Speaking on the BBC’s Sunday Show, David Phillips, head of state and local government finance at the IFS, said Scotland was one of the wealthiest regions in the UK, outperforming Wales and Northern Ireland as well as the north of England and the UK. . Midlands.
When it comes to economic growth, he added that on a per capita basis, Scotland’s economy has performed better than the rest of the UK since the pandemic.
“Scotland is one of the best regions in the UK,” Phillips said. It lies behind London and south-east England, but well ahead of the central regions and the north of England, not to mention Wales and Northern Ireland.
“Scotland has a large-scale economy, a relatively well-educated workforce, and of course oil and gas and associated onshore activities are much larger than in the rest of the UK.
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“I think looking at recent growth, Scotland has very slightly outperformed growth in the rest of the UK over the last few years.
“On a per capita basis, Scotland’s economy is slightly larger than it was before the pandemic while in the rest of the UK it is slightly smaller.”
He added that this followed a period in the second half of the 2000s when Scotland’s economy was slightly weaker than the rest of the UK.
Last week, a major survey by the Royal Bank of Scotland found that Scotland was an “outstanding” performer among the UK’s nations and regions, with private sector economic growth accelerating in May at the fastest pace in two years.
The latest Purchasing Managers’ Index (PMI) showed that Scotland’s private sector growth in May was the second fastest among the UK’s 12 nations and regions, behind only Northern Ireland and ahead of London.
Scotland’s acceleration in growth contrasts with a slowdown in expansion in the UK’s overall private sector economy last month.
Employment growth in Scotland was the third fastest pace among UK countries and regions, behind only Northern Ireland and northwest England, and accelerated in May to its fastest pace in three months.
Phillips said Scotland’s economic fortunes were strongly linked to activity in the North Sea.
“When there is growth in the oil and gas industry, the Scottish economy tends to outperform slightly compared to the rest of the UK. “When it suffers, as was the case between 2014 and 2021, the Scottish economy tends to do slightly worse,” Phillips added.
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“It’s not because oil and gas is a huge share of the economy, but there’s a lot of activity among north-east Scotland that is still linked to that.”
When asked whether Scotland’s economic growth was significant enough to make a difference to the economy, Phillips was skeptical.
He said: “If you look back over the last five years, Scotland’s economy compared to 2019 is about 1.5% larger per person. That’s 0.3% growth per year.
“If you compare that to the growth we were used to in the 2000s, it’s very slow.”