Bill Jamieson: Diet of low growth ambrosia has begun to cloy

John McLaren says performance has been poor for eight years. Picture: Greg Macvean
John McLaren says performance has been poor for eight years. Picture: Greg Macvean
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Happiness can blossom where you least expect it. Some years ago I chaired a Scottish election hustings in Edinburgh. Leading figures from the main political parties earnestly stressed their commitment to economic growth.

But as the meeting broke up, an elderly lady approached me. “What good is economic growth?” she demanded. “We don’t need it or want it. We’re much better if it just stays the same.”

What a miserable old bat, I thought. I tried to mount a defence of growth, but I could see it was futile. Her facial expression was as soft as a walnut cracker.

But today she must be the nearest she has come to a state of bliss. Instead of the roaring engines of growth that the politicians pledged to fire up, the boilers of Scotland’s economy are barely warm. Instead of a roar we have a murmur, a stuttering gurgle as we circle the plughole. We have an engulfing 
entropy, life with barely a pulse, the onset of rigor mortis against pestilential growth.

Compared with the rest of the UK, here in Scotland the forces of stasis are winning. Last year our economy grew by just 0.8 per cent, against the 1.8 per cent scored by the UK. This extends a prolonged period of sub-par economic performance. Indeed, revised data shows that there was even a very mild recession in Scotland during 2015.

I have further good cheer for my no-growth lady friend, courtesy of economist John McLaren. His latest Scottish Trends analysis reveals this as no momentary downturn. After adjusting for the abnormal pattern of construction growth, Scotland’s performance, he writes, has been very poor, at just one per cent a year for three years. Indeed, the picture does not look any better when the comparison is stretched over the past eight years, with annual growth averaging just 1.1 per cent. By comparison the UK overall has grown by around double this rate (two per cent a year) over the past eight years.

Of course, the growth lobby has taken comfort in the long continuous swing towards services. But here too the raucous tumult of growth has quietened. While the business services sector has been a strong performer since 2009, its annual growth rate since, at 2.5 per cent, is well behind that seen at the UK level (annual average 5.6 per cent).

Arguably the most telling statistic is the performance of GDP per head. Here, McLaren notes, Scotland has now experienced no change since the start of 2015, compared with a rise of 3.2 per cent seen for the UK over the same period. So, not just low growth on this measure, but perfect stasis.

You would not garner any of this from the Scottish Government press office: that charmed grove of ambrosia, where the drink of the gods confers blissful longevity upon whoever consumes it.

According to the official release, the latest figures mark the fourth consecutive quarter of positive growth in Scotland and an improvement on 2016 when the economy grew by just 0.2 per cent. It was the turn of Jamie Hepburn, Minister for Employability and Training, to inhale the ambrosian vapours: “Scotland’s economy,” he declared, “continues to show strength… These figures are welcome but we are determined to do more to grow our economy and protect Scotland from the headwinds of Brexit.”

You never have to read more than a few sentences of a Scottish Government press release before reference is made to “the headwinds of Brexit”.

Let’s not make light of the uncertainties of Brexit and the concerns of businesses over the terms of the final outcome. But there is never an explanation from St Andrew’s House as to why, despite these “headwinds”, the UK as a whole is not suffering an equivalent handicap, considering that it is the whole of the UK, not just Scotland, that is withdrawing from the European Union.

Two weeks ago the minister pronounced that “Brexit remains the single biggest concern to Scottish businesses, and the greatest threat to our economy”. But according to Liz Cameron of the Scottish Chambers of Commerce, representing more than 50 per cent of private sector jobs in Scotland, speaking last week, “our economic data continues to show that recruitment difficulties remain top of mind for Scotland’s businesses. Making sure that Scotland continues to attract and develop the talent required to power the growth of businesses across the country is a priority…”

Now it cannot be said that the administration is idle on the economic front. It has committed to new infrastructure investment, extension of broadband and more help for apprenticeships and youth training. All these are laudable, as indeed are the ambitions of the government’s 16 growth initiatives, nine development agencies and 32 local authorities.

But it has to be asked why, amid this Amazonian jungle of government promotion activities, the economy continues to perform so poorly. Yet not only is there little sign of any policy change on the horizon but there is also little recognition of the yawning gap between the performance of Scotland’s economy and that of the UK, or even that we have a problem with our growth performance.

As McLaren put it: “Despite initiatives like the new Scottish Investment Bank, current Scottish Government policies seem unlikely to do much to remedy this. Meanwhile the lack of understanding, or interest in, why this has happened remains of worry.”

If such a miserly performance was evident across the UK, the demands would be loud and long for an explanation and action – and much of them from the SNP contingent at Westminster.

Cheer might at least have be taken this weekend by the reminder from Chancellor Philip Hammond that tax rates are being lowered for middle and higher earners. But this pleasing reassurance had to be expunged from the Scottish editions of newspapers, for here we are to have five tax bands and the burden for higher and top earners is being raised.

I’m happy for the lady who had no enthusiasm for economic growth. But combine this with a higher tax take and, hey, why should the joy not be shared? Pass round the ambrosia. We are now all in need of the nectar of the gods.