27 April 2016

Scotland needs Scottish Labour’s Plan for Growth






The Scottish economy needs a boost because it is very weak in absolute terms and relative to the rest of the UK.

GDP growth is very weak , almost stagnant

Unemployment increased by 19,000 during Dec15-Feb16 (from 5.4% to 6.2% but UK rate unchanged)

Scottish manufactured exports percentage growth was estimated as -1.5% for q4 2015, (from 5.4% to 6.2% but UK rate unchanged)

House prices in Scotland are down unlike the rest of the UK

The Conservative government shrink Scottish economy by £2.4Bn per annum via their welfare reforms.

So, what’s the Scottish Labour plan to boost the economy?

There are two ways to generate economic growth:

Exogenous: expand by attracting more investment (such as the secret SNP FDI planned with the Chinese company blacklisted by Norway’s oil investment fund)

Endogenous: by using resources in Scotland to invest in Scotland to expand the economy

Scottish Labour wants to attract investment to Scotland and thinks Scotland can attract more attractive investors than one with “a risk that the company is involved in gross corruption”.

In countries with higher levels of inequality economic growth is found to be low, but redistributive policies can reduce inequality and boost the economy.

Scottish Labour’s shall implement endogenous growth by using redistributive policies:

1p on the SRIT; 50p tax rate for earners on £150k or more; not implementing the change in the higher rate tax threshold; the new property tax and the new local taxes.

IPPR Scotland estimate Scottish Labour’s proposals will generate £1.1-£1.2 bn additional spend each year.

This will allow significant investment in communities and our people over the next five years.

This money will be invested in education, house building and other infrastructure programmes.

This investment will expand the economy further due to the fiscal multiplier; we could see the economy expand by a further £300m per year.

Scottish Labour is going for growth to benefit everyone in Scotland.

This is why people wanting a stronger economy need to give both votes to Scottish Labour.

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