Crombie dismisses talk of 'green shoots'

Published on Monday 15 June 2009 10:02

STANDARD Life boss Sir Sandy Crombie has dismissed talk of the "green shoots of recovery" in the Scottish economy.

The Edinburgh-based insurer's departing chief executive, recently appointed to the board of Royal Bank of Scotland, said he believes the economy may still be going down.

His comments are in line with CBI Scotland, which warns that the Scottish economy may not return to growth until the middle of next year.

The forecasts come despite Chancellor Alistair Darling's assertion that growth will return in the second half of this year and gross domestic product (GDP) will rise by 1.25 per cent next year. Sir Sandy said: "There are talks of green shoots, but I can't see them.

"Things could go either way."

The CBI did say that there are signs that the worst of the recession is now over.

While growth is expected to return at a UK level in the first three months of the border, its Scottish arm said Scotland may have to wait until the middle of next year.

It predicted GDP growth of 0.7 per cent in 2010, following a 3.9 per cent decline this year. Its forecast for 2010 is still well below the estimates of the Chancellor.

David Lonsdale, assistant director of CBI Scotland, said: "With the wider UK economy still in the doldrums, the likelihood is that Scotland's economy won't perk up until well into next year.

"These latest figures underline the need for government at all levels to continue to do all they can to aid business through the downturn, and to prepare Scotland to take full advantage of the recovery when it comes."

Meanwhile, Sir Sandy said that the decline of RBS and the collapse of HBOS is something that people in Edinburgh will "have to get over", but that RBS has to now rebuild itself.

He said that, since he was only appointed as a non-executive director at RBS only last month, it is too early to pass judgement on what happened at the bank, and he expressed sympathy for former chief executive Sir Fred Goodwin, who has been vilified for role in the bank's troubles "I have a strong reaction at a human level," he said. "And I think that he's taken a real beating. It might not be fashionable to feel on the human level, but I do."