SNP minister claims Scottish economy growing by 0.1 per cent is ‘good news’

SNP minister claims Scottish economy growing by 0.1 per cent is ‘good news’

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SNP ministers have been urged to “wake up” after they insisted Scotland’s latest economic figures were “good news” despite growth being almost zero and a third of the rate across the UK.

Keith Brown, the Economy Minister, welcomed GDP statistics covering April to June this year showing the economy flat-lining, with growth of only 0.1 per cent compared to 0.3 per cent across the UK.

He said it was “good” that growth was more than zero, but economists pointed out that the increase had been just 0.1 per cent or lower for five of the last six quarters. Over the previous year, Scotland’s growth totalled just 0.5 per cent compared to 1.5 per cent for the UK.

Professor John MacLaren, an eminent economist, said the minister’s reaction “suggests that he considers such a poor performance to be acceptable. Surely that cannot be the case.”

With Nicola Sturgeon considering hiking income tax, business groups said the figures showed consumer and business confidence was “brittle” and argued ministers “should avoid any steps which will hit household incomes.”

The Tories said the statistics should be “a wake-up call” for the SNP that companies across the country were suffering thanks to their “anti-business agenda.” Labour accused ministers of complacency “at a time when the Scottish economy remains on the cliff edge of recession.”

The Scottish Government had boasted about the previous quarter’s figures, which initially showed 0.8 per cent growth compared to 0.2 per cent across the UK.

However, these have since been revised to 0.6 per cent and 0.3 per cent respectively and the new figures appeared to confirm a longer-term trend of extremely poor growth below the UK average.

Mr Brown said: “Today’s figures are good news, showing the Scottish economy continuing to grow over the second quarter of this year.

“Although this is more modest growth than we would ideally like to see, it is particularly pleasing to see growth over the first half of the year in industries linked to the oil and gas supply chain, which provides more evidence that confidence is gradually returning to the sector.”

While Scotland’s service sector, which makes up the bulk of the economy, grew by 0.7 per cent in the second quarter of 2017, production fell by 0.7 per cent. Construction slumped by 3.5 per cent, meaning this sector has now been in decline for 18 consecutive months.

Professor Graeme Roy, director of the Fraser of Allander Institute at Strathclyde University, said it was “important to look at the longer-term trend given the inherent volatility” of the quarterly figures.

He said the economy had grown over the past year at around a third of the UK rate and the latest statistics “continue to show just how fragile growth the Scottish economy is at the current time”.

Prof MacLaren, of the Scottish Trends think tank, said Scotland’s GDP output had increased by only 1.2 per cent over the past two-and-a-half years compared to 4.5 per cent for the UK.

Ewan MacDonald-Russell, head of policy for the Scottish Retail Consortium, said: “With customer confidence brittle, Ministers should avoid any steps which will hit household incomes, and consequently impact on consumer spending.

“That spending is still the lifeblood of Scotland’s economy and ensuring it continues to pump around the economy is a priority.”

Dean Lockhart, the Scottish Tories’ Shadow Economy Minister, said: “Alarm bells should be ringing for the Scottish Government, particularly as new powers mean our public services are becoming more dependent on the performance of the economy.”

David Mundell, the Scottish Secretary, said: “The GDP figures show the Scottish economy growing, but at a far slower rate than we would like to see.”