Scots growth lags behind UK with fears of no U-turn

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Scotland’s economy is continuing to lag behind the rest of the UK despite a full year of growth in 2017.

There are now warnings that the Scottish Government current approach won’t reverse this after the country recorded growth of 0.3 per cent in the final quarter of 2017. This compares with 0.4 per cent UK-wide. Across the whole of 2017, Scottish growth was 0.8 per cent , less than half of the 1.8 per cent in the UK.

Nicola Sturgeon visits Aggreko, a supplier of mobile power generators, in Dumbarton. Pic: Getty

Nicola Sturgeon visits Aggreko, a supplier of mobile power generators, in Dumbarton. Pic: Getty

Scotland’s services sector, including the key finance industry grew by 0.5 per cent , while output in Production grew by 0.9 per cent . But the construction sector continues to struggle and shrank by 2.6 per cent in the final three months of last year.

Professor John McLaren, political economist with scottishtrends.co.uk said: “Scotland’s GDP growth performance continues to disappoint. While the last two to three years have been particularly poor, slow growth has been evident ever since the end of the recession back in 2009.”

“Despite initiatives like the new Scottish Investment Bank, current Scottish Government policies seem unlikely to do much to remedy this.”

There are also fears that the recent collapse of construction giant Carillion and bad weather could further thwart growth in the months ahead.

Scotland’s has struggled to keep pace with UK growth since the 2014 oil price crash, which devastated the North Sea economy.

The Fraser of Allander think tank Institute warned last week that “confusion” in Scottish Government policy making could be thwarting growth.

Stuart McIntyre of the Institute said the latest headline figures are “a significant concern.”

But he added: “Growth in much of the Scottish economy was actually slightly better than the headline figure suggests”.

Scottish Government Employability minister Jamie Hepburn said: “With four consecutive quarters of positive growth in 2017, Scotland’s economy continues to show strength. These figures are welcome, but we are determined to do more to grow our economy and protect Scotland from the headwinds of Brexit.”

Scottish Secretary David Mundell said it was “good news” that GDP in Scotland continued to grow.

But he added: “It is increasingly concerning that a significant gap persists between Scotland’s economy and the rest of the UK.

“The Scottish Government has the powers to boost productivity and strengthen the economy, and must use them to close this gap. By making Scotland the highest taxed part of the UK, the Scottish Government risks damaging, rather than growing, our economy.”

Labour’s economy spokeswoman Jackie Baillie added: “These figures expose how Scotland’s pitiful economic growth under the SNP is low and slow.”