The Scottish Government must urgently update its economic strategy to address “considerable challenges”, a parliamentary report has said.
Holyrood’s Economy Committee also identified “significant opportunities” for Scotland and set out a series of recommendations for ministers following a wide-ranging inquiry.
The cross-party report concluded that economic growth in Scotland for the period 2007-2017 was “significantly below Scottish Government targets, the performance of the UK economy as a whole, historical trend growth rates for Scotland and small EU countries”.
“Levels of GDP growth are marginal; productivity is low and wages are stagnant,” it said.
“Whilst employment growth has been positive, some of that increase has been in insecure, low paid work.”
The report added: “It is clear that the future will be equally challenging given the independent Scottish Fiscal Commission’s revised forecast of lower tax revenues, of as much as £1.7 billion, and already low GDP growth has been revised downwards to less than 1 per cent.
“If we are to reverse this trend then the Scottish Government must use all of the levers at its disposal to bring a sharper focus on growing the economy, and ensuring that growth is inclusive.”
The review of economic strategy should also take into account the potential economic impact of Brexit and have a “robust” action plan as well as comprehensive monitoring and evaluation, the committee said.
Other recommendations include a clearer focus for Scotland’s enterprise and skills agencies, a consistent definition of inclusive growth, more focus on the economic potential of regions and increased support for women in business.
Convener Gordon Lindhurst said: “We have a resilient labour market and a strong business community, but we need to encourage more entrepreneurship as well as ambition within existing businesses in order to strengthen productivity.
“We found some companies had a ‘fear of heights’ - lacking confidence to scale-up and grow.
“We expect the Scottish Government to work together with the UK Government to recognise the substantial opportunities that exist and closely analyse what policies are working so that both can help bring a sharper focus to growing the economy.”
Opposition parties used the report to criticise the SNP administration’s stewardship of the economy.
Tory MSP Dean Lockhart said: “This is a savage critique of the SNP’s economic record over the past 11 years.
“This highly respected cross-party Committee has concluded that the SNP has significantly failed to meet all of their own economic targets.
“It is now time for the SNP to listen to this important Committee Report and urgently change economic policy for the sake of Scotland.”
Labour’s Jackie Baillie said: “This is an important report that shines a light on the SNP’s failure to properly grow our economy.
“It is increasingly clear that the SNP government is in denial about its mismanagement of our economy over the last decade - and is content simply to try and blame Westminster for all of Scotland’s economic woes. That is simply not good enough.”
A Scottish Government spokesman said: “The Scottish Government is focussed on growing the Scottish economy, which is why the 2018-19 Budget delivered an increase of 64 per cent in the Economy, Jobs & Fair Work budget as part of our investment of almost £2.4 billion in enterprise and skills, and investing in the National Manufacturing Institute and Scottish National Investment Bank.
“Scotland continues to have the most competitive business rates package in the UK. The Scottish Government welcomes the report into the performance of the Scottish economy and will reply to the recommendations in due course.”