“It’s the economy, stupid” means nothing to the SNP

“It’s the economy, stupid” means nothing to the SNP

by Jamie Greene
article from Thursday 27, April, 2017

TWENTY-FIVE years ago James Carville (pictured) coined the phrase “It’s the economy, stupid” for the then Democrat’s nominee for Presidency of the United States, Bill Clinton. The meaning behind the phrase is clear: the public cares about the economy because people want to know that their jobs, wealth and livelihoods are secure under whatever administration is at the helm.

The SNP seems to have forgotten that key phrase, or perhaps has neglected it out of distraction. Recent figures from the Office of National Statistics showed that in the last quarter of 2016 the Scottish economy contracted by 0.2 per cent. In contrast the UK economy as a whole grew by 0.7 per cent. In Q4 of 2016 construction alone output fell by 0.9 per cent.

The official definition for a recession is two quarters of negative growth (i.e. six months of economic shrinkage). Right now Scotland is halfway to recession. But we should also be clear, we could already be in recession. We won’t know until the first quarter’s figures (Q1 Jan-Mar 2017) are published in June, but the foundations of our economy (which have been shaky for the last three years) are crumbling before our very eyes.

But what is to blame for Scotland’s economic slump, or rather who? As it stands, Scotland is being plagued by a toxic cocktail of a bad economic environment, uncertainty and low confidence.

Nicola Sturgeon’s first act with the Scottish Parliament’s new powers over taxation was to make Scotland the highest taxed part of the UK. By doing so the SNP sent a clear message to investors abroad and across the UK domestic market about how Scotland intends to do business.

In a political and economic union such as the UK’s, where goods, services, capital and people can move about the four nations unfettered (something which the EU does not actually offer by the way) then you need to broadly align your rates and taxation policy otherwise investors will target the areas where their return is highest.

Is the SNP so opposed to the notion of a United Kingdom that they’re willing to pretend basic market principles don’t exist? By ignoring this simple fact of economics they’ve sent investors and wealth creators down south to the other nations of our country. This is good news for England, Wales and Northern Ireland, but Scotland is really getting the short straw here.

But what else could be to blame for our economic slump? Governments come and go, investors must be able to realise that future governments could help produce a proper return on their investments in years to come. Unless of course the long-term economic environment was so unreadable that no such return can be certain.

I am of course referring to the SNP’s endless pursuit of a re-run of the 2014 vote on Scottish independence.

The uncertainty caused by this referendum has massively undermined our economy and destroyed investor confidence in the long-term. What’s more is that they will keep this on the table for at least another two years.

One of the differences between 2014 and the second vote is that the SNP wants to break not just the political union but the economic union with the UK, a dangerous move when 65 per cent of your exports are to your domestic market. It doesn’t paint a rosy picture for our markets.

The effects of this will only get worse and worse and whilst the Scottish Government won’t feel the pinch (remember, Nicola Sturgeon earns more than the Prime Minister) – working men and women across our country will.

Not only that but the SNP isn’t even being clear what economic route an independent Scotland would take, whether it would re-join the EU, become a member of the EEA or simply sign up to EFTA. The devil is very much in the detail.

Of course, the current trend could be revised with the right steps. Ending uncertainty and providing businesses the right environment to set up and employ people across our country would see an instant boost to our fortunes.

By ending speculation of a re-run of 2014 the SNP could send a message to investors in the UK and across the world that Scotland’s economy is stable and open for business in the long-term.

Unfortunately to take these steps would be admission of the problem by the SNP so I wouldn’t advise holding your breath. This was evident when Derek Mackay took to the airwaves to blame Brexit for this mess, despite the rest of the UK flourishing in the wake of the vote.

His comments stand as confirmation of what we already knew: the uncertainty will not stop and the march to a second independence referendum will not be derailed by anything, least not public support or a shrinking economy. Tunnel vision indeed.

Jamie Greene is a Scottish Conservative MSP for West Scotland and party spokesman for technology, connectivity, the digital economy and broadcasting.

 

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