Does Scotland have a good economy?

GDP indicates Scotland has a good economy

Stephen Richard — Mon, 18 Oct 2021 11:22:57 +0000

GDP indicates Scotland has a good economy Stephen Richard Mon, 10/18/2021 - 12:22

Author or Creator

Fraser of Allander Institute

The definition of a good economy is difficult as there are many viewpoints. GDP provides an international comparison. In most years, Scottish GDP per head is larger than UK GDP per head when a geographical share of North Sea oil and gas extraction is included. This is higher than the OECD average. When only a population share of oil and gas is considered, the Scottish GDP per head is slightly below the OECD average. But higher than Italy’s, New Zealand’s, Japan’s and South Korea’s.

In most years, Scottish GDP per head is larger than UK GDP per head, when a geographical share of North Sea oil and gas extraction is included. Some may therefore be inclined to report this figure, and even imply that the average Scot is better off than the average person in the UK as a whole. That is a strong claim to make, and one that requires some caveats, which we will discuss further down.

Scotland’s (and the UK’s) GDP per head at purchasing power parity was lower in 2019 than what we would consider some of the traditionally wealthiest countries: the Scandinavian countries, the US, Germany, France or Australia.

Significantly however, when including a geographical share of oil and gas, the number for Scotland was higher than the OECD average (an organisation of mostly rich countries). And even when ‘only’ a population share of oil and gas is considered, the Scottish figure is slightly higher than Italy’s, New Zealand’s, Japan’s and South Korea’s – all countries that many people would consider ‘wealthy’.

Scotland appears to be doing well by one of the most significant measures of economic performance used and recognised internationally.

Keywords

Economy

Economic data

GDP

Scotland challenges inequality, while UK falls behind

Stephen Richard — Fri, 05 Nov 2021 12:00:09 +0000

Scotland challenges inequality, while UK falls behind

Primary Author or Creator

Believe in Scotland

Stephen Richard Fri, 11/05/2021 - 12:00

Alternative Published Date

2021

Category

Economy

Wealth

Fast Facts

It is evident that inequalities and uneven levels of deprivation across the UK continue to be a significant problem. However, it is also clear that Scotland is continually challenging these inequalities and the Scottish Government is working to ensure that levels of GDP per head in Scotland match the average of EU countries

More details

Deprivation is a useful measure to identify areas of the country that are experiencing significant disadvantage. The Scottish Index of Multiple Deprivation (SIMD) uses statistics on income, employment, health, education, access to services, crime and housing to calculate the level of deprivation across all regions of Scotland. Last year, levels of deprivation fell in Glasgow City, Renfrewshire and City of Edinburgh compared to SIMD 2016. Glasgow City demonstrated the greatest fall, from 48% of data zones in the 20% most deprived areas in Scotland, to 44%.

However, the UK Government has not privatised solving deprivation and so, a UK-wide index of multiple deprivation does not exist. Therefore, it is difficult to compare levels of disadvantage in areas of Scotland and other regions of the UK. As a result, this article will offer a comparison of GDP per head of population, one of the common indicators of deprivation and disadvantage, within the UK and across the EU.

10 Regions of UK with lowest GDP per head (2018) RegionGDP per head

Tees Valley and Durham (England) 21,882

Northumberland and Tyne and Wear (England) 24,960

Merseyside (England) 24,464

South Yorkshire (England) 22,104

Lincolnshire (England) 23,322

Outer London – East and North East (England) 22,626

Cornwall and Isles of Scilly (England) 22,096

Devon (England) 23,858

West Wales and The Valleys (Wales) 21,274

Southern Scotland (Scotland) 19,937

As this table demonstrates, of the 10 regions with the lowest GDP per head in the UK, only one area is within Scotland. Meanwhile, 8 of the regions are within England and one is in Wales. This suggests that economic inequality is a greater problem in the rest of the UK than it is in Scotland.

Furthermore, it is interesting to compare these figures to the EU-27 countries average GDP per head of population. Indeed, it has been implied that regions within the UK have struggled to keep pace with the rest of Europe since the financial crash in 2008.

In 2018, GDP at market prices in the EU-27 was valued at 13.5 trillion euros, equivalent to an average of 30,200 euros per person (approximately £26,195.63).

UK NUTS 2 (Nomenclature of Territorial Units for Statistics)

Regions with GDP per head lower than EU-27 Average RegionGDP per head (£)% of EU-27 Average

Tees Valley and Durham 21,882 83%

Northumberland and Tyne and Wear 24,960 95%

Merseyside 24,464 93%

South Yorkshire 22,104 84%

Derbyshire and Nottinghamshire 25,367 97%

Lincolnshire 23,322 89%

Shropshire and Staffordshire 25,574 98%

Outer London – East and North East 22,626 86%

Dorset and Somerset 25,442 97%

Cornwall and Isles of Scilly22,09684%

Devon 23,858 91%

West Wales and The Valleys 21,274 81%

Southern Scotland 19,937 76%

Northern Ireland 25,981 99%

This table highlights that many regions across the UK continue to lag behind many European countries in terms of GDP per capita. Indeed, 14 NUTS 2 regions in the UK have a GDP per head lower than the EU-27 average. Of these regions only 1 is in Scotland, 1 is in Wales, 1 is in Northern Ireland and 11 are in England.

The major exception

While we have demonstrated that deprivation and inequality are rife across England, there continues to be one major exception – London. In fact, this is a huge part of the problem. In 2018, data from the Office for National Statistics showed that London recorded a 1.1% annual rise in output per person to £54,700. Meanwhile, in the North East, growth was only 0.4%, rising to just £23,600 per head. This shows a further widening of the per capita gap between the richest and poorest regions of the country.

We have recognised for years that the key issue at play here is that the UK is far too centralised around London and the South East. Seven years ago, at Business for Scotland, we said that “power, money, opportunity and influence has been drained from the rest of the country for generations towards a metropolis that has developed its own financial and capitalist culture which sits a world apart from the distant regions and nations that make up the wider UK” and unfortunately, this still applies today but to an even greater degree. Ultimately, this constant investment in London and the financial sector has resulted in huge disparity across England, and harmed the other nations of the UK, including Scotland, Wales and Northern Ireland.

Further mismanagement

The past year has undoubtedly been a challenging one for many countries across the world, with the COVID-19 pandemic having drastic consequences for economies and healthcare systems worldwide. However, adding a hard Brexit deal to the equation has only worsened matters, particularly with regards to deprivation. Indeed, studies have found that there is a high risk that the economic impacts of COVID-19 and Brexit will further increase regional disparities. In particular, already deprived areas such as the North East, Wales and Outer London are likely to be hardest hit by Brexit. Meanwhile, tourism dependent coastal communities and hospitality dependent cities such as Manchester and Liverpool are already facing drastic consequences as a result of COVID-19.

These struggles are only emphasised by the lack of support displayed by the UK Government. Indeed, new research has shown that if the Chancellor’s plans to cut Universal Credit go ahead, millions of individuals will be left without the income needed to afford the minimum living standard and the Scottish Child Payment will be undermined. Indeed, after years of austerity, followed by the chaos of Brexit and a global pandemic, such policy decisions will only cause further deprivation and inequality in the UK, particularly in England where great disparity already exists. This highlights that as a result of UK Government mismanagement and the already severe levels of inequality, certain impoverished areas in England are likely to suffer further in the coming months and years.

Southern Scotland

This region is the only area of Scotland that is within the 10 regions of the UK with the lowest GDP per head and holds a GDP per capita lower than the EU-27 average. However, it is important to note that this situation is gradually improving and the GPD per head of population in this region has significantly improved since 2011. In 2011, Southern Scotland’s GDP per head was £16,142. Meanwhile, the EU-27 average was approximately £22,346. This means that Southern Scotland’s GDP per head was approximately 72% of the EU-27 average in 2011. However, in 2018, this figure had risen to 76%, demonstrating the gradual increase of GDP per head and the closing gap between Southern Scotland and the EU-27 average.

Scottish Government Approach

So, let’s see why Scotland is leading the way in reducing such deprivation. One of the key ways to tackle deprivation is through education. Indeed, the Scottish Government recently announced the investment of £215million to benefit pupils in Scotland’s most deprived communities.

An area in which the Scottish Government has also invested in to reduce deprivation and inequality is affordable housing. Indeed, in the 2021-22 budget, £711.6 million was dedicated to affordable housing and a new £55 million programme was put in place to support town centres.

Another critical example that extends to the wider community is the Empowering Communities Fund. This programme was established in 2015 and has already had huge benefits for deprived communities in Scotland. To date, the programme has helped hundreds of projects that create change in disadvantaged communities through training, employment, healthy eating and volunteering opportunities.

It is clear that reducing inequalities and deprivation is a key ambition of the Scottish Government and one that is continuously being met, with levels of deprivation reducing across the country.

Conclusions

Resource Address (URL)

https://www.believeinscotland.org/scotland-challenges-inequality-while-uk-falls…

Keywords

Wealth

Economic inequality

Language English

A Guide to Scottish GDP

Stephen Richard — Sun, 03 Oct 2021 12:09:10 +0000

A Guide to Scottish GDP

Primary Author or Creator

Fraser of Allander Institute

Stephen Richard Sun, 10/03/2021 - 13:09

Alternative Published Date

2020

Category

Economy

Type of Resource

Guide

Fast Facts

This guide shows the difference between measures of GDP. The guide shows how the Scottish economy compares in the UK and the world. Scotland's GDP per head is at the average of the OECD countries, just behind Great Britain. There are wide regional differences in Gross Vaue Added per head of the most value being 3 times the least area. Disposable income per head has much less variation (38%). The Human Development Index shows Scotland very close and recently narrowing the small gap with the UK

Resource Address (URL)

https://fraserofallander.org/scottish-gdp-guide/

Keywords

GDP

Human Development Index

Income inequality

Household Income

Value Added

Language English

State of the economy

Stephen Richard — Sat, 02 Oct 2021 18:51:10 +0000

State of the economy

Primary Author or Creator

Chief Economic Advisor

Stephen Richard Sat, 10/02/2021 - 19:51

Additional Author(s) / Creators

Scottish Government

Alternative Published Date

2020 -

Category

Economy

Type of Resource

government report

Fast Facts

This is the three times a year report on the Scottish economy in an international context.

Resource Address (URL)

https://www.gov.scot/collections/state-of-the-economy/

Keywords

Language English

Scottish Development International

Stephen Richard — Sat, 02 Oct 2021 18:37:44 +0000

Scottish Development International

Primary Author or Creator

Scottish Development international

Stephen Richard Sat, 10/02/2021 - 19:37

Alternative Published Date

2020 -

Category

Economy

Type of Resource

website

Fast Facts

Presents the Scottish economy from an international business and investment perspective.

Resource Address (URL)

https://www.sdi.co.uk/

Keywords

Language English

SCOTTISH ECONOMY OVERVIEW

Stephen Richard — Sat, 02 Oct 2021 18:33:13 +0000

SCOTTISH ECONOMY OVERVIEW

Primary Author or Creator

Scottish International Development

Stephen Richard Sat, 10/02/2021 - 19:33

Alternative Published Date

2021-

Category

Economy

Type of Resource

Web site

Fast Facts

This gives the Scottish economic statistics from an international investment point of view.

Resource Address (URL)

https://www.sdi.co.uk/business-in-scotland/scottish-economy-overview

Keywords

Language English

Scottish economic statistics

Stephen Richard — Sat, 02 Oct 2021 18:26:51 +0000

Scottish economic statistics

Primary Author or Creator

Scottish Enterprise

Stephen Richard Sat, 10/02/2021 - 19:26

Alternative Published Date

2021

Category

Economy

Type of Resource

government report

Fast Facts

This paper gives key statistics in graphic form showing such things as: Population 5.4 million, GDP as £166.8 billion or £30,530 per person, employment as 74.8%, unemployment as 4.2%, average weekly full time wage as £595, and many more.

Resource Address (URL)

https://www.scottish-enterprise.com/learning-zone/research-and-publications/com…

Keywords

Language English

The political economy of and practical policies for inclusive growth—a case study of Scotland

Stephen Richard — Sun, 26 Sep 2021 16:49:47 +0000

The political economy of and practical policies for inclusive growth—a case study of Scotland

Primary Author or Creator

Donald Houston

Stephen Richard Sun, 09/26/2021 - 17:49

Additional Author(s) / Creators

Georgiana Varna, Iain Docherty

Date Published

Tue, 12/22/2020 - 12:00

Category

Economy

Type of Resource

Academic Paper

Length (Pages, words, minutes etc...)

19pp

Fast Facts

The article reports comparative analysis of economic and planning policy documents from Scotland, England and the UK. This indetifies four key policy areas for ‘inclusive growth’: skills, transport and housing for young people; city-regional governance; childcare; and place-making.

More details

The concept of ‘inclusive growth’ (IG) is discussed in a political economy framework. The article reports comparative analysis of economic and planning policy documents from Scotland, England and the UK and findings from expert workshops held in Scotland, which identify four key policy areas for ‘inclusive growth’: skills, transport and housing for young people; city-regional governance; childcare; and place-making. These policies share with the ‘Foundational Economy’ an emphasis on everyday infrastructure and services, but add an emphasis on inter-generational justice and stress the importance of community empowerment as much as re-municipalisation. Factors enabling IG policy development include: the necessary political powers; a unifying political discourse and civic institutions; and inclusive governance and participatory democracy.

Cambridge Journal of Regions, Economy and Society, Volume 14, Issue 1, March 2021, Pages 197–215

Resource Address (URL)

https://academic.oup.com/cjres/article-abstract/14/1/197/6043953

Keywords

Language English

What Does Good Green Infrastructure Planning Policy Look Like? Developing and Testing a Policy Assessment Tool Within Central Scotland UK

Stephen Richard — Sun, 26 Sep 2021 16:39:20 +0000

What Does Good Green Infrastructure Planning Policy Look Like? Developing and Testing a Policy Assessment Tool Within Central Scotland UK

Primary Author or Creator

Max Hislop

Stephen Richard Sun, 09/26/2021 - 17:39

Additional Author(s) / Creators

Alister J. Scott, Alastair Corbett

Date Published

Fri, 11/01/2019 - 12:00

Category

Economy

Type of Resource

Academic Paper

Fast Facts

the best performing policies were captured and adapted to inform a suite of model policies with global application. Significantly, the policies champion the different functions performed by GI and stress the need for early and ongoing involvement throughout any development process with funding for long-term stewardship post-development.

More details

This paper develops and tests a new self-assessment policy tool that illuminates the quality of planning policy for green infrastructure (GI). Working with 19 local planning authorities within the UK Central Scotland Green Network area (CSGN), the multi-functional coverage and strength of GI policies in statutory development plans were assessed. The tool was built from fusing two existing but unrelated initiatives addressing GI standards; Building with Nature and Integrating Green Infrastructure (IGI). The results reveal surprising variation across the functional coverage of GI-related policy and strength of associated policy wording, suggesting a significant vulnerability for how GI is mainstreamed in decision-making processes. To address this knowledge exchange deficit, the best performing policies were captured and adapted to inform a suite of model policies with global application. Significantly, the policies champion the different functions performed by GI and stress the need for early and ongoing involvement throughout any development process with funding for long-term stewardship post-development. The results serve as a catalyst for improved dialogue and social learning across planning, and wider built/natural environment teams and professions to plug identified policy gaps. In particular, there is recognition of the need for planning policy responses to move outside their usual environmental remit and engage with other policy sectors using more holistic policy hooks such as placemaking, placekeeping and the climate emergency. We argue that this tool has universal applicability in many planning systems for improving the policy response and imperative for GI, thereby increasing the potential for better spatial planning delivery.

Planning Theory & Practice Volume 20, 2019 - Issue 5

Resource Address (URL)

https://doi.org/10.1080/14649357.2019.1678667

Keywords

Green Economy

government policy

Green infrastructure

Language English

The Transformation of Scotland; the Economy since 1700

Stephen Richard — Sun, 26 Sep 2021 16:30:02 +0000

The Transformation of Scotland; the Economy since 1700

Primary Author or Creator

T M Devine

Stephen Richard Sun, 09/26/2021 - 17:30

Additional Author(s) / Creators

C H Lee, G C Peden, Edinburgh University Press

Alternative Published Date

2011

Category

Economy

Type of Resource

Book

Length (Pages, words, minutes etc...)

269pp

Fast Facts

There are issues, such as the distribution of income, which merit particular attention in Scotland's case. There are also contradictions in explanations of Scotland's economic performance that have to be addressed.

Resource Address (URL)

https://books.google.co.uk/books?hl=en&lr=&id=d28xEAAAQBAJ&oi=fnd&pg=PR5&dq=Doe…

Keywords

Economic History of Scotland

Language English