We’re on verge of another recession
Clash over what’s to blame: Scexit or Brexit
‘A cowardly way to govern’
SCOTLAND is teetering on the brink of another recession amid fears over the effects of Brexit and the threat to the Union from a potential ‘Scexit’.
The severe economic dip between April and June was blamed on the effect of companies stockpiling ahead of the original Brexit date in March.
Economic output in Scotland fell by 0.3 per cent, while the UK economy fell by 0.2 per cent. Finance Secretary Derek Mackay was attacked for refusing to take responsibility and blaming Brexit.
Opponents said ‘constitutional upheaval’, including the threat to the Union, is causing economic chaos in Scotland.
When the figures for the first quarter of 2019 were published in June, Mr Mackay said they proved Scotland’s economy ‘continues to go from strength to strength’.
But the latest National Statistics report states that may have been down to some industries stockpiling.
Dean Lockhart, economy spokesman for the Scottish Conservatives, said: ‘In true SNP style, whenever things look bad Derek Mackay reaches for the Brexit crutch.
‘When Scotland’s economy grew just three months before, all the SNP cared about was trumpeting its own record. Yet when Scottish businesses need assurances and explanations the most, the Nationalists run for cover. That’s a cowardly way to govern.’
Ian Murray, Labour MP for Edinburgh South, said: ‘Constitutional upheaval is causing economic turmoil in Scotland and across the UK. If we crash out of the EU without a deal then the economic damage will be considerably more severe. The threat to the Union is also causing unnecessary economic uncertainty.’
Scotland’s economy had previously grown for nine consecutive quarters.
The National Statistics report said more than half of GDP growth in the first quarter was down to increases in production of spirits and wines and pharmaceuticals.
It said: ‘This quarter sees a downturn in growth in these industries, which may be the result of companies running down stockpiled inventories.’
The Fraser of Allander Institute said Brexit uncertainty had ‘affected the pattern of business activity’.
Scottish Secretary Alister Jack said: ‘I am concerned the Scottish economy has shrunk. Coming on the back of disappointing unemployment figures, more needs to be done to boost our economy and close the gap.
‘I urge the Scottish Government to use the powers at their disposal to improve the Scottish economy rather than holding it back with threats of a second independence referendum and the decision to make Scotland the most highly taxed part of the UK.’
Mr Mackay said: ‘It is unsurprising, but deeply frustrating that we are now seeing the Brexit impact on the Scottish economy. The responsibility for this lies entirely with the UK Government.
‘There can now be no doubt that any form of Brexit will damage our economy and a No Deal would be disastrous.’
IT should be a matter of grave concern to the SNP Government that Scotland’s economy contracted by 0.3 per cent last year.
Put simply, ministers must find a way to resurrect growth. They should also face up to their own failings, and find new ways of addressing the stagnant economy.
Instead, somewhat predictably, SNP ministers resorted to their usual approach of stoking grievance and blaming Brexit.
When the figures for the first quarter of 2019 were published earlier this year and showed growth, SNP Finance Secretary Derek Mackay was quick to insist they show the Scottish economy goes ‘from strength to strength’. Sadly, he chose to claim yesterday that the decline in the second quarter was solely down to Brexit.
This is all the more unbelievable because the figures for quarter one, as his own statisticians acknowledge, were artificially boosted by Brexit stockpiling.
If Brexit is the sole cause of the latest decline, why is the UK’s economy – which still has its serious problems – contracting at a slower rate? And why has Scottish GDP growth trailed the UK’s over the last year, and several before it?
Over the past 12 months, the Scottish economy has grown by 0.7 per cent, which is much slower than the 1.2 per cent seen across the UK.
Labour MP Ian Murray, while never shy of taking the opportunity to scaremonger about Brexit, hit the nail on the head when he raised concerns about the never-ending constitutional upheaval facing Scotland. He is right to say that the threat to the Union adds more chaos to the impact of Brexit.
The SNP should accept that its decisions – including making Scotland the highest-taxed part of the UK and punishing, rather than rewarding, businesses that want to expand – are part of the problem.
Instead, they are renewing their bid to break up Britain, with Nicola Sturgeon yesterday taking her relentless campaign to stoke division to Germany.
The biggest threat to the Scottish economy is leaving its biggest economy partner, the rest of the UK, and the SNP’s plan to ditch the pound makes this even more dangerous.
It is time Miss Sturgeon and her ministers focused on the day job and started trying to revive the ailing economy rather than threatening to pile on more misery.