SNP?

Someone who will heed warnings and turn the ship around when the dangers approach, or who sails straight into that iceberg – leading everyone on-board to their fate?  

 

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