Scotland behind UK in economic recovery

CBI Scotland director Iain McMillan said higher levels of public spending had helped keep the Scottish economy “more buoyant” during the depths of the recession and called on the Scottish Government to act.

But he added that the squeeze on public spending meant that the country was now emerging “at a slower rate than the rest of the UK”.

In his New Year message Mr McMillan said that in 2012 the SNP administration “must create the conditions in which Scotland can move forward and direct its entire energy to rebuilding our economy”.

He recalled that in 2007 ministers had pledged to raise the rate of Scotland’s economic growth to the UK level by 2011, but said: “This target is likely to be missed with Scotland’s growth rate this year estimated at about half the UK level.

“So sharpening its focus on the economy must be the Scottish Government’s number one priority.”

Speaking on BBC Radio Scotland’s Good Morning Scotland, the CBI Scotland director said public sector spending had “managed to keep the economy more buoyant than the rest of the UK during the depths of the recession in the late 2000s”.

However he added: “Going forward from there, there is less public money to spend and what we are finding in Scotland I think is that the suppression of spend there is resulting in Scotland coming out of the economic downturn at a slower rate than the rest of the UK.”

He also said that the private sector north of the border was “not as dynamic” as the rest of the UK and “does not occupy as large a proportion of the economy as it does south of the border”.

Finance Secretary John Swinney said yesterday that key sectors of Scotland’s economy had performed well this year, despite the economic turmoil in Europe and beyond.

However, he also stressed that economic recovery was still “fragile”, adding the Scottish Government “must redouble” efforts to strengthen these sectors in the coming 12 months.

The sectors - tourism, life sciences, energy, financial services, food and drink, the creative industries and Scotland’s university sector - have had a number of successes over the last year, attracting investment and creating jobs.

While Mr Swinney hailed the achievements of these parts of the economy, he also said: “It is clear that the economic recovery - both in Scotland and internationally - remains fragile. We are clear that we must redouble our efforts to strengthen our key sectors in 2012.”

The Finance Secretary said the SNP administration was “using all available levers to stimulate growth across Scotland”, adding that its economic strategy “outlined actions to drive sustainable growth and develop a more resilient and

adaptable economy”.

Scotland behind UK in economic recovery - CBI