Upbeat figures must not mask need for positive policies

WHERE are the policies to promote recovery? Figures showing a fall in claimant-count unemployment and that Scotland is moving out of recession may give the politicians comfort that the economy is returning to health and that those horrific figures on the budget deficit and overall government debt will now melt away.

This is dangerously complacent. Close inspection reveals large sections of the Scottish economy are still mired in recession with growth sluggish in other areas, while unemployment on the wider International Labour Organisation measure continues to rise. The fact that fewer people are claiming unemployment benefit does not at all mean there are more people in work.

Official figures on the Scottish economy continue to lag those of the UK by several months, a bizarre oddity which the SNP administration has failed to remedy. They show that while the Scottish economy grew by 0.2 per cent in the final quarter of last year – lagging the growth recovery across the UK as a whole – the damage to business and employment has been substantial. Overall GDP is down 4.8 per cent on a year-on-year comparison. The production sector is down by 8.9 per cent and the construction sector by a whopping 10.8 per cent. Output from the building sector fell by a further 2.8 per cent in the quarter and Michael Levack of the Scottish Building Federation warns that the figures for the first quarter of this year will be as bad, if not worse.

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This is, therefore, no time to be crowing about recovery but instead spelling out in detail policies aimed at promoting growth. Yet the housebuilders are having to battle against a Liberal Democrat proposal to slap VAT on new building. This would immediately add to housing costs. The party, says Jonathan Fair, the head of Homes for Scotland, seems to be unaware that the industry is facing its worst housing crisis since the Second World War, has lost up to half its work force, that development has slumped to near-record lows and first-time buyers are struggling to find deposits. Measures that increase the cost of new homes, whether public or private are, he says, "sheer madness".

Only the most limited comfort can be taken from figures showing claimant-count unemployment falling by 32,900 in March across the UK, taking the rate to a nine-month low of 4.8 per cent. But on the broader ILO measure, the jobless total rose in Scotland by 6,000 to 208,000 and across the UK by 43,000 in the three months to February to a 15-year high of 2.5 million, or 8 per cent. The overall employment rate is down to 72.1 per cent, the lowest since 1996.

It is not enough for the parties' recovery plans to proceed by negatives – the Conservatives by not implementing the full proposed National Insurance increase, Labour by not implementing early public sector cuts. Bold and positive programmes are needed to address our sluggish economy, boost the job-creating private sector and replace fear with hope.