When economic reality bites back, it will be Scottish Government's fault - Brian Monteith

There is much to be impressed and proud of in what happens the Scottish economy.

We have some great engineers, creatives, manufacturers and scientists still producing the goods and turning a profit – but be under no illusion, this is despite the existence of the Scottish Government and the vast majority of politicians in Holyrood, rather than because of them.

Ever since its birth there has been a great disconnect between the Holyrood Parliament and Scottish businesses, especially the SME sector and the self-employed who have no time or inclination to play the lobbying game the larger corporates can indulge in.

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This barrier was evidenced almost immediately in Holyrood’s early years by the establishment of various forums and committees to ensure MSPs and business people could interact and the needs of the private sector be better understood.

The owner of UK brands including McVities has announced plans to close its factory in the east end of Glasgow, putting nearly 500 jobs at risk. Picture: AFP via Getty Images

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Inevitably, however, that approach has failed. Holyrood sees free enterprise as a problem that can only be cured by making it less free.

No one talks about “free enterprise” in Scotland any more. Instead, layer upon layer, a veritable millefeuille of regulation, is slowly asphyxiating various sectors such as hospitality, residential letting, care homes and anything requiring health and safety.

This is all well intentioned, of course, but without the benefit of sunset clauses that might require legislation to be scrutinised to see if it actually achieved what it set out to do or meets a cost-benefit test.

All the while creative and industrious people are selling up their assets and getting out of doing business in Scotland. I know, because they tell me.

Although it will politely be denied by the owners, the proposed closure of McVitie’s last manufacturing outpost in Scotland – the great British brand started in Edinburgh’s Rose Street – is testimony to an undercurrent only going one way.

I follow the announcements of foreign investment into the UK and the examples of new factories being planned in England just never lets up. Sadly I rarely find anything of note outside the services sector happening in Scotland.

The other problem is the majority of Holyrood MSPs see the private sector as a cash cow, there to be milked without any care for its welfare or what might first make it flourish to produce the milk.

Politicians’ claims of cuts in business rates have been nothing but virtue signalling – using increases in rate charges from some business sectors to finance cuts in others.

Meanwhile new taxes have been invented or old ones redesigned to the detriment of both enterprise and our public finances.

By making the doing of business more expensive economic activity has been discouraged and predicted revenues have not materialised. It’s no surprise then the other phrase you rarely hear now is ‘Scotland is open for business’ – lockdown or no lockdown.

The SNP Government’s handling of Covid-19 and especially the distribution of financial relief or assistance to the business sector – when the money was made readily available by the British Treasury – has showcased the disdain and contempt, if not hatred, too many politicians have for any operation turning a profit.

This is not some misty-eyed indulgence of a nostalgic view of Scottish industry and commerce from the past.

There is no escaping the data. Scottish GDP growth since 2007 has barely been half the UK average, costing the Scottish people some £11 billion of beneficial economic activity every year and with it £3.9bn of lost tax receipts.

Whatever your view about Scotland separating from Britain, this is not good for our public services, our younger generations we bequeath the huge and growing public debt to, and our prospects for the future.

For every year the nonchalant and sometimes pernicious attitude towards business continues, more than a year will be required to put it right.

Two developments in the last week show the immediate prospects are only likely to get worse rather than improve.

The attitude of the SNP to a trade deal between the UK and Australia and the possibility of a formal pact between the SNP Government and Green Party – with its enthusiasm to put enterprise into reverse – is only likely to send those entrepreneurs who are mobile to run for the border.

The SNP hates international trade with a passion. Its representatives have voted year after year against any trade deal that ever came before them.

Even when it had the chance after the Brexit referendum to keep the UK inside the EU’s Customs Union, its 35 MPs chose to abstain and the vote was lost by eight votes.

The SNP only ever sees threats from imports and never the opportunities for exports. Adam Smith showed trade is not a zero-sum game; it lowers prices, provides greater choice and specialization – benefiting both parties by creating new markets.

Animal welfare standards in Australia are actually higher in many regards to our own and the business threat is not the displacement of Scottish farming, but of the more expensive EU foods it might replace (especially meat from Ireland).

The opportunities an Australian deal can then make possible by opening up a wider deal with the trans-Pacific economies are limitless.

Similar delusion emanates from the Green Party’s belief that a forced abandonment of oil and gas production without cost to our economy is possible.

Idiotic claims it will be less injurious to communities than the past closing of deep coal mines shows a degree of ignorance matched only be their shallow sympathy for miners’ families given their animosity towards coal.

When reality bites it must be Holyrood that changes, but we missed our chance earlier this month and now must wait while economic performance deteriorates further.

Brian Monteith is editor of ThinkScotland.org and served in the Scottish and European Parliaments for the Conservative and Brexit Parties respectively.


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