Scottish Economy

Paul Masterton Excerpts

Wednesday 27th June 2018 Westminster Hall

[Paul Masterton (East Renfrewshire) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Main. I congratulate my colleague on the Scottish Affairs Committee, the hon. Member for Rutherglen and Hamilton West (Ged Killen), on securing this important debate.

East Renfrewshire is home to the thriving small businesses and micro-enterprises that power the British economy while also providing investment and employment for the local community. It is these companies that help make Britain one of the largest economies in the world, which helps provide our vital public services. We have more established names, such as Barrhead Travel and A. C. Whyte, which are based in East Renfrewshire but are world leaders in their sector, as well as dynamic, newer enterprises, such as J&M Murdoch & Son, which was recently recognised in the 2018 London Stock Exchange report, “1000 Companies to Inspire”. The Scottish and UK Governments must prioritise and support those companies and many thousands like them, if we are to encourage investment and continue to grow our sluggish economy.

For too long, however, a high oil price has hidden Scotland’s economic underperformance, allowing Scottish Governments of both colours to neglect fixing the Scottish economy’s fundamentals. Most recently, the Scottish Parliament’s own highly respected Economy, Jobs and Fair Work Committee unanimously agreed a report that stated that in Scotland,

“levels of GDP growth are marginal, productivity low and wages are stagnant”.

Scotland’s major problem, as the hon. Member for Rutherglen and Hamilton West has highlighted, is its productivity, which is at a lower level than it was in 2010. The gap between UK and Scottish productivity is larger than it was in 2009.

The Scottish Government do deserve some credit for setting up the new Scottish national investment bank. Ultimately, however, it was a rehashed announcement of something that has already supposedly been launched multiple times by this tired, separatist Government. If it does come to fruition, it will be a positive step for the Scottish economy, but we will have to wait and see what happens.

Last year, the Scottish economy grew at less than half the rate of the UK and slower than every single EU country. Future predictions are not particularly positive. The Scottish Fiscal Commission forecasts that Scotland will fail to match wider UK economic growth for the next five years. That is really important, because it means less money for the Scottish NHS, Scottish schools and other Scottish public services. It means less money in the pockets of those struggling to get by and businesses taking on fewer staff. It means less money circulating in the local economy, something which contributes to the picture of high streets across Scotland, where local businesses simply cannot continue.

Let us not forget that behind the economic data, this is a real story for people throughout Scotland. Entrepreneurs are risk takers, innovators and wealth creators. They need both our Governments to support them, but too often they are the victims of competing priorities. The UK Government have recognised the importance of increasing productivity, with the publication of the industrial strategy, and city deals are an important part of solving the productivity puzzle. The Glasgow city region deal is investing £44 million in East Renfrewshire. I was pleased to visit a number of the projects recently. City deals also demonstrate the benefits of Scotland’s two Governments working together rather than pulling apart—we need a heck of a lot more of that.

Meanwhile, businesses in rural Scotland, including areas such as Eaglesham and Uplawmoor, continue to be hampered by poor broadband—a basic necessity in the 21st century. People across Scotland have been hit with a double whammy, as the SNP Government raise taxes on more than 1 million Scots—22,000 of them in my constituency—on top of significant council tax hikes. Local employers suffer under the highest business rates across Europe. I do not understand why the Scottish Government believe that when 80% of our economy is based in the service sector they can boost economic growth by taking more out of hard-working people’s wallets.

The truth is that the Scottish economy needs a kick. It is flatlining and the Scottish Government’s high-tax agenda may be the final straw. The UK Government have introduced various measures, including the national living wage, personal allowance increases and wider business initiatives, such as the industrial strategy, to help mitigate some of the damage, but they also can and should do more. We need a pragmatic approach and some better joined-up thinking between Scotland’s two Governments. Nine successive quarters of declining activity in the construction sector, for example, is not acceptable. The hon. Member for Midlothian (Danielle Rowley) dealt well with some of the challenges facing that sector.

Yesterday saw the departure from Holyrood of an Economic Secretary whose legacy is one of declining productivity, skills, job quality and investment, and an economy with one of the lowest GDP growth rates in the OECD. Scotland needs a Scottish Government prepared to invest and give businesses the opportunity and security they so desperately need. Roll on 2021, when we will finally get one.

--- Later in debate ---

[Drew Hendry]

No, I am going to make progress. The Fraser of Allander Institute estimates that 80,000 jobs are at risk.

[Paul Masterton]

Will the hon. Gentleman give way?

[Drew Hendry]

No, I am going to carry on, because I have only a minute.

The UK Government are paying no real attention to stimulating the oil and gas industry. Fortunately there is now an upturn in oil and gas prices, and we need investment from the UK Government.

I have much more to say, and as we are the third party in Parliament I should have hoped for more time to say it, but unfortunately that is not the case—