RUTH Davidson has been told to “hang her head in shame” for pressing ahead with Brexit while admitting it could come at a massive economic cost to Scotland and the wider UK.

Nicola Sturgeon made the remark to the Scottish Conservative leader during First Minister’s Questions yesterday when Davidson pressed her on the Scottish economy and whether the prospect of income tax rises would damage the economy.

Davidson said business leaders such as David Lonsdale of the Scottish Retail Consortium and Liz Cameron of the Scottish Chambers of Commerce had both spoken out against possible income tax hikes.

READ MORE: War of words in the Commons as Scottish Tory and SNP MPs clash over Brexit

She told the First Minister: “Scotland’s businesses are telling you what they want and need and you’re not listening.”

And she continued: “We have been here before, and the question is the same. If raising taxes in Scotland damages the Scottish economy and leads to the loss of revenue that the Scottish National Party’s own manifesto talked about, which is the money that we need to spend on our national health service and schools, why would any responsible government do it?”

In response, the First Minister picked up on a newspaper interview Davidson gave earlier this week in which she spoke of concerns over leaving the European Union and single market.

Davidson, a staunch Remain supporter, pushed for access to the single market after Brexit to protect trade both north and south of the Border.

And asked about the impact of Brexit, Davidson said: “My real fear is that if there’s a short-term economic hit, we don’t bounce back from it.”

Sturgeon referred to the views that Davidson had expressed and said that while Scotland’s economy “faces challenges”, in the most recent statistics it had grown four times as fast as the economy elsewhere in the UK, while unemployment was close to its lowest level on record.

The First Minister then added: “The second point that is worth making is one that, day and daily, everybody across the country is becoming ever clearer about.

“One of the reasons why we are having these debates now is the damage that Tory austerity is doing and the damage that the reckless Tory Brexit is threatening to do to our economy.

“Frankly, it is beyond belief that Ruth Davidson can say, as she did yesterday, that she thinks that Brexit might do damage to this country that it will never recover from and yet expects us to carry on with Brexit regardless.

“Frankly, Ruth Davidson should hang her head in shame.”

The exchange over the economy and Brexit took place as the University of Strathclyde’s Fraser of Allander Institute and the Scottish Centre for Employment Research yesterday published the fourth Scottish Labour Market Trends.

The report shows that Scotland’s labour market continues to hold up remarkably well, despite challenges elsewhere in the economy.

The employment rate in Scotland now stands at 75.2 per cent, up 1.1 percentage points on a year ago. Meanwhile, the unemployment rate has fallen to 3.9 per cent, down 1.2 percentage points since last year.

It added that in another positive development, two recent concerns in the labour market data, youth unemployment and economic inactivity, “appear to have receded somewhat”.

It said: “The youth (16-24 year old) unemployment rate is at a record low rate of 8.4 per cent. This is also the lowest rate of any part of the UK.

“The rate of economic inactivity increased to 23 per cent at the end of 2016, but at 21.8 per cent has now fallen back closer to the UK average of 21.3 per cent.

“Challenges remain with a need to better understand the extent of part-time employment, fragile employment and underemployment in the labour market. Similarly, recent rises in self-employment need to be better understood. We also identify a decline in job related training, a subject to which we will return in future editions of this publication.”

Responding to Davidson’s comments on businesses being concerned about a possible income tax increase, Sturgeon said: “Our businesses need investment as well, they need investment in health, in education, in skills, in infrastructure. All of that has to be paid for. And we all want, at least all of us on this side of the chamber, want high quality public services.

“So we will lead an open, honest, mature debate about how as a country we best provide the services and the business support we need.”

The First Minister added: “I don’t know if the Tories will want to be part of that debate or whether they will simply call for more and more spending and more and more tax cuts for the richest.

“But I am determined to lead a debate that is right for the overall interests of this country that I am proud to be First Minister of.”

In her interview, despite her concerns about the handling of Brexit, Davidson praised Theresa May, saying the Prime Minister was “not a game player” and was prepared to “put in a shift”.

“She’s absolutely straight down the line,” Davidson said.