Driving Up Competitiveness

The First Minister claims inequality is 'holding back' economic growth.

Nicola Sturgeon estimates the cost rests at £1, 600 per person.

She'll launch Scotland's Economic Strategy today and says the true cost of inequality and austerity cannot be disputed or ignored.

Recent research published by the Organisation of Economic Cooperation and Development (OECD) found that increased inequality had reduced the UK’s growth potential.

The research examined the GDP growth rate of different countries between 1990-2010 and found that rising UK inequality had negatively impacted economic growth in the UK by nearly 9 percentage points over that period.

Scottish Government analysis using this growth gap and the latest ONS figures suggests that UK GDP could have been nearly £100 billion higher in 2010 had the UK economy grown at this potential rate. 

The First Minister said: "Our Economic Strategy will set out a long term vision based on one fundamental principal: by becoming a fairer society, we will also become a more productive and more prosperous society.

“We want to see economic growth that is inclusive, innovative and fairly distributed. For too long, our economy has been held back by rising inequality as a result of successive generations of Westminster economic policy.

“I have been clear that a key priority for this Government is to tackle the blight of inequality, which serves as a destructive social and economic spiral. These figures suggest that had equality and economic growth been confronted with equal importance, then UK GDP would now be approximately £100 billion higher. That is a proposition that simply cannot be ignored.

“That failure of Westminster’s economic policy to properly address inequality – and the resultant loss to economic growth – has merely been compounded by the more recent austerity policies pursued by the UK Government and which the Scottish Government is deeply opposed to. We are using every lever and platform at our disposal to mitigate the effects of austerity. In Scotland, the employment level is at a record high whilst unemployment is it its lowest since early 2009. Female participation in the labour market has also increased to reach record levels and youth unemployment is at its lowest in five years. We will continue to press the UK Government for full devolution of unemployment support to help us do even better.

“The Scottish Government’s policy of inclusive growth is already being recognised internationally by economists and academics and I am delighted to set out full details of Scotland’s Economic Strategy later today.”