Scotland’s economy ‘may never recover without help’

Scotland and the UK economies are among the ‘worst performing in Europe’ despite figures today showing an economic uplift in June, according to the Scottish Chambers of Commerce.

Chief executive Dr Liz Cameron said the estimated 19.7 per cent decline in gross domestic product (GDP) between April and June meant vulnerable businesses now needed further state support to survive.

Scotland’s chief statistician published provisional estimates today which said Scotland’s GDP fell by 19.7 per cent in quarter two, or the period between April and June. That compares to a fall of 2.5 per cent during quarter one, or the period between January and March 2020. However, June still saw a rise of 5.7 per cent in Scotland, while May saw GDP lift 2.3 per cent.

Overall, GDP remains 17.6 per cent below the level it was in February before the pandemic effect was felt, and as much as 21.7 per cent below what it was at the end of December 2019, or quarter four.

Dr Cameron said today: ‘These figures confirm the Scottish economy is in deep recession and intervention is required now to prevent real and lasting damage to the jobs market. If businesses are to continue to retain their employees, we call on the Chancellor of the Exchequer to make an immediate reduction in employers’ national insurance contributions.’

She added: ‘As wage support is withdrawn, we also need to see new initiatives such as an Employee Retention Incentive which covers new and existing employers, so that employers, particularly in vulnerable sectors and locations, can keep the doors open until they are able to start earning again.

‘Without rapid intervention in the form of fiscal stimulus packages as well as cost cutting efforts such as rates holidays, we fear that the Scotland’s economic landscape may never recover to previous levels.’