Terry Murden: Storm has been weathered but the outlook is far from settled

Published on Wednesday 21 April 2010 20:34

ECONOMISTS said it would be a close run thing and a number of them were tipping Scotland to remain in recession for another quarter. But none will be disappointed that their pessimism proved misplaced after figures for the fourth quarter of 2009 showed the country just creeping into recovery mode.

The 0.2 per cent growth means Scotland is behind the UK economy which, on revised figures, expanded by 0.4 per cent. The figure for the first quarter of this year will give us some indication as to how sustainable the upturn is likely to be. The GDP figure for the UK is out tomorrow but we'll have to wait until July before getting the Scottish numbers.

Fears of a double-dip recession for the UK have receded, but for Scotland that 0.2 per cent figure still looks a little unsettling. We're 1-0 up against Brazil with 85 minutes of the game still to go.

Needless to say the Scottish Government was taking credit for the move into positive territory while berating Westminster for making the work of recovery so much more difficult.

Joe Fitzpatrick of the SNP, claimed that "thanks to the Scottish Government's economic recovery plan Scotland has weathered the storm better than other parts of the UK...and (spent] a shorter period in recession".

Others took a different angle: Dougie Adams of the Ernst & Young Item Club preferred to focus on the size of the downturn, rather than its longevity, noting that "the Scottish economy shrank marginally more than the UK over the course of the recession."

As for blaming Westminster, it was back to the public spending issue. Fitzpatrick said the task of building the recovery and creating jobs had been "made harder by the cuts being imposed by the UK government on the Scottish budget".

Graeme Sharp, chief economist at the Institute of Directors, took an opposing view, arguing that the latest unemployment figures (for the UK) reveal "more worrying evidence that the government is still not taking appropriate steps to bring public spending under control".

In truth, there are self-inflicted wounds on both sides of the Border. The SNP is under fire, particularly from the Scottish Chambers of Commerce, for "huge rises in business rates" while Labour in Westminster continues to fend off attacks from all sides over its plan to hike national insurance contributions – the so-called tax on jobs.

The Lib-Dems have gone farthest in proposing a reform of the tax system, though the party's tax cutting proposals are aimed at helping the low paid rather than cutting taxes for businesses and entrepreneurs.

A truly innovative tax system that helps stimulate growth is what business really wants but it doesn't seem to feature in the mud-slinging.

Sell-off of cinema advertiser brings SMG back to small screen

SMG acquired Pearl & Dean, the famous cinema advertising business, over a decade ago at a time when it was seen as part of a mini-media conglomerate that the Glasgow company was building under the ambitious leadership of Andrew Flanagan.

History tells us that it didn't work out for SMG or the chief executive who departed the company, since renamed STV to reflect its revised focus on its core television activities. Under its current management the company has gone full circle and the journey has not been without pain.

Disposals have cost the company and its shareholders dearly: Virgin radio and now Pearl & Dean have been sold for less than SMG paid for them and STV is a fraction of its size when Flanagan was strutting his stuff.

The plan under current chief executive Rob Woodward is to build the company around its television business and a new multi-media strategy that is still in development.

But after offloading the last of its non-core assets it is becoming increasingly reliant on programme-making and will hope it can galvanise a recently-hired creative team to ensure there is a sufficient flow of commissions. A first series for the BBC hints at some progress at widening its scope.

TV advertising plummeted during 2009, described by Woodward himself yesterday as a "horrendous year", but there are signs of improvement in that direction, too.

The total television advertising market is forecast to be up 21 per cent in April and by 23 per cent in May, while preliminary indications for June show growth of between 10 and 20 per cent

The shares, after a good run in the past fortnight, fell back as investors took profits. They remain a bit of a gamble.