Monday, January 23, 2006
Businesses have shed 17,000 jobs over a period where the government and its various agencies have hired 24,000 more staff - the exact reverse of the trend promised by Jack McConnell, the First Minister.Jim Mather makes a very good point about Scotland not having a feedback system that encourages the Executive to actually think about the economy. It is worth pointing out that in the 8 years since devolution not once have the Scottish Lib Dems debated a single purely economic motion [they did have one entitled SUSTAINABLE ECONOMY but it was an environmental motion not remotely aimed at growth]). The problem is how do we get from here to there - if we only spent all the tax we raise, including North sea oil, we would be about £4 billion down. If we don't think about this it is inevitable that some day England will.
........An unpublished survey of Scotland's labour market by the Office for National Statistics has found 707,000 people are now employed by the government - almost one in three jobs in Scotland. Such a ratio is rarely seen outside Scandinavia.
This is far higher than the official 577,000 figure published earlier this month by the Executive. But the ONS study includes people like GPs and quango staff - who are technically independent, but work only for the state.
The number of private-sector jobs, which had been rising after devolution, albeit slower than in England, fell from 1.73 million in August 2004 to 1.71 million last November - a rate of 50 jobs a day.
Iain MacMillan, head of the CBI Scotland, said he was shocked but not surprised at the news. "The public sector in Scotland is too big, and it's still growing," he said. "It's harder for the Scottish economy to grow because the public sector is taking up so much of the economy."
.........The Scottish National Party said that an independent country would feel the pain of the private sector - but there is no link in Scotland between tax collected and government money spent.
"Jobs losses in the private sector do not impact on the Scottish Executive because it did not collect the tax and won't pay the unemployment benefit," said Jim Mather, the SNP economics spokesman.
"For as long as Scotland's economic nervous system is not properly wired up, we will have this imbalance and the Executive will continue not to care about competitiveness."
The Scottish Executive issued a defence last night, saying that the private sector had grown since devolution in 1999 and that the extra jobs were for important tasks like the National Health Service and education. "These are frontline staff, and we make no apology for investing in them," said a spokeswoman. "A strong economy means investment in the public sector."
Mr MacMillan said the Executive should understand that "all the extra public-sector workers may be worthwhile, but they are making no contribution to GDP".
The SNP has long called for Scotland's spending to be fixed to its tax haul, after including a certain share of North Sea revenues. This, it said, would both boost accountability and government spending.
But unionist parties have said that government agencies in Scotland have long spent far more than its business could generates in tax, even taking oil into account.
By comparison to call the Executive response complacent would be an insult to complacent people. That the real economy has "grown" in the last 7 years is not an achievement. The world has been in the longest economic boom in history, driven by the information revolution & in my opinion likely to continue wherever politicians let liberal economics work. The Chinese economy has doubled since devolution & these numpties are proud that ours has grown a miderable few per cent.