Leader comment: Growth strategy needs rethink

It might be a new year, but it's the same old story for the Scottish economy according to a report which records a fall in the number of Scots finding permanent work. We are also told that the Scottish economy is 'under-performing' compared to the rest of the UK.

The Scottish jobs market is going through a "tough patch" according to a report. Picture: Ian Georgeson.

The downturn in the oil industry has had a significant effect on the Scottish economy, both in terms of direct job losses and knock-on consequences. But that does not entirely explain the issues that are at work here.

The Recruitment and Employment Confederation has pointed to uncertainty and a lack of confidence, and while it is clear that last year’s EU referendum has had a UK-wide effect on confidence, Scotland has virtually had double the uncertainty with the prospect of a second independence referendum. Of course, First Minister Nicola Sturgeon announced yesterday that there will be no second referendum in 2017, but this will have limited effect in restoring confidence, particularly when her predecessor, Alex Salmond, has already predicted a vote will be held in 2018.

We could ask for both governments, Scottish and UK, to deliver the stability required for confidence to return, but the biggest single influence on the economy as we look ahead is the Brexit settlement, which neither government has control over.

In such circumstances, it is the Scottish Government’s responsibility to take a hard look at why the economy is underperforming, regardless of what comes of Brexit negotiations. Whatever growth strategy is in place at the moment is not bearing dividends. The Scottish economy cannot be left to slide while we wait for the kind of certainty that may be a long way off, if indeed it ever comes.