They were written at a time when the now globally renowned bard had yet to prove himself as a writer and was in the financial doldrums. Almost 250 years later, and as we celebrated Burns’ birthday this week, it’s sobering to reflect that many of our fellow Scots currently share that gloomy disposition.
The results of a recent Scotland-wide poll certainly bear this out. The survey, conducted by Survation, found that a clear majority of people believe 2023 will be a bad year for Scotland’s economy, while 71 per cent feel the cost-of-living crisis will only worsen.
Perhaps most interestingly, there is a distinct lack of confidence among the general population that either the Scottish or UK governments have the right policies in place to deliver economic prosperity. Alison Rose, chief executive of NatWest Group, captured this sentiment during an interview this week: “We are seeing very little investment thanks to very low business confidence… that for me is a real concern because it will affect future growth.”
The need to achieve sustainable economic growth has never been so apparent and, given this hugely challenging period, in which businesses have shown such resilience in the face of adversity, there is an urgent need for politicians and policymakers to deliver plans that can create the environment for them to thrive.
The imperative of delivering sustainable, inclusive growth should not be viewed as a contentious issue but as a collective national ambition. Ultimately our ability to improve the provision and funding of public services and enable a long-term rise in living standards, particularly for those in lower and middle-income households who have been hardest hit by the cost-of-living crisis, can only be achieved if we successfully increase our tax base.
The average GDP growth rate in Scotland has underperformed that of our nearest neighbours in recent years and we face significant structural challenges such as an ageing population and projected population decline. Scotland’s real-terms productivity has been almost stagnant, lagging slightly behind the rest of the UK and well behind other advanced European economies of similar size.
In seeking to address these challenges and accelerate our recovery, we must underpin any future approach with measures which can stimulate sustainable, long-term economic growth. Financial and professional services will be central to meeting this ambition. Our industry is already a major source of economic strength, sustaining around 150,000 jobs in highly skilled, well-paid sectors, and contributing around £14bn gross value added to the UK economy.
Private investment supports businesses and entrepreneurs to grow and innovate, creating jobs and finding solutions to big societal challenges. Long-term capital is needed to invest in infrastructure, clean energy and modernisation while delivering a return on investment for customers.
That’s why the focus of Scottish Financial Enterprise this year will include a range of initiatives designed to support growth for our own sector and the wider economy. Working in partnership with several organisations, we will urge the Scottish and UK governments to progress policy interventions that will help set the underlying economic policy framework to enable sustainable growth and job creation with clear recognition the private sector is key to delivering this.
In order to thrive, Scotland must be viewed as an attractive place to work, live and invest. We want to encourage individuals, particularly young and aspirational professionals, to have successful and long careers here so we must ensure we have a tax regime that is fair and at least competitive with the rest of the UK. Equally, if we are to accelerate economic recovery, consideration must also be given to the boundaries of regulatory intervention in the economy and acknowledgement that the role of government is to help, not hinder, in this regard.
Our industry remains well-capitalised and ready to be an engine of growth for the wider economy. But to maximise our potential, we need to see real focus from both the Scottish and UK governments on policies that aid competitiveness, support collaboration and encourage investment. So, as we raise a dram to Scotland’s national poet this week, let’s also toast a renewed focus on achieving sustainable economic growth and prosperity for our national economy.
Sandy Begbie is chief executive of Scottish Financial Enterprise