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Alex Johnstone: Scotland's reliance on public sector will slow its emergence from recession

Alex Johnstone MSP Alex Johnstone, who speaks for the Conservatives in the Scottish Parliament on Transport, Infrastructure and Climate Change, made an interesting speech on the Scottish economy on Thursday.

Mr Johnstone said:

"The first myth is that Scotland is somehow insulated from the worst rigours of the recession in a way that other parts of the United Kingdom are not. It is true that statistics can be used to show that Scotland has been slower to enter recession, but I strongly believe that it is the nature of the Scottish economy that made that the case—it was always going to be thus. Scotland's economy is disproportionately dependent on the public sector. Without wishing to enter into any arguments about whether that is a good thing or a bad thing, members will understand that an economy that is dependent on the public sector will be slower to enter recession than one that is more dependent on the private sector. However, the sad consequence of that is that, although we are slower and later to enter recession, there is a strong likelihood that we will also be slower and later to emerge from that recession. That is why the issues that we are discussing today are important. We need to think now about that recovery phase and put in place measures that will underpin the rise in our economy at that point.


However, the simple fact is that, as we enter the recession, public expenditure that has already been allocated is more significant to the Scottish economy during this current year and, therefore, underpins the economy at a time when shrinkage is taking place. Sadly, the problem is that, once recovery begins, the green shoots—if I may be allowed to use that phrase—will appear too late in Scotland, and public expenditure will be depressed, which will mean that the Scottish economy will suffer from a lack of resource at a time when growth is beginning to develop in other places. However, I agree that well-placed public expenditure remains extremely important through that phase."

The Labour Government at Westminster, which has massively expanded public sector jobs in order to create a client voter base, should pay heed to Mr Johnstone's shrewd analysis.

Tom Greeves


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