Calls to fire up the economy as lockdown sees Scots GDP drop by a fifth

The UK government has stepped up calls for Nicola Sturgeon to restart Scotland’s economy after the “terrible impact” of the coronavirus lockdown saw GDP shrink by a fifth.

The Scottish Secretary Alister Jack said Scots must get back to a “normal way of life” as the First Minister prepares to announce today that the country will move into phase 2 of lockdown exit.

This is likely to mean a firm date for shops to reopen and the green light for many factory workers to return.

It came after new monthly

GDP statistics were published yesterday by the Scottish Government, to help track the economic impact of the pandemic, showing that GDP is provisionally estimated to have fallen by 18.9 per cent during April, after a fall of 5 per cent in March.

The official GDP statistics, also published yesterday, indicate a 2.5 per cent contraction between January and March – worse than the 2 per cent contraction recorded across the UK as a whole. The bleak picture for Scotland follows growth of 0.7 per cent in the fourth quarter of 2019. Compared with the same quarter last year, Scotland’s GDP has contracted by -2.3 per cent, compared with equivalent UK growth over the same period of -1.6 per cent.

“These figures confirm the terrible impact coronavirus has had on our economy,” Mr Jack said.

“The UK government has put in place unprecedented measures to support people. Our furlough scheme, and support for the self-employed, has protected the incomes of almost 800,000 Scots – more than a quarter of the workforce. That’s been accompanied by an extra £3.8 billion of funding for the Scottish Government.

“Across the UK we will continue to prioritise public health. But now the Scottish ‘R value’ is holding below one, we must also start looking at how to open our economy safely. People need to get back carefully to a more normal way of life, and the Scottish Government should keep an open mind about the measures needed to get Scotland moving again.”

Andrew Mcrae, Federation of Small Business Scotland policy chair, backed calls to get the economy moving.

“Half of the country’s small business community closed their doors during this crisis which led to a big drop in economic output,” he said. “That’s why many in business desperately want the First Minister to announce on Thursday an accelerated timetable for easing trading restrictions.”

Ms Sturgeon’s will update Scots on her latest three weekly review of lockdown restrictions later today, but has made it clear the country will move to stage 2 of lockdown exit.

Economy secretary Fiona Hyslop said: “The coronavirus pandemic is having an extremely serious impact on the economy right across the UK and – as these figures demonstrate – Scotland is no exception.

“Ever since the start of this crisis the Scottish Government has been working tirelessly to keep businesses afloat and ensure as many people as possible keep their jobs. So far this has included a tailored package of more than £2.3bn in business support.”

The grim figures emerged just a day after the latest employment statistics showed this had risen by 30,000 in Scotland and now stands at 127,000.

Labour Leader Richard Leonard said the GDP statistics show the “enormous damage” done to Scotland’s economy by the coronavirus pandemic.

“We are now deep into uncharted economic waters with the prospect of mass unemployment looming,” he added. If action is not taken by both the UK and Scottish government with a clear plan to get the economy back on course, then we may be left with an economy in tatters.”

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