It’s the economy, stupid! Well, when we come to considering the Scottish economy we need to be reminded of that famous Forrest Gump saying impressed upon him by his mother, “Stupid is as Stupid does” – which means don’t judge people on appearances but by what they do.
And boy, do we have a Scottish government behaving stupidly, demonstrated by the latest economic statistics showing that Scotland is halfway to recession.
In the last quarter of 2016 (Oct-Dec) the UK’s economic output, measured by Gross Domestic Product (GDP), grew by 0.7% while Scotland’s went into reverse and fell by -0.2%.
If there is another fall in the first quarter of 2017 (Jan-Mar) then Scotland will officially be in recession. That is very bad news.
Negative growth means that Scotland, viewed as a business, is selling and producing less. In turn it means that government revenues, which are calculated on expected GDP, will be less and the shortfall will have to be made up by borrowing more or taxing more.
As the SNP government has already said it would borrow to the max, it means taxes will have to rise or there will have to be cuts in services and employees. Neither are a good option as they both encourage economic growth to slow down further.
In typical “stupid does” fashion the SNP Government Financial Secretary, Derek Mackay, absolved himself of any responsibility – instead he blamed YOU! Yes, you. For his excuse for the fall in economic activity is that you are so worried by the threat of Brexit that you have reduced your spending and that is slowing down the economy.
So get this, the SNP message is that you have to spend more to save us from recession, you have to go into more debt, max-out the credit and storecards, borrow against your house, all to save him from behaving stupidly.
Unfortunately for Mr Mackay it is now April and his exhortations will make no difference to the First Quarter figures, which closed on Monday, at the end of March. We will know how well or badly we have done when the figures become available at the beginning of July.
The truth is quite different, for when we look at the statistical detail we can see retail spending grew by 2% since Q4 2015. So, you were already doing your bit.
What has happened is that construction and manufacturing has fallen badly and that can’t be blamed on your wallet.
The reality is that it is the SNP Government’s own policies that are causing the economic crisis – we might call it the Sturgeon slump.
Just this week the serial entrepreneur Robert Kilgour reported how he regularly comes across big financial investors that no longer consider Scotland as a place to put their funds.
The reason for this is they risk averse, and with Nicola Sturgeon’s constant Woody Woodpecker rat-a-tat-tat about a second independence referendum she is scaring investors away. Kilgour’s anecdotal evidence backs up previous surveys by property agents who have reported a slow down in purchasing and commissioning of new developments. All of this destroys jobs and activity in manufacturing and construction sectors.
And why is the UK experiencing strong economic growth when we are not? Surely we should have a similar economic pattern, especially as our biggest customer is the rest of the UK!
In fact, if we go back a few years what you can see is that Scotland was performing broadly the same as the rest of the UK, but since the 2014 referendum we’ve flat-lined while the UK has pulled away. Being assailed constantly with the prospect of a second vote is damaging the economy
To add to this instability that investors hate, Mackay and Sturgeon have been making Scotland the highest taxed part of the UK. Your council tax, business rates, income tax and stamp duty have all gone up compared to the rest of Britain.
The outcome? In 2016 UK growth was 1.8% while Scotland only just scraped in with 0.4%. Most damning of all was how all parts of manufacturing shrank; Food & Bev -6.6%; Textiles -11.6%; Refining -8.3%; Metals -6.3%; computers -5.9%; Transport equipment -8.85; and Other -6.7%.
Stupid is as stupid does – and we have one stupid government that cannot see it is taking us on the road to ruin.
Nicola’s numbers just don’t add up
Nicola Sturgeon tweeted this week, “In terms of our economic policy, we have worked to promote gender equality.”
Shame, then, that our girls are 43% more likely to get a university offer than our boys. That’s what I call a fail.
Meanwhile, NHS Scotland missed its A&E waiting time target for the seventh consecutive month. But where was the First Minister..?
While we were finding out our economy is in dire straits, our First Minister was doing her day job – in the United States, funded by you, announcing £1.2 million for training 200 women from war zones in conflict resolution at the UN.
Education is meant to be her “number one priority”, so how that resolves our literacy and numeracy problem baffles me.