Scottish Chambers of Commerce have called for urgent government action to restore confidence in the Scottish economy, as GDP figures show that Scotland’s economy is contracting – in stark contrast to the overall UK position.

Liz Cameron, Chief Executive of Scottish Chambers of Commerce, said:

“The news that Scotland’s economy is contracting at a time when the overall UK economy is growing healthily must ring alarm bells for both the Scottish and UK Governments. While Scotland’s growth has been sluggish since the fall in oil prices in 2015, the evidence now shows that no sector in the Scottish economy is experiencing growth, with production and constructing falling and our service sector flatlining.

“This news must now bring an urgent change in policy from the Scottish Government in particular. The Scottish Parliament has just introduced a Budget in which medium and large businesses pay a higher rate of business rates than they would in England and where Scottish higher rate taxpayers pay more tax than they would anywhere else in the UK. The Scottish Government is also planning higher planning fees, a potential new infrastructure levy and the returns from the Apprenticeship Levy are also less direct than for businesses in England. These additional costs for Scottish businesses are only now being felt, so could result in an even less competitive business environment in Scotland this year.

“It is time for the Scottish Government to abandon this high tax agenda before it is too late, as these policies risk driving investment out of Scotland. Instead, it must focus its attention on supporting businesses to grow and to create the jobs and wealth our economy needs. Urgent action is needed to reverse the additional costs that businesses are incurring in Scotland.

“The urgency of the Scottish Government’s enterprise and skills review and the agenda for change that this signals in terms of government policy is also now paramount, enabling a reinvigoration of how Scotland’s public and private sectors can work together in mutual support.

“These may be one quarter’s figures, but they are illustrative of a trend which has existed throughout 2015 and 2016. Scotland’s economy is in red alert and must be the number one priority for both the Scottish and UK Governments.”