Westminster is all talk and no action when it comes to Scottish jobs
The Westminster government talks a lot about the importance of jobs. Yet today’s “spring statement” - effectively an emergency budget - is only going to do further harm to Scottish businesses, Scottish jobs and the Scottish economy.
Scotland has a measure of devolution - but the levers of power when it comes to the economy are still held by Westminster.
The Scottish government’s budget is set according to what England’s politicians put in place for England. The cuts in welfare and government operational spending will impact Scotland’s budget next year.
But also the Scottish government cannot borrow money for infrastructure so it depends on the UK to support that. It also cannot affect the damaging tax on jobs.
Scotland cannot rejoin the European Union or even the single market, the biggest possible game changer for the Scottish economy.
Only with independence can the Scottish people elect a government with the powers to act according to Scotland’s needs and priorities.
Here are three reasons why the Spring Statement brings nothing but harm to the Scottish economy.
1. Big infrastructure spend for England - but only peanuts promised for Scotland
The UK Chancellor, Rachel Reeves said the government will increase capital spending by £2 billion a year
But all of the specific projects Westminster has trumpeted, such as a third runway for Heathrow, are in England.
There is very little in prospect for Scotland. There was no mention of Grangemouth, Scotland’s only remaining oil refinery, which is closing with the loss of hundreds of jobs. The UK Government has said it will put £200 million towards investing in an alternative - there are doubts if even that will materialise.
2. No change to the National Insurance rules which come in next month
Rachel Reeves did not address or attempt to mitigate any of the harm caused by the tax on jobs that comes in next month.
Business for Scotland wrote recently about how the increase in National Insurance Contributions is a major threat to the Scottish economy and to both public and private sectors. It will impact unfairly on the Scottish government, which will not be compensated fully for the public sector cost.
It is discouraging growth in the private sector too. Seven out of ten Scottish businesses said the changes will impact their performance in 2025. Scottish business are already struggling with the highest energy costs in the world and this new tax is an extra pressure.
Three quarters of business leaders in Scotland have said they will have to:
- Freeze or slow recruitment
- Cut hours
- Postpone wage increases
- Postpone capital investment
3. Brexit
The single biggest thing the UK Government could do to unlock Scottish business growth would be to rejoin the EU.
Many Scottish businesses are suffering both from the increased bureaucracy for exporting to the EU and from the struggle to get seasonal workers in areas like hospitality and agriculture.
Scottish strawberries were once sought after across Europe but now fields are being replanted with less labour intensive crops. John Gray of Angus Soft Fruits told the Times last week that the inability to get agricultural workers since Brexit was one cause.
That is just one of many problems currently caused by Brexit, from the worst medicine shortage in years to the blight on young people’s ability to work and study in the EU.
Conclusion
The Spring Statement had nothing in it for Scotland. The Labour government talks about jobs but they have done nothing to help Scottish businesses to create them.
It is time that Scotland had the levers of power to control its own economy and government. The Wesminster government talks about jobs but their actions will only hurt businesses and jobs in Scotland.