Predictions of doom don’t help business confidence

The Scottish Government must drop the negativity of Brexit scare stories if it is to create the right climate for economic growth

With so much uncertainty in the air over the looming Brexit and the prospect of a second independence referendum, there was some understandable relief in the latest unemployment figures for Scotland.

A 0.5 per cent drop in the Scottish rate to 4.5 per cent, marginally below the 4.7 per cent for the whole of the UK, is welcome after a fairly gloomy period for the Scottish economy of late.

However, this cannot mask the fact that the number of Scots in work between December and February actually fell by around 8000.

And economic activity – the number of people in work combined with those actively seeking a job – fell by 24,000 over the quarter.

The Scottish Government was swift to hail the “resilience” of the economy north of the Border in the wake of the new figures.

But it could not resist sounding the alarm bells again over the potential impact of “a hard Brexit” on the Scottish labour market.

It is only a few days since the latest GDP statistics showed Scotland’s economy shrank in the final three months of 2016.

At the time ministers blamed the “economic reality of the Brexit vote” for the slump, which contrasted with growth for the UK as a whole.

The reality is that the doom-laden predictions for the UK in the event of a vote in favour of Brexit have simply not materialised.

Meanwhilen the emerging picture north of the Border does suggest that there are underlying problems with the Scottish economy. Further evidence emerged yesterday with a survey of small business revealing Scotland had the bleakest outlook in the UK.

It is telling that the Federation of Small Businesses in Scotland has now warned that “too few Scottish businesses have faith that our economy is travelling in the right direction”.

It cannot do much for all-important business confidence in Scotland to read predictions from the Scottish Government – in response to the latest unemployment figures – that Brexit is threatening to cost the country 80,000 jobs over the space of a decade.

If ministers genuinely believe Brexit is going to cost the Scottish economy £11 billion a year then they should be doing everything in their power to ensure it is in the strongest possible position when the UK does leave the EU.

Businesses lacking confidence in the future are clearly in need of encouragement. Yet all they appear to be hearing from the government is how grim the country’s economic outlook is, and how the doomsday scenarios are getting worse with every passing month. A change of message may seem unlikely in the run-up to the local council elections, when issues like Brexit and an independence referendum are already taking centre stage, but it is long overdue.

The time for scare stories is over. The focus should be on getting to grips now with the clear challenges looming over the Scottish economy, rather than undermining it any further with predictions of doom.