January 15, 2014 11:17 am

Scottish growth lags behind UK

Scotland’s economy gathered pace last year, but the pace of recovery still lagged behind the overall UK growth rate, officials figures showed on Wednesday.

As September’s referendum on Scottish independence draws closer, data showed the economy north of the border grew 0.7 per cent in the third quarter of last year compared with 0.8 per cent for the whole UK. For the three quarters of 2013, Scotland’s economy grew 1.7 per cent, a touch slower than the UK’s 2.1 per cent.

The performance of the Scottish economy is a core issue in the referendum debate. The UK Treasury warns about the risks of independence while nationalists say that only independence can close the persistent growth gap between Scotland and the UK.

The differences between the Scottish and UK recovery are small. A year earlier – the third quarter of 2012 – the Scottish economy did better, with an annual expansion of 2.1 per cent compared with the 2 per cent UK average. The discrepancy between the annual figures and more recent evidence arose from Edinburgh’s better performance recorded for the fourth quarter of 2012.

The figures suggest that manufacturing has done better in Scotland with year-on-year growth of production output in Scotland estimated at 3 per cent compared with a 0.1 per cent fall in the whole of the UK. The growth of the much more important service sector was similar in both countries.

Reacting to the figures John Swinney, Scottish finance secretary, welcomed the continued recovery north of the border. “It is positive to see that progress has been made in our three major sectors with construction, production and services industries all posting growth,” he said.

Using the figures to bolster the Nationalist campaign for independence, he noted that Scotland had lower unemployment and higher employment than England, Wales or Northern Ireland.

“It is only with the full powers of independence that we can build a wealthier, fairer and economically sustainable Scotland ensuring that everyone benefits from our natural wealth and talent,” Mr Swinney said.

In contrast, Alistair Carmichael, the Liberal Democrat Scottish secretary in the UK government, said the figures showed how successful Scotland was “as part of the UK”.

“This government’s long-term economic plan is working and Scotland’s economy is successful and stronger as part of the UK with its security, scale and influence,” he added.

These figures are the most reliable estimates of the economic performance of Scotland compared with other nations and regions in the UK.

In December, the ONS published the first regional breakdown of real growth figures for the whole of the UK, but had to issue a health warning after they were shown to offer a completely different and worse picture of the health of the Scottish economy than those published by the Scottish government.

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