Comment: Scotland not as black as SNP make out

IN HER maiden speech last week, Mhairi Black, our youngest MP, swept all before her.

It was hailed across social media. Here, surely, was an authentic young Scottish voice, speaking of and for her time. Seldom have the woes of Paisley been more eloquently expressed, or the regime of benefit cuts, austerity and Scotland’s general misery more roundly denounced.

But there is another Scotland, an altogether more hopeful country, and one to which the SNP is all too ready to lay claim when it politically suits. Last week brought ample evidence of a world beyond Mhairi Black’s bleak depictions of deprivation, poverty wages, woeful life chances and crushed hopes: what Paisley-born former Scotland on Sunday editor Iain Martin described as “gift of the gab fluency and ‘think of the children’ handwringing” – a style, he added, that “particularly suits agitprop young Left-wingers such as Black”.

Here I am not without sympathy for the SNP administration, which knows there is a more positive story to tell but struggles to tell it against this wailing chorus of despair in its own ranks. For the fact is that, setting some notable caveats aside, Scotland is doing better.

Figures last week showed Scotland’s economy growing faster than the UK overall, that it had proportionately more of its people in work and fewer on the dole compared with the rest of the UK.

Here are the facts: Scottish GDP grew by 0.6 per cent in the first quarter, compared with 0.4 per cent for the UK over the same period. Employment rose by 1,000, with most of the gain in full-time jobs. In comparison, UK employment fell by 67,000. Scottish unemployment meanwhile fell by 15,000 over the latest quarter, equivalent to a fall of 0.5 percentage points. In comparison, the figure for the UK was a rise of 15,000.

On an annual comparison, (the March-May quarter of this year against the same quarter a year ago), Scottish employment rose by 40,000 or 1.2 per cent. And at 74.3 per cent our employment rate remains above that of the UK by one percentage point. The gain across the UK was just 0.5 per cent. Scottish unemployment over the year has fallen by the equivalent of 1.4 per cent, while across the UK it fell by just 0.8 per cent. And at 5.5 per cent, Scotland’s unemployment remains marginally below that of the UK (5.6 per cent).

Moreover, latest survey data point to an intensifying shortage of qualified applicants for jobs. Last week Andy Willox, head of the Federation of Small Businesses Scotland, warned that “skills shortages are a growing concern for Scotland’s small businesses”. We have employment supply problems – but there is no lack of opportunity.

This does not mean that we are basking in the warm sunshine of prosperity but it helps to correct the misimpression of a Scotland shivering in relieved jobless misery.

Much has been made of “low pay Britain” and even the Conservative Chancellor has admitted that “Britain deserves a pay rise”. Improvement has been a long time in coming. But here again, official figures point to improvement under way. Official figures for earnings including bonuses in June show an annual growth rate of 3.2 per cent, the fastest rate for five years. That is a significant rise in real earnings for millions of households, particularly when seen in the context of inflation back at zero.

And it will doubtless have been a major consideration behind the latest guidance from Bank of England Governor Mark Carney last week of a rise in interest rates – the first for six years –around the turn of the year.

Economic data in Scotland over the first six months of the year pointed to a slowdown, fuelling concerns that recovery momentum was being lost. So where has the growth come from?

Growth in the first quarter was fastest in construction (plus 2.1 per cent), hotels & catering (plus 2.0 per cent) and “other” services (+5.4 per cent). In contrast, financial services (-2.2 per cent) and agriculture (-4.0 per cent) performed poorly.

On a year-on-year comparison Scotland’s growth rate at 2.8 per cent still fractionally lags that for the UK (2.9 per cent). But here again construction was a stand-out performer with growth of 21.1 per cent – notably stronger than the UK as a whole.

It is widely claimed that Scotland has been “held back” by massive cuts in infrastructure spending. But the striking construction figure owes much to big projects under way, many of them funded by the Scottish Government: the Border railway, the Forth Replacement Crossing, the M8 upgrade in Lanarkshire.

Says John McLaren of Fiscal Affairs Scotland: “Scotland’s economy continues to improve in terms of higher output and employment. The boom in the construction sector over the past year has been remarkable… After faltering at the end of 2014, the services sector in Scotland has returned to growth, with the hiccup in the performance of the business services sector now over.”

The picture, of course, is not one of unalloyed optimism. The Scottish Government has had to come clean on drastically reduced forecasts for North Sea oil revenues. There is an increasing shortage of labour – in particular skilled labour. There are growing uncertainties over future tax policy in Scotland which could inhibit future investment and expansion. And global concerns – China and the doubts on Greece – could well darken prospects in the year ahead. These concerns barely figured in the Scottish Government’s latest State of the Economy assessment.

But the bleak narrative of the Left on which Mhairi Black draws heavily is of a wholly different order of despair. It is essentially pessimistic. As the entrepreneur Luke Johnson points out, it argues that the current economic system is broken, inequality is rising, poverty is endemic and “austerity” is crushing the spirits of millions.

They say that “neo-liberalism” is the cause of our miseries. But as Johnson points out, “in fact British austerity is largely a piece of fiction: according to HM Treasury’s budget, expenditure in 2010/11 was £697 billion; in 2015/16 it is forecast to be £743 billion – an increase of almost £50 billion. Public spending has grown – it has not been cut.”

We have problems. But prospects in Scotland may not be quite as black as Mhairi paints them. «