Kate Forbes urges Westminster action as Scotland's economy shrinks

The National

28-05-2025

Data published by the Scottish Government reveals GDP fell 0.2% in March, following a similar drop of 0.2% in February – although GDP as a whole increased over the first three months of 2025 by 0.4%
Figures for January, however, saw Scotland record an increase in GDP while the UK as a whole saw the economy contract.
Deputy First Minister Kate Forbes said with the Scottish Government only having "limited powers" over the economy, Labour ministers need to 'counter the damaging economic impacts of Brexit' and reverse the recent hike in employer national insurance contributions.
The increase recorded over the first three months of the year is still below the 0.7% GDP growth recorded for the UK as a whole over the same period.
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For the period January to March, Scotland's services sector – which makes up the bulk of the economy – grew by 0.5%, while the production sector grew by 0.3%.
The construction sector was flat with 0% growth recorded, while the agriculture, forestry and fishing sector contracted 0.4%.
Looking at March alone, output in the services sector was flat at 0% growth, while the production sector shrank by 1.6%. However the construction sector expanded by 0.3%.
Forbes, who has responsibility for the economy within the Scottish Government, stressed the figures for the first quarter of 2025 are 'encouraging' when compared to the 0.1% growth recorded over October to December 2024, and said they show quarterly growth 'getting stronger'.
She added: 'In the face of ongoing global challenges, dynamic steps are being taken to grow and transform Scotland's economy.
'We are pursuing new investment, building export potential and supporting innovation. Last week the First Minister announced that US green aircraft engine developer ZeroAvia is to establish a new manufacturing base in Scotland, creating around 350 jobs.
'Meanwhile, our Programme for Government includes a six-point export plan to help businesses tap into new markets and increase sales.'
(Image: Jane Barlow/PA Wire) But she added the Scottish Government's 'limited' powers mean 'decisive action' is needed from the UK Government to 'counter the damaging economic impacts of Brexit and tackle the economic uncertainty currently being felt by business, workers and families'.
This action from Westminster must include reversing the 'damaging decision to increase employers' national insurance contributions', the Deputy First Minister insisted.
Scotland Office minister Kirsty McNeill made clear however that 'Scotland's growth must not lag behind the rest of the UK'.
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She insisted it is 'absolutely essential that both governments work together to deliver better jobs, wages and opportunities for the people of Scotland'.
McNeill said: 'The UK Government ended austerity in Scotland with a record £50 billion block grant in 25-26 for the Scottish Government to spend on public services.
'Meanwhile our Brand Scotland trade missions are promoting Scotland's goods and services on the world stage to encourage further growth and investment, and our forthcoming industrial and trade strategies will create opportunities for people right across the UK.'
She also said the UK Government's Plan for Change is 'working by kick-starting economic growth and putting more money in people's pockets'.
McNeill added: 'There's been an annual pay rise of around £1400 for up to 220,000 Scottish workers and an end to zero-hours contracts for nearly 80,000 Scots thanks to our ground-breaking Employment Rights Bill.'