Looking at the skyline across Scotland’s capital city, a striking feature is the number of cranes signalling the rebirth of many formerly abandoned or derelict areas. The same holds true for other projects such as the V&A on Dundee’s waterfront or the new Queensferry Crossing over the Firth of Forth.
But the outward signs of activity are misleading. The latest figures showing that Scotland’s unemployment rate is now 5.3 per cent – compared with 4.8 per cent for the rest of the UK .Here we have yet another indicator that Scotland’s economy is faring worst than the UK economy as a whole.
There is no doubt the continuing uncertainty over Brexit is affecting the situation, with many businesses exercising caution, while householders too are delaying making major decisions such as moving home until their long-term financial prospects are more secure.
But the figures beg the question – “what is England doing right that Scotland isn’t?” or is the added undertainty of a second independence referendum the additional factor?
Jamie Hepburn, minister for employability and training, has said that Scotland’s unemployment rate is down by 0.4 per cent over the year, with the country outperforming the UK on youth and female employment. Be this as it may, it does not alter the more worrying fact that Scotland’s employment rate is falling. This is a greater indicator of the heath of the economy than the unemployment figures as, quite simply, people can drop off the official unemployment figures for a range of reasons. If they are not on the employment figures it means thay are not economically active.
Mr Hepburn talked about recent initiatives such as an extra £100 million for capital projects and establishing a new £500m Scottish Growth Scheme supporting small and medium enterprises. This is absolutely right and proper and news of such endeavours is to be welcomed.
Another positive factor is that the Scottish Government now has more levers to control the economy, especially many tax powers.
Today’s draft budget proposals to be revealed by Finance Secretary Derek Mackay, provides the ideal opportunity for the Scottish Government to step in. Liz Cameron, chief executive of the Scottish Chambers of Commerce, is righty warning of choppy waters ahead and has outlined one act that would be a real improvement. Ms Cameron said the Scottish Government has a “golden opportunity” in the budget to give businesses a tremendous boost by tackling the rising costs of business rates.
This is a measure in Holyrood’s gift and would allow businesses which form the solid foundation of Scotland’s economy to flourish.
Bringing forward big building projects provides help for a defnined sector. Cutting business rates would be a real help to businesses in every sector, and allow greater opportunity for them all to grow, and a give a far bigger boost to the economy in general.