Sturgeon’s Indyref2 bid dealt blow as Scotland’s GDP growth shows reliance on Union

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Scotland’s GDP is now just 0.4 percent below pre-pandemic levels with October’s growth driven by the services sector and health and social work. Kate Forbes, Cabinet Secretary for Finance and the Economy, described the figures as “encouraging news” but also stressed the importance of £375m in support to businesses pledged by First Minister Nicola Sturgeon on Tuesday. However, with £175m of this coming from the UK Government, critics of Scottish independence have pointed out the role of the Union in helping Scotland through the pandemic. Struan Stevenson, chief executive of Scottish Business UK, told “What this shows clearly is that the support provided to Scottish businesses and public services courtesy of the UK Treasury have enabled and accelerated pandemic recovery.

“As Audit Scotland pointed out last week, it was this funding which enabled Scottish ministers to allocate an extra £8.6bn of consequentials to finance COVID activity in the last financial year.

“Now that Omicron has once again fed more uncertainty in the business community in the run-up to Christmas, the Scottish Government should stop pretending that it’s anything other than the support we enjoy as members of the UK that is keeping Scotland’s pandemic recovery on track.”

In a tweet, Conservative MSP Pam Gosal said: “The UK Government are delivering vital funding to Scotland to support our business and people and yet the SNP are still complaining.”

Despite funding from the UK Government, Ms Forbes has called for “greater flexibility” from the Treasury as Scotland deals with the fallout of the pandemic.

Reacting to the GDP figures, Scottish Secretary Alister Jack said: “Our focus is on a strong, sustainable recovery, particularly as we face new challenges from the Omicron variant.

“That’s why this week we doubled the amount of additional funding available to the Scottish Government to tackle Omicron to £440m – and that’s in addition to the record £41 billion per year funding settlement set out in October for the next three years.”

As well as funding to tackle Omicron, Scotland is also expected to benefit from £191m of Levelling Up funding as well as £1.5bn in Growth Deals.

Businesses in Scotland have suffered a further blow this week as new Covid restrictions triggered waves of cancellations.

Under the new rules, outdoor events will be limited to 500 people with Hogmanay called off and football matches effectively playing without supporters.

Table service and social distancing will also come into force for hospitality from December 27.

Andrew McRae, Federation of Small Business Scotland policy chair, said: “After a disappointing festive trading period, these moves will heap pressure on local firms and the self-employed.

“The same group of businesses that took the greatest hit earlier in the crisis now face another gruelling winter and spring.

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“These operators now face tough decisions about whether they open their doors with restrictions in place or stop trading until they’re lifted.”

Food services and accommodation formed one of the biggest drivers of Scotland’s GDP in October, meaning any declines here could have big knock on effects for growth.

It mirrors the wider situation across the UK where GDP came in below expectation today at just 1.1 percent.

Fears have now grown that the next quarter will see GDP fall further as Covid restrictions and inflation impact consumer and business confidence.

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